Brooks Equipment & Manufacturing Co. v. Taylor

Seawell, J. When the plaintiff had completed its evidence counsel demurred to defendant’s pleading which set up his further defense and counterclaim, on the ground that fraud ivas not sufficiently alleged. The court reserved its judgment on the demurrer pending further proceedings. These consisted of a preview in the absence of the jury of the evidence the 'defendant intended to offer in support of his defense and counterclaim. It can readily be seen that the defendant’s evidence had no relevancy to the demurrer, which was to the pleading. At the conclusion of this hearing defendant was advised by the court that it would not, in the court’s opinion, be sufficient “to withstand plaintiff’s counterclaim,” — no doubt meaning the claim plaintiff had asserted in the action. The defendant, in deference to the intimation given by the court, “offered no further evidence.” Thereupon the court allowed plaintiff’s “motion for nonsuit on the counterclaim.” This may have referred to the demurrer to -the pleading, or it may have taken in consideration the evidence just heard in the absence of the jury. The part played by the defendant in establishing the theory of the trial in the lower court, and the procedure adopted, seems subordinate to that of the court, and ought not to forfeit his right to be heard on any aspect of his pleading which, by liberal construction, presents a cause of action upon which he may be entitled to relief. *686 Tbe pleading, notwithstanding any defect of mere form, and regardless of its allegation of fraud, sufficiently sets up a cause of action for breach of implied warranty; and we have no doubt that if presented in that aspect alone, without accompanying diversions, the jury might have so found. But our immediate concern is with the sufficiency of the defendant’s plea of fraud and the support afforded it in the evidence he desired to be submitted to the jury. It is .true that the party charged with fraud must he informed of the constituent facts because he has to answer; and the judge passing upon the pleading, also, because he must judge of their character as prima facie fraudulent; but the pleading need not observe any set formula or be in precise technical language to be good on demurrer. It is sufficient if, upon a liberal construction of the whole pleading, the charge of fraud might be supported by proof of the alleged constitutive facts. However informal, the defendant’s pleading fulfills this condition. Ordinarily the rule caveat emptor applies to sales of personalty, but there are so many exceptions that we must look to the particular circumstances surrounding the transaction to determine the respective duties of buyer and seller with respect to discovering defects shown to have existed in the subject of the sale at the time it is made. It is a practically universal rule, and it is the law in this State, that under circumstances which make it the duty of the seller to apprise the buyer of defects in the subject matter of the sale known to the seller but not to the buyer, suppressio veri is as much fraud as suggestio falsi. 46 Am. Jur., Sales, sections 94, 96, 98; Williston on Sales, sections 631 (a), 632, 634; Restatement, Sales, 471 (b) ; Brown v. Gray, 51 N.C. 103, 76 Am. Dec. 563; Southern Iron & Equipment Co. v. Bamberg, E. & W. Ry. Co., 149 S.E. 271, 151 S.C. 506. To the defendant the serious defects existing at the time of the sale were unknown. The casual inspection made by him in Tennessee and the opportunity afforded him were not sufficient to discover them. To him they were latent. He could not reasonably be supposed to have gone into the complicated interior of the tractor at that time and discover the defects in the engine block and the cylinders which operated the hoist. He explained to the selling agent that he knew nothing about tractors; and in fact must rely on the plaintiff as to the condition of the machine and its ability to perform the work ■intended. Plaintiff, the seller, introduced a new element in the relation between the parties when its agent, at the request of the defendant, undertook to take the tractor to its shops in Knoxville and there investigate its condition and report thereon as a condition precedent to the sale. The duty then rested upon him, in the exercise of good faith, to make the *687 examination which he had promised, and for which he had been paid, and report the condition to the prospective buyer. It may be inferred from the evidence that the crack in the engine block which caused the exhaust to spout water as soon as it was put to work in Virginia, existed before it left plaintiff’s possession; and that the defect in the cylinders through which the hoist was operated did not suddenly develop en route from plaintiff’s machine shops in Knoxville to Virginia. There is a reasonable inference that they existed as material facts at the time of plaintiff’s examination in its shops at Knoxville, and that plaintiff’s agent knew of this condition when he advised the defendant that the tractor was “o.k.” and ready to go; and, therefore, it was his duty to disclose these defects to the defendant buyer. But it will be observed that if these defects did exist, the selling agent added his positive declaration to the contrary in reporting that the machine was “o.k.”; and it makes no difference whether he was consciously misrepresenting the fact, or was merely recklessly reporting something to be true of which he had no knowledge. 46 Am. Jur., sec. 98; Anno. 61 A.L.R. 492, 509 (c); "Williston on Sales, 634. The main point is whether the defendant might reasonably rely on the plaintiff with respect to the condition of the tractor without' undertaking an examination beyond the limits of his skill and experience and his opportunity, and which the plaintiff had specifically agreed to make for him. Under the circumstances we have outlined that became distinctly a jury matter. 46 Am. Jur., p. 288, 598 ; 24 Am. Jur., Fraud and Deceit, sec. 143. We cannot find from the record that the defendant at any time surrendered his rights by reason of the peculiar form of the proceeding in which he became involved. And we think that his Honor was in error in holding that fraud was not sufficiently pleaded and nonsuiting the defendant on his cross-action and counterclaim, and in instructing the verdict for the plaintiff. The defendant is entitled to a trial de novo. It is so ordered. New trial.