(dissenting).
I hereby adopt as my dissent the majority opinion of the court of appeals as appended herein in full.
APPENDIX
Court of Appeals of New Mexico.
OPINION
ALARID, Judge.Plaintiffs, Cal (Cal) and Keith (Buddy) Foutz, sued First Interstate Bank of Gallup (FIBG) for fraud and negligent misrepresentation in connection with a transaction involving plaintiffs and Robert Berni (Berni). The case was tried to a jury. At the close of plaintiffs’ case-in-chief, defendant moved for a directed verdict on all claims. The trial court granted defendant a directed verdict on plaintiffs’ fraud claims and on certain claims of alleged negligent misrepresentation, but denied the motion on plaintiffs’ claims of negligent misrepresentation of the value of Berni’s assets. The jury returned a verdict for plaintiffs. Subsequently, defendant filed a motion for a new trial, which was denied. Defendant now appeals, claiming that: (1) the jury was improperly instructed concerning the measure of damages; and (2) the evidence was insufficient to uphold the verdict. We affirm.
FACTS
Plaintiffs entered into a business relationship with Berni during the summer of 1981. The precise nature of this business relationship was not at issue in this case; suffice it to say that each of the plaintiffs contributed $50,000, Berni contributed some equipment and a wrecker’s license, and the parties began two businesses known as Buddy’s Used Cars and B & F Auto Center and Wrecker Service, both of which were managed and operated by Berni. Subsequently, the Foutzes and Berni had several disagreements as to how the businesses were being handled, and in August 1982, Berni gave the Foutzes a promissory note in the amount of $100,000 to buy them out of the businesses. Thereafter, Berni continued to operate both businesses. Berni was unable to make all of the payments on the note, and by December 1982 or January 1983, the note was delinquent.
In December 1982 or January 1983, Cal Foutz was informed by an employee of FIBG that a note on which he was liable was delinquent. Cal, a long-standing customer of FIBG, expressed some surprise and indicated that he was unaware of the pending note. Subsequent inquiries by Cal of Kenneth Agee (Agee), the bank vice-president who handled Berni’s account with FIBG, disclosed that in September 1981 FIBG had extended Berni a $50,000 unsecured loan. In connection with this loan, Berni had apparently supplied FIBG with a partnership resolution executed by the Foutzes and Berni in connection with a smaller loan from a different bank. In September 1982, the $50,000 loan had apparently been “rolled over.” At the time of Cal’s meeting with Agee, the loan was delinquent and there was some suggestion that FIBG was looking to the Foutzes to make payments on this loan.
The initial meeting between Cal and Agee led to a second meeting in January 1983 involving both the Foutzes and Agee. As a result of these meetings, FIBG agreed to loan Berni $163,703, $100,000 of which was paid to the Foutzes to buy out the promissory note that Berni had previously given them. The other $63,703 was used to consolidate a number of loans that Berni had with FIBG at that time, including but by no means limited to the balance still due on the $50,000 unsecured loan given to Berni in September 1981. In connection with this loan, FIBG took a security interest in all the assets of Buddy’s Used Cars and B & F Auto Center and Wrecker Service, as well as a security interest in Berni’s personal residence and other personal property. In addition, the Foutzes signed a continuing guarantee of the loan to Berni up to the amount of $150,000, and a hypothecation agreement pledging their certificate of deposit in the amount of $100,000 as collateral for the loan to Berni. Both documents are dated February 1983.
Subsequently, Berni defaulted on the payments of the loan. Ultimately, by letter dated January 11, 1984, FIBG notified Cal that FIBG had repossessed all the collateral available to it under the loan agreement with Berni and it had no alternative but to exercise its rights under the hypothecation agreement and continuing guarantee to take the certificate of deposit. At the time FIBG took the certificate to apply it against the loan balance, there was still a balance remaining, after the application of the certificate of deposit, in the amount of $21,741.08 which FIBG was expecting to satisfy out of the contract receivables of Buddy’s Used Cars.
PROPRIETY OF THE INSTRUCTION CONCERNING MEASURE OF DAMAGES
FIBG contends that instruction no. 19, given by the trial court, is an incorrect statement of the measure of damages available to plaintiffs. Instruction no. 19 provides in pertinent part:
If you should decide in favor of the Plaintiff [sic] on the question of liability, you must then fix the amount of money which will reasonably and fairly compensate them for any of the following elements of damages proved by the Plaintiffs to have resulted from the negligent misrepresentation as claimed:
The value of the loss of the Certificates [sic] of Deposit. The value of the loss of interest on the Certificates [sic] of Deposit.
FIBG attacks this instruction as an incorrect statement of the measure of the damages available to plaintiffs under either a rescission theory or a negligent misrepresentation theory.
The standard of review on appeal is well-settled. Jury instructions must correctly state the law and be based on the evidence. Pittard v. Four Seasons Motor Inn, Inc., 101 N.M. 723, 688 P.2d 333 (Ct.App.1984). The instructions are sufficient if they fairly present the issues and the applicable law. Id. On appeal, the question is whether all the instructions, read and considered together, fairly present the issues. See Webb v. Webb, 87 N.M. 353, 533 P.2d 586 (1975).
FIBG’s argument concerning the damages available for rescission misses the mark. The case was not submitted to the jury on a rescission theory, nor could it have been. See Committee Comment to SCRA 1986, 13-814. FIBG was not entitled to an instruction on an issue foreign to the theory on which the case was submitted to the jury. FIBG’s second attack on the propriety of the jury instruction turns on its contention that the $100,000 promissory note from Berni to the Foutzes was essentially worthless. The first jury instruction instructed the jury on the theories of the case of both plaintiffs and defendant, including defendant’s theory that plaintiffs were not damaged because the promissory note was worthless.
The tort of negligent misrepresentation is articulated in the Restatement (Second) of Torts § 552 (1977), and adopted in Stotlar v. Hester, 92 N.M. 26, 582 P.2d 403 (Ct.App.1978). The section reads:
Information Negligently Supplied for the Guidance of Others
(1) One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
(2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered
(a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and
(b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction.
(3) The liability of one who is under a public duty to give the information extends to loss suffered by any of the class of persons for whose benefit the duty is created, in any of the transactions in which it is intended to protect them.
The Restatement (Second) of Torts is persuasive authority and we believe that this section applies in the instant case. Section 552 and comments (a) and (b) indicate that damages for the tort of negligent representation are determined by “out-of-pocket loss” or reliance damages. That measure of damages, as described in Section 552B(l)(a), is: “the difference between the value of what he [plaintiff] has received in the transaction and its purchase price or other value given for it.” In the present case, the out-of-pocket loss is equal to the difference between the amount plaintiffs gave and the amount they received in the secured transaction with FIBG, i.e., the continuing guaranty and the hypothecation agreement of February 1983. The difference between what plaintiffs gave, a $100,-000 certificate of deposit plus unpaid interest, and what they received, nothing, is $100,000 plus interest. This amount corresponds with jury instruction no. 19, which sets forth the compensation for negligent misrepresentation at the value of the loss of the certificates of deposit, plus the value of lost interest on the same. Under the trial court judgment, plaintiffs would thus receive $75,000, or $100,000 less the dollar amount corresponding to their 20% attributed negligence and Berni’s 5% attributed negligence. Read as a whole, the jury instructions adequately and properly instructed the jury on defendant’s theory of the case. Webb v. Webb.
SUFFICIENCY OF THE EVIDENCE TO SUPPORT THE VERDICT
Defendant raises a number of arguments concerning the sufficiency of the evidence to support the verdict. The standard of review on appeal is well-settled. On an appeal, all disputed facts are resolved in favor of the party who got the verdict, and all inferences indulged in the support of the verdict. Evans Products Co. v. O’Dell, 96 N.M. 500, 632 P.2d 735 (1981). The same general rules apply where a motion for judgment notwithstanding the verdict is denied. Barnes v. Sadler Assocs., Inc., 95 N.M. 334, 622 P.2d 239 (1981). The verdict must be upheld if, after viewing the evidence in the light most favorable to support the verdict, the appellate court finds that the verdict is supported by substantial evidence. “Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, and has been defined as evidence of substance which establishes facts from which reasonable inferences may be drawn.” Barnes.
In this appeal, FIBG attacks the sufficiency of the evidence concerning four areas: the value of Berni’s assets; the reasonable grounds for Agee’s belief as to the truth of his representation of the value of Berni’s assets; the reasonableness of the Foutzes’ reliance on the representation of Berni’s assets; and finally, on the proof of damages. We have carefully reviewed the record in this case and have concluded that sufficient evidence was presented in each area raised by FIBG and, therefore, that a challenge based on insufficient evidence must fail.
The verdict and the trial court’s denial of defendant’s motion for a new trial are affirmed.
The joint request of the parties for oral argument is denied. See Garcia v. Genuine Parts Co., 90 N.M. 124, 560 P.2d 545 (Ct.App.1977).
IT IS SO ORDERED.
FRUMAN, J., concurs. BIVINS, J., dissents.