Court Opinion

ID: 4733266
Source: CourtListenerOpinion
Date Created: 2021-08-12 02:57:34.224819+00
Date Added: 2024-06-11T08:08:08.946186
License: Public Domain

Gose, J.
This action was brought to recover a judgment for money paid to the defendant in consequence of its alleged fraudulent representations.
*600On the 15th day of April, 1910, the appellant sold to Nelson-Johanson Mill Company, a corporation, hereafter called the mill company, upon a conditional sale contract, one pair of twin engines with complete equipment, for an agreed consideration of $2,150; $537.50 cash, the balance payable in five monthly installments of $322.50 each, evidenced by interest-bearing notes. The contract provided that, if the vendee failed to make any payment when it became due, the payments theretofore made should be deemed rental, and the “contract of conditional sale shall be forfeited and determined at the election” of the vendor. The vendee installed the engines in its sawmill near Tacoma. The respondent had mortgages upon all the property of the mill company, both real and personal, including the engines, to the extent of the full value of all of its property. On the 8th day of September, 1910, the mill company was adjudged a bankrupt and its property passed into the hands of a trustee. On the 28th day of December, 1910, the last two installments, aggregating, with interest, $681.55, were due and unpaid. On that day, the appellant assigned its conditional sale contract to the respondent and received as a consideration $1,185.95. When the assignment was presented to the appellant, and before its delivery, the following words were added in pencil: “which is guaranteed the balance due from the above mentioned company.” At the time of the assignment, the mill company owed the appellant upon a note and an account which were unsecured a sum equal to the difference between $681.55 and $1,185.95, that is, $504.40. The respondent sued for this difference, alleging that it purchased the engines for the balance due upon the conditional sale contract, which the appellant falsely and fraudulently represented to be $1,185.95, when in truth and in fact it amounted to only $681.55.
The court found the facts in favor of the respondent, and entered a judgment in its favor for the amount claimed. The court expressly found that the mill company had no property *601or assets of any kind with which to pay any part of the claims of the general creditors. This finding is conceded to be true by both parties. It also found, that the respondent, in order to retain the engines in the mill, agreed to pay the appellant the balance due and owing upon the conditional sale contract; that the appellant agreed to assign the contract to the respondent for such balance; that the appellant represented and warranted to the respondent that the balance due and owing upon the conditional sale contract was $1,185.95, when in truth and in fact the balance, including principal and interest, was $681.55; that respondent, relying upon the representations and believing them to be true “and not otherwise,” paid the appellant the sum of $1,185.95. The court deduced, as a conclusion of law, that the respondent was entitled to recover the amount paid to the appellant in excess of the amount actually due upon the conditional sale contract.
The respondent was required to sustain its allegations of fraud by clear and convincing evidence. We think that it did so. In fact, the evidence as we read it is overwhelming in support of the findings of the court. Prior to the execution and delivery of the assignment, a representative of the appellant wrote the respondent that it had a conditional sale agreement upon the engines, that it expected this claim to be paid in full, that it was entitled to take the machinery, and that it desired to avail itself “of that course unless we can obtain the money in full settlement of our claim,” and that it was unwilling “to take the chances of securing a purchaser [meaning at a trustee’s sale] who will pay enough to liquidate all the preferred claims.” In other correspondence it referred to this conditional sale contract and to its preferred claim. It mentioned no other claim. On the day the conditional sale contract was assigned, representatives of the appellant met with representatives of the respondent, and the only question discussed was the conditional sale contract and the amount due upon it. When the assignment of *602the contract was presented to the representative of the respondent who closed the deal in its behalf, he requested the appellant’s representative to insert a guaranty in the assignment that the $1,185.95 was the amount due upon the contract. In response to this request he wrote the penciled quotation. As we have said, the appellant at no time suggested its unsecured claims. The parties were negotiating concerning the conditional sale contract as a preferred claim.
It is argued that, because the engines as installed in the mill were worth more than the amount received as a consideration for the assignment, the respondent was not injured, and that, in view of the fact that the appellant had the right at its election to remove the machinery, there can be no recovery. These suggestions are beside the question. We need not determine whether the appellant could have exercised its option to remove the machinery. It had not exercised it, and the correspondence and the oral testimony show conclusively that it did not desire to exercise it. It obtained the difference between the amount due upon the contract and the amount which it received either by false representations, or by a suppression of the truth, which was equivalent to a suggestion of falsehood. In either case, its liability is complete.
The judgment is affirmed.
Crow, C. J., and Main, J., concur.