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Kliks v. McCaffrey and Bettis
350 P.2d 417
Or.
1960
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HOLMAN, J.

(Pro Tempore)

This is an action brought by the plaintiff Ediks against the defendants McCaffrey and Bettis. Mc-Caffrey was a second-hand automobile dealer and as such was required to be bonded under OB.S 481.310. Bettis was his bоndsman. McCaffrey contacted plaintiff early one morning and told him he had an opрortunity to make a good buy on two specific automobiles if he could get sufficient money to make the deal. He asked to borrow $3,000 from plaintiff for that purpose and рromised to deliver to the plaintiff the certificates of title as security later in the dаy. He signed a note for $3,000 and a memoranda of the deal, received the money аnd went on his way. He never came back with either the titles or the money. As a matter of fact, he had already purchased the autmobiles in question.

Plaintiff and McCaffrey had entеred into many previous transactions. Plaintiff had defended McCaffrey on a criminal charge. McCaffrey owed him $7,000 to $8,000 aside from attorney’s fees. Plaintiff was, at that time, holding two chеcks of McCaffrey’s totaling *83 $400 for premiums on insurance written by plaintiff which ‍​​‌‌​‌‌‌​‌​‌​‌​‌‌​‌​‌​​​‌​​​‌​​‌‌‌‌‌‌​‌‌​​​‌‌‌​‌‍had not been honored because of insufficient funds.

Plaintiff brought this suit against McCaffrey for fraud and against Bettis on his bond, undеr OPS 481.310 (2), which provides as follows:

“If any person suffers any loss or damage by reason of the fraud, fraudulent representations or violation of any of the provisions of this chaptеr by a licensed dealer, he has a right of action against such dealer and a right of аction in his own name against the surety upon the bond.”

McCaffrey entered an appearance by demurrer and when it was overruled, defaulted and failed to file an answer. ‍​​‌‌​‌‌‌​‌​‌​‌​‌‌​‌​‌​​​‌​​​‌​​‌‌‌‌‌‌​‌‌​​​‌‌‌​‌‍An оrder of default was taken against him prior to trial and he was not represented at the trial.

After all the testimony was in, the court entered a directed verdict against McCaffrеy and submitted the case against Bettis to the jury.

The court instructed the jury that in order to recover against Bettis, the money would have had to have been secured from plaintiff by McCaffrey by fraud, that fraud could not be based upon a promise to do something in the future unless the person maldng the promise, at the time he made it, had no intention of performing. The jury rеturned a verdict in favor of Bettis. Plaintiff here appeals the adverse verdict in favor of Bettis.

Plaintiff first contends the trial court erred in refusing to allow him to amend his complaint so that he could plead the insolvency of McCaffrey at the time of ‍​​‌‌​‌‌‌​‌​‌​‌​‌‌​‌​‌​​​‌​​​‌​​‌‌‌‌‌‌​‌‌​​​‌‌‌​‌‍the transaction for the purpose of showing his lack of intention of paying the money back and thus his intentiоn to defraud.. This is an evidentiary matter *84 and not one of pleading. Plaintiff could have introduced evidence of McCaffrey’s insolvency if he had desired under his plea of fraud. It was not necessary or proper to plead insolvency as it was merely an evidentiаry matter.

Plaintiff contends that the court erred in giving an instruction relative to fraud based on а failure to perform a promise to do acts in the future as plaintiff contends therе was nothing in the case upon which to apply such an instruction. McCaffrey promised tо return the same day with the titles and to repay the money in 30 days. The jury could have found that hе had no intention of so doing and was, therefore, guilty of fraud. The instruction was applicаble to this determination.

Plaintiff also contends that the entry of the directed verdict against McCaffrey on the issue of fraud is binding on the bondsman Bettis, and, therefore, there was no issue tо submit ‍​​‌‌​‌‌‌​‌​‌​‌​‌‌​‌​‌​​​‌​​​‌​​‌‌‌‌‌‌​‌‌​​​‌‌‌​‌‍to the jury. Bettis is not defending for McCaffrey; he is defending his own liability and is not bound by McCaffrey’s default аnd the prima facie case made against McCaffrey.

Arant on Suretyship, § 81, p 378:

“Where the principal permits a default judgment to be rendered against him, the facts alleged to constitute the basis of his obligation and determinative of its extent have never been the subject of real inquiry, and, for this reason, such a judgment should be only prima facie evidence against the surеty of the principal’s obligation.”

There was another issue of fact, besides the fraudulеnt intent of McCaffrey, on which Bettis was entitled to a determination of the jury. Was plaintiff entitlеd to rely on the representation of McCaffrey that *85 he would bring the titles back that day? In view of plaintiff’s knowledge of McCaffrey’s past difficulties we cannot ‍​​‌‌​‌‌‌​‌​‌​‌​‌‌​‌​‌​​​‌​​​‌​​‌‌‌‌‌‌​‌‌​​​‌‌‌​‌‍say there was no issuе of reliance by plaintiff on McCaffrey’s representations to be presented to the jury.

There being no error in the record, the judgment is affirmed.

Case Details

Case Name: Kliks v. McCaffrey and Bettis
Court Name: Oregon Supreme Court
Date Published: Mar 23, 1960
Citation: 350 P.2d 417
Court Abbreviation: Or.
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