Summary
discussing “what amounts to proof of scienter,” the Court held that it must be shown that representations were made “with actual knowledge of their falsity, or without knowing whether they were true or false, or under such circumstances that he ought to have known that they were false, whether he did or not”
Summary of this case from Harrington v. Office of the Miss. Sec'y of StateOpinion
No. 39346.
November 8, 1954.
1. Fraud — year of model — used automobile — material representation.
Representation by salesman that used automobile was a 1948 model was a material representation on which buyer was entitled to rely.
2. Fraud — false representations — proof necessary to impose liability.
In action at law for false representations in order to impose liability, it must be shown that defendant made the representations with actual knowledge of their falsity or without knowing whether they were true or false or under such circumstances that he should have known that they were false.
3. Pleading — fraud and deceit — evidence — bill of sale admissible — copy not annexed to declaration.
Action against seller to recover damages for allegedly false representations that 1946 model used automobile sold to plaintiff was a 1948 model was a tort action, founded on fraud and deceit, and not a suit on open account or on a writing, and hence plaintiff's bill of sale describing automobile as a 1948 model was admissible in evidence even though copy thereof was not annexed to declaration. Sec. 1469, Code 1942.
4. Fraud — false representations — remedies of buyer.
Buyer, allegedly defrauded by seller's false representation concerning used automobile, could retain automobile purchased and recover in tort action for damages resulting from such false representation.
5. Fraud — evidence — required to show.
Fraud must be shown by evidence which is clear and more convincing than a mere preponderance.
6. Fraud — false representations — automobile dealer — liable for.
Where agents of automobile dealer represented that 1946 model used automobile was a 1948 model without knowing what model it was, and buyer purchased automobile in reliance on such representation, dealer was liable to buyer for difference in value between automobile sold and a 1948 model automobile of the same kind in the same mechanical condition.
7. Fraud — false representations — knowledge of falsity of — not essential.
In such case, proof that seller actually knew that representation was false was not essential to recovery of damages.
8. Appeal — instructions — conflict in — defendant could not complain.
Defendant could not complain of the conflict between correct instructions given for plaintiff and erroneous instructions improperly given for defendant.
9. Appeal — fraud — damages — warranted under evidence.
In such suit, whether automobile was in the mechanical condition represented by defendant was immaterial, where damages awarded plaintiff were warranted solely by the difference between automobile of the model sold and automobile which defendant represented such automobile to be.
10. Fraud — damages — evidence sustained verdict.
In such case, evidence sustained verdict for plaintiff in the sum of $300.
Headnotes as approved by Lee, J.
APPEAL from the circuit court of Newton County; W.E. McINTYRE, Judge.
S.T. Roebuck, Newton, for appellant.
I. The lower court committed reversible error in admitting in evidence over the objection of the defendant, the bill of sale of an automobile by Mayfield Motor Company to A.Q. Parker. Enochs-Flowers, Inc. v. Bank of Forest, 172 Miss. 36, 157 So. 711, 159 So. 407; Lawson v. Dean, 144 Miss. 309, 109 So. 801, 110 So. 797; Paine v. Newton, 186 Miss. 844, 192 So. 310; Secs. 1469-70, Code 1942.
II. The Court committed reversible error in refusing the motion of defendant for a directed verdict.
III. There is no sounder doctrine of law established in our courts than that he who alleges fraud must state the facts upon which the fraud is based, and prove them. Otts Finance Co. v. Myers, 169 Miss. 407, 152 So. 834.
IV. A recovery cannot be had in an action for deceit, where the evidence fails to sustain the fraud and deceit charged in the declaration. Carter v. Eastman Gardner Co., 92 Miss. 651, 48 So. 615; Childs v. Hall, 128 Miss. 111, 90 So. 626; Dunlap v. Fox (Miss.), 2 So. 169; Metropolitan Life Ins. Co. v. Hall, 152 Miss. 413, 118 So. 826; Parkhurst v. McGraw, 24 Miss. 134; Willoughby v. Pope, 101 Miss. 808, 58 So. 706.
V. The burden of proof was on the plaintiff to show that the defendant, Mayfield Motor Company, acted willfully, maliciously and intentionally in the transaction, and this the plaintiff failed to do. It is not only the rule in Mississippi that he who charges fraud must prove it by evidence which is clear and more convincing than a mere preponderance of the evidence, but it is also the rule in other states. American Guaranty Co. v. Sunset Realty Planting Co., 208 La. 772, 23 So.2d 409; Florida Bank Trust Co. v. Yaffey, 102 Fla. 723, 136 So. 399; Martin v. Gill, 182 Miss. 810, 181 So. 849; Southern Ry. Co. v. Arnold, 162 Ala. 570, 50 So. 293.
VI. In order to impose an action at law for false representation, it must be shown that the defendant made the representations with actual knowledge of their falsity. H.D. Sojourner Co. v. Joseph, 186 Miss. 755, 191 So. 418; State v. Cummins, 203 Miss. 583, 35 So.2d 636.
VII. A purchaser of property who has been deceived by material false representation in the procurement of the contract, which renders it void, may elect to rescind and be restored to the position he occupied at the time of the sale. He must, however, act promptly and return to the seller that which he, the buyer, obtained as part of the sale. Laurel Auto Supply Co. v. Sumrall, 184 Miss. 88, 185 So. 566.
VIII. The instructions granted to the plaintiff are in sharp conflict with instructions granted for the defendant and cannot be reconciled. Ellis v. Ellis, 160 Miss. 345, 134 So. 150; Friedman v. Allen, 152 Miss. 377, 118 So. 828; Hunt v. Sherrill, 195 Miss. 688, 15 So.2d 426; Jackson v. Leggett, 186 Miss. 123, 189 So. 180; May v. Culpepper, 177 Miss. 811, 172 So. 336.
IX. The verdict of the lower court is contrary to the overwhelming weight of the evidence in this case.
A.B. Amis, Jr., Newton, for appellee.
I. This being a tort action, we were not required to attach a copy of the invoice to the declaration.
II. The plaintiff had the option to rescind the contract and sue for return of the consideration, or sue for breach of warranty, if there is a warranty, or bring an action for damages for fraud and deceit. Hunt v. Sherrill, 195 Miss. 688, 15 So.2d 426.
III. The essential elements required to sustain an action for deceit are, generally speaking, that a representation was made as a statement of fact, which was untrue and known to be untrue by the party making it, or else recklessly made; that it was made with intent to deceive and for the purpose of inducing the other party to act upon it; and that he did in fact rely on it and was induced thereby to act to his injury or damage. Pilot Life Insurance Co. v. Wade, 153 Miss. 874, 121 So. 845; Truckers Exchange Bank v. Conroy, 190 Miss. 242, 199 So. 301; Vincent v. Corbett, 94 Miss. 46, 47 So. 641, 21 L.R.A. (N.S.) 85; 23 Am. Jur., Sec. 20 p. 773.
IV. To make a party liable in an action at law for false representations, it must be shown that he made the representations with actual knowledge of their falsity, or without knowing whether they were true or false, or under such circumstances that he ought to have known that they were false, whether he did or not. H.D. Sojourner Co. v. Joseph, 186 Miss. 755, 191 So. 418.
V. A purchaser has a right to rely upon the representations of a seller as to facts within the latter's knowledge, and the seller cannot escape responsibility by showing that the purchaser, upon inquiry, might have ascertained that such representations were not true. Contributory negligence is not a defense to an action based on fraud. If a false statement is made by one party who may be fairly assumed to know what he is talking about, it may be accepted as true, without question and without inquiry, although the means of correct information are in reach. Laurel Auto Supply Co. v. Sumrall, 184 Miss. 88, 185 So. 566; Nash Mississippi Valley Motor Co. v. Childress, 156 Miss. 157, 125 So. 708.
VI. It is a material representation that the motor vehicle is of a certain year of manufacture. Williams v. McClain, 180 Miss. 6, 176 So. 717.
VII. We admit that instructions Nos. One and Three as granted the plaintiff conflict with those as given for the defendant, but we say that those as granted to the defendant do not properly set up the law of the case.
VIII. The instructions as granted to the plaintiff were properly granted.
IX. Under the testimony, there was ample evidence to justify the jury in finding the verdict which they did find. They were, and are, the triers of fact and their finding was not against the weight of the evidence. Under the facts, it is clearly shown that the automobile in question was, and is, a 1946 model. The defendant admits that it does not know what model it is and that it made no effort to find out. The defendant admits that the original owner submitted her invoice and that it shows the automobile to be a 1946 model. The defendant admits that it didn't care too much about the model. The evidence clearly shows that the difference in value of a 1946 and a 1948 Plymouth automobile was $300 to $350. The plaintiff states that he expended $350 in making repairs to the automobile to place it in the condition that it had been represented to him as being in at the time that he bought it. The defendant offers no proof to dispute the fact that such expenditures were made. The defendant admits that it sold the car as a 1948 model in A-1 mechanical condition. We, therefore, submit that the verdict of the jury was not against the overwhelming weight of the evidence, and that such verdict should not be set aside.
This is an appeal by Mayfield Motor Company, Inc. from a judgment of the Circuit Court of Newton County, which awarded to A.Q. Parker damages on account of alleged false representations concerning a certain automobile.
The plaintiff, in his declaration, charged in effect that Gene May and Neal Horn, agents of the motor company, on September 14, 1951, sold him a Plymouth Fordor Sedan for $800; that they represented it to be a 1948 model in good mechanical condition; that the automobile was actually a 1946 model and was not in good mechanical condition and was not worth $800, that such representations were willfully, maliciously and intentionally made, and by reason thereof, he was induced to make the purchase, and subsequently, was required to expend a substantial sum of money for repairs.
The answer denied that the defendant made any intentional misrepresentation; that, if the automobile was a 1946 model, such fact was not known to the defendant at the time; that it was actually worth $800, and was not in bad mechanical condition; and that the company guaranteed the automobile for a period of thirty days, and plaintiff made no claim thereon for more than a year.
The cause was submitted to a jury, and they found for the plaintiff in the sum of $300.
The motor company acquired the automobile from Mrs. Jimmie Ethridge. Her bill of sale was at home at the time. May told her that he would get it later. However, he did not do so until after this controversy arose. The bill of sale, when obtained, showed the car to be a 1946 model. Three or four days after the purchase, on September 14, 1951, May sold the car to Parker. He represented it to be a 1948 model, it was so described in Parker's bill of sale, and Parker relied on such representation. May's explanation was that the husband of Mrs. Jimmie Ethridge told him that the car was a 1948 model; that he did not care so much about the model; and that he could tell no difference between these two models. There was positive proof that it was a 1946 model. While the evidence showed that the difference in these two models is not distinguishable to the average person, it was clear that the models can be identified by the cover over the door lock in most instances; but, if not in that way, at least by reference to the serial number; and that automobile dealers have the facilities to make the identification. All of the evidence was to the effect that, if automobiles of the two models are in the same mechanical condition, the 1948 model is worth more. The plaintiff offered proof that the difference in sale value in this instance was $300 to $350.
(Hn 1) The representation that a Ford hearse was a 1933 model when in fact it was a 1932 model has been held to be a material one. Williams v. McClain, 180 Miss. 6, 176 So. 717. Parker had the right to rely on May's representation. He had no means at the time of determining that it was false. Besides, he was inexperienced in such matters. Nash Mississippi Valley Motor Company v. Childress, 156 Miss. 157, 125 So. 708.
Mrs. Ethridge's bill of sale would have shown, at the time of this sale, that the automobile was a 1946 model, but the defendant did not obtain such bill of sale. The cover over the door lock would have probably indicated the model, but the defendant did not make such observation. A reference to the serial number would have conclusively determined the model, but the defendant did not make such reference.
(Hn 2) In H.D. Sojourner Company v. Joseph, 186 Miss. 755, 191 So. 418, on the question of what amounts to proof of scienter, or such knowledge as charges one with the consequences of his acts, in fraud and deceit, this Court recognized as stating the settled rule, a quotation approved in Vincent v. Corbett, 94 Miss. 46, 47 So. 641, 21 L.R.A. (N.S.) 85, as follows: "To make a party liable in an action at law for false representations, it must be shown that he made the representations with actual knowledge of their falsity, or without knowing whether they were true or false, or under such circumstances that he ought to have known that they were false, whether he did or not." (Emphasis supplied.) See also 23 Am. Jur., Fraud and Deceit, Section 20, p. 773; 37 C.J.S., Fraud, Section 19, p. 254 and (c) Section 21, p. 258.
Under defendant's own version, its agents did not know whether the model was a 1946 or 1948, and yet they represented it to be a 1948. A reasonable examination would have shown that it was a 1946 model. Hence it ought to have known that the representations were false.
(Hn 3) Appellant complains that it was error to admit Parker's bill of sale in evidence because a copy thereof was not annexed to the declaration. But this suit was not founded on open account or on a writing, and Section 1469, Code of 1942, therefore has no application. (Hn 4) This was a tort action, founded on fraud and deceit. The plaintiff had the right to choose this form of action. Laurel Auto Supply Company v. Sumrall, 184 Miss. 88, 185 So. 566; Hunt v. Sherrill, 195 Miss. 688, 15 So.2d 426.
By plaintiff's instruction, designated number 3, the jury was instructed in substance that if they believed from "a clear and convincing preponderance of the evidence" that the automobile was a 1946 model, and that it was represented as a 1948 model, then they should find for the plaintiff in an amount equal to the difference in value between the two models.
(Hn 5) Hunt v. Sherrill, supra, collates many authorities that "fraud must be shown by evidence which is clear and convincing" and that the proof must be "clear and more convincing than a mere preponderance." The instruction was correct. (Hn 6) The defendant did not maintain that the automobile was a 1948 model. It just did not know. On the contrary, the proof for the plaintiff established that it was a 1946 model. Following the above cited authority, the defendant, under the admissions of its own witnesses, was liable for the difference in value.
(Hn 7) Appellant contends that the instruction is in conflict with its instructions, designated numbers 4 and 5. This is true. But those instructions were erroneous and improper. They required the plaintiff to prove that the falsity of the representation was actually known by the defendant. The plaintiff was not required to assume such a heavy burden. (Hn 8) Since the plaintiff's instruction was correct, the appellant cannot complain of the conflict with its two instructions, since they were more than it was entitled to. Hardaway Contracting Company v. Rivers, 181 Miss. 727, 180 So. 800.
The like criticism of plaintiff's instruction, designated number 1, is not tenable.
(Hn 9) The issue as to the mechanical condition of the automobile was in sharp conflict. However, since the verdict of the jury, in amount, was warranted solely by the difference in value of the two models, it is not necessary to recount the disputed facts on that issue, or to deal further with that question.
(Hn 10) The court properly overruled the defendant's motion for a directed verdict in its favor. The verdict of the jury was amply sustained by the evidence. No harmful error appears in the record.
It follows that the judgment of the lower court must be, and is, affirmed.
Affirmed.
McGehee, C.J., and Hall, Kyle and Holmes, JJ., concur.