Sterner v. Lehmanowsky

• Decision Date: 02 March 1962
• Docket Number: No. 35078,35078
• Parties: T. L. STERNER, Appellant, v. Robert LEHMANOWSKY, also known as Russell Robert Lehmanowsky, and Western Surety Co., Appellees.
• Court: Nebraska Supreme Court

Page 588

113 N.W.2d 588

173 Neb. 401

T. L. STERNER, Appellant, v. Robert LEHMANOWSKY, also known as Russell Robert Lehmanowsky, and Western Surety Co., Appellees.

No. 35078.

Supreme Court of Nebraska.

March 2, 1962.

Syllabus by the Court

1. A motion for a directed verdict admits, for the purpose of a decision on the motion, the truth of the material and relevant evidence on behalf of the party against whom the motion is directed, and he is entitled to have every controverted fact found in his favor and to have the benefit of fair inferences deducible from the evidence.

2. Fraud is never presumed but must be clearly proved by the party who pleads and relies on it.

3. Fraud must relate to a present or pre-existing fact and may not generally be predicated on an inference concerning any event in the future or acts to be done in the future unless such representations as to future acts are falsely and fraudulently made with an intent to deceive.

4. The failure of a motor vehicle dealer to keep a promise to do an act in the future does not amount to fraud within the provisions of section 60-619, R.R.S.1943, in the absence of a showing that the dealer's promise was not made in good faith.

Mitchell & Taylor, Kearney, for appellant.

Munro, Parker & Munro, O. A. Drake; Andrew J. McMullen, Kearney, for appellees.

Heard before CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH and BROWER, JJ.

SPENCER, Justice.

This is an action to enforce the provisions of a statutory bond of a licensed used car dealer brought by a holder of notes endorsed with recourse and secured by chattel mortgages and certificates of title on automobiles sold by the dealer. At the close of the plaintiff's case, motions for directed verdict by both the dealer and the surety were sustained, and plaintiff perfected this appeal.

Plaintiff, T. L. Sterner, who will hereinafter be referred to as plaintiff, is the holder of a small loan license and operates a real estate, insurance, and loan business in Franklin, Nebraska. The defendant, Robert Lehmanowsky, was a licensed used car dealer operating businesses at Kearney and Grand Island, Nebraska. He will be hereinafter referred to as Lehmanowsky. Defendant, Western Surety Company, hereinafter referred to as surety company, was the surety on a motor vehicle dealer's bond furnished by Lehmanowsky pursuant to section 60-619, R.R.S.1943, which is set out hereinafter.

The plaintiff pleaded two causes of action against Lehmanowsky and the surety. The first cause of action alleged that the plaintiff purchased from the defendant Lehmanowsky, with recourse, a note of one Danielson, secured by a chattel mortgage on, and the certificate of title to, a 1955 Buick. Danielson defaulted on his payments and Lehmanowsky was given the note, mortgage, and certificate of title to repossess the Buick unless payment was made. When the Danielson papers were delivered to Lehmanowsky, the plaintiff took a demand note from him for $863.19, the amount due on the Danielson obligation. Plaintiff testified that he took this note as a receipt. The demand note, which is exhibit 2, contains no recitaion of that fact or reference of any nature to the Danielson transaction. The only recitation on the note is as follows: '833 if paid by 3/1.' Lehmanowsky subsequently collected the amount due on the mortgage but did not remit it to plaintiff.

Plaintiff's second cause of action covers three separate transactions which for convenience may be described as follows: (1) A 1952 Buick sedan sold to one Don Lizer, hereinafter referred to as Lizer Buick; (2) a 1952 Ford sold to Gusto Gonzales, hereinafter referred to as Gonzales Ford; and (3) a 1953 DeSoto sold to Leroy Journey, hereinafter referred to as Journey DeSoto. It seems that only the certificate of title, endorsed in blank, was delivered to the plaintiff on the Gonzales Ford. On the other two transactions, the notes, chattel mortgages, and certificates of title were delivered to the plaintiff. The plaintiff alleges Lehmanowsky either repossessed or was supposed to reposses the three cars but now falsely claims they are lost or stolen. None of the papers on these cars was delivered to Lehmanowsky, as was the situation in the first cause of action. The Lizer and Journey notes were assigned with recourse.

In evaluating the plaintiff's evidence, which is very sketchy, we apply the following rule: A motion for a directed verdict admits, for the purpose of a decision on the motion, the truth of the material and relevant evidence on behalf of the party against whom the motion is directed, and he is entitled to have every controverted fact found in his favor and to have the benefit of fair inferences deducible from the evidence. Hancock v. Parks, 172 Neb. 442, 110 N.W.2d 69.

The Lizer Buick paper was sold to Sterner February 7, 1959, for $550. The first payment was due March 12, 1959. Nothing was paid on the note, and sometime before March 30, 1959, it was turned over to the plaintiff's attorneys. On that date, Lehmanowsky was allowed credit of either $25 or $35 against the obligation, which represented an adjustment on other notes. The car was apparently repossessed by Lehmanowsky and put on his lot in Grand Island where it was supposed to have been damaged in a hail storm. Lehmanowsky agreed with plaintiff's attorneys that any money received from the insurance company on the hail loss would be turned over to the plaintiff. On October 3, 1959, Lehmanowsky advised plaintiff's attorneys that no loss was paid on the Buick. He was then told to bring the car to Kearney and to deliver it to an auction house. Extracts from Lehmanowsky's deposition indicate that the car was to have been delivered to the auction house by one Marvin who tends bar at a tavern in Grand Island; that Lehmanowsky met him at a Kearney tavern after he supposedly delivered the Buick; and that he did not see it thereafter. The car apparently was never delivered. Plaintiff, on the assumption that it was Lehmanowsky's responsibility to account for the car, produced no further evidence. Plaintiff, in his brief, sums up his position in the following paragraph: 'In brief, if we assume that the Lizer Buick represented by Exhibit 6 ever existed, is has now vanished someplace between a bar in Grand Island and a tavern in Kearney. Lehmanowsky would have us believe that it just disappeared off of a Kearney street. He owes a better explanation than that.'

Exhibit 6 is plaintiff's ledger sheet on the transaction. Exhibit 7 is the certificate of title. Exhibit 7 was in the plaintiff's possession. The car could not have been sold by Lehmanowsky unless he fraudulently secured a duplicate title which would be covered by the bond. If the car never existed, exhibit 7 would be a forgery and the transaction would be covered by the bond. The plaintiff has the burden of proving his case. He certainly cannot shift that burden to the defendant by innuendo.

The Journey DeSoto was sold by Lehmanowsky in July 1958 for $588.24. Lehmanowsky discounted the paper with plaintiff and received $500. When the August payment was not paid by Journey, Lehmanowsky assigned another note and mortgage to plaintiff in the amount of $178.20, for which he was given credit on this transaction. The car was subsequently wrecked by Journey and was never repossessed by Lehmanowsky, although in a letter to plaintiff, exhibit 4, set out hereinafter, Lehmanowsky referred to it as repossessed. Plaintiff's attorneys had asked Lehmanowsky to deliver the Journey car after the wreck to the auction house. This was never done.

The Gonzales Ford certificate of title, signed in blank, and another title not involved herein, were delivered to the plaintiff's attorneys in May 1959 in exchange for a certificate of title on a Chrysler which was being sold. On July 16, 1959, Lehmanowsky reported that the Ford had been stolen from his lot, and advised plaintiff's attorneys that when he settled with the insurance company he would turn the proceeds over to them. There is no evidence in this record as to the nature of the policy under which a claim was being made or whether any assignment of the policy had been made to the plaintiff. Lehmanowsky later settled with the insurance company but the amount of the settlement does not appear in evidence. The proceeds were never paid over to the plaintiff or to his attorneys.

It is plaintiff's contention that the losses sustained by him in financing these four transactions are the result of Lehmanowsky's 'misappropriations, misrepresentations, fraud and deceit in the conduct of his business as a used car dealer, in the handling of cars repossessed by the dealer for non-payment by the purchasers,' and as such are covered by the surety bond.

The plaintiff relies heavily on Sun Insurance Co. v. Aetna Ins. Co., 169 Neb. 94, 98 N.W.2d 692, in which we said: 'As we interpret section 60-619, R.S.Supp., 1955 upon which the plaintiff's bond is based, the Legislature intended that persons other than purchasers might sustain damage or loss by reason of a motor vehicle dealer's misrepresentations, false and fraudulent acts, and misappropriation of funds or deceitful practices in representing a motor vehicle to the purchaser thereof. It is obvious that the Legislature intended that any person sustaining loss by reason of a motor vehicle dealer's conduct in engaging in acts prohibited by law would be entitled to recourse on such a bond as the plaintiff's bond in the instant case, regardless of the particular status of such person as defined in section 60-601, R.S.Supp., 1955.

'The plaintiff's bond, being a statutory bond, must be interpreted in the light of section 60-619, R.S.Supp., 1955.

'In 11 C.J.S. Bonds § 39, p. 418, it is said: 'A statutory bond will be construed in the light of the purpose for which it is required as expressed in the statute, * * *. Accordingly, in view of the fact that the public has an interest in official and other...