Court Opinion

ID: 3965936
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:25:33.921701+00
Date Added: 2024-06-11T09:39:13.615024
License: Public Domain

On the original submission of this case, this court also took submission of the case of Morriss-Buick Co. v. F. C. Pondrom,84 S.W.2d 272, and in reviewing the two cases together, as I view them, both should be reversed. I have expressed opinion dissenting from the majority in the Pondrom Case, and my reasons therein expressed, in the main, are applicable here.
The two cases are similar: Pondrom, on October 2, 1929, purchased of Morriss-Buick Company a 1929-47 model Buick sedan; Huss, on October 5, 1929, purchased a like model; Pondrom testified he was in the market for a new 1930 model, but was induced to purchase a 1929-47 model, on account of a reduction in price; Huss testified to the same thing; Pondrom's contention, supported by evidence, that, on July 4, 1929, the automobile he purchased was the one figured in a collision while being driven by R. B. Irion, with an automobile driven by Dr. Roy Keller; Huss' contention and testimony centers on the same fact; that the automobile he purchased was the one in the Irion-Keller wreck. The photographs of an automobile, the appellee in the Pondrom Case claims to be the Irion-Keller wreck, were offered in evidence in both cases, as were the items of damage and expense of repair for the Irion-Keller damaged automobile. Many of the same witnesses were offered in the two cases to show that the automobile purchased by the aggrieved party in each of the cases was the one figured in the *Page 269 
Irion-Keller wreck. In the Pondrom Case, the testimony is undisputed that there was but one wreck in which a new 1929-47 model sedan was involved, and in this case the testimony centers only on the one wreck of July 4, 1929; the Irion-Keller, wreck. Thus, on separate jury trials, the Morriss-Buick Company has suffered two judgments to be rendered against it for an alleged sale of a wrecked automobile, when the uncontroverted evidence discloses there was but one automobile of the kind purchased involved in a wreck on the date mentioned in the evidence.
The evidence further shows that Morriss-Buick Company was the local agent for the handling of Buick automobiles. Appellee, with the view of inspecting the various models on display, visited appellant's place of business. At that time, in the showroom, on the ground floor of appellant's place of business, it had placed the new 1930 models, and on the second floor, the 1929 models. Appellee had a conversation with one Ed. Smith, a salesman, and one Mr. Langley, a sales manager, relative to purchasing a new automobile, in which Mr. Smith told him that he could get a slight reduction in price by taking a 1929 model, because the 1930 models had already come out. A few days later, appellee returned, quoting from his testimony:
"Q. What did you do at that time? A. I looked at cars. They were all there and asked me to choose which one I wanted, and I told them I was interested in the '29 model. They had several 1929 models and they told me to pick the car I wanted, and the only choice was in color.
"Q. Did they tell you they were all new 1929s? A. Yes, sir, `there they are; they are all alike'; that is what Mr. Langley said.
"Q. Said they were all alike? A. All alike. Help yourself.
"Q. What did you do then? A. I chose the type I wanted and the deal was closed."
It must be noted here that there is no contention whatever that Mr. Smith or Mr. Langley, the only agents of appellant negotiating with appellee in the transaction, knew that the automobile which Huss selected from the floor of the showroom of the Morriss-Buick Company was the automobile which had figured in the Irion-Keller collision, or that it was a wrecked car, rebuilt by the company, if, in fact, it was such a car; but, on the contrary, Mr. Smith testified, quoting from his testimony:
"Q. Did you know at the time you sold the car to Mr. Huss that it was a wrecked, rebuilt car? A. I did not.
"Q. Would you have sold it to Mr. Huss as a new car if you had known it was a wrecked car? A. No, I wouldn't have sold it to him as a new car without telling him it had been wrecked and rebuilt."
Mr. Langley testified, quoting from his testimony:
"Q. Was it brought to your attention by Mr. Morriss or any one connected with the Morriss-Buick Company after you began your connection with the Morriss-Buick Company that any of those 1929-47 model Buicks had been wrecked and repaired? A. No. No such cars were pointed out to me.
"Q. You don't know anything concerning that new 29-47 — that any 29-47 models had been wrecked and repaired and offered for sale? A. No."
Bearing in mind that appellee's cause of action is based on fraudulent representations, that they were made for the purpose of deception, that the appellee relied upon such, and that he was induced thereby to enter into the contract of purchase, in my opinion, it was incumbent on appellee not only to show that the party made untrue representations, but to further show that the party making them knew at the time he made them that they were false.
It may be truly said that the seller is under a duty, down to the moment when the contract is concluded, to disclose all material facts as are within his actual knowledge and are not within the actual or presumptive knowledge of the buyer, then again, it is a safe rule of law, that in negotiating for contracts of certain kinds of property, such as a sale of merchandise, automobiles, the seller must necessarily, and from the nature of such contemplated transaction, be cognizant of facts of which the purchaser must be presumed ignorant, and for the disclosure of which the latter must rely on the good faith of the former to enable him to form a judgment as to the expediency of entering into the contract on the terms proposed.
I take it to be quite clear that if a person makes a representation by which he induces another to take a particular course, it is an imperative duty of the party who has made the representation to communicate to the party to whom the representation has been made the material facts within his *Page 270 
knowledge, and if such facts are not within his knowledge, the misrepresentations so made are not fraudulent.
Obviously, there can be no duty on any one if the fact was not known, because it is an impossibility to communicate or impart to another a knowledge which he does not possess himself. The following from 2 Pomeroy's Equity Jurisprudence (4th Ed.) 1838, § 888, is applicable: "Where a person makes a statement of fact which is untrue, but at the time of making it he honestly believes it to be true, and this belief is based upon reasonable grounds which actually exist, the misrepresentation so made is not fraudulent either in equity or at law."
The uncontroverted evidence of the appellee, substantiated by that of appellant's, is that the parties with whom appellee negotiated the contract of sale did not know the automobile was a wrecked and rebuilt automobile. Then how could it be said that the innocent acts of the party or parties inducing appellee to make the selection of the automobile amounts to fraud, and, indeed, furnishes to appellee the right to exact of appellant exemplary damages? As said in my dissenting opinion in the Pondrom Case, supra, at most, it shows a breach of implied warranty, for which appellee would be entitled only to recover for his actual damage.
To what extent was appellee damaged? The testimony shows that appellee purchased the automobile for "pleasure and business"; that the car performed the same service that he would expect of any other automobile; and that, at the time of the institution of this suit, appellee had driven the automobile in excess of 45,000 miles, more than 1,000 miles per month, more than half of life of usefulness of a new automobile. And, while he has had considerable trouble with it since the purchase, yet, with a fair opportunity of inspection, he neglected to avail himself of it or accord to appellant an opportunity to right the breach of an implied warranty that the automobile was one that appellee could reasonably have expected not to have been involved in a wreck. In the negotiation of the contract, the parties agreed on the price of the automobile appellee received at $1,525, and on the automobile taken by appellant as part of the consideration, the sum of $700; appellee paying the difference between the two by note in the sum of $825. The evidence does not show that there was a fixed price on the 1929-47 model automobiles, as evidenced in the Pondrom Case, where the same style and model was purchased for $1,389.85, only three days earlier than the sale of the car to Huss, thus the value of each car was fixed only at exchange prices, rather than a fixed purchase price.
Whether there was a sale or exchange, the action is brought purely for the declared purpose of damages for the negotiation of a contract for a certain kind of automobile. Ordinarily, the measure of damages in such action is "the difference between what appellee parted with and what he received." However, it must be borne in mind that appellee had operated the automobile in question for more than three years, and, as stated above, in excess of 45,000 miles, more than 1,000 miles per month. The automobile had rendered to him for pleasure and business the same service as a new automobile would have rendered to him, and appellee had many opportunities to inspect and ascertain the kind of automobile he received. The sale was made innocently of any defects or previous harm done to the automobile. Appellant had no opportunity to right the wrong until the automobile had been run for more than half of the life of usefulness of a new automobile. Thus, in my opinion, it would be a manifest injustice, under the peculiar facts of this case, for appellee to be made whole, as of the date of purchase, with all these attending circumstances.
In my opinion, the difference in the resale value of the automobile appellee actually received at the time of trial, plus the necessary expenses paid attributable to the wreck, and the value of an automobile he should have received, operated for the time and extent, as shown by the evidence appellee had actually operated the automobile, the result should represent appellee's damages. He should not be permitted to recover the difference in contract value of the automobiles, placed on them for the purpose of the transaction, and, in addition thereto, the use and service of the automobiles he received, for the time and mileage as disclosed in this record; especially so, in the light of the innocent acts of appellant's agents and the negligence of the appellee in failing to inspect and notify appellant of the undisclosed fact. The law *Page 271 
does not place a premium on negligence or unreasonable credulity.
At any rate, the measure of appellee's damage should not be more than the difference between the actual value of the used car plus the $825 represented by the note, and the actual value of the automobile received at the time of the transaction. 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; B.  H. Motor Co. v. Tucker (Tex.Civ.App.) 299 S.W. 949; Texarkana Motor Co. v. Brashears (Tex.Civ.App.) 37 S.W.2d 773, 775.
In the case of Texarkana Motor Co. v. Brashears, supra, the measure of damages applied was the difference between what appellee parted with and what he received. Quoting from that opinion: "* * * The courts of this state have expressly held that in an action, as here, brought purely for the declared purpose of damages, as redress by a purchaser who has been induced to make the purchase, the purchaser will be awarded in payment the difference between the value of what he parted with and that received in exchange. 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; Greenwood v. Pierce, 58 Tex. 130; Moore v. Beakley (Tex.Com.App.) 215 S.W. 957; Thrasher v. Walsh (Tex. Civ. App.) 228 S.W. 961; Medley v. Lamb (Tex.Civ.App.) 223 S.W. 1048; B.  H. Motor Co. v. Tucker (Tex.Civ.App.) 299 S.W. 949."
In the case of Robert  St. John Motor Co. v. Bumpass (Tex. Civ. App.) 65 S.W.2d 399, 401, in which the Supreme Court refused a writ of error, the Eastland court held: "If it be granted that damages for breach of a warranty were claimed, the measure of damages would be the difference between the purchase price of the automobile ($700) and the value of same in its defective condition at the time of the purchase. Gutta Percha  Rubber Mfg. Co. v. City of Cleburne, 102 Tex. 36,112 S.W. 1047; Alba-Malakoff Lignite Co. v. Hercules Powder Sales Co. (Tex.Com.App.) 235 S.W. 547; Swift et al. v. Roach (Tex.Civ.App.)266 S.W. 846."
So, in the case at bar, if appellee is to be awarded damages, augmented by the use and service of the automobile for more than three years, more than half of the life of a new one, plus the note and plus interest on the money paid, in no event should the damages be more than the difference in actual value of the two automobiles at the time of purchase. The trade, or contract values, on which the judgment is based, affirmed by this court, should not control.
Furthermore, under the broadest interpretation that can be given to appellee's testimony, even if it be admitted that he purchased an automobile from appellant upon the representation that it was a new automobile, when, in fact, it had been wrecked and rebuilt, still, in view of the undisputed fact that it, in a large measure, served the identical purpose for which it was purchased and was capable of serving those purposes, and there being an utter lack of proof tending to show that appellant's conduct evidenced an intent on its part to injure the appellee or that such conduct amounted to gross negligence, there is nothing to support an award for exemplary damages.
True enough, as held in the original opinion, the actual or presumptive knowledge of the agent Smith, who negotiated the sale to appellee, may be imputed to the principal, and any willful concealment from appellee of the fact that the car purchased had been wrecked and repaired be ascribed to appellant; but, there is not a scintilla of evidence in this record that Smith knew that the automobile he sold to appellee was a wrecked, rebuilt automobile; but, on the contrary, as stated above; the evidence is undisputed that Smith did not know that fact. Then, how can it be said that the innocent acts of Smith would impute a willful conduct to appellant and be such that society demands the exactment of a punishment in the nature of exemplary damage?
I am convinced that the judgment of the lower court should be reversed and the cause remanded, and, so believing, register my dissent to the opinion of the majority on motion for rehearing. *Page 272