Donald S. WILSON, Maxine G. Wilson, his wife; Louis A. Aslanian and Alice Aslanian, his wife, Appellants,
L. M. BYRD and Anna Byrd, his wife, Appellees.
[79 Ariz. 303] Fred J. Hyder, Phoenix, for appellants (Edwin D. Green, Phoenix, of counsel).
James E. Flynn, Phoenix, for appellees.
LA PRADE, Chief Justice.
This is an appeal from a judgment wherein the appellants, Donald S. Wilson, Maxine G. Wilson, Louis A. Aslanian and Alice Aslanian, were the defendants and counterclaimants, and the appellees, L. M. Byrd and Anna Byrd, were the plaintiffs. For purposes of clarity the parties will be referred to by their trial court designations.
The plaintiff, L. M. Byrd, by his complaint sought to recover on a conditional sales contract entered into with the defendants. The contract contemplated the sale of a quantity of night club fixtures and furnishings to the defendants, who were also interested in operating the club wherein the fixtures were located. It is clear from the evidence that the plaintiff seller owned nothing but the subject matter of the sales contract.
The defendants in their answer to the complaint affirmatively pleaded that the plaintiff fraudulently induced them to enter into the conditional sales contract. Defendants also brought a counterclaim against plaintiff Byrd seeking to recover damages based on the same fraudulent inducement.
The parties went to trial on the plaintiffs' claim and the counterclaim of the defendants. At the conclusion of the defendants' opening statement the trial court granted a motion of the plaintiffs for a directed verdict in their favor on defendants' counterclaim. The court granted the motion of the plaintiffs based on the insufficiency of the allegation of fraud, in that the defendants failed to allege a 'right to rely' upon the charged misrepresentations. Permission to amend the pleadings and opening statement was denied after an avowal by counsel for the defendants. Trial then proceeded upon plaintiffs' claim on the conditional
sales contract and note. The defendants having pleaded fraud as a defense were permitted to introduce evidence thereon. The jury returned a verdict for the defendants upon the plaintiffs' claim, whereupon the plaintiffs moved for judgment notwithstanding the verdict which was granted.
The defendant-appellants make four assignments of error. Briefly they are these:
[79 Ariz. 304] 1. That the court erred in granting plaintiffs' motion for a directed verdict on the defendants' counterclaim, made at the close of defendants' opening statement; and in overruling defendants' motion for a new trial based on the counterclaim.
2. That the court erred in denying defendants' motions made through the trial to reinstate the counterclaim and allow the introduction of evidence thereon.
3. That the court erred in denying the motion of the defendants to amend their counterclaim, if necessary, to allege that the defendants had a right to rely on the alleged fraudulent statements of the plaintiffs.
4. That the court erred in granting plaintiffs' motion for judgment notwithstanding the verdict of the jury on the plaintiffs' claim; and in overruling and denying defendants' motion for a new trial.
In considering this appeal it will not be necessary to examine each of the above-assigned errors in detail. Consideration will be given to the alleged misrepresentations and their legal significance. There can be no actionable fraud without a concurrence of all the elements thereof. Moore v. Meyers, 31 Ariz. 347, 253 P. 626, reversed on another point, 31 Ariz. 519, 255 P. 164; Koen v. Cavanagh, 70 Ariz. 389, 222 P.2d 630. The elements are:
'* * * (1) A representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) his ...