Osborn v. Gene Teague Chevrolet Co.

• Decision Date: 16 December 1969
• Parties: Odice OSBORN, Respondent, v. GENE TEAGUE CHEVROLET COMPANY, an Oregon corporation, Appellant.
• Court: Oregon Supreme Court

Page 988

459 P.2d 988

254 Or. 486

Odice OSBORN, Respondent, v. GENE TEAGUE CHEVROLET COMPANY, an Oregon corporation, Appellant.

Supreme Court of Oregon, In Banc.

Argued before Department No. 1 and Submitted March 5, 1969.

Reargued May 12, 1969.

Decided Oct. 22, 1969.

Rehearing Denied Dec. 16, 1969.

Norma Paulus, Salem, argued the cause for appellant. With her on the brief were Bell, Gehlen & Bell, Stayton.

William S. Nokes, Silverton, argued the cause and filed a brief for respondent.

HOLMAN, Justice.

This is an action for damages for claimed fraudulent misrepresentations of the mileage on a used automobile purchased by plaintiff from defendant. Defendant has appealed from a judgment, entered on a verdict favorable to plaintiff, for both actual and punitive damages.

There was sufficient evidence to justify the following factual finding by the jury. At the time the automobile was traded in to the defendant its odometer indicated slightly in excess of 100,000 miles. When it was sold a few weeks later to plaintiff the odometer showed approximately 62,000 miles. Defendant made no verbal representation of the mileage on the vehicle. However, plaintiff observed the mileage reading on the odometer and purchased the automobile in reliance thereon. Defendant admitted replacing the odometer, claiming that it had done so because the odometer was broken.

Defendant claims the court erred in failing to direct a verdict in its favor because of insufficient evidence to sustain plaintiff's cause of action. Defendant first contends there is no evidence of any representation of the mileage the vehicle had been driven. This contention necessarily rests upon the premise that representations must be verbal. We believe that this is not so and that a representation can be made of the amount of the vehicle's prior use by the manipulation or change of a part of the vehicle that serves the purpose of showing how far it has traveled. It should and could have been anticipated by defendant that even in the absence of a verbal representation, a person who was considering the purchase of a vehicle would look at and rely upon the odometer.

Defendant next claims there is no proof of its intent to defraud. Except rarely, fraud can only be proved by circumstantial evidence. The jury can certainly take notice that automobile dealers are aware that one of the purposes of an odometer is to represent the use of a vehicle and thus the extent of its wear and its resultant value. It can also assume that every automobile dealer, including defendant, knows that the purchasing public is likely to look at and rely upon the odometer for this purpose. If, knowing this, a dealer changes the mileage and does not tell the purchaser of the change, we believe that there is sufficient evidence of fraud to go to the jury. Under these circumstances, the dealer's silence can be found to be the badge of fraud. The likelihood that the mileage change and silence concerning it was for the purpose of misleading plaintiff was sufficient to permit the jury to draw an inference of fraud.

Defendant also contends there was insufficient evidence to sustain actual damages because there was no proof of the market value of the vehicle. The only evidence of the vehicle's market value favorable to plaintiff was plaintiff's testimony that had he known the mileage on the vehicle he would not have paid more than $300 for it. In Lewis v. Worldwide Imports, Inc., 238 Or. 580, 395 P.2d 922 (1964), we held that such testimony could be regarded by the jury as the owner's estimate of the vehicle market value rather than an expression of its special value to him. We also continued to recognize that an owner is qualified to testify to the value of that which he owns even in the absence of his qualifications as an expert in evaluating property of the kind in question.

The defendant next urges that the court erred in failing to withdraw from the jury's consideration the issue of punitive damages. Defendant first contends there was no evidence that the odometer was changed for the purpose of deceiving the purchaser. We have already crossed this bridge in a direction contrary to defendant's contention when we decided that there was sufficient evidence of intent to defraud to sustain the jury's verdict. We have previously held that turning back an odometer with intent to deceive was sufficient to sustain punitive damages. Lewis v. Worldwide Imports, Inc., Supra, at 585--586, 395 P.2d 922. The legal justification for punitive damages is determent. Sumrell v. Household Finance Corp., 250 Or. 381, 443 P.2d 179 (1968). Punitive damages would appear to be particularly well suited to prevent defendant and others from the kind of conduct here complained of.

Defendant next contends that there is no evidence that it authorized or ratified the act which furnishes the basis for the claim of punitive damages and therefore it is not responsible for them. The evidence reveals that the president of defendant corporation talked with plaintiff about three weeks after the sale, examined the facts surrounding plaintiff's complaint and the sale, and refused to make any adjustment. At this time he must have known all the relevant facts. The decision of defendant's president to stand firm and retain the benefits of the transaction is strong evidence of its ratification.

Defendant next contends that the court erred in not giving a requested instruction on the necessity for authorization or ratification of the acts complained of before there could be corporate responsibility for punitive damages. The requested instruction stated as follows:

'I instruct you that the defendant corporation can not be held liable for punitive damages...