Opinion
41931.
ARGUED APRIL 6, 1966.
DECIDED MAY 10, 1966.
Action for damages; fraud and deceit. DeKalb Civil and Criminal Court. Before Judge Mitchell.
Howard Byrd, Margaret Hopkins, Pierre Howard, for appellants.
Candler, Cox, McClain Andrews, E. Lewis Hansen, for appellee.
The petition — alleging that the defendant automobile dealer had orally agreed, as a term of the contract for the sale of a new automobile, to pay off the existing balance due by the plaintiff prospective buyers on a note secured by the automobile being traded in; that the plaintiffs were induced by the defendant to sign a blank sale contract; that when they saw a copy of the contract as filled in by the defendant the space for the "amount owing" on their traded-in automobile contained the word "none"; that the defendants had failed to pay off said note, causing the plaintiffs to be sued thereon — set out a cause of action for fraud and deceit, the contract as filled in by the defendants being capable of being construed as containing a representation of the past and then-existing facts that the defendant had paid off the note as agreed and, therefore, that no amount was owing thereon.
ARGUED APRIL 6, 1966 — DECIDED MAY 10, 1966.
Gail and Roy Chesnut brought an action for damages for fraud and deceit against Al Means Ford, Inc. The petition as amended alleged substantially as follows: That the plaintiff wife told the defendant automobile dealer that she and her co-plaintiff husband wished to purchase an automobile if satisfactory terms could be arranged; that they wished to trade in as part payment on the proposed purchase an automobile in which they owned an equity, but that said automobile was security for a note and they would not be financially able to buy the new automobile unless some arrangements would be made to pay off the loan; that the defendant's agent assured her that this could be done and orally agreed to allow them $402.36 plus the paying off of the note as the trade-in value; that said agent suggested that she sign a blank contract so that he could obtain the exact figures, which she did; that when the plaintiffs received a copy of the completed written sale contract, the space for the amount owing on the trade-in automobile was filled in as "none," leading them to believe that the defendant had paid off the note as agreed; that about a month after the transaction was completed, the plaintiffs were sued on the note by its holder and when she asked the defendant's agent about the note, he informed her that nothing could be done to get it paid and that, as to his representation that it would be paid, "salesmen do that every day"; "that the representation that said Union Finance note would be paid as part of the consideration for purchase of the said 1964 Ford automobile, and the representation by the aforesaid entry on the said conditional bill of sale, Exhibit `A', that it had been paid were made by the defendant, acting through its said agents and employees, Fuller and Barnes, as aforesaid; that said representations were knowingly and with design false; that they were made for the purpose and with the intent of deceiving and defrauding plaintiffs by inducing them to enter into a contract for the purchase of a new automobile, knowing they would not do so unless said note was paid off; that said representations did deceive and defraud plaintiffs, and were made at the time of said transaction and as an existing part thereof; that plaintiffs did not know said representations were false, and that they relied upon said representations to their damage as aforesaid; . . . that the false and fraudulent statements of defendant's agents as aforesaid, made for the purpose of inducing them to enter into said contract, and which did induce them to enter therein, and the fraudulent statement aforesaid in the contract itself showing no balance due on the car traded in, constitute one connected scheme and chain of events whereby plaintiffs were defrauded out of a part of their trade-in allowance as aforesaid; and plaintiffs have elected to waive the breach of the contract on the part of the defendant in failing to pay off the prior note as aforesaid, and have elected to sue defendant for the fraud and deceit in procuring said contract." The defendant filed general and special demurrers to the petition, which it renewed to the petition as amended. The court sustained the renewed general demurrer to the petition as amended, from which judgment the plaintiffs appeal.
The mere alleged oral representation that the defendant would pay off the note, standing alone, would not be a basis of fraud and deceit under the general rule that representations which authorize an action for fraud and deceit must be made with reference to existing or past facts and not as to future acts. Brooks v. Pitts, 24 Ga. App. 386 (1) ( 100 S.E. 776); Ambrose v. Brooks, 109 Ga. App. 881 (1) ( 137 S.E.2d 573) and cit. Nor, under the above rule, would the written contract of itself be the basis for an action for fraud and deceit if the stipulation that no money was owing on the traded-in automobile be construed as merely a promise to pay the note in the future. It is clear from the petition, however, that the plaintiffs are relying solely neither upon the alleged oral representation or inducement nor upon the written contract, but rather upon them both, the former providing a reasonable basis for their construction of the stipulations of the latter.
The plaintiffs were allegedly induced to sign a blank sale contract on the apparent pretext that the exact figures were not available at that time. Their signing of the blank contract was an act of reliance upon the defendant's agent to fill in the contract in accordance with the terms of their oral agreement. In a sense, the defendant's agent, while filling out the contract, was acting as the plaintiff's agent, so that the representation that no amount was owing on the traded-in automobile amounted to a representation by the plaintiffs. Of course, the parties were dealing at arm's length and the plaintiffs had the duty of ascertaining whether or not the written contract did in fact conform to the prior oral agreement. Even a close inspection of the written contract, however, would not disclose any discrepancy. In view of the alleged representation that the defendant would pay off the note, the plaintiffs were justified in construing the word "none" to mean that the defendant had already paid off the note as it had allegedly agreed to do, especially since this word was inserted by the defendant itself subsequently to the agreement. Rather than being put on notice, by the word "none," of a variance between the agreement and the written contract, then, the plaintiffs might be found to have been led to believe that the defendant had already performed in accordance with the agreement. The contract could therefore be found to contain a representation with reference to the past fact of the defendant's payment of the note and the then-existing fact that no amount was therefore owing.
Appearing on the face of the contract, which is attached as an exhibit to the petition, is the provision that the buyer "agrees that the provisions printed on the reverse side hereof are a part of this contract and are incorporated herein by reference." The defendant asserts that one of the provisions on the reverse side (the failure to attach a copy of which being the ground of one of the special demurrers) is to the effect that the buyer expressly waives the right to rely on any other terms and conditions not made a part of the contract. It is contended that this stipulation barred the plaintiffs from reliance on the alleged representation as an inducement. Assuming that such a stipulation exists and is to the effect alleged, it can have no bearing in a case where fraud in procuring the signing of the instrument is an issue. Williams v. Toomey, 173 Ga. 199 (2) ( 159 S.E. 866), citing Barrie v. Miller, 104 Ga. 312, 315 ( 30 S.E. 840, 69 ASR 171). Even aside from the issue of fraud in procurement, however, the plaintiffs could rely on the representation for the reason that it was made a part of the contract by the defendant's own act of filling in the space therein in accordance with its representation, as hereinabove discussed. For this same reason, the plaintiff's action is not barred by the general rule that oral negotiations preceding a written contract are merged therein and the parties must stand upon the contract as written.
The plaintiffs' action for fraud and deceit would not be barred by their affirmance of the contract or by keeping the automobile purchased. "A suit for damages by the defrauded party for the fraud committed is not a suit for the violation of the contract, but is one for a tort and involves affirmance of the contract, and he may keep the fruits of the contract and maintain an action for the damages sustained by reason of the fraud." Tuttle v. Stovall, 134 Ga. 325, 329 ( 67 S.E. 806). Nor would any payments of purchase-money installments made after discovery of the fraud, with no additional act amounting to ratification, amount to a waiver of the fraud. Atlanta Car Wash, Inc. v. Schwab, 215 Ga. 319 (2) ( 110 S.E.2d 341).
The petition contained the seven essential allegations for an action in tort for fraud and deceit, as enumerated in Wiseman Baking Co. v. Parrish Bakeries, 103 Ga. App. 61 ( 118 S.E.2d 190); therefore, the court erred in its judgment sustaining the renewed general demurrer to the petition as amended.
Judgment reversed. Frankum and Pannell, JJ., concur.