Tietjens v. General Motors CorporationTietjens v. General Motors Corporation
Action for damages for fraud resulting in verdict and judgment for plaintiff against both defendants for $15,000 actual damages and against defendant General Motors Corporation for $5,000 punitive damages, a total judgment of $20,000.
In the summer of 1958 plaintiff, William T. Tietjens, in association with his son Terry, was farming and raising cattle on 1,052 acres near Richland, Kansas. Lloyd Craig, while a partner in a Massey Ferguson farm implement dealership in Hiawatha, Kansas, had known Mr. Tietjens for twelve or fourteen years. In the summer of 1958 Mr. Craig was selling farm implements for various dealers on commission and he visited Mr. Tietjens several times. Through him, Mr. Tietjens learned that Frank and Ted J. Kuckelman, owners of Massey Ferguson, Inc., New Holland Machine Company, and Chevrolet Division of General Motors Corporation dealer franchises at Frankfort, Kansas, were interested in selling their business. Mr. Tietjens became interested in purchasing the Kuckelman business and, on September 23, 1958, contracted with them for the purchase of their real estate, building, shop equipment, parts, and fixtures, contingent upon plaintiff’s receiving dealer franchises of Chevrolet Motor Division and of the two farm implement companies.
At all times General Motors maintained a zone office in Kansas City, Missouri, for its Chevrolet Division and its area included
On September 29, 1958, plaintiff, his son Terry, and the Kuckelmans were in the Kansas City zone office where they met zone manager Carter and assistant zone manager Woodin. Plaintiff testified that at this meeting Ted Kuckelman told Mr. Carter “he was selling — we had bought his business, subject to the contract, of course.” Mr. Carter gave plaintiff an “application for Chevrolet Dealer Selling Agreement” which plaintiff took home, completed, and mailed to the zone office. He understood its provisions, including the recitals that he, as applicant, “ACKNOWLEDGES AND AGREES:
“1. THAT THIS APPLICATION FORM HAS BEEN SUPPLIED TO HIM AS A CONVENIENCE.
“2. THAT RECEIPT OF THIS APPLICATION BY CHEVROLET MOTOR DIVISION SHALL BE WITHOUT OBLIGATION ON ITS PART.
“3. NO ONE OTHER THAN THE GENERAL MANAGER, GENERAL SALES MANAGER OR AN ASSISTANT GENERAL SALES MANAGER OF THE CHEVROLET MOTOR DIVISION HAS THE AUTHORITY TO APPROVE THE UNDERSIGNED’S APPLICATION FOR A CHEVROLET DEALER SELLING AGREEMENT FOR ANY LOCATION; THAT SUCH APPROVAL, IF GIVEN, WILL BE WRITTEN; THAT ANY EXPENDITURES MADE, OR COMMITMENTS ASSUMED BY THE UNDERSIGNED PRIOR TO RECEIPT BY THE UNDERSIGNED OF SUCH WRITTEN APPROVAL SHALL BE THE SOLE RISK AND RESPONSIBILITY OF THE UNDERSIGNED WITHOUT ANY LIABILITY OR OBLIGATION WHATSOEVER ON THE PART OF CHEVROLET MOTOR DIVISION.”
On November 3, 1958, plaintiff, Terry, and the Kuckelmans were again in the zone office and the application and plaintiff’s plans were discussed. Plaintiff recognized at this meeting that the application had not had sufficient opportunity to get through channels for consideration in Detroit.
On November 19, 1958, these same persons were in the zone office. Plaintiff asked how the franchise was coming along and Mr. Carter said “that he had passed on it and sent it on to his — I just proposed (sic) that it was Detroit — he said it was his superior.” Plaintiff knew and understood at this time that before he could get a Chevrolet dealer selling agreement it had to be approved in Detroit and that it had not yet been approved in Detroit. Plaintiff had been approved for the Massey Ferguson and New Holland dealerships prior to this meeting.
It was shown that a zone manager was responsible to the regional manager; that persons seeking dealer selling agreements would file written application with the zone manager. If the zone manager approved, he sent the application to the regional manager. If the regional manager approved, he sent the application to Detroit; if not, the matter ended there. .
Mr. Carter prepared a “Chevrolet Dealer Organization Change” December 5, 1958, in which he approved a dealership change from Kuckelmans to Mr. Tietjens. This was mailed to the regional office December 9, 1958. On December 17, 1958, the region
Tietjens went to the Kuckelmans and negotiated and entered into new contracts of purchase excluding Chevrolet parts and omitting contingency provisions. The contracts were performed by plaintiff; he purchased the land, building, shop equipment, fixtures, and farm machinery parts, and “the first part of the year” he and Terry took possession of the property and the farm implement business.
About January 5, 1959, Mr. Tietjens and Terry met Mr. Woodin in Manhattan, Kan
“A couple of weeks” after the Manhattan meeting, “I was down to Massey Ferguson * * * in Kansas City * * * and I called up Mr. Carter’s office and Mr. Woodin answered and I asked him — I hadn’t heard anything — and I says to him, I hadn’t heard anything about how the franchise was coming, and I wonder how— whether it was — write an order so that we could be signed for it, and Mr. Woodin informed me that they wasn’t passing on it, that we wasn’t to get the franchise. * * * I was so upset over the whole thing that I just hung up.”
Honorable Earl Hatcher, Commissioner of the Supreme Court of Kansas, testified that in April 1959, when he was in law practice, Mr. Tietjens came to his office, and he arranged a meeting with Mr. Carter and Mr. Woodin. The meeting was on May 4, 1959, with Hatcher, Tietjens, Carter, and Woodin present. “We discussed several things, but specifically in connection with the contract. I asked him (Mr. Carter) if it were true that he had told Mr. Tietjens that a contract had been prepared and was in the office * * *. He replied that it was * * *. I asked him directly why they did not go through with their contract with Mr. Tietjens * * *. He said that they had adopted a policy by which they were not going to grant any more franchises in a thinly populated area where there was one existing.” In respect to the contract Mr. Carter said “there was papers ready for signature there. They were not signed, as I understand it.” Mr. Carter told Mr. Tietjens about the papers at “a conference that preceded the conference which I had, and I think it was just before Christmas (1958).”
Mr. Carter died prior to trial. Mr. Woo-din, although a party defendant and present at the trial, did not testify. The suit was dismissed as to Woodin at the close of plaintiff’s case.
Appellants contend first that plaintiff failed to make a submissible case of fraud against them.
Instruction No. Two directed a verdict for plaintiff if the jury believed:
“1. Chevrolet Zone Manager Carter was operating within the course and scope of his employment by defendant, General Motors Corporation, when and at the time of representations, if any, made by him to the plaintiff, and
“2. Carter represented to plaintiff that the written Chevrolet dealership, application and contract had been approved by 'the authorized General Motors official in Detroit and had been returned and was in the Kansas City Zone office, intending that plaintiff rely upon such representations in purchasing the building and property from the Kuckelmans, and
“3. The representations were false, and
“4. Carter knew that they were false, and
“5. The representations were material to the dealership transaction, and
“6. Plaintiff relied on the representations in purchasing the building and property, and in so relying, plaintiff was using ordinary care, and
“7. As a direct result of such representations, the plaintiff was damaged.”
The jury thus was instructed on all the essential elements of an action for
By Instruction No. Three the jury was advised that Carter’s “acts were within the scope and course of employment, * * * even though not specifically authorized by” General Motors, if Carter did them “to further the interests of General Motors Corporation under the general authority and direction of General Motors Corporation, and they arose naturally from the performance of (his) work.”
The jury could find that Carter’s agency, performance of his work, and the course and scope of his employment with General Motors were established by the evidence obtained by interrogatories; that defendant General Motors maintained a zone office at Kansas City, Missouri; that defendant Bennett C. Carter and dismissed defendant William L. Woodin were the manager and assistant manager of the zone office during the times of the transactions involving plaintiff; that the zone office normally handled all matters and contacts with retailers, selling dealerships, and dealership applicants.
In keeping with this situation, plaintiff secured an application for a dealership from Carter and Woodin and filed it with them. The jury could find that plaintiff’s purpose at the December 23, 1958, meeting was to determine what had happened to his application in view of the information from his vendor, Kuckelman, that plaintiff was not getting the franchise. The jury also could find that at this meeting with Carter and Woodin it was represented and said to plaintiff, in answer to specific questions, that a franchise had been approved, that he was getting a contract, and that it was in the zone office for his signature, subject only to modification of his contract with Kuckelman and committing additional space. This representation obviously was material to the transaction.
The testimony of Judge Hatcher that Carter said plaintiff was not given the dealership because Chevrolet was not going to grant any more franchises in a thinly populated area where one already existed, and the letter to similar effect from regional manager Strang to the zone office December 17, 1958, furnished evidence to support a jury finding that Carter’s representation was false and that Carter knew it was false. Judge Hatcher’s testimony also was evidence that Carter was then performing his work and furthering the interest of General Motors by enforcing its policy of granting no more franchises in rural areas such as Frankfort, Kansas, in the same county with Chevrolet dealerships in Marysville and Waterville, Kansas. (No new dealerships have been granted in the county since 1958, and the Frankfort dealership terminated when Kuckelman sold to plaintiff.)
That plaintiff relied on the representations that the franchise had been approved and awarded to him could be found from the evidence that following the December 23, 1958, meeting he renegotiated his contract with Kuckelmans as directed by Carter, omitting the contingencies, and the jury could find further that by reason of such purchase of property intended as a Chevrolet agency which he was never able to use as such plaintiff suffered actual damages. (The $15,000 amount is not questioned.)
Appellants argue in particular that plaintiff failed to establish his right to rely upon Carter’s representations in that such right is inseparably connected with the correlative duty to use diligence in respect to
Examination of the capital letter provision shows that it was notice to plaintiff of who had to approve an application for a dealer agreement and how it would be approved. Plaintiff, Carter, and Woodin understood who such officials were, that they were located in Detroit, and that such approval would be written. Plaintiffs inquiries of Carter and Woodin, beginning with a November 3, 1958, meeting, related to whether the zone office had sent his application to Detroit and whether it had been approved in Detroit. Plaintiff took no action to carry out his heretofore contingent agreement to purchase from Kuckelmans until he was told on December 23, 1958, by General Motors’ agent Carter that his contract was in the zone office ready for plaintiff’s signature. Plaintiff’s submission is not that he relied on any statement by Carter or Woodin that they had approved the contract or that written approval of the application had been received; he relies only on Carter’s statement in Woodin’s presence that he was getting a new contract which was now in their office. There was nothing about the capital letter understanding that told plaintiff he could not believe what he was told by General Motors’ agent who was in the zone office for the specific purpose of transacting the company’s business with retail dealers and prospective dealers. It cannot be read as notice to plaintiff that Carter had no authority to represent to plaintiff that the situation had changed from a proposed transfer from Kuckelmans to plaintiff to one in which not a written approval of an original application but a new franchise contract itself was in the zone office for delivery to plaintiff confin-gent only upon furnishing a letter of intent to construct additional space and improving his purchase arrangements with Kuckel-mans so that he would not be burdened with obsolete parts and overpriced shop equipment. He did thereafter alter his contract with Kuckelmans and was prepared to give the letter of intent to build whenever Field Representative (block man) Tuckfield came to get it. No reason appears why plaintiff should question the truthfulness and veracity of the General Motors agents in dealing with him in a situation where the agents had superior knowledge of the subject matter, and any questions of credibility would be for the jury to resolve.
The law on a person’s right to rely upon fraudulent statements against a contention of lack of care and diligence is reviewed and stated in Cottrill v. Crum,
“ * * * In other words, the jury were told in this instruction that, although the defendant made false representations as to material, existent facts, calculated to affect the plaintiff’s estimate of the value of the property, for the purpose of inducing him to trade therefor, upon which the plaintiff relied, and by which he was induced to make the trade, yet if, by diligent inquiry, he might have discovered that such representations were false, then he could not recover. We do not understand this to be the law. ‘It has indeed been laid down as a broad proposition of law that if the means of knowledge be at hand, and equally available to both parties, and the subject of the transaction be open to the inspection of both alike, the injured party must avail himself of such means, if he would be heard to say that he was deceived by the representations of the other party, unless there was a warranty of the facts.’ Bigelow, Frauds, 522. This instruction cannot be maintained even upon the broad terms of this proposition; for by it the plaintiff is precluded from recovery if he could have discovered the truth by diligent inquiry, whether the means of knowledge were at hand, or
Baker v. Bickel, Mo.,
Appellants argue further from the application’s capital letters that plaintiff was “specifically advised of the limits of authority” of the General Motors agents, and that a corporation is not bound by the acts of agents “within some apparent scope of authority, when the person dealing knows that the corporate agent has no such authority.” International Harvester Co. of America v. Rieke, 8 Cir.,
The particular difference between Carter’s lack of authority to give written approval of plaintiff’s application or to enter into a contract, and the liability for the tortious representation by Carter that a contract of franchise for plaintiff was in Carter’s office is stated, Globe Indemnity Co. v. First National Bank in St. Louis, Mo.App.,
Appellants, of course, interpret the testimony and evidence differently; but respondent is entitled to the most favorable view of the evidence, and under this evidence and these authorities, plaintiff’s case was for the jury.
Appellants charge error in admitting, in violation of the Dead Man’s Statute, Section 491.010, V.A.M.S., plaintiff’s testimony as to statements of Chevrolet Zone Manager Bennett C. Carter to plaintiff, because Mr. Carter was dead at the time of trial. Appellants cite a number of cases which assert generally that where the agent with whom the plaintiff dealt in transactions in issue is dead, the plaintiff may not relate statements of the agent against his principal, but such cases and general rule do not govern this case.
Mr. Carter was an original defendant in this case, but he died prior to trial and his administratrix was substituted as a party defendant. The fraudulent representation attributed to Mr. Carter and relied upon as the basis of plaintiff’s action was made on December 23, 1958, when Carter was the agent of General Motors as Kansas City Zone Manager of Chevrolet Division. On that date William L. Woodin, a joint defendant until dismissed at the close of plaintiff’s case, was also the agent of General Motors as assistant manager of the Kansas City zone office. Mr. Woodin was present and participating with Mr. Carter at the initial meeting with plaintiff in the zone office September 29, 1958; he was
Under these circumstances Woodin and Carter were joint agents in all transactions with plaintiff in the course of their employment and the Dead Man’s Statute does not apply. “The object of the statute is to guard against false testimony by the survivor, and, in order to do this, it establishes a rule of mutuality, by which, when the lips of one contracting party are closed by death, the lips of the other party are closed by law. And this principle remains unaltered, as well where the contracting agent of a corporation dies, as where the contracting agent of a firm dies; and the dangers and the mischiefs of any other rule would be as great in the former as in the latter case. A corporation can only speak and act through agents. The agent represents the corporation, and if, after the death of an agent of a corporation, it were admissible for a party to come in and testify to a contract made with such agent, * * * it is easy to see that corporations would be without protection * * Williams v. Edwards,
Error is charged against defining “ordinary care” as “that degree of care that the plaintiff would reasonably use under his situation and circumstances.”
The gist of appellants’ argument is that this definition provides “actually no stand
Admittedly MAI 11.05 defining ordinary care does not provide a definition applicable to a fraud case thus requiring a modification for this case.
The rule with respect to care in a fraud case is stated in State ex rel. Union Pac. R. Co. v. Bland,
Appellants suggest that the definition should have been “that degree of care that would be reasonable in view of plaintiff’s situation,” and such a definition would be preferable, but the definition given was sufficiently accurate as to avoid misdirection and negate the strained construction placed upon it by appellants. Fields v. Missouri Power & Light Co., Mo.,
Examined by these principles,' the definition did not assume nor direct the. jury that the ordinary care required of plaintiff was what he thought was reasonable under the circumstances. While the
Instruction No. Four on measure of damages and No. Eleven on forms of verdict each required assessment of damages against both defendants if the issues were found for plaintiff. Appellants charge this to be an erroneous submission, arguing that “defendant Carter could be liable for actual damages alone, on the basis that the claimed representations, not being authorized by defendant General Motors, were not binding upon the corporate defendant.”
Appellants recognize that “[t]he principal must respond for any fraud that an agent perpetrates while he is about his master’s business within the scope of his authority”, National City Bank v. Carleton, supra,
“Under the particular factual situation here presented we find no error in the giving of Instruction No. 9. It will be recalled that the first paragraph of plaintiff’s verdict-directing instruction required the jury to find as true the plaintiff’s theory that Santa Cruz was acting as the agent of the other defendants in conducting the negotiations with the plaintiff regarding the sale of this building. Read together the first and second paragraphs of Instruction No. 3 required the jury to find that Santa Cruz was acting as agent for the other defendants at the time the misrepresentation was made. In view of the plaintiff’s theory as to Santa Cruz’s agency and the uncontra-dicted evidence to support it, the giving of this instruction precluding the jury from finding against less than all of the defendants was not error.” 403 S.W.2d l.c. 657.
Instruction Number Five authorized an award of punitive damages against General Motors if the jury found that the agent’s conduct as submitted in Instruction Number Two was wilfully wanton or malicious. Appellants assert that punitive damages are not recoverable against the estate of the decedent, and since Carter was dead and could not respond in punitive damages, this precluded an award of punitive damages against General Motors and error is charged, therefore, in submitting an issue of punitive damages to the jury.
Although not ruled in Missouri, it appears from the law of other jurisdictions that where a wrongdoer has died before trial, punitive damages cannot be awarded against his estate. See for example, Evans v. Gibson,
“We have consistently sustained the award of punitive damages against a corporate defendant (private corporation) for the wrongful act of its servant or agent in the course or line of his employment when the evidence shows such wrongful act was done wilfully, wantonly or maliciously.” State ex rel. United Factories, Inc. v. Hostetter,
The precise point was decided in Ford Motor Credit Co. v. Hill, W.D.Mo.,
Finally, appellants complain of the definition of “agency” in Instruction Number Three, arguing that it did not fit the case or issue and that offered Instructions A and C should have been given.
Instruction Number Three was MAI 13.02. Although designed for use in a case of battery by an agent, it is equally the proper instruction for use in a case involving other wrongful or tortious conduct of an agent, and whenever MAI contains an instruction applicable to a particular case, “such instruction shall be given to the exclusion of any other on the same subject.” Civil Rule 70.01(b). Examination of offered Instructions A and C shows them not to be definitions of “agency” appropriate to this case; at most, they are converse or cautionary instructions.
Judgment affirmed.
The foregoing opinion by HIGGINS, C., is adopted as the opinion of the court.