Woodyard v. Hunt

• Decision Date: 18 July 1985
• Docket Number: No. 01-85-0008-CV,01-85-0008-CV
• Citation: 695 S.W.2d 730
• Parties: James S. WOODYARD, Appellant, v. James L. HUNT, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 730

695 S.W.2d 730

James S. WOODYARD, Appellant, v. James L. HUNT, Appellee.

No. 01-85-0008-CV.

Court of Appeals of Texas Houston (1st Dist.).

July 18, 1985.

Thomas B. Greene, III, Crain, Caton, James & Womble, Houston, for appellant.

Karl C. Hoppess and James A. Gieseke, Hoppess, Cowgill & Emmott, P.C., Houston, for appellee.

Before COHEN, JACK SMITH and DUNN, JJ.

OPINION

COHEN, Justice.

Appellant sued appellee for common law fraud and fraud under Tex.Bus. & Comm.Code sec. 27.01 (Vernon 1968). The jury affirmatively answered the special issue on fraud, but awarded zero dollars in damages. The trial court entered a judgment that appellant take nothing.

Appellant proved that in February of 1978, appellee induced him to pay $35,000 to purchase 1/6 of the shares of stock in a corporation, Champions South Development, Inc., by falsely representing that the corporation had or would soon acquire the right to purchase a certain 15.3 acre tract. In fact, only 1.43 acres was committed to the corporation. After discovering this fact, appellant became active in the corporation's activities and purchased more stock in the corporation, which ultimately declared bankruptcy. Appellant claims that the jury's finding of zero damages is in fatal conflict with its general finding that he was damaged and that this conflict requires either a new trial or rendition of judgment in his favor for $35,000.

Appellant brings two points of error, both regarding the apparent conflict between special issues no. 1(a) and 2(a). Special issue no. 1(a) stated:

Do you find from a preponderance of the evidence that James L. Hunt committed actionable fraud in regard to any of the following?

Answer "We do" or "We do not" as to each;

a. James Woodyard's

original investment on

February 3, 1978, of

$35,000; WE DO

-----

As a preface to special issue no. 1, the jury was instructed:

The phrase "actionable fraud" as used in this charge means that James Hunt made a material representation that was false and when the representation was made, James Hunt knew it was false or made it recklessly without any knowledge of its truth and as a positive assertion and further that James Hunt made the representation with the intent that it should be acted upon by James Woodyard and that James Woodyard acted in reliance upon such representation and James Woodyard thereby suffered damages. (emphasis supplied)

Special issue no. 2(a) stated:

What sum of money, if any, do you find from a preponderance of the evidence would reasonably compensate James Woodyard for damages, if any, suffered by James Woodyard as a result of such conduct, if you have so found?

Answer in dollars and cents, if any.

a. James Woodyard's

original investment on

February 3, 1978, of

$35,000; -0-

---- Appellant argues that the court erred in overruling his motion for new trial and his motion for judgment non obstante veredicto, because of the allegedly fatal conflict of the issues. Neither motion is included in the record. Appellee contends that nothing is presented for review because of the absence of the motions from the appellate record.

A motion for new trial is not required where the complaint on appeal is conflicting jury issues. See Tex.R.Civ.P. 324. Furthermore, appellee does not contend that the motions for new trial and for judgment n.o.v. were not presented to and denied by the trial court. Under Tex.R.Civ.P. 419, we accept as true appellant's statements that the motions were presented to the trial court and overruled. Whatley v. Whatley, 493 S.W.2d 299, 301 (Tex.Civ.App.--Dallas 1973, no writ). Therefore, we will decide whether there is an irreconcilable conflict between the jury's answers to special issues no. 1(a) and 2(a).

The test for determining whether a conflict between special issues is irreconcilable is whether one answer would establish a cause of action while the other answer would destroy it. McGaha v. Dishman, 629 S.W.2d 220 (Tex.App.--Tyler 1982, writ ref'd n.r.e.). The "ultimate" question is whether the conflict is fatal to the entry of judgment. Bay Petroleum Corp. v. Crumpler, 372 S.W.2d 318, 319 (Tex.1963).

In issue no. 1(a), the jury found fraud that, according to the definition in the jury charge, includes damage to the victim. See Hennigan v. Harris County, 593 S.W.2d 380, 383 (Tex.Civ.App.--Waco 1979, writ ref'd n.r.e.). This finding would require judgment for the appellant. A finding to issue no. 2(a) that there were no damages would defeat the cause of action and, as it did here, result in a judgment for the appellee. This does not decide the matter, however, because the court is under a duty to reconcile conflicting jury findings if at all possible. Huber v. Ryan, 627 S.W.2d 145 (Tex.1981). Courts presume that jurors do not intend to return conflicting answers, and will not reverse a judgment if there is any reasonable basis upon which the answers can be reconciled. Id.

The word "damages" has an ordinary meaning that encompasses every loss or diminution occasioned by the fault of another. Magnolia Pipe Line Co. v. City of Tyler, 348 S.W.2d 537 (Tex.Civ.App.--Texarkana 1961, writ ref'd). While the common definition may enable a jury to find that some general kind of damage has occurred, "damages" in a fraud case are measured by a particular standard. The proper measure of damages for fraud is the difference between the price paid and the value received, Success Motivation Institute, Inc. v. Lawlis, 503 S.W.2d 864, 867 (Tex.Civ.App.--Houston [1st Dist.] 1973, writ ref'd n.r.e.), or the difference between the value received and the value as represented. Wright v. Carpenter, 579 S.W.2d 575, 577 n. 1 (Tex.Civ.App.--Corpus Christi 1979, writ ref'd n.r.e.). The jury in this case was given no instruction whatsoever concerning how to determine the amount of damages. Without such guidance, the jury could have determined that, while appellant suffered damage, the damage did not include economic loss.

We further observe that the evidence was insufficient to enable the jury to assess damages under the legal standard. Appellant asserts that $35,000, the amount of his initial investment, was the proper amount. However, there is no evidence in the record of the value of appellant's share in the corporation or the value as represented by the appellee. The evidence shows only that appellant invested $35,000 to buy stock in the corporation because he was told that the corporation had contracted to purchase 15 acres, and that his money would go towards the final purchase. He invested because the profit, after development and sale of lots to builders, "looked like it was going to run 1.2 million or a million and a quarter and a sixth of that would have been $200 to $250,000 or so for the $35,000 we were putting in." None of these figures represents the value received or the value represented at the time of the fraud. Even if the jury had known the measure of damages, it could not have made a proper award because damages are measured by comparing values represented and received at the time of sale, not at some future time. El Paso Development Co. v. Ravel, 339 S.W.2d 360 (Tex.Civ.App.--El Paso 1960, writ ref'd n.r.e.); McDonnell-Perkins Builders, Inc. v. Cranford, 328 S.W.2d 800, 804 (Tex.Civ.App.--Fort Worth 1959, writ ref'd n.r.e.).

Appellant relies on Artco-Bell Corp. v. Texstar Corp., 591 S.W.2d 945 (Tex.Civ.App.--Fort Worth 1979, writ ref'd n.r.e.) and Smart v. United States Fidelity & Guaranty Co., 513 S.W.2d 291 (Tex.Civ.App.--Waco 1974, writ ref'd n.r.e.), both of which were cases where the fraud victim was awarded the amount of his initial payment as damages. In Artco, the fraud victim paid $35,000, an amount identical to appellant's initial investment, in order to purchase a business, and in Smart the fraud victim paid $5,600 for the construction of a cement foundation slab. Both cases are distinguishable...