Opinion ID: 1354462
Heading Depth: 2
Heading Rank: 2

Heading: Fraudulent Misrepresentation Regarding the Machine

Text: The Ledbetters challenge the court's findings to the effect that the Ledbetters fraudulently misrepresented the condition of the ice cream machines to the Webbs, and they challenge the trial court's refusal to adopt their requested findings No. 8-13 and conclusions No. 1 and 2. So far as we can tell, the court did in fact adopt  at least in substance  the Ledbetters' conclusions of law No. 1 and 2 relating to the court's jurisdiction and the existence of a contract (evidenced by a promissory note) between the parties. The Ledbetters' requested findings No. 8-13 refer merely to evidentiary facts, some of which are uncontested and others of which are inconsistent with the ultimate fact of fraud as found by the court. Cf. Goodwin v. Travis, 58 N.M. 465, 272 P.2d 672 (1954) (court has no obligation to find all relevant facts but only such ultimate facts as necessary to determine issues in case). There was substantial evidence to support the court's finding of fraud regarding the ice cream machine. The Ledbetters, admitting that they told the Webbs that the machine was in good working order, nevertheless argue that the Webbs did not prove by clear and convincing evidence that the machine was defective and that the Ledbetters knew it was defective at the time of the sale. Where a claim must be proved by clear and convincing evidence it is for the finder of facts, and not the appellate courts, to weigh conflicting evidence and decide where the truth lies. Duke City Lumber Company, Inc. v. Terrel, 88 N.M. 299, 540 P.2d 229 (1975). The function of the appellate court is to view the evidence in the light most favorable to the prevailing party, and to determine therefrom if the mind of the factfinder could properly have reached an abiding conviction as to the truth of the    facts found. Id. at 301, 540 P.2d at 231. (Our emphasis.) The facts and circumstances surrounding a transaction may provide clear and convincing evidence of fraudulent intent. See Sauter v. St. Michael's College, 70 N.M. 380, 374 P.2d 134 (1962). Considering that there was evidence of a malodorous smell a month after sale; that dried, mildewed and caked ice cream on the motor, condensor and elsewhere took two persons 20 hours to clean; that a rag was found tied around leaking copper tubing and the catch pans had rusted through, it was well within the province of the factfinder to reach an abiding conviction that the Ledbetters knew that the machine was latently defective when they told the Webbs that it was in good working order. The Ledbetters argue, however, that the Webbs had an opportunity to investigate the condition of the machine firsthand, thus implying that the Webbs did not justifiably rely on their representations. That contention is without merit. The Webbs had never before operated an ice cream business or worked with ice cream machines. They were entitled to rely on the Ledbetters' representations regarding the condition of the machines. Cf. Hammaker v. Lowe, 57 N.M. 585, 261 P.2d 129 (1953) (vendees without experience in housing construction or knowledge of building materials entitled to rely on agent's representations that houses would be delivered as represented). The finding of reliance upon the sellers' misrepresentations is supported by substantial evidence.