Rice v. Tissaw, Civ. 4310

• Citation: 57 Ariz. 230,112 P.2d 866
• Decision Date: 28 April 1941
• Docket Number: Civ. 4310
• Parties: HAL W. RICE, E. C. HOULE, R. D. KENNEDY, CHARLES W. SECHRIST, E. W. PHILLIPS and W. W. WATKINS, Appellants, v. PAUL TISSAW, Appellee
• Court: Supreme Court of Arizona

112 P.2d 866

57 Ariz. 230

HAL W. RICE, E. C. HOULE, R. D. KENNEDY, CHARLES W. SECHRIST, E. W. PHILLIPS and W. W. WATKINS, Appellants, v. PAUL TISSAW, Appellee

Civ. No. 4310

Supreme Court of Arizona

April 28, 1941

APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment reversed.

Messrs Moore & Romley and Messrs. Sloan, Scott & Green, for Appellants.

Mr Richard G. Johnson and Mr. Lemuel P. Mathews, for Appellee.

Mr Jacob Morgan, Amicus Curiae.

OPINION

LOCKWOOD, C.J.

Paul Tissaw, plaintiff, brought suit against Hal W. Rice, E. C. Houle, R. D. Kennedy, Charles W. Sechrist, E. W. Phillips and W. W. Watkins, defendants, for damages. The case was tried to the court sitting with a jury and judgment rendered in favor of plaintiff for the sum of $2,000 actual, and $4,000 punitive, damages, whereupon this appeal was taken.

Plaintiff's counsel admitted in oral argument that the complaint was not a model of pleading, and we agree with him. As well as we can determine from a careful examination thereof, it alleges in substance as follows: On August 3, 1937, plaintiff was an employee of Coconino county as a laborer, doing construction work. On that date, while engaged in his employment, he was injured by a fall of cinders upon him. He reported the accident to the Industrial Commission of Arizona, hereinafter called the commission, and it found that he was entitled to compensation for injuries received as a result of the accident, and paid him $90 per month for approximately nine months. During the time he was drawing compensation, defendants Kennedy, Houle and Watkins had examined him, and were well acquainted with his condition as it existed on May 9, 1938. On that date the commission desired to stop all further compensation to plaintiff, and sent him to defendants for a medical examination. These defendants were all doctors regularly employed by the commission and knew that if they rendered a false report as to the condition of plaintiff the commission would be justified, as a matter of law, on the face of the report in taking the action which it desired to take as aforesaid, and being willing, on account of the fact that they had received certain compensation from the commission for their services, to render any report, true or false, which the commission desired, they "willfully, deliberately, wrongfully, unlawfully and purposely did falsely report to the Industrial Commission" that plaintiff was cured of the injuries which he had received in the accident and the ill effects resulting therefrom had disappeared. Plaintiff then alleged that he had never recovered from the result of the accident, and had defendants reported truly on his condition he would have been entitled to, and would have received, further compensation, and that he had been damaged by the false report of defendants in the sum of one hundred thousand dollars actual, and fifty thousand dollars punitive, damages.

The complaint apparently attempts to set up a conspiracy between the commission and the defendants to prevent plaintiff from receiving industrial compensation to which he was entitled under the law by means of a false report made to the commission as to his physical condition and the cause thereof, which report the commission knew at the time to be false.

The action, if it has any basis at all, is one for false and fraudulent representations by defendants. We have defined the elements of actionable fraud in Moore v. Myers, 31 Ariz. 347, 253 P. 626, 628, as follows:

"(1) A representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) his consequent and proximate injury. 26 C.J. 1062. If these factors all appear, a cause of action for fraud will unquestionably exist."

We further amplified this in Stewart v. Phoenix National Bank, 49 Ariz. 34, 64 P.2d 101, 105, by saying:

"If the complaint states all these elements, plaintiff should have been permitted to present his evidence. If it does not, the court was correct in its ruling, for, if the complaint does not state a cause of action, it is a foolish thing to proceed to trial thereon, as the defect is one which may be taken advantage of at any time. Section 3777, Rev. Code 1928."

While it is not claimed defendants made representations of any nature to plaintiff, it is obviously the theory of the case that they were under a duty to him to make true representations as to his physical condition to the commission, in order that the latter might be properly advised as to whether he was entitled to further compensation. This proposition is, of course, correct. Cole v. Town of Miami, 52 Ariz. 488, 83 P.2d 997. But the complaint does not allege that defendants made a false report to the commission, whereby the latter was deceived and acted in reliance thereon, but that the commission well knew all the time that the representations were false and were made at its request as a mere excuse for its doing something which it knew perfectly well it had no right to do.

During the course of the oral argument of the case, counsel for plaintiff was requested by this court to point out the evidence which showed this wicked conspiracy between the commission and defendants, and he very frankly admitted that there was no evidence whatever in the record that the commission ever intimated to defendants that it desired a false report, or that it knew or suspected the report made to it was false. On the contrary, both then and in his brief he insisted that the commission acted in good faith and was deceived by the false representations of defendants. The judgment cannot be sustained on the theory of a conspiracy between defendants and the commission to defraud plaintiff.

Counsel for plaintiff, in his argument, apparently recognized the dilemma in which the pleadings, which by the way were not drawn by him, as viewed in the light of the evidence, placed him and stated frankly that ...