Lamasters v. Springer, 49832
Decision Date | 17 November 1959 |
Docket Number | No. 49832,49832 |
Citation | 251 Iowa 69,99 N.W.2d 300 |
Parties | Joe G. LAMASTERS, Appellee, v. George H. SPRINGER, Jr., d/b/a Factory Direct Distributing Co., Appellant. |
Court | Iowa Supreme Court |
I. Joel Pasternak, Des Moines, for appellant.
Lawrence E. Myers, Des Moines, for appellee.
This is an action at law to determine whether the statements and representations made by the defendant and his agent to plaintiff were such as to constitute fraud and deceit inducing plaintiff to put up a $250 cash bond and enter into an agreement with defendant known as Exhibit 'B' wherein plaintiff was engaged as an exclusive, franchised 'manufacturers' representative' or 'county agent' in Grundy county, Iowa, for the sale and distribution of defendant's products and merchandise.
Plaintiff alleged he was induced to enter into the execution of Exhibit 'B' by representations made by the defendant and his agent that plaintiff would be given training by defendant as a county agent; that defendant would spend $2,000 to $3,000 in newspaper promotional advertising in Grundy county, Iowa, within 90 days after the execution of Exhibit 'B' for the aid and assistance of plaintiff in making sales; that defendant advised plaintiff to disregard the express terms of the contract relating to the $250 cash bond which plaintiff had deposited with defendant, and which defendant stated would be returned to plaintiff within 90 days notwithstanding the terms of the written agreement.
The errors relied upon for reversal are (1) The court erred in overruling the defendant's motion for a directed verdict made at the conclusion of the plaintiff's evidence for the reasons (a) The plaintiff failed to sustain the burden of proving a material misrepresentation of an existing fact and (b) The plaintiff failed to prove that, if there was any misrepresentation, he was defrauded thereby. (2) The court erred in overruling the defendant's motion for judgment notwithstanding the verdict (This motion on same grounds as the motion to direct verdict), claiming (a) That the evidence actually shows a substantial performance regarding promotional advertising by defendant. (3) The court erred in overruling defendant's motions for a new trial--(a) Instruction No. 6 to the jury was erroneous in that it was a misstatement of the law and was confusing and misleading. (b) Instruction No. 10 was erroneous in that it was a misstatement of the law as to the rule governing measure of damages.
I. The defendant claims plaintiff failed to sustain the burden of proving a material misrepresentation of an existing fact or that he was defrauded thereby if there was such misrepresentation. He contends 'The mere failure to perform a promise or intention in futuro which may have been an inducement to executing the contract, is not, in itself, proof of fraud unless the promise is made with a secret intention of not carrying out the promise or expressed intention.' In support thereof appellant cites the following cases: In re Harker's Estate, 113 Iowa 584, 85 N.W. 786; Farmers Savings Bank v. Weeks, 209 Iowa 26, 227 N.W. 508; Security Savings Bank v. Capp, 193 Iowa 278, 186 N.W. 927; Rowe Mfg. Co. v. Curtis-Straub Co., 223 Iowa 858, 273 N.W. 895; State Bank v. Central Flour & Feed Co., 227 Iowa 596, 288 N.W. 614; 23 Am.Jur. 794; Williams v. Cohn, 201 Iowa 1121, 206 N.W. 823. So far as material to appellant's contention these cases hold in substance that fraud cannot be predicated upon the failure to perform a promise or stated intention to do something in the future, unless the statement is made with an existing real intention not to perform, and some of these cases say or imply that such fraudulent intent not to perform may not be inferred merely from the fact of nonperformance. We agree with the holding of these cases.
Lee & Son Co. v. Sundberg, 227 Iowa 1375, 291 N.W. 146, 149. Burner v. Myers, 212 Iowa 308, 312, 233 N.W. 505, 506, 235 N.W. 726; 37 C.J.S. Fraud § 12.
In Scheel v. Superior Mfg. Co., 249 Iowa 873, 884, 89 N.W.2d 377, 384, we said, Citing cases.
The essential elements of actionable fraud are: (1) A false representation, (2) scienter, (3) an intent to deceive, (4) reliance, and (5) resulting injury. Brickman v. Toriello, 242 Iowa 677, 46 N.W.2d 565; Rawleigh Co. v. Cook, 200 Iowa 412, 205 N.W. 57; Gipp v. Lynch, 266 Iowa 1020, 285 N.W. 659. The plaintiff must establish each of these items before he is entitled to recover.
'Parol evidence is admissible to prove fraud that induced the writing.' Scheel v. Superior Mfg. Co., supra [249 Iowa 873, 884, 89 N.W.2d 382]. 32 C.J.S. Evidence § 979 a; 24 Am.Jur., Fraud and Deceit, Sec. 267.
We come now to the difficult question whether or not there was sufficient competent evidence in the record to take the case to the jury. This question can be determined only by a careful examination of the evidence. Plaintiff testified,
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Plaintiff said '* * * Mr. Cochran told me that Factory Direct Distributing Company would furnish between $2,000 and $3,000 of advertising in Grundy County in the first ninety days,' and that Mr. Springer told him the same thing. The most plaintiff could claim for these statements is that they were promises in futuro. Without advertising plaintiff could no doubt, by dint of personal solicitations and hard work, accomplish some sales of merchandise, but the jury would be amply justified in finding that the promise of the investment of from $2,000 to $3,000 in advertising in Grundy County was one of the inducements offered plaintiff to get him to enter into the desired contract. Did Mr. Springer intend to perform this promise when he made it? The jury, on the record, could find it was made and not substantially kept. Catalogues costing $200 were delivered to plaintiff and 1,903 brochures costing 10cents each were mailed to Grundy County prospects. Advertising in a Des Moines newspaper and by...
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