Title: Sobel v. Jenkins

State: texas

Issuer: Texas Supreme Court

Document:

477 S.W.2d 863 (1972) Jerome I. SOBEL, d/b/a The Script Shop v. Raymond JENKINS, d/b/a Jenkins Auto Rental. No. B-2909. Supreme Court of Texas. March 15, 1972. Rehearing Denied April 12, 1972. *864 Edwards, Faulkner & Giles, John B. Faulkner and Dan A. Makowsky, Waco, for petitioner. Sheehy, Cureton, Westbrook, Lovelace & Nielsen, J. Robert Sheehy and Philip E. McCleery, Waco, for respondent. McGEE, Justice. This is a suit for fraud brought by the buyer, Sobel, against Jenkins, the seller, alleging that the seller wilfully represented that the car was new when in fact it was used. The jury answered all issues in favor of the buyer. The trial court sustained Jenkins' motion for judgment notwithstanding the verdict and rendered judgment that Sobel take nothing. The court of civil appeals has affirmed. 468 S.W.2d 884. We reverse the judgments of the courts below and remand the cause to the trial court. In this opinion, the parties will be referred to by name. Sobel is the Petitioner here. On November 1, 1967, Sobel signed a lease-purchase agreement with Jenkins. Sobel thereby leased a 1967 Volkswagen for 24 months at $55 per month with an option to buy the car at any time up to the end of the lease term for $1675 less the amount of lease payments previously made. Sobel used the car as a delivery vehicle during November, December, and January, making the monthly lease payments. Difficulty with the car's starter developed and a dispute arose over the cost of repairs. Jenkins obtained and retained possession of the car from date of delivery of the car for repairs in January until October 14, 1968. Jenkins, in a former lawsuit, sued Sobel as a result of that dispute, but the nature of this cause of action is not disclosed in this record. In the former lawsuit, Sobel filed a cross-action claiming that the car was not in the condition and usable for the purpose for which it was leased and as represented by Jenkins. Sobel upon advice of his attorney agreed to settle this prior lawsuit by paying $1650 and taking title to the car on October 14, 1968. On January 4, 1969 Sobel received a title history from the Texas Department of Public Safety showing that the car in fact was a used car instead of a new car at the time of the lease-purchase agreement of November 1, 1967. Sobel testified that he later learned the car he purchased was a composite of one car's body and another's chassis which were improperly aligned. This malalignment was the primary source of the repair problems. On August 13, 1969 Sobel filed this suit against Jenkins for fraud alleging that Jenkins "had knowledge that the Volkswagen was not new but was a used Volkswagen and deliberately and falsely made a misrepresentation to Plaintiff." In this case the jury answered all special issues in favor of Sobel and found $850 actual damages and exemplary damages in the amount of $5500. As noted above, the trial court rendered judgment notwithstanding the verdict that Sobel take nothing. The court of civil appeals affirmed the judgment of the trial court on the ground that there was no evidence to support the jury's answers to Special Issues No. 11 and No. 4. The jury findings, as described by the Court of Civil Appeals were as follows: We agree with the holding of the court of civil appeals that there is no evidence to support the jury's answer to Special Issue No. 11. In fact, it is undisputed that the prior case was settled by Sobel's payment of $1650 to Jenkins and Jenkins' transfer of title to Sobel. We do not agree with the court of civil appeals' conclusion that this holding requires an affirmance of the trial court's judgment on the grounds that the order of dismissal entered pursuant to the settlement agreement is res adjudicata of the issues raised by Sobel in this case. The issues as to whether the car was new and was represented as new by Jenkins raised in this case, were not before the court in the former trial. Sobel, long after the former trial had been concluded, learned that the car was not new when he received a title history from the Texas Department of Public Safety on January 4, 1969. As an additional reason for affirming the judgment of the trial court, the court of civil appeals held that there was no evidence of probative force to uphold the jury's finding in answer to Special Issue No. 4 to the effect that Sobel relied upon Jenkins' representation that the car was new on November 1, 1967, the date of the original lease-purchase agreement. In passing upon the law question of no evidence we must consider only the evidence which supports the jury verdict and consider only the facts and circumstances which tend to sustain the verdict. Moreover, we must reject all evidence and inferences which are contrary to the finding of the jury. Cartwright v. Canode, 106 Tex. 502, 171 S.W. 696 (1914); Biggers v. Continental Bus System, 157 Tex. 351, 298 S.W.2d 79, 303 S.W.2d 359 (1957); C. & R. Transport, Inc. v. Campbell, 406 S.W.2d 191 (Tex.1966). We will review some of the testimony of Sobel and Jenkins. Sobel testified that he would not have bought the automobile had he not believed it to be new; that the car had been leased to him as new; that it was represented by Jenkins to be a new car; that he would not have paid Jenkins $1650 if he had known that the car was not new; that up until he wrote a certain letter to Jenkins after the dispute arose, he believed all that Jenkins told him. Jenkins testified that he sold the Volkswagen as a new car; that he leased it as a new car. Jenkins further testified that he was told that the warranties were coming and related this to Sobel. Warranties never came. We quote Sobel's testimony, which, if believed by the jury and it was, would support the jury's answer to Special Issue No. 4. The Court of Civil Appeals relies in large part on Sobel's letter to Jenkins dated February 15, 1968, some eight months before the former lawsuit was settled as conclusive evidence that Sobel did not rely on Jenkins' statement that the car was new. The letter reads as follows: The jury could have concluded that this letter was proof that Sobel did not rely on Jenkins' misrepresentation. On the other hand, the jury could, and did apparently, rely on Sobel's explanation of the letter. On cross examination Sobel testified: We hold that the court of civil appeals erred in holding that there was no evidence of probative force to support the jury's answer to Special Issue No. 4. Jenkins' motion for judgment notwithstanding the verdict contained eleven grounds or reasons therefor. Five of the grounds or reasons were included as cross-points (labeled by him as "reply" points) in Jenkins' brief in the court of civil appeals. In our discussion of Special Issues 11 and 4, we have been dealing with matters which were presented to the court of civil appeals in cross-points 2 and 5. Our disagreement with the holding of the court of civil appeals on those matters would require that we reverse the judgments of both courts below and render judgment on the verdict for Sobel for the amount of damages found in answer to Special Issues 6, 7 and 9, unless Jenkins' other cross-points, if sustained, would result in affirmance of the trial court's judgment for Jenkins or in remand of the cause for retrial. McKelvy v. Barber, 381 S.W.2d 59 (Tex. 1964); Shelton v. Belknap, 155 Tex. 37, 282 S.W.2d 682 (1955). Jenkins' first cross-point asserts that there is "no legally competent evidence of any representation made by appellee [Jenkins] to appellant [Sobel] of a nature sufficient to support a cause of action for fraud." His third cross-point asserts that there is "no legally competent evidence of reliance" and that "all of the evidence at the trial establishes as a matter of law that the appellant [Sobel] had no right to rely on the alleged representations of the appellee [Jenkins]." These cross-points are without merit and are overruled on the basis of our discussion of Jenkins' second cross-point. Jenkins' fourth cross-point reads as follows: *868 The correct measure of damages in this fraud action, as contended by Jenkins, is the difference between the amount actually paid by Sobel for the automobile and the fair market value of the automobile as delivered. Morriss-Buick Co. v. Pondrom, 131 Tex. 98, 113 S.W.2d 889 (1938). The jury's answers to Special Issues 6 and 7 would, if given effect, authorize recovery by Sobel of the difference between the actual value of the car at the time of the sale and the value it would have had at such time if it had been new as represented. A recovery on that basis does not conform to the Texas rule of damages as set out in the Pondrom case. Both parties treat this action as one in fraud and not one for breach of warranty under the Tex. Bus. and Comm.Code, §§ 2.313 and 2.714, V.T.C.A. Judgment cannot be rendered for Sobel for the damages found by the jury in answer to issues 6, 7 and 9. Our conclusion that judgment cannot be rendered for Sobel for the damages found by the jury does not mean, however, that the judgment for Jenkins, notwithstanding the verdict, can be upheld. We approve the holding on this question in Collier v. Bankston-Hall Motors, 267 S.W.2d 898 (Tex.Civ.App., Dallas 1954, no writ), which is squarely in point. The jury's answers in this case to the other Special Issues would support a recovery by Sobel of nominal damages, and judgment for Sobel for nominal damages could be rendered here. See Collier, supra. However, inasmuch as the judgments of the court of civil appeals and the trial court must be reversed, this court is authorized by Rule 505, Texas Rules of Civil Procedure, to remand the cause for a new trial in the interest of justice rather than render the judgment which the trial court should have rendered. See Scott v. Liebman, 404 S.W.2d 288 (Tex.1966). Since an erroneous measure of damages was submitted to the jury and Sobel has not had a fair opportunity for a jury finding on a correct measure of damages, we deem it in the interest of justice to remand this cause for a new trial. We consider in this respect that the record reflects the type of good and sufficient reason for a remand envisioned in Jackson v. Ewton, 411 S.W.2d 715 (Tex.1967). The judgments of the court of civil appeals and trial court are reversed and the cause is remanded to the trial court for a new trial.