Carl M. Taute, Dba Econo-Car of Billings v. Econo-Car International, Inc., Econo-Car International, Inc. v. Carl M. Taute, Dba Econo-Car of Billings

Econo-Car International (Econo-Car) appeals from a judgment based upon a jury verdict in favor of Carl M. Taute for fraud and for breach of a franchise agreement.

FRAUDULENT INDUCEMENT

In June, 1963, Econo-Car granted Taute a franchise to operate a rent-a-car business in Billings, Montana. Taute claims Burko, an Econo-Car agent, made the following representations and promises prior to the execution of the franchise agreement:

The trial judge instructed the jury that the measure of damages for fraudulent inducement is the value of the franchise agreement with the inducements, diminished by the value of the franchise without the inducements. The jury awarded Taute $6,000, the full amount he paid Econo-Car for the franchise.

In August, 1963, while the contract was largely executory, Taute learned that Burko’s statements were false. Nevertheless, Taute continued with his preparations to go into business on the basis of the written agreement. He selected a location and terminated his employment. In October, 1963, he accepted delivery of ten cars and thereafter remained in business for 16 months without mentioning the misrepresentations. In addition, Taute negotiated changes in the…