White Sewing Machine Co. v. Gilmore Furniture Co.
White Sewing Machine Co. v. Gilmore Furniture Co.
Opinion of the Court
delivered the opinion of the court.
This is an action in assumpsit to recover $1,500, by the White Sewing Machine Company, a corporation, against Gilmore Furniture Company, a corporation, a balance claimed for the purchase price of a carload of 150 sewing machines. The case was tried upon the plea of non-assumpsit and two special pleas. The special pleas alleged false representations and fraud on the part of the vendor and its agent, and claimed consequential damages of $5,038.48, and sought to recover the difference against the plaintiff. The plaintiff demurred to the defendant’s evidence. The jury found a verdict in favor of the plaintiff for $1,500 and in favor of The defendant for $2,850 damages, subject to the judgment of the court upon the demurrer to the evidence. The court overruled the demurrer, entered judgment in favor of the defendant for $1,350, the difference, and of this the White Sewing Machine Company is here complaining, but has failed to specify and assign errors in its petition for the writ of error with that particularity which is required.
■ The facts appearing are substantially these: In June, 1910, N. L. Massey, as the sales agent of the White Company, approached John A. Gilmore, president of the Gilmore Company, for the purpose of making a sale Of ', a large
“I personally agree to furnish the Gilmore Furniture Company two salesmen to sell 150 machines, this day purchased, for them, they to pay said salesmen $6.25 commission for each machine sold and expenses and board and furnish horses and wagons, and to furnish W. T. Fitzpatrick free for one week, they to pay his board and to give demonstration of White with Art Exhibit.
“N. L. Massey.”
The Gilmore Company, in their efforts to dispose of the machines, encountered many difficulties, incurred expense, spent much time, and then finally notified the White Company that they would decline to pay the balance claimed and would claim damages because of these false representations under which they had been induced to enter into the contract.
It is alleged that the court erred in permitting the introduction of the personal agreement signed at the same time by N. L. Massey, upon the ground that it varies and con
In Baker v. Berry Hill Co., 109 Va. 776, 65 S. E. 656, where the plaintiff sought to enjoin an action on notes alleging that they had been secured by collateral as part of a fraudulent scheme to deprive the plaintiff of certain securities and with the understanding that they were not to be enforced except as the collateral should be sold pursuant to a general scheme, it was objected that to recognize such a scheme would be a violation of the parol evidence rule; but this court held that, “The proposition is founded upon the parol evidence rule, that a contract in writing complete on its face cannot be altered or contradicted by such evidence of an inconsistent agreement previously or contemporaneously made. But there is a well recognized excep
The exception is thus stated in Clinch Valley Coal & Iron Co. v. Willing, 180 Pa. St. 165, 36 Atl. 737, 57 Am. St. Rep. 626: “The execution of a contemporaneous parol agreement between the parties, under the influence of which a note or contract has been signed, which is violated as soon as it has accomplished its purpose in securing the execution of the paper may always be shown where the enforcement of the paper is attempted. It is a plain fraud to secure the execution of an instrument by representations as to the •manner in which payment shall be made, differing in important particulars from those contained in the paper, and after the paper has been signed, attempt to compel literal ■compliance with the terms, regardless of the contempora•neous agreement without which it never would have been signed at all.
The same principle generally prevails, and Judge Cooley, in Laing v. McKee, 13 Mich. 124, 87 Am. Dec. 738, where the plaintiff sought to recover of the defendant, a purchaser at a tax sale, certain lands which the defendant had bought in and which the plaintiff had not redeemed, relying on defendant’s promise to make over to plaintiff an assignment of the certificate, the promise being shown to be fraudulent, held that the plaintiff was entitled to relief in spite of the statute of frauds, and said: “It is a matter of no moment whether the fraud was perpetrated by means of a promise upon which he (plaintiff) relied,, and which defendant did not intend to keep, or by untrue statements as to existing facts.”
Coming specifically to the clause purporting to exclude all agreements or understandings with the sales agent, we repeat that the Gilmore Company is not relying upon the
We find this in Crump v. U. S. Mining Co., 7 Gratt. (48 Va.) 368, 56 Am. Dec. 116:
“That a person professing to act as agent for another does so wholly without authority, or transcends the authority actually conferred upon him by his principal, is no reason for enforcing the contract against the other party when obtained from him by false and fraudulent representations. In the words of a judicious writer: ‘Contracts made for the benefit of another, but without his privity or consent, may be rejected or affirmed at his election. But by making the election to affirm it he adopts that which is detrimental as. well as that which is for his benefit. And in seeking to enforce contracts entered into by agents, the principal is subject to have them impeached by any conduct of his agent which would have that effect if proceeding from himself. Every species of fraud, misrepresentation, or concealment, therefore, in the agent, affects the principal’s right to recover.’ * * *
“It is difficult to conceive a case of an action founded upon contract of sale, to which the defense is that it was obtained by fraud, in which the acts and declarations, whether of the principal seeking to enforce the contract, or of his agent through whose intervention it was procured, occurring at the time of making' it as part of the res gestae, are inad*641 missible evidence. Such a defense does not present a naked question of law for the decision of the court; but a mixed question of law and fact for the consideration of the jury, with the aid of such instructions as the court may give in regard to the principles of law applicable to the facts that may be proved to the satisfaction of the jury.”
Owens v. Boyd Land Co., 95 Va. 560, 28 S. E. 950, enforces the same rule.
The precise question involved in the sale of machines of various kinds has frequently been considered in other jurisdictions. For instance, in J. I. Case Threshing Co. v. McKay, 161 N. C. 584, 77 S. E. 848, which was an action for the purchase price of a tractor, in which the defendant pleaded that certain false representations as to the capacity of the engine had been made to him as an inducement to purchase. In considering the effect of a clause limiting the authority of the selling agent, and exempting the seller from liability for representations of its agent at variance with a written contract, it is said: “It is contended that the contract contains a clause limiting the authority of the selling agent and that McKay, being able to read, is fixed with knowledge of such clause. This position, might be well taken if the defense was based upon the contract, but it is well settled that a clause in a sale contract exempting the seller from liability for its agent’s representations at variance with the contract does not protect the seller where the contract was void by reason of agent’s fraud. Machine Co. v. Bullock, 161 N. C. 1, 76 S. E. 634, last term. In Unitype Co. v. Ashcraft, 155 N. C. 63, 71 S. E. 61, it was said, ‘The declarations made by the agent were made by him dura fervet opus and his principal must be considered as bound by them as much so as if it had' made them itself.' As said in Peebles v. Guano Co., 77 N. C. 233, 24 Am. Rep. 447, ‘A corporation can only act through its agents and must be responsible for their acts. If a manufacturing cor-
To the like effect is Smith & Nixon Co. v. Morgan, 152 Ky. 430, 153 S. W. 749, which was an action on a contract for the sale of a player piano, in which the court held parol evidence admissible to prove that the contract was induced by fraudulent representations, notwithstanding such a clause limiting the authority of the selling agent. And this must be true, because otherwise such a condition would make it impossible to avoid any such sale, however fraudulent it might be.
In Tiffany v. Times Square Automobile Co., 168 Mo. App. 729, 731, 154 S. W. 865, 866, where the contract contained the clause “It (the instrument) is the complete and entire contract between the parties and no representations, warranties, or conditions, other than those appearing hereon, will be binding upon either party,” the court held that parol evidence was admissible to show fraud in the procurement of the written contract, saying: “The words of the contract have full force and application- as to representations, warranties, and conditions culminating in a sale. But they do not mean that fraud should not be inquired into. One’s written contract may be such as to show that fraud, as known to the law, has not been committed; but we think it would not be permissible for a party to make a binding contract that his fraud shall not be shown, any more than that it would that his crime should not be closed from view by the terms of the written paper.”
Pertinent cases illustrating the principle could be multiplied, but we only note one other, because it involves the precise clause in question, and the plaintiff in error here. That is White Sewing Machine v. Bullock, 161 N. C. 1, 76 S. E. 634, where it is held that it constituted no bar in
The representatives of fifteen dealers who had purchased machines from the White Company under contracts made between February, 1909, and June, 1913, testified in this case. Their transactions were strikingly similar to this and to each other. In each case the purchaser had been induced to purchase the machines by representations alleged to be false and fraudulent, and all the transactions were entirely unsatisfactory in their results; and the methods of their agent, Massey, in inducing merchants to buy their machines, has been brought to the attention of the White Company so frequently as to leave no doubt that they were fully aware of his habitual unrighteous business methods. In this case neither Massey, who attended the trial, nor any other representative of the White Company, took the witness stand or controverted in the slightest degree the damaging facts which so clearly demonstrated the system of fraud of which the Gilmore Company in this case was made the victim.
We do not think it necessary to pursue this feature of the case any further, because it is perfectly apparent from the evidence that the allegations of the pleas that the contract was induced by the fraudulent representations of Massey, the agent of the. White Company, are fully sustained. Upon the merits of the case there can be but one conclusion.
Taking up. the certificates of exception and the specific objections to the procedure, we find this:
After having detailed the circumstances, including the
We have discussed this question in the case of French v. Virginian Ry. Co., 121 Va. 383, 93 S. E. 585, and there held that notwithstanding the strictness of the original rule as to the proof necessary to authorize the introduction of books or summaries therefrom, a freight adjuster, who was an employee of a railway company would be allowed to testify that he had obtained the original train sheets from the proper custody, and that thus identified these train sheets were admissible as evidence. The insistence there was that such sheets could only be verified by the train dispatcher in whose office they were lodged. We have no reason to doubt the soundness of that decision, and for the reasons which are there stated, which we think it unnecessary here to repeat. It would indeed be a reflection upon the law to say that the president and general manager of the business of a corporation, could not identify the books of the corporation, for whose business in its details he was personally responsible as its general manager, and who testified in addition that he supervised its bookkeeping. The substance of the exception is that Gilmore occupying that relation to these books, could not identify them. Every other fact which is necessary for the introduction of the books appears,
“The court instructs the jury that the measure of damages for misrepresentation of the price at which machines of this kind and quality had been sold, is the difference between the price at which they had been sold and the price paid, and they shall find accordingly. The measure of damages for false representations regarding other sales and regarding the assembling of a corps of honest, trained and efficient salesmen, and regarding the honest purpose of Massey to carry out the agreement to furnish such men, is the difference between the value of such machines if such representations had been true and their value under actual conditions. This difference in value the jury shall determine and charge against the plaintiff.”
We are of opinion, therefore, to affirm the judgment.
Affirmed.
Reference
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- Syllabus
- 1. Sales — Fraudulent Representations of Agents — Stipulation in Qontract Limiting Authority of Agent. — A clause in a sale contract exempting the seller from liability for its agent’s representations at variance with the contract does not protect the seller where the contract is void by reason of the agent’s fraud. Such a clause does not refer to false and fraudulent representations of fact, and if it did would be unavailing, because a principal cannot by any) such clause or other device relieve himself of the consequences of the fraud of his own agent while claiming the benefit of the contract. 2. Sales — Fraudulent Representations of Agents- — Stipulation in Contract Limiting Authority of AgenL — Case at Bar. — In the instant case an order was obtained by plaintiff from defendant, a retail dealer, for the purchase of a carload of sewing machines by means of the fraudulent representations- of plaintiff’s agent. The order contained a clause that no claim of any understanding or agreement between the plaintiff company ar d purchasers would be recognized unless in writing and accepted by the company. It was contended that by reason of this clause it was error for the trial court to allow the introduction of a personal agreement signed by the agent guaranteeing the fulfillment of certain representations made by him upon the ground that such agreement varied the written contract. Held: That this contention misconceived the true nature of defendant’s defense, which was not an attempt to hold plaintiff responsible for the agent’s personal contract, but an effort to recover damages resulting from the contract, which was induced- by false representations of the agent, and for which plaintiff assumed responsibility by claiming the benefit of that contract after full notice of the agent’s chicanery. 8. Sales — Fraudulent Representations of Agent — Pcwol Evidence.— Parol evidence is admissible to prove that a contract of sale was induced by the fraudulent representations of seller’s agent, notwithstanding a clause limiting the authority of the selling agent, and exempting the seller from liability for representations of its agent at variance with the written contract. 4. Sales — Fraudulent Representations — Reliance on Representor tions — Presumption of Reliance. — Of course, the false representation which is relied upon to escape the binding effect of a contract must be relied upon by the vendee at the time the contract is entered into; but when the vendor has made a false representation, which from its nature is likely to induce a buyer to enter into a contract on the faith of such' representation, it will be inferred that the vendee was induced thereby to make the contract, and he is not required to show that he in fact relied upon the representation. If the seller wishes to discredit this natural inference, he must prove either that the buyer knew that the representation was false, that he expressly stated in terms, or showed by his conduct that he relied upon his own judgment and not upon the false representation. 5. Appeal and Error — Assignment of Error — General Objections.— A certificate of exception to- the testimony of a witness showed in general terms that counsel objected to the introduction of the witness’s testimony. As there were fifteen questions and answers, this was entirely insufficient to sustain the exception. The exceptor should designate the particular questions and answers his exceptions relate to. The Supreme Court of Appeals will not endeavor, where some of the evidence is clearly admissible and some may be inadmissible, to discover the objectionable portions of the testimony. 6. Sales — Evidence—Admissibility—Res Gestae- — -Appeal and Error —Ha/rmless Error. — In an action by seller for the purchase of sewing machines, which buyer was induced to purchase by the fraudulent representations of seller’s agent in regard to a scheme to aid the buyer in reselling the machines, the personal guaranty of the agent of the reselling scheme, while not admissible for the purpose of varying or contradicting the contract of sale, was admissible as a part of the res gestae — the ' attending circumstances and conditions under which the contract was entered into. Even if it should not have been admitted, its admission was harmless, because the jury clearly understood-that it constituted no part of the contract. 1. Documentary Evidence — -Books of Account — Identification by President of Corporation. — The regular books of a corporation, containing the financial record of its business with| the entries made contemporaneously with the transactions referred to, are admissible when they come from the proper custody, and are identified by the president and general manager, of the corporation who also supervised the bookkeeping of the corporation, although the actual entries were made by a number of bookkeepers. 8. Documentary Evidence — Books of Account. — In an action by a seller for purchase price, the ledger sheets of the buyer corporation were introduced by its president showing merely the dates and amounts of debit and credit, with references to the pages of the journal and cashbook. On cross-examination, the president testified that he could not tell to whom and for what many of the amounts referred, but testified that he could go back and find out. On the next day he produced the same sheets with the names of the parties and the purposes for which the several payments had been made added, identifying the items from his examination of the cashbook and journal. As thus amended the admission of the sheets was objected to. Held: That the sheets as amended were admissible. The additions to the ledger sheets were made in order to give the court, jury, and counsel such additional information as could be obtained from the books of original entry. 9. Sales — Documentary Evidence — Work of Salesmen. — In an action for the purchase price of sewing machines, where the defense was fraudulent representations as to a reselling scheme, the president of buyer corporation was asked whether he could show the work of each salesman from his books, and he thereupon made up some statements of the work of the various salesmen, showing the amounts collected and paid out on account of the work of each, and tendered them. Held: That the court properly admitted the statements and allowed the president to testify with reference thereto. 10. Documentary Evidence — Books of Account — Summaries in Original Books. — Exceptions to the introduction of the ledger sheets of a corporation and summaries therefrom, whatever difference of opinion there might be as to their introduction in the first place, become immaterial and of no consequence whatever in view of the fact that the witness brought the books of original entry into the court room, and they were formally tendered as evidence, so that counsel who questioned the verity of any of the items shown by these statements had the opportunity to examine the original books and' to discredit them if they could have be.en discredited. 11. Sales — Instructions—Fraud of Seller’s Agent — Measure of Damages. — In an action for the purchase price of a carload of sewing machines, the defense interposed was the fraudulent representations of the seller’s agent. The court instructed the jury that the measure of damages for misrepresentation of the price at which the machines had been sold by others was “the difference between the price at which they had been sold and the price paid.” Held: That while not as clear as it might have been, the instruction could not have misled the jury. In substance the instruction told the jury that the measure of damages for' the misrepresentation of the price at which such machines! had been sold to others is the difference between such smaller price and the price fixed in the contract with the buyer, which was substantially correct. 12. Sales — Instructions—Fraud of Seller’s Agent — Measure of Danvages.- — In an action for the purchase price of a carload of sewing machines, the defense interposed was the fraudulent representations of the seller’s agent. The court instructed the jury that the measure of damages for false representations regarding other sales and regarding the assembling of a corps of efficient salesmen, and regarding the honest purpose of seller’s agent to carry out the agreement to furnish such men, was the difference between the value of such machines if such representations had been true and their value under actual conditions. Held: Correct. 13. Damages — Speculative Damages — Remote Damages — Sales— Fraudulent Representations of Agent. — The question of damages is one peculiarly within the province of the jury, and, while a litigant cannot escape his obligation to establish his damages with reasonable certainty by the best evidence which is available, still where it is manifest that he is entitled to substantial damages and does the best he can to give the jury all of the information he possesses, he is not to be denied any recovery because he cannot demonstrate the amount of such damages with precision. Such uncertainties will always be resolved against a vendor who seeks to profit by the fraud of his own agent. 14. Sales — Fraudulent Representations bp Seller — Buyer’s Damages. —Where a retail dealer was induced to make a contract for the purchase of 150 sewing machines, at $26 each, by the fraudulent representations of seller’s agent as to aid to be furnished the retail dealer in reselling the machines, and the retail dealer spent a great deal of time and money in endeavoring to sell the machines, suffering substantial pecuniary damage, all available facts being before the jury there is no sufficient reason for concluding that a verdict for $2,850 in favor of the retail dealer was excessive.