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Kelleher v. Detroit Motors

Decided: October 20, 1958.

FRANCIS KELLEHER, PLAINTIFF-RESPONDENT,
v.
DETROIT MOTORS, A CORPORATION, DEFENDANT-APPELLANT, AND DON ORLEY, ALSO KNOWN AS DONALD ORLOWSKI, DEFENDANT



Price, Schettino and Gaulkin. The opinion of the court was delivered by Gaulkin, J.A.D.

Gaulkin

Plaintiff recovered a judgment for $4,000 against Detroit Motors and Don Orley, its salesman. When the complaint was served upon Orley it contained only the first count hereafter mentioned, which sought compensatory damages of $2,350.76. Orley failed to file an answer. Thereafter the complaint was amended to add a second count which demanded $10,000 punitive damages. The amended complaint was never served upon Orley. Plaintiff concedes that so much of the $4,000 judgment as represents punitive damages awarded against Orley on the second count is invalid, even though Orley has not appealed. Detroit Motors appeals from the entire judgment.

Plaintiff's complaint, as amended, alleged that in October 1956 defendants had sold him an automobile represented to be a new 1956 Chevrolet when it was in fact used; that immediately upon learning this he offered to return it to defendants upon refund of the purchase price of $2,100 plus carrying charges of $250.76 which he had paid upon the conditional sales contract under which the automobile had been sold to him; and that defendant had refused to accept the car or to refund those sums to him. Plaintiff therefore demanded, in the first count of his complaint, the sum of $2,350.76. In the second count he repeated these allegations and demanded punitive damages.

Detroit Motors' answer denied any misrepresentations and said that if Orley had made any the corporation had no knowledge thereof, did not authorize them and was not responsible for them. The answer (filed April 26, 1957) further alleged that plaintiff had used the automobile "for a period of four months." In the pretrial order the defendant asserted that if there was any fraud it was committed

by Orley without the corporation's knowledge or consent, and consequently the corporation was not liable for punitive damages. Among the issues stated in the pretrial order was "rescission or attempted rescission."

The car was purchased in October 1956 and plaintiff tendered its return three months later. At the trial in January 1958, 14 months after the purchase, plaintiff testified as follows on cross-examination:

"Q. Mr. Kelleher, you still have this car today? A. Yes.

Q. You use it? A. Yes.

Q. You used it ever since you took it out of the Detroit Motors lot, is that right? A. That's right."

At the conclusion of plaintiff's case defendant moved to dismiss the first count (which demanded $2,350.76) on the ground that since plaintiff continued to use the automobile for almost a year after the tender he waived the rescission. Therefore, said defendant, the measure of his damages was the difference between the value of a new 1956 Chevrolet in October 1956 and the car which he received, and since no evidence of that difference had been offered by plaintiff, defendant was entitled to a dismissal of the first count. Defendant also moved for a dismissal of the second count, for punitive damages, on the ground that it had not been shown that Orley's misrepresentations had been authorized by or brought home to the corporation. Both motions were denied.

At the conclusion of the entire case defendant again moved for judgment on both counts on the ground that plaintiff "still has the use of the car and he has had the use of the car for one whole year," and on the ground that no case had been made out against the corporation for punitive damages. These motions were denied. The court did not submit to the jury in its charge ...


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