Kuchta v. Western Oldsmobile, Inc.

• Decision Date: 21 September 1960
• Citation: 355 P.2d 458,224 Or. 50
• Parties: Jan KUCHTA, Respondent, v. WESTERN OLDSMOBILE, INC., a corporation, Appellant, and General Motors Acceptance Corporation, Defendant.
• Court: Oregon Supreme Court

Page 458

355 P.2d 458

224 Or. 50

Jan KUCHTA, Respondent, v. WESTERN OLDSMOBILE, INC., a corporation, Appellant, and General Motors Acceptance Corporation, Defendant.

Supreme Court of Oregon, Department 1.

Argued and Submitted Sept. 9, 1960.

Decided Sept. 21, 1960.

William J. Masters, Portland, argued the cause for appellant. On the brief were Masters & Masters, Portland.

Robert Clapperton, Portland, argued the cause and filed a brief for respondent.

Before McALLISTER, C. J., and ROSSMAN, PERRY, GOODWIN and KING, JJ.

KING, Justice pro tem.

This is an appeal from a judgment on a jury's verdict awarding plaintiff $2,200 in an action to rescind a contract for the purchase of an automobile for alleged fraud.

On Saturday, April 5, 1958, the plaintiff, a Danish-Polish immigrant, entered the defendant's automobile agency and discussed trading his Pontiac station wagon on a 1957 Oldsmobile car. This discussion was with Chuck Hodge, an employee and agent of the defendant corporation.

No agreement was reached at that time, and another meeting was arranged for the next afternoon, which was Sunday. At this meeting, after considerable discussion, the plaintiff signed a sales contract in blank, left his Pontiac car and drove the 1957 Oldsmobile to his home in Vancouver, Washington.

It is plaintiff's claim that he was merely trying out the Oldsmobile and that the blank contract was signed for defendant's protection and for the purpose of allowing the plaintiff to try out the car.

On the following Monday morning the plaintiff returned to defendant's place of business and claims he informed the defendant that he was not satisfied with the Oldsmobile and demanded the return of his Pontiac. After considerable heated argument this was refused.

Again, on Tuesday, April 8, 1958, the plaintiff returned with the Oldsmobile and attempted to get the Pontiac. Being unable to do so, after another long and heated discussion he signed another and completed contract for the Oldsmobile. That contract, in evidence, shows the date of April 7, 1958, but plaintiff testified it was not signed until April 8, 1958.

On July 25, 1958, the plaintiff gave written notice to the defendant that he elected to rescind the contract, offered the return of the Oldsmobile, together with pay for reasonable use thereof, and demanded the return of the value of the Pontiac traded in as a down payment, and for other money paid on the contract. The rescission was based on the claim that the Oldsmobile was represented as a new 1957 model, when in fact it was a used 1957 model.

As mentioned before, the jury returned a verdict for the plaintiff in the amount of $2,200. The over-all question is: should this verdict and judgment be sustained under the pleadings and proof in this case?

The defendant's first assignment of error is: the court erred in denying the motion of defendant for a mistrial, and in failing to sustain objections to questions asked the plaintiff and to his answers to what took place and what was said before and at the time of the alleged signing of the contract in blank and before the completed contract was signed.

The defendant made his original motion for a mistrial during the opening statement of the plaintiff's attorney as he was outlining what they expected to prove. This outline included all the trade and purchase dealings between the parties from Saturday, April 5, 1958, through Tuesday, April 8, 1958. When that motion was denied, objection was made to testimony regarding the same matters. At the time the motion for mistrial was made, fraud was alleged as the basis for the rescission, and this was denied by the answer. The defendant, after its motion was made and denied, then admitted for the first time that it had represented to the plaintiff that the Oldsmobile was a new 1957 car, but by its pleadings still denied that it was in fact a used or old car. The defendant seems to rely on the theory that it is not necessary to allege and prove scienter, as it is known in fraud and deceit. They urge that it is only necessary to allege and prove that the material fact was relied on and that it was not true. That seems to be the general rule in Oregon and is upheld by many cases, including the following cited by the defendant. Sharkey v. Burlingame Co., 131 Or. 185, 282 P. 546; Weiss and Hamilton v. Gumbert, 191 Or. 119, 227 P.2d 812, 228 P.2d 800; Fields v Haupert et al., 213 Or. 179, 323 P.2d 332, 333.

It is true that the buyer may rescind a sales contract for the breach of an express warranty, without the necessity of proving the seller had knowledge of the breach. Fields v. Haupert et al., supra. It does not necessarily follow that breach of warranty is the only basis for a rescission or that all the evidence of the transaction or of preliminary transactions would be improper because they tended to prove scienter, if such facts were also material to other parts of the case.

Fraud in inducement is a basis for an action for rescission of a contract, and it was upon this theory that the plaintiff relied and had a right to rely. Kruse v. Bush, 85 Or. 394, 167 P. 308; Hanna v. Hope, 86 Or. 303, 168 P. 618; McCabe v. Kelleher, 90 Or. 45, 175 P. 608; Nisson v. Tillman et ux., 213 Or. 133, 323 P.2d 329.

The motion for mistrial was properly denied. The plaintiff had alleged fraud in inducement to the contract, and this was all denied by the defendant in its answer. Even if the proof of scienter was not necessary, the testimony given could be used to prove the other elements of fraud, such as reliance by the plaintiff and his...