Smith v. Wrehe

261 N.W.2d 620, 199 Neb. 753, 1978 Neb. LEXIS 634
CourtNebraska Supreme Court
DecidedJanuary 11, 1978
Docket41294
StatusPublished
Cited by50 cases

This text of 261 N.W.2d 620 (Smith v. Wrehe) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Wrehe, 261 N.W.2d 620, 199 Neb. 753, 1978 Neb. LEXIS 634 (Neb. 1978).

Opinion

Brodkey, J.

Alan E. Smith, plaintiff and appellee herein, initiated this action to recover the balance due on the purchase price of a contract for the sale of a taxicab company to Harold E. Wrehe, defendant and appellant herein. Defendant prayed for dismissal of plaintiff’s petition on the grounds that he was not personally liable on the contract, and that he had been induced to sign the contract because of a false representation made by the plaintiff. The trial court determined as a matter of law that the balance due on the contract was owing to the plaintiff and that defendant’s claim of misrepresentation was not sustained by the evidence. The court submitted to the jury only the issue of whether the defendant was *755 personally liable on the contract, or whether his assignee was liable. The jury returned a verdict in favor of the plaintiff, judgment was entered thereon, and defendant’s motion for new trial was overruled. Defendant has now appealed to this court, contending that the trial court erred in failing to submit to the jury his claim of misrepresentation; and in failing to instruct the jury that should it find that the parties’ intent was that the contract could be assigned by the defendant, then it must find that the assignee was liable for any indebtedness on the contract. We affirm the judgment of the District Court.

The facts relevant to this appeal are as follows. On October 1, 1973, defendant contracted to buy plaintiff’s taxicab company, which was located in Council Bluffs, Iowa, for a price of $27,900. Initial payments totalling $12,900 were made at the time of closing. The contract provided that the balance of $15,000 “shall be satisfied by the promissory note of the Buyer.” Immediately after this provision, the words “or his assignee” were deleted from the contract, which had been prepared by defendant’s attorney, and both parties initialed the deletion. The balance due was to be paid in monthly installments of $500, with interest of 8 percent thereon.

The contract also provided: “It is expressly understood that the Buyer expects to cause a new corporation to be formed to own and operate the taxi cab business herein being purchased and to assume the Buyer’s responsibilities under this Agreement. The Seller hereby consents to the assignment of the interest acquired by the Buyer under this Agreement to such corporation.” The words “which shall then stand in the Buyer’s stead to the same extent as if such corporation had been an original party to this Agreement” were deleted from the end of the last sentence quoted immediately above, this deletion being initialed by both parties.

*756 At the time of the sale, the company, the Yellow Cab Company of Council Bluffs, was the only cab company in that city. Defendant did incorporate the newly purchased company, and assigned his rights and delegated his duties under the sales contract to the new corporation. The new corporation made payments on the balance due on the contract until March 1975, at which time neither the defendant nor the corporation made further payments. At the time of trial, approximately $12,000 remained owing on the contract.

The plaintiff testified that prior to the execution of the contract he told the defendant that the cab company was “the only cab company in Council Bluffs.” Plaintiff introduced the defendant to city officials of Council Bluffs, in part to enable the defendant to ascertain whether the city would issue a cab company permit to another person so long as the defendant maintained a cab company without complaints. Plaintiff denied that he represented to defendant that he was selling a cab company franchise which was intended to be exclusive in nature.

On direct examination, defendant testified that plaintiff told him that he was buying the “exclusive right to the Yellow Cab Company of Council Bluffs,” and that there would be no competition in Council Bluffs. Defendant also stated that a city official of Council Bluffs told him that “there was only one cab company and that was all the town could support.” On cross-examination, defendant stated that he did not believe that plaintiff was “in cahoots” with the city officials with regard to the sale. Defendant also stated that he believed that the city officials were honest when they stated that only one cab company could exist in Council Bluffs. Finally, defendant was asked and answered questions as follows: “Q. And really Mr. Smith didn’t tell you anything beyond what the city officials told you, did he? A. No, he said that it was only a one cab city, that it should *757 only be a one cab city. Q. And that is exactly what the city officials told you; isn’t that right? A. That’s right.”

After the purchase, defendant’s company did not fare well, apparently because of poor management. Approximately 1 year after the contract was executed, a second cab company began operation in Council Bluffs. This second company was founded by plaintiff’s business associate, who also was a brother-in-law of the defendant. There was no evidence that the plaintiff was involved, directly or indirectly, with the second company, even to the extent of encouraging or suggesting its formation. Apparently some of the drivers who were employed by defendant’s company chose to leave their employment and work for the second company. Defendant’s company was eventually closed.

Defendant’s claim concerning misrepresentation is that the plaintiff fraudulently represented to him that he would be able to continue the operation of the only authorized cab company in Council Bluffs. Since the trial court directed a verdict in favor of the plaintiff on this issue, we must review defendant’s claim in accordance with the rule that a motion for a directed verdict must be treated as an admission of the truth of all material and relevant evidence submitted on behalf of the party against whom the motion is directed. Such party is entitled to have every controverted fact resolved in his favor and to have the benefit of every inference which can reasonably be deduced from the evidence. Jensen v. Shadegg, 198 Neb. 139, 251 N. W. 2d 880 (1977).

To maintain or defend an action on the ground of false representation, the pleader must allege and prove what representation was made, that it was false and so known by the party making it or was made without knowledge as a positive statement of known fact, that the pleader believed the representation to be true, and that he relied on and acted upon *758 it and was thereby injured. Cook Livestock Co., Inc. v. Reisig, 161 Neb. 640, 74 N. W. 2d 370 (1956). The fraud involved in the misrepresentation must relate to a present or preexisting fact, and generally may not be predicated on an inference concerning any event in the future or acts to be done in the future unless such representations as to future acts are falsely and fraudulently made with an intent to deceive. Central Constr. Co. v. Osbahr, 186 Neb. 1, 180 N. W. 2d 139 (1970); Transportation Equipment Rentals, Inc. v. Mauk, 184 Neb. 309, 167 N. W. 2d 183 (1969). See, also, Boettcher v. Goethe, 165 Neb. 363, 85 N. W. 2d 884 (1957).

In the present case, ibis apparent that the defendant, as a matter of law, did not present sufficient evidence to sustain his burden of proof on the issue of misrepresentation.

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Cite This Page — Counsel Stack

Bluebook (online)
261 N.W.2d 620, 199 Neb. 753, 1978 Neb. LEXIS 634, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-wrehe-neb-1978.