Title: Carpenter v. Kraninger
Citation: 225 Or. 594, 358 P.2d 263
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: December 29, 1960

Reversed December 29, 1960.
Petition for rehearing denied January 31, 1961.
*595 David M. Spiegel, Portland, argued the cause for the appellant. With him on the briefs were Lenske, Spiegel and Spiegel, Portland.
Martin Schedler, Portland, argued the cause for the respondent. With him on the brief were Schedler &amp; Moore, Portland.
Before McALLISTER, Chief Justice, ROSSMAN, PERRY, GOODWIN and KING, Justices.
REVERSED.
KING, J. (Pro Tempore)
This action was brought against the defendant for the return of payment made on an earnest money contract.
The third amended complaint consisted of three counts. The amended answer was a general denial, and a further and separate answer and defense alleging, in effect, that plaintiff had violated the earnest money agreement and that defendants were not required nor entitled to return plaintiff's money.
The jury returned a verdict for the plaintiff. Defendant filed a motion for judgment notwithstanding the verdict and a new trial. This motion was denied and defendant brings this appeal.
The defendant was a real estate broker who specialized in the sale of businesses of various types. He conducted his operation under the name of Business Sales Company and his office was located at 7434 N.E. Sandy Boulevard, Portland, Oregon.
On or about May 19, 1956, one C.H. Eastergreen listed a milk pick up route with the defendant for sale. *596 The principal physical asset of the milk route was a used van type truck. The business consisted of picking up the cans of milk from the various small dairy farms and delivering the milk to the central depot or factory.
The plaintiff conducted a garbage business in Eugene, Oregon which he was in the process of selling. He saw defendant's advertisement of the milk route in the Oregonian and called to inquire about it. In the course of the conversations and dealings the plaintiff and his wife signed an earnest money agreement to purchase the milk route for $8,300 and made a $1,000 down payment. About a week later the plaintiff informed the defendant that he would not go through with the purchase agreement and demanded the return of the $1,000. His general claim was that the business had been misrepresented to him. His request for the return was refused. The basis for the refusal, among other things, was that plaintiff had violated his contract and forfeited the down payment and that defendant was not authorized to return the money by the seller, Mr. Eastergreen.
The second count of plaintiff's third amended complaint alleged fraud in inducing the plaintiff to sign the earnest money agreement and paying the $1,000.
One of the assignments of error is based upon receiving in evidence the testimony of Robert R. Blyth, Assistant Manager of the Portland Better Business Bureau.
We are not enlightened by the evidence what, if any, official status the Portland Better Business Bureau has or exactly how its records are made up or maintained. In fact, the jury and this court were left entirely to surmise, conjecture, guess work or previous understanding as to its duties. In any event, prior to *597 the witness appearing before the jury, the following statement was made by the defendant to the court in chambers:
Mr. Blyth was then called as a witness by the plaintiff and the following took place:
The plaintiff was apparently offering this testimony in an attempt to prove knowledge and a fraudulent system by the defendant. He relies on Union Central Life Ins. Co. v. Kerron, 128 Or 70, 264 P 453.
In that case, testimony of similar transactions with other persons regarding the plaintiff's methods and practice of making mortgage loans and the charges in connection therewith was received in evidence for the purpose of proving knowledge and a fraudulent system practiced by the plaintiff's agent.
1, 2. In Union Central Life Ins. Co. v. Kerron, supra at 79, this court said:
See also 24 Am Jur 109, Fraud and Deceit § 270; 37 CJS 424, Fraud § 113.
In Jones v. United States, 258 US 40, 42 S Ct 218, 66 L ed 453, in an action to recover the value of public lands procured by fraud, evidence of similar arrangements between the defendant and other entrymen on similar lands was held admissible in the court's discretion to prove knowledge and intent, if such evidence was not too remote, lengthy or complex collateral issues. McCormick, Evidence 345, § 164; 2 Wigmore, Evidence (3rd ed) 317, § 321.
3. In the case at bar, the above quoted testimony offered and received failed to qualify under the liberal rules of the above cases. They were uninvestigated and unsubstantiated complaints. So far as the record shows they were unverified and not sworn to, and testimony of the witness regarding the complaints was nothing more than hearsay. It was not shown that the alleged similar acts took place on or near the time of the complaint in the case at bar. In fact, in cross-examination the witness said the three complaints were filed with them during the 14 year period from 1945 to 1959 without specifying the exact dates. The only date given on direct examination involved a matter that allegedly took place in 1955.
It is also noticeable that the above evidence was received without limitation or restriction. It was not limited to the fraud counts, and was left with the jury to use as they saw fit without any explanation or *603 restrictions whatever, either at the time it was received or by later instructions.
It was reversible error to allow the above mentioned testimony to go to the jury, and it could naturally be expected to inflame their minds and prejudice them against the defendant.
The other assignments of error will not be mentioned as the case will be remanded for new trial.
Reversed.