Bice v. Nelson

The opinion of the court was delivered by Burch, J.: The action was one by the payee of a promissory note to recover from the maker. The defense was that the note was procured by false representations. The defendant prevailed, and the plaintiff appeals. [24] The note was given for the price of an auto truck owned originally by John Klaes. The plaintiff owned real estate which he sold to Klaes. Klaes desired to give the truck in part payment, but the plaintiff would not accept it until Kleas found a purchaser for it. Klaes produced the defendant. Klaes gave a bill of sale of the truck to the plaintiff, which the plaintiff assigned to the defendant. The defendant secured his note by a mortgage on the truck. The truck was sold for a specific purpose. It was utterly worthless for that purpose, and the defendant returned it to the plaintiff. The answer alleged that the plaintiff “warranted” the truck to be of the kind desired, and that the defendant purchased relying on “the representations and statements of the plaintiff.” The answer further alleged that the plaintiff did then and there “warrant and guarantee” the truck to give satisfaction for the purpose for which the defendant was buying it, and the defendant executed his note and chattel mortgage solely upon the aforesaid “representations and statements” of the plaintiff, and in conjunction with the plaintiff, of Klaes. The fifth paragraph of the answer was as follows: “Defendant further alleges that at the time the note and mortgage herein sued upon was executed and delivered as aforesaid, the defendant was very much in need of a mode of conveyance to haul coal ‘from the mines of Marshall to the city of Boulder, Colorado,’ as alleged in plaintiff’s amended petition, which fact he made known to the plaintiff and one John Klaes, a person with whom the plaintiff claimed he was consummating a deal, whereby the plaintiff would become the owner of said auto truck as aforesaid, provided he, the defendant, would purchase the same; thereupon the representations and statements as hereinbefore alleged in paragraphs two, three and four were made to the defendant by the said John Klaes, the plaintiff being present and assenting thereto, both urging the defendant to buy this truck, and both claiming as aforesaid that said truck would do the work for which they knew the defendant was greatly in need of such a car or conveyance; the defendant, acting solely upon the above and foregoing representations of the plaintiff and the said John Klaes, made, executed and delivered said note and mortgage to the plaintiff, who now holds the same, without any other consideration.” It is quite clear that the allegations of warranty, guaranty, and representations all referred to the statements respecting the suitability of the truck for the defendant’s use, made to induce the sale. The proof was that Klaes made the representations, and the plaintiff insisted he did not even indorse what Klaes said. The court instructed the jury that the plain [25] tiff would be bound by the representations of Klaes, if Klaes were his agent in selling or assisting to sell the truck. The instruction stated the law, and it was not necessary to allege the agency of Klaes in order to establish the charge that the plaintiff made the representations. It is said there was no evidence on which to base the instruction. The agency of Klaes was sufficiently established by the plaintiff’s own testimony. He testified that when Klaes made the proposition to trade for his real estate, he told Klaes he would make the deal if Klaes would get him a buyer for the truck. Klaes made his bill of sale to the plaintiff, and the defendant bought the truck of the plaintiff, as the result of Klaes’ activity. The court further instructed the jury that the plaintiff would be liable for the false representations if he and Klaes were acting in collusion. It is said that collusion was not pleaded. The paragraph of the answer quoted above sufficiently raised the issue of collusion. It was not necessary that the word collusion be employed, and it was not essential that there should be any agreement to combine efforts in order to constitute collusion. (Balch v. Beach, 119 Wis. 77, 92.) In the case cited, it was held that failure on the part of school-district officers to perform a known duty to make defense to an action against the district constituted guilty collusion, rendering the judgment pronounced in the action subject to attack in equity by taxpayers. Where a sale of a chattel is made for the mutual benefit of the seller and another, and the sale is procured by false representations of one of them, active cooperation of the other, by means of statements tending to induce the buyer to accept and rely on the representations, constitutes collusion. It is said there was not sufficient evidence on which to base an instruction relating to collusion. The evidence already referred to disclosed the interests of the plaintiff and Klaes in disposing of the truck to the defendant. The plaintiff testified the defendant told him the defendant had contracts to haul coal, and wanted the truck for that purpose. There was evidence that the plaintiff was informed the defendant’s time was limited, that he did not have time and did not have an expert to examine the truck, and that the plaintiff refused to permit the defendant to test the truck for five days in the work [26] which it was expected to do. Klaes had given profuse assurances that the truck was just what the defendant wanted. Such being the defendant’s situation, the plaintiff actively aided the sale in the manner shown by the following testimony of the defendant: “A. He [Bice] said to me, ‘Mr. Klaes has guaranteed this truck; I think Mr. Klaes is all right.' That is the way he put it. He had previously said he knew nothing about the truck — never had seen it. He took Mr. Klaes’ word for it, that it was in good condition and would do my work.” “Q. Did he guarantee it ‘would do my work’? A. Yes, sir.” “Q. And he [Klaes] guaranteed it to be good . . . that is the reason you bought it? A. Yes, sir, Mr. Bice also said to me at the time he thought Klaes was a reliable fellow and whatever he said would go with him, as to the condition of the truck. “Q. He [Bice] told you he was fully depending on his statement? A. Yes, sir, he believed Mr. Klaes was all right, he would guarantee the truck with Mr. Klaes.” In this state, false statements of fact, made by a seller to induce a sale and relied on by the buyer, are actionable, without regard to whether or not the seller knew the statements to be false, or acted recklessly in making them, or intended to deceive. (Wickham v. Grant, 28 Kan. 517; Morrow v. Bonebrake, 84 Kan. 724, 115 Pac. 585; Westerman v. Corder, 86 Kan. 239, 119 Pac. 868; Maffet v. Schaar, 89 Kan. 403, 131 Pac. 589; Akins v. Holmes, 89 Kan. 812, 820, 133 Pac. 849.) The instruction given relating to examination of the truck by the defendant before purchasing stated the law and adequately covered the subject. The instructions pertaining to the same subject requested by the plaintiff, and an instruction regarding representation and warranty requested by the plaintiff, were unsound. (Foote v. Wilson, ante, p. 191; Griesa v. Thomas, 99 Kan. 335, syl. ¶ 4, 161 Pac. 670.) The jury were fully and properly instructed concerning what the defendant was required to prove to establish his defense, and it was not error to refuse special instructions dealing with particular phases of the evidence. It was not error to refuse a new trial for the purpose of allowing the plaintiff to produce impeaching evidence claimed to have been newly discovered. There is nothing else of importance in the case. The judgment of the district court is affirmed. (Filed June 7, 1919.)