Case Name: MORRISS-BUICK CO. v. HUSS
Court: Texas Courts of Civil Appeals
Jurisdiction: Texas
Decision Date: 1935-05-11
Citations: 84 S.W.2d 264
Docket Number: No. 11626
Parties: MORRISS-BUICK CO. v. HUSS.
Judges: 
Reporter: South Western Reporter Second Series
Volume: 84
Pages: 264–271

Head Matter:
MORRISS-BUICK CO. v. HUSS.
No. 11626.
Court of Civil Appeals of Texas. Dallas.
May 11, 1935.
Rehearing Denied June 8, 1935.
R. T. Bailey, of Dallas, for appellant.
Young, Blakley, Cooper & Armstrong and Joe Utay, all of Dallas, for appel-lee.

Opinion:
JONES, Chief Justice.
In a suit in a district court of Dallas county, H. H. Huss, appellee, recovered from the Morriss-Buick Company, appellant, judgment in the sum of $1,021.40, consisting of $675 actual damages, in the purchase of an automobile, $200 exemplary damages, and $146.40 accrued interest, at the rate of 6 per cent, per annum, costs of1 suit, and interest from May 16, 1933, the date of the judgment. The appeal has been duly perfected to this court, and the following are the facts:
On October 5, 1929, appellee purchased from appellant a 1929-47 Buick sedan, at the then regular purchase price of $1,525; this consideration was paid by the allowance of $700 on a 1928-47 Buick sedan, owned by appellee, and the execution of a note for $825, which note was paid at or about its maturity in April, 1930. On the date of the purchase, the 1929-47 Buick was an obsolete model, in that the 1930 Buick had been placed on the market in July, 1929, and because of this fact, appellant had reduced the sales price of all 1929-47 models when they ceased to be current models; the former sales price of the particular car appellee purchased had been approximately $1,785. The reduced price had existed since about the time the new models were displayed in July, 1929.
Appellee knew that he was buying an obsolete model, but was informed and believed that it was a new car; that is, one that had never been subjected to use, and he would not have considered the purchase of any car that had theretofore been used. He paid the purchase price for a new car of the model and character of car he purchased. The car was purchased from a sales agent of appellant, assisted by W. G., Langley, the head of appellant's sales department.
The car began to give trouble soon after the purchase was made, and had to be taken to a service station a great many times. Soon after appellee paid the note, the balance due on the car, he received hearsay information that the car had been wrecked, on or about July 4, 1929, by one of appellant's salesmen, and had undergone material repairs, was not an unused car, but, on the contrary, was a car that had been through a serious wreck and had undergone extensive repairs. At the time of such wreck, appellant's corporate name was Worsham-Buick Company, but on August 20, 1929, by a vote of its stockholders, this corporate name was changed to that of Morriss-Buick Company; but it remained the same corporation, except as to the change in name. Appellee investigated the report as to the car he had bought and found, from appellant's former mechanic, who repaired the car, that it had been wrecked and rebuilt. He then went to Langley, appellant's sales manager, and demanded an adjustment. This sales manager had entered appellant's employ after the car had been wrecked and rebuilt, and he informed appellee that he would investigate and let him know. The result was that no conclusion was reached on the adjustment, and suit was at once' instituted.'
This suit is not a suit for rescission, nor for a breach of contract, for the contract had been performed, but is a suit for damages because of fraudulently selling to ap-pellee a wrecked and rebuilt car, under the representation that it was a new and unused car. The recovery sought is for the difference between the reasonable market value of the car, at the time he was caused to make the purchase by reason of the alleged fraud, and the price he paid for same.
Appellant answered the suit by a general demurrer, a number of special excep-1 tions, a general denial, and a special plea, to the effect that appellee relied on his own judgment in the purchase of the car, knew of the alleged defects, or could have known of them by the use of ordinary care; that he purchased the obsolete model because he believed he might get a better price for his used car, as well as a reduction in the purchase price.; further, to the effect that the car purchased was well worth the amount paid.
All of the facts material to appellee's recovery rest on disputed evidence, except the purchase price, the manner in which such price was paid, and the fact that ap-pellee bought a 1929-47 Buick sedan, then an obsolete model. The disputed issues of fact were submitted to the jury on special issues, in the form of interrogatories, and on them the jury made the following findings: (1) That the car appellant sold ap-pellee on October 5, 1929, had been damaged in a wreck prior to said sale; (2) that appellee, at the time he purchased said car, was ignorant of its previous damaged condition; (3) that appellee would have refused to purchase said car, had he known it had been previously damaged in a wreck; (4) that appellee could not, by the exercise of ordinary care, have discovered the fact that the car had been damaged in a wreck prior to the date of the purchase; (5) that the reasonable cash market value of the car purchased by appellee October 5, 1929, was $850; (6) that appellant willfully concealed from appellee the fact that said car had been damaged in a wreck; (7) that ap-pellee is entitled to exemplary damages in the sum of $200.
The court correctly defined the term "ordinary care," in connection with special issue No. 4, correctly defined the term "reasonable cash market value," in connection with special issue No. 5, correctly defined the term "willfully concealed," in connection with special issue No. 6, and correctly defined the term "exemplary damages," submitted in special issue No. 7. All of these findings on the disputed facts are sustained by substantial evidence, and are adopted as the findings of this court.
The court entered the judgment above described. In arriving at the actual damages sustained by appellee, the court deducted the amount of the value of the car appellee purchased, in the condition it was when delivered to appellee, as found by the jury, from the amount of the purchase price of $1,525, which difference is the $675 item assessed in the judgment as actual damages. If the purchase price of $1,525 had been paid in money, or part in money and part in notes accepted as money, there could be no question raised as to the correctness of the court's method of arriving at the amount of actual damages sustained. The rule is well settled that, in a suit for damages based on fraud in the sale of property, the measure of damages is the difference between the price paid and the market value of the property sold at the time of the sale. 20 Tex. Jur. 190; 27 C. J. 92; 12 R. C. L. 453; and authorities cited in the notes of each.
In the instant case, appellee delivered to appellant his Buick sedan of the 1928-47 model, that had been used by him from date of its purchase, something over a year, for a payment of $700 allowed him on his old car, and the court considered such sum as the equivalent of a cash payment. Was this error? Appellant contends that it was error, for the reasons: (a) That this transaction was an exchange of property, as distinguished from a sale, and that in such a transaction the court is not governed by the value placed by the parties on each piece of property exchanged, but must be governed by the reasonable market value of each piece of property at the time of the exchange, regardless of the trade value placed thereon by the parties; (b) that if the transaction should be construed as a sale, rather than an exchange, the same rule would apply and the $700 value for his old car, as part payment of the purchase price of the new car, does not form a basis for the measure of damages, but the rule would be the same as in the exchange of property; that is, consideration would have to be given to the reasonable market value of appel-lee's old car, at the time of such transaction, rather than to the value fixed and allowed by appellant at the time the car was purchased.
If this transaction were a mere exchange of automobiles, in which it was contemplated that appellee should pay the difference between the value of his used Buick sedan and appellant's new sedan, appellant's theory as to the measure of damages would be correct. Under the decision of the Supreme Court, in George v. Hesse, 100 Tex. 44, 93 S. W. 107, 8 L. R. A. (N. S.) 804, 123 Am. St. Rep. 772, 15 Ann. Cas. 456, and a long line of decisions following the doctrine announced in such case, of which the B. & H. Motor Co. v. Tucker (Tex. Civ. App.) 299 S. W. 949, is a fair rep-, resentative, the measure of damages applied by the court is erroneous; such measure of damages would be the difference between the fixed sales price of $1,525 and the $825 represented by the note, augmented by the fair market value of appel-lee's used car at the time of the transaction.
On the other hand, if the transaction is a sale of appellant's supposed new Buick; sedan, of the 1929-47 model, for a consideration to be paid in money, or what was agreed to be the equivalent of money, then the transaction would clearly be a sale and not an exchange of automobiles, and we believe the measure of damages that was applied in the case of Ford v. Sims (Tex. Civ. App.) 190 S. W. 1165, wortld control under the facts of this case.
It is fairly inferable from the testimony that, at the time of this transaction, ap pellant had on hand three 1929-47 model Buick sedans for the purpose of sale, at the fixed price of $1,525. Appellee clearly had in mind the purchase of a new Buick sedan at the purchase price, in money, or what appellant would accept as its equivalent, when the negotiations were had that resulted in the sale to him of one of these obsolete models, for the purchase price of $1,525. In other words, the minds of the parties met on the sale of the car in question for $1,525. Ford v. Sims (Tex. Civ. App.) 190 S. W. 1165; 18 Tex. Jur. 471, and authorities cited in note; Thornton v. Moody (Tex. Civ. App.) 24 S. W. 331; Ullmann v. Land, 37 Tex. Civ. App. 422, 84 S. W. 294; 23 C. J. 185 ; 23 R. C. L. 1201.
What was the consideration paid for the car ? Was it the $825, represented by the note and the fair market value of the used Buick sedan, at the time the sale was consummated? We do not find such to have been the intention of the parties at said time; but, on the contrary, we find that the used Buick sedan, taken in on the sale, was considered by the parties as the equivalent of a cash payment of $700 on the purchase price. This we think necessarily follows from the acts and conduct of the parties immediately preceding the sale. Appellee wanted the value of his used Buick sedan applied to a part of the pur-, chase price. Before he had selected the car he finally purchased, he went with appellant's agent to appellant's skilled appraiser. It appears to have been, in part at least, the office of such person to appraise the cash value of used cars to be taken in on the sale of a new car. This appraiser carefully examined the used Buick sedan, with the result that he placed on the blank furnished by appellant the appraised value of the used car of appellee to be $700. Why was this appraisal made? Apparently, it could have been for no other purpose than to fix the equivalent of cash that appellee would be allowed as a credit on the price of the new car.
The evidence is clearly to the effect that the price of $1,525, placed by appellant as the sales price of the car appellee purchased, was the cash sales price of such car, or what appellant considered as the equivalent to cash. As said in Ford v. Sims (Tex. Civ. App.) 190 S. W. 1165, 1167, under a similar condition, "If the property in Mississippi was valued at a certain sum by the parties and treated a? a payment, it should be considered in as-> certaining the amount of the damages, as money paid on the land." So, in the instant case, as appellant had appellee's used car appraised to ascertain its cash value, and the parties in the sale treated the appraised value of said car as a payment on the purchase price of the new car, we must so consider it in ascertaining the amount of damages appellee suffered by reason of appellant's fraud, in selling as new a wrecked and repaired car. As the evidence does not disclose that appellant realized less than the appraised value of the used car, we do not see that it has a valid complaint, because, in measuring damages growing out of its fraudulent act, the court treated such appraised value as money paid on the price of appellee's purchase. • If appellant had not received this appraised value for the used car, the evidence of such failure was in its possession and subject to proof. Under such circumstances, the presumption should prevail that appellant realized at least the appraised value of' the car. We therefore hold that the court did not err in the manner of computing appellee's actual damages. .
Did appellee have the right to recover exemplary damages to the extent of a reasonable attorney fee, in prosecuting this suit? Appellant is a corporation, and its sales employee, Smith, represented appellant in making the sale to appellee. Smith was a mere subordinate and not a vice principal. The willful concealment from appellee of the fact that the car ap-pellee purchased had been wrecked and repaired was primarily the act of Smith. Can such willful act be ascribed to appellant, a corporation, Smith's employer? The old case of Western Union Tel. Co. v. Brown, 58 Tex. 170, 44 Am. Rep. 610, formulated the rule of law that should govern under the facts of this case: "It is now the settled law of this State that, to make a corporation liable for exemplary damages, the 'fraud, malice, gross negligence or oppression' which must authorize and justify the same, must have been committed by the corporation itself, or some superior officer representing it in its corporate capacity; or, if committed by a subordinate servant or agent, the act must have been either previously authorized, or subsequently ratified or approved by the company or such superior officer after knowledge of the facts."
The rule above announced has been somewhat modified and restated in an opinion by Chief Justice Cureton, in the case of Fort Worth. Elev. Co. v. Russell, 123 Tex. 128, 70 S.W.(2d) 397, but. in respect to this case, whose facts deal with the act of a subordinate servant, there is no modification of the doctrine announced. In such a case, the act of the servant, found by the jury to be a willful act, must have been either previously authorized, or subsequently ratified or approved to form a basis for 'exemplary damages against a corporation.
If appellant, through a superior officer, had theretofore pursued the same course of concealment, in respect to the sale of cars in a condition similar to that of the car! appellee purchased, then the jury was authorized to find that the act of concealment by Smith was the act of appellant. Appellant's president admitted, on the witness stand, that he considered that, if a new car had been wrecked and repaired, it was still a new car, and that it was .the custom of the Morriss-Buick Company, during the year 1929, and since that date, to sell such a car to customers as new cars, without disclosing its true condition. Langley, head of appellant's sales department, gave evidence substantially to the same effect. In fact, as gathered from the testimony of these two witnesses, appellant contended, in the trial of this case, that the car sold to appellee was a new car, notwithstanding the fact that it may have been theretofore wrecked and rebuilt.
We therefore conclude that, under the evidence and findings of the jury on this issue, the trial court was warranted in entering judgment for exemplary damages.
Error is assigned on the fact that the court, in defining the term "exemplary •damages," charged the jury that the amount .of said damages could not exceed $250. This perhaps' was technical error, under the authority of Southland Greyhound Lines, Inc., v. Ashby (Tex. Civ. App.) 80 S.W.(2d) 445. This error affected only the item of exemplary damages; and as the claim for exemplary damages is only for a remuneration of the expense of an attorney' fee in prosecuting the suit; and as the finding of the jury was for $200, $50 less than the sum named as the maximum, by the court; and as the undisputed evidence by a qualified attorney was that $250 was a reasonable fee, we are constrained to hold that this record affirmatively shows that no harm resulted to appellant by this error. Heiligmann v. Rose, 81 Tex. 222, 224, 16 S W. 931, 13 L. R. A. 272, 26 Am. St. Rep. 804; Texas & P. Ry. Co. v. Huffman, 83 Tex. 286, 18 S. W. 741, 743; International & G. N. Ry. Co. v. Sein, 11 Tex. Civ. App. 386, 33 S. W. 558; Texas & N. O. Ry. Co. v. Carr (Tex. Civ. App.) 42 S. W. 126; International & G. N. Ry. Co. v. Slusher, 42 Tex. Civ. App. 631, 95 S. W. 717, 718.
We have carefully examined all assignments of error not specifically discussed, with the result that we find that none of them show reversible error.
It necessarily follows that, in our opinion, this case should be affirmed, and it is so ordered.
Affirmed.