Lindberg Cadillac Company v. Aron
371 S.W.2d 651, 1963 Mo. App. LEXIS 450 (1963)
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Rule of Law:
A seller's silence about a known, material, latent defect constitutes actionable fraud when combined with affirmative acts of concealment intended to prevent the buyer's discovery of that defect.
Facts:
- In October 1959, the coolant in a 1957 Imperial owned by Aron froze, causing the motor block to crack on both sides.
- A filling station operator informed Aron of the cracked block and the estimated cost for a proper repair.
- At Aron's direction, the operator performed a temporary repair using a sealer and then concealed the filled cracks with Permatex, a gasket sealer.
- On November 20, 1959, Aron brought the Imperial to Lindberg Cadillac Company to trade it in.
- During the appraisal, Lindberg Cadillac's salesmanager inspected the car, but the concealed cracks were not discoverable through ordinary diligence like checking for overheating or leaks.
- Aron did not disclose the existence of the cracked motor block during the trade-in negotiations.
- Relying on the car's apparent condition, Lindberg Cadillac allowed a trade-in value of $2,290.
- After reconditioning and selling the car, the new purchaser discovered the defect when the car overheated, at which point the cracks were found.
Procedural Posture:
- Lindberg Cadillac Company (plaintiff) filed a fraud action against Aron (defendant) in the trial court.
- The case was tried to the court without a jury (bench trial).
- The trial court found in favor of the plaintiff, Lindberg Cadillac, and awarded damages of $759.00.
- The defendant, Aron, filed a motion for a new trial, which the court denied.
- Aron (appellant) appealed the trial court's judgment to the St. Louis Court of Appeals.
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Issue:
Does a seller's silence about a known, material defect, combined with acts of concealment intended to prevent the buyer's discovery of that defect, constitute actionable fraud?
Opinions:
Majority - Wolfe, Judge.
Yes. A seller's silence about a known, material defect, combined with affirmative acts of concealment, constitutes actionable fraud. The court reasoned that while mere silence is not always fraud, it becomes fraudulent when a seller knowingly allows a buyer to be deceived about a vital aspect of the transaction. Here, the case involved more than mere silence; it involved 'positive fraudulent concealment.' Aron's act of having the cracks sealed and then covered with Permatex was an artifice calculated to mislead Lindberg Cadillac. Citing Jones v. West Side Buick Auto Co., the court analogized this act to turning back a speedometer, holding that a representation is not confined to words but can consist of deeds or acts designed to deceive. Therefore, Aron's actions were designed to, and did, defraud the plaintiff.
Analysis:
This case solidifies the principle that fraud by concealment can be established without any verbal misrepresentation. It clarifies that affirmative actions taken to hide a defect are treated as fraudulent representations in themselves. The decision is significant for transactions involving used goods, particularly vehicles, as it holds sellers accountable for actively masking latent defects that a buyer could not discover through ordinary diligence. This precedent strengthens buyer protection by expanding the concept of fraudulent representation beyond words to include deceptive acts.
