Packard Norfolk, Inc. v. Miller

• Decision Date: 26 November 1956
• Docket Number: No. 4564,4564
• Citation: 198 Va. 557,95 S.E.2d 207
• Parties: PACKARD NORFOLK, INCORPORATED v. M. J. MILLER. Record
• Court: Virginia Supreme Court

Page 207

95 S.E.2d 207

198 Va. 557

PACKARD NORFOLK, INCORPORATED v. M. J. MILLER.

Record No. 4564.

Supreme Court of Appeals of Virginia

November 26, 1956.

Edward S. Ferebee, for the appellant.

Joseph E. Baker and M. R. Broudy (Broudy & Broudy, on brief), for the appellee.

JUDGE: MILLER

MILLER, J., delivered the opinion of the court.

On May 10, 1955, H. J. Miller filed a suit in equity against Packard Norfolk, Incorporated, hereinafter called Packard, to cancel a written contract dated February 26, 1955, the pertinent parts of which appear in the margin, ¹ under which Miller had purchased from Packard a sedan automobile. Miller alleged that he had been induced to purchase a new 1955 Packard automobile under false, fraudulent and material representations.

The chancellor granted the prayer of the bill, cancelled the contract, and ordered Packard to refund the purchase price of the car. We granted Packard an appeal.

The testimony was heard ore tenus, and all conflicts in the evidence and just inferences deducible therefrom have been resolved in favor of Miller. The chancellor's factual finding is entitled to the same weight as a jury's verdict. Worrie v. Boze, 191 Va. 916, 62 S.E.2d 876.

With all conflicts in the testimony resolved in favor of Miller, the evidence upon which the contract was cancelled may be summarized as follows:

Miller is a physician who has practiced his profession in Norfolk since 1927, and he purchased the car for professional use and pleasure purposes. During previous years he had bought two Packard cars from this company and had experienced trouble with them, and he was somewhat reluctant to acquire another car of the same make. A few days prior to consummation of the sale when John R. Sandy, Packard's salesman, called on Miller at the latter's office in an attempt to make sale of the car, Miller apprised the agent of his unsatisfactory experiences with the other cars. At this interview he told the agent that he wanted 'the car to be absolutely in as good running condition as it can, with everything perfect and thoroughly checked.' The agent assured him 'that the car was an improvement over previous models, * * * would have more power, * * * more pick up' and 'that for the first time the Packard had a V-8 motor and that a V-8 high speed motor would give * * * more power.' Miller then stated to the agent that he was not sure that he wanted to get a car and that maybe he had 'better let them try the Eight first.' To that Miller said the agent responded as follows: '[That] I might rest assured that these motors have been tested for six months prior to any car being put on the market * * * that I should not fear trouble, and to rest assured that I would have no further trouble with anything else, that the car would be in perfect condition, * * * thoroughly checked * * * gone over carefully, * * * [and] in as good running condition as it could be when it was delivered to me. I told him that only under those circumstances would I even consider buying another Packard car.'

Upon being asked if he would have purchased the car if the agent had not represented to him that it was 'in perfect running condition,' he replied: 'I wouldn't; I would not have even considered buying a car unless I had definite assurances that they were going to stand behind it.'

F. W. Dunn, called as a witness by Miller, was asked what conversation was had between Miller and the salesman on February 25, 1955, (that being the day the sale was actually made though the contract is dated February 26) just before the sale was closed and he answered as follows:

'A. Mr. Sandy told Dr. Miller that the car was in first class condition, he was sure he would have no trouble with it. Dr. Miller told Mr. Sandy that if the car were not in first class condition he would be glad to wait until they put it in first class condition. * * *'

Though the car did not run smoothly when first driven by Miller, he then attributed that condition to its newness. The first trouble of moment was experienced on March 2, 1955, when the mileage on the car registered 180 miles. On that occasion Miller had an emergency professional call but was unable to start the car although he tried for half an hour to get it to operate. When Huston R. Powell, Packard's service manager, came to examine the automobile, he found the automatic choke blades stuck and that the car needed water. When taken to the shop, a rubber hose connection was found to be perforated and was replaced. Upon return of the car that night to Miller, it was vibrating, making loud noises, and ran with difficulty. The next day, March 3, the car was returned to the shop, and after further examination Packard's mechanic agreed that the motor was making noises; a valve rocker arm was found to be worn and had to be replaced. The trouble could not be immediately repaired because the needed parts were not then available, but on the following day Miller was told that the car was ready for delivery. However, when it was started, it made a whistling sound 'almost like a police siren,' did not run smoothly, and the valves were tapping. Miller advised salesman Sandy that he would not accept it. Packard's service manager then made some adjustment that toned down the whistling but the car still did not run smoothly. At Powell's suggestion to take the car 'out and run it and bring it back' if it did not run properly, Miller drove away but had difficulty starting the car. Thereafter he continued to have difficulty in starting the car, and when in operation it felt as if it were bumping over rough places in the road, lacked pick-up and would buck, particularly on inclines if the driver 'put a little power on it.' The car was left with Packard on six or seven different times to have them correct the defects, and Miller says that in the thirty days that he kept the car, he did not have one day of perfect driving. What Miller described as a broken valve lift was replaced and still the car did not perform properly, and it was returned to Packard on March 25, and several hours thereafter Packard's service manager advised Miller that all the car needed was to be run about 70 to 75 miles per hour.

During the time the car was driven the first five hundred miles it was missing, bucking and lacked power, and when the speedometer registered 548 miles, the spark plugs were replaced but this did not correct its sluggishness; that was still evident at a reading of 800 miles.

While this unsatisfactory condition existed, the car lost an unusual amount of oil, and Miller was advised by the service manager that the car would probably lose oil until it had been driven 3,000 miles or more and that the loss of oil might be as much as a quart every hundred miles. He attributed this loss to the fact that the car had chrome piston rings which had not become seated and which he said took longer to get seated than cast iron rings. Miller testified that he was told by the service manager that 'until they get seated, the car is going to lose oil, and when it loses oil, it won't fire properly.' When Miller complained that the salesman had not advised him of any such condition, Powell replied, 'He didn't know it but I knew it * * * because I spent two weeks at the factory studying this new model car even before they put it on sale * * * I noticed that and I called their attention to the fact * * * that the car would lose oil. * * * I know you have had a whole lot of trouble with the car * * * but there isn't anything I can do about it.'

On March 28, 1955, Miller returned the car to Packard and demanded refund of the purchase price.

The evidence sustains the conclusion that the salesman believed that the statements he made to Miller were true. However, they were untrue, and if they were representations of material facts and relied upon by the purchaser to his damage, the salesman's belief that they were true is of no avail.

'Whether the representation is made innocently or knowingly, if acted on, the effect is the same. In the one case the fraud is constructive; in the other it is actual.' Jefferson Standard Life Insurance Co. v. Hedrick, 181 Va. 824, 834, 27 S.E.2d 198.

'For though the representation may have been made innocently, it would be unjust to allow one who has made false representation, even innocently, to retain the fruits of a bargain induced by such representation.' 3 Williston: Sales (Rev. ed.), pp. 435, 436.

'The intent of the party making the representation is wholly immaterial. The point is, has the other party been misled? It is sufficient that the statement is actually untrue, so as to mislead the party to whom it is made. The party making it need not know of its falsity, nor have any intent to deceive; nor does his mere belief in the truth make any difference. A party making a statement as true, for the purpose of influencing the conduct of the other party, is bound to know that it is true.' Wilson v. Carpenter, 91 Va. 183, 189, 190, 21 S.E. 243.

Miller contends that the statements made by the salesman, especially that made at the former's office a few days before the sale was consummated 'that the car would be in perfect condition * * * thoroughly checked * * * gone over carefully * * * [and] in as good running condition as it could be when delivered to me * * *' were material representations of an existing fact which were false and which induced him to...