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contractappealtrialverdicttestimonysustained
defendanttrialverdictmotiontrustwillcorporationsustainedappellantappellee

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Wink Enterprises, Inc. v. Dow, 491 S.W.2d 451

Facts

Wink Enterprises, Inc., composed of three bankers, sought to purchase the Winkler County State Bank after learning it was for sale. They met with Dow, the seller, who assured them that the bank was financially sound and would continue to make money. After purchasing the bank stock for $140,000, the new owners discovered significant financial issues during subsequent bank examinations, leading them to allege that Dow had concealed the true financial condition of the bank.

Appellant herein, Wink Enterprises, Inc., was a corporation composed of Willis A. Hawkins, Jr., Willis A. Hawkins, Sr., and O. Norlan Dudley. These individuals were bankers in various parts of the Texas Panhandle, and learned, in the latter part of July, 1969, that the Winkler County State Bank was for sale.

Issue

Did the trial court err in granting a directed verdict for the seller, thereby failing to allow the jury to consider the evidence of fraud presented by the buyers?

Appellant contends, by its first point of error, that the trial Court erred in instructing a verdict for Appellee as ‘Appellant had fully raised issues of fact to support its cause of action.’

Rule

Fraud in a transaction involving stock consists of a false representation of a past or existing material fact made to induce a person to enter into a contract, which that person relies upon.

In 25 Tex.Jur.2d, Sec. 13, p. 625, the elements of fraud are ‘. . . said to be made up of any act, omission, or concealment that involves a breach of legal duty, trust, or confidence justly reposed and that is injurious to another person, or by which an undue and unconscientious advantage is taken. An action for fraud may rest on concealment of, or failure to disclose, what is true, as well as on a direct false statement.’

Analysis

The court analyzed the evidence presented by the buyers, which included testimony that Dow had made misleading statements about the bank's financial health. The court noted that while a more thorough investigation might have revealed the bank's true condition, the buyers' reliance on Dow's assurances raised factual issues regarding the potential fraud that should be resolved by a jury.

Our examination of the record in this case, in the light in which it must be reviewed, leads us to the conclusion that fact questions exist as to whether fraud has been committed, and that the Directed Verdict granted by the Trial Court cannot be sustained by other grounds in the Defendant-Appellee's motion therefor.

Conclusion

The appellate court concluded that the trial court's directed verdict could not be sustained and reversed the decision, remanding the case for further proceedings.

The judgment is reversed and remanded.

Who won?

Wink Enterprises, Inc. prevailed in the appeal because the appellate court found that there were sufficient factual issues regarding fraud that warranted a jury's consideration.

The appellate court concluded that the trial court's directed verdict could not be sustained and reversed the decision, remanding the case for further proceedings.

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