Lindberg Cadillac Company vs.
Leornard Aron
COURT OF APPEALS OF MISSOURI, ST.
LOUIS DISTRICT
1963 Mo. App. LEXIS 450
10/15/63
OPINION: This is an action in fraud in which
the defendant is charged by the plaintiff with concealing defects in an
automobile which he traded to plaintiff in part payment of the purchase
price of a new car which the plaintiff sold to him. The trial was to
the court, which found for the plaintiff in the sum of $759.00 and
costs. After an unavailing motion for a new trial, the defendant
appealed.
The plaintiff company was engaged in the sale of automobiles. Its
business was located in the City of St. Louis. The defendant was in the
vending machine business in St. Louis. He had some trucks and a
Cadillac and Imperial automobiles which he used in connection with his
business.
He decided to trade in his 1957 Imperial on another Cadillac. In June
of 1959 the Imperial was brought into the plaintiff's place of business
and was appraised by the salesmanager in charge of such work. He
examined the automobile and appraised its value to be $2,165 at that
time. No deal was made then because the parties were unable to reach a
trade-in figure that was agreeable to both.
In the month of October, 1959, during a cold spell, the coolant in the
Imperial froze. The car was taken to a filling station which Aron, the
defendant, patronized. According to the testimony of the filling
station operator, defendant told him that the motor had frozen and he
wanted it checked to see if it had cracked. The filling station
operator thawed out the motor and placed the car on a grease rack to
check it over. He testified that he found two cracks on each side of
the motor block. He said that the told Aron, the defendant, that the
block was cracked. He estimated the cost of a new block to be in the
neighborhood of four or five hundred dollars. He told Aron that he
could put a "K and W sealer" in the cracks, but that it would be
"strictly temporary". He also suggested that if the car was to be
traded in, the cracks filled with the sealer could be covered with
Permatex, which would conceal the filled cracks. Permatex is a gasket
sealer and could serve no purpose other than to conceal the filled
cracks in the motor block. He said that Aron told him to do this work,
and that he did a "pretty smooth job" and that the Permatex concealed
the cracks.
About the 20th of November, 1959, Aron drove the Imperial into the
Lindberg Cadillac Company's service department for appraisal as a
trade-in. It was there about half an hour, and he then drove it away.
Aron had not driven the Imperial after the crack sealer was put in
until the time he drove it to the plaintiff's place of business for the
purpose of a trade-in. Defendant Aron testified that he discussed the
condition of the Imperial in plaintiff's office when they were
attempting to close the deal. He said that they agreed that it needed
floor mats, that the motor was leaking oil and needed repair, and that
the fenders needed fixing. He did not tell either the salesman or the
salesmanager about the cracked block. Thus the car which had been
appraised in June was reappraised on November 20, and an agreement was
eventually reached to allow $2,290 for the Imperial on the purchase
price of a new Cadillac. There was testimony that the actual value of
the Imperial as traded in, assuming that the block was not cracked, was
appraised at $1,720.00, and $259.00 was later spent by the plaintiff on
reconditioning it for sale. There was also testimony that the book
value of the car was $1,979.00.
The salesmanager for the plaintiff company, who made the appraisal of
the car, drove it for a few minutes on November 20. He checked the heat
gauge to see if it was overheating. This would normally disclose a
cracked motor block. He also checked for water leaks, and found none.
After the appraisal and sale, the car was reconditioned in the normal
course of business for sale. This usually took about 30 days.
On December 21, the Imperial as reconditioned was sold for $2,476.08.
The purchaser returned the next day and complained that it was
overheating. The car was taken to the plaintiff's shop to verify the
purchaser's complaint. It was found that the motor block had the cracks
in it, and the plaintiff refunded to the purchaser the money he had
paid for the car. The plaintiff then sold the Imperial, known to the
buyer to have a cracked motor block, for $1,200.
The defendant, testifying in his own behalf, said that he did not know
what a motor block was. He said that when the Imperial was frozen, he
took it to the filling station because they were supposed to have put
anti-freeze in the radiator. He testified that the station attendant
said that he would take care of what was wrong, and kept the car for
about a day. The attendant said nothing to him about the cracked motor
block. He said that after he was informed of the cracked block by the
plaintiff, he never went to the filling station attendant about the
matter nor had any communication with him in relation to it. Defendant
also testified that he had been sentenced to three and one-half years
for counterfeiting cigarette tax stamps, and at the time of trial he
was on probation for a period of seven years.
As stated, the court found for the plaintiff in the sum of $759.00, and
the defendant appealed.
The first point he raises is that the appellant failed to make a prima
facie showing of fraud, and that the court should have found for the
defendant. The appellant asserts in support of this that he made no
misrepresentation, and that his mere silence cannot be held to have
been fraudulent where the matter was open to investigation by the party
alleged to have been defrauded. This constitutes a complete disregard
of the facts. Silence can be an act of fraud. In one of our earliest
cases, McAdams v. Cates, 24 Mo. 223, l.c. 225, our Supreme Court
stated:
"If, in a contract of sale, the vendor
knowingly allow the vendee to be deceived as to the thing sold in a
material matter, his silence is grossly fraudulent in a moral point of
view, and may be safely treated accordingly in the law tribunals of the
country. Although he is not required to give the purchaser all the
information he possesses himself, he can not be permitted to be silent
when his silence operates virtually as a fraud. If he fails to disclose
an intrinsic circumstance that is vital to the contract, knowing that
the other party is acting upon the presumption that no such fact
exists, it would seem to be quite as much a fraud as if he had
expressly denied it, or asserted the reverse, or used any artifice to
conceal it, or to call off the buyer's attention from it."
The reason for the rule is that since matters are not what they appear
to be and the true state of affairs is not discoverable by ordinary
diligence, deceit is accomplished by suppression of the truth.
We have in the facts before us more than a failure to speak.
There is also a positive fraudulent concealment. In the case of Jones
v. West Side Buick Auto Co., 93 S.W.2d 1083, decided by this court, we
had before us facts quite similar in effect to those here under
consideration. There a fraudulent seller turned back the speedometer in
the car sold to 22,400 miles, when the car had in fact been driven
48,800 miles. There was no verbal or written representation by the
seller, but the buyer, relying upon the mileage registered on the
speedometer, purchased the car. We held that the buyer had been
defrauded by the deception, stating: "* * * a representation is not
confined to words or positive assertions; it may consist as well of
deeds, acts, or artifices of a nature calculated to mislead another and
thereby to allow the fraud-feasor to obtain an undue advantage over
him." See, also, Hutchings v. Tipsword, Mo. App., 363 S.W.2d 40, l.c.
45. The acts of the defendant as stated above were designed to, and
did, defraud the plaintiff, and there is no merit to the contention
that a case in fraud was not made.
The second point raised is that the court erred in its finding as to
damages. The court reached the sum of $759.00 as damages by allowing
$500.00 for the motor block and $259.00 for the sum spent by the
plaintiff in reconditioning the car. It is asserted that the proper
measure of damages is the difference between the actual value and the
value the car would have had if the representation had been true. We
agree that such generally is the proper measure of damages.
In applying the rule we must consider the nature of the fraud committed
as it reflects upon the value of the property as fraudulently
represented. A trade was made here with the full knowledge that the car
was to be reconditioned for sale. It was represented as a car that
could be so reconditioned by certain minor repairs caused by normal
use. It was known by the defendant that the expenditures that the
plaintiff intended to make would not make the car serviceable for
resale, as the car, after such repairs, could not honestly be sold for
its intended use. The fact that the court, in reaching the amount of
damages, found the cost of the block and the cost of the repairs to be
the total, was not erroneous, as both went to the value of the car as
represented and its actual value.
We find no error present, and the judgment is affirmed.