United Fire & Cas. Co. v. Nissan Motor Corp. in U.S. A.
| Decision Date | 09 October 1967 |
| Docket Number | No. 21967,21967 |
| Citation | 433 P.2d 769,164 Colo. 42 |
| Parties | UNITED FIRE & CASUALTY COMPANY, a corporation, Plaintiff in Error, v. NISSAN MOTOR CORPORATION IN U.S.A., a corporation, Defendant in Error. |
| Court | Colorado Supreme Court |
Yegge, Hall, Treece & Evans, Roland E. Gebert, Denver, for plaintiff in error.
Lee, Bryans, Kelly & Stansfield, Fletcher Thomas, Denver, for defendant in error.
Nissan Motor Corporation, an importer and distributor of Datsun automobiles, is a California company qualified to do business in Colorado. It brought suit against Clyde R. McKnight, a former Denver Datsun automobile dealer and United Fire and Casualty Co. as surety for McKnight. The record discloses that United had issued McKnight three surety bonds each in the amount of $5,000 which bonds were in effect during the period in question from January 13, 1961 to June 30, 1963. Under the provisions of C.R.S. '53, 13--11--11, these bonds indemnified all persons, firms, and corporations dealing with McKnight against any loss suffered by reason of his fraud, fraudulent representations or violations of the provisions of C.R.S. '53, chapter 13, article 11. The bonds also ensured payment of any judgment obtained against McKnight for such acts or violations. The surety appeared by counsel who also filed an answer on behalf of McKnight.
Nissan's complaint alleged that McKnight had been appointed its agent and dealer for the Denver area for the sale of Datsun automobiles; that he had made repeated false representations to Nissan to induce it to deliver automobiles and parts to him on credit; and that many of these automobiles and parts were never paid for. Damage was sought in the amount of $15,330.88. Nissan additionally claimed recovery against United on the surety bonds in the full amount of $5,000 for each bond period. Following trial to the court, judgment entered in favor of Nissan against McKnight in the amount of $12,780.88 plus costs and against United in the amount of $15,000 plus costs.
Although United, as the sole appellant, urges several grounds for reversal, we deem the crucial issue in the case to be whether there is evidence to support the trial court's oral finding that a fiduciary relationship existed between McKnight and Nissan, and that McKnight was guilty of constructive fraud.
We shall first consider the nature of the relationship between Nissan and McKnight and then we shall consider the issue of fraud.
A reading of this record convinces us that no fiduciary relationship existed here. For example, McKnight was not actually Nissan's agent in a legal sense. He purchased the automobiles and parts from the former and sold them as He desired, apparently without any control from Nissan as to his actions. Also no prior business agency, no professional or confidential relationship and no family ties were shown which might have impelled or induced Nissan to relax the care and vigilance it would and should have ordinarily exercised in dealing with a stranger. Cf., In re McDonnell's Estate, 65 Ariz. 248, 179 P.2d 238 (1947) and 37 C.J.S. Fraud § 2. The fact that Hoen, who was Nissan's general manager, testified that he 'trusted' McKnight because they belonged to the same fraternal lodge, also did not create any such relationship. A confidential relationship has been defined as one '* * * between two...
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...To be actionable as fraud, a misrepresentation must be of an existing or past material fact. United Fire & Cas. Co. v. Nissan Motor Corp., 164 Colo. 42, 45, 433 P.2d 769, 771 (1967) (citations omitted). In contrast, a representation of law is a statement of opinion as to what the law permit......
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