Opinion
35176.
DECIDED MAY 13, 1954. REHEARING DENIED MAY 26, 1954.
Breach of contract; fraud. Before Judge Atkinson. Chatham Superior Court. March 19, 1954.
Leon L. Polstein, Brannen, Clark Hester, for plaintiff in error.
Gilbert E. Johnson, Oscar C. Burnett, Jr., contra.
1. The general grounds are not meritorious.
2. The special grounds are without merit for the reasons given in division 2 of this opinion.
DECIDED MAY 13, 1954 — REHEARING DENIED MAY 26, 1954.
Herbert G. Davis (defendant in error here) will hereinafter be referred to as the plaintiff. Mickey Rountree (plaintiff in error) will hereinafter be referred to as the defendant, and Dealer's Discount Corporation will be referred to as the discount corporation. The defendant was a dealer who mainly buys and sells used cars. Omitting the formal parts, the petition alleges substantially, in paragraph 4, that the action was brought in the superior court as a court of equity to avoid a multiplicity and circuity of actions and so that the superior court, having all the parties before it, may pursuant to the provisions of the declaratory statute, determine all the rights and liabilities of the parties.
In paragraph 5 it is alleged that, on or about March 17, 1953, the plaintiff contacted the defendant for the purpose of trading the plaintiff's Chevrolet Fleetline two-door passenger automobile as part of the purchase price for a 1953 Plymouth Belvedere model automobile.
In paragraph 6 it is alleged that, after considerable negotiations and after several representations were made by the defendant, which representations were material and false, the defendant induced the plaintiff to enter into a contract with the defendant. The plaintiff agreed to transfer his Chevrolet to the defendant and buy from him the Plymouth.
In paragraph 7 it is alleged that the fraudulent representations made by the defendant were: that the Plymouth was a "brand new" car which had been bought by the defendant from a Plymouth dealer, when in truth and in fact the defendant knew that the Plymouth was not new, that it had been run and used before and physically damaged and wrecked, so that it had to be and was straightened out and repainted and had in fact been obtained by the defendant at an automobile auction to which auction the Plymouth had been brought by a used-car dealer, all to the plaintiff's hurt and damage.
Paragraph 8 alleges that the defendant, in order to induce the sale to the plaintiff, falsely misrepresented to the plaintiff that the defendant was selling the Plymouth to the plaintiff for exactly the same price that would be charged by a Plymouth dealer for a new Plymouth such as the one the defendant was selling to the plaintiff. But the price which a Plymouth Dealer would have charged for the Plymouth in question at the time and place of the sale before being used and before being wrecked and damaged was the total sum of $2,532.20. But the defendant charged the plaintiff $3,164.66, this amount being $632.46 more than the price should have been.
In paragraph 9 it is alleged that, upon discovering the foregoing itemized fraud and damage to the plaintiff, he promptly returned the Plymouth to the defendant and demanded the return by the defendant to the plaintiff of the Chevrolet which had been traded and surrendered by the plaintiff as part of the purchase price for the Plymouth.
In paragraph 10 it is alleged that the defendant acted in bad faith, and the plaintiff seeks to recover a reasonable sum as expenses and attorneys fees.
In paragraph 11 it is alleged that the plaintiff, in order to finance a portion of the purchase price of the Plymouth, obtained a loan of $2,232.25 with the discount corporation.
In paragraph 12 it is alleged that the discount corporation charged the plaintiff more for making the said loan than the law permits, and that the contract is usurious.
In paragraph 13 it is alleged that the discount corporation took possession of the Plymouth about March 21, 1953, without the plaintiff's consent and without legal right, and since that time has illegally refused to surrender the Plymouth to the plaintiff.
In paragraph 14 it is alleged that, by reason of the discount corporation retaining the Plymouth and converting it, the discount corporation has lost and destroyed any right it had or may have had under the loan contract with the plaintiff.
In paragraph 15 it is alleged that, on or about April 9, 1953, the discount corporation began a proceeding against the plaintiff in the City Court of Savannah, and on May 4, 1953, obtained an order whereby the sale of the Plymouth was to be carried out under such proceedings. Such proceedings are "wrongful and illegal."
In paragraph 16 the plaintiff shows that, by reason of the foregoing facts, he has been wrongfully and fraudulently deprived of the Chevrolet, of the value of $912.57, and the use of the Chevrolet, that he has been harassed and put to a great deal of expense for which he asks redress.
In paragraph 17 it is alleged that the conduct of the defendant and discount corporation has been related and connected, and it is asked that the superior court properly decide and give effect to the plaintiff's rights, and should have both the defendant and the discount corporation before it so that a full and complete remedy can be provided and full justice obtained by the plaintiff.
In paragraph 18 it is alleged that, in order to preserve the status of the parties and the property involved, it will be necessary and proper that the defendant be restrained from disposing of the Chevrolet and that the discount corporation be restrained from proceeding to sell the Plymouth until the court can properly investigate and determine and declare the rights of the plaintiff.
The prayers are: (1) for process; (2) that the defendant be restrained from selling, disposing of, or using the Chevrolet; (3) that the discount corporation be restrained and enjoined from proceeding against the plaintiff in the City Court of Savannah to sell the Plymouth; (4) that the plaintiff's rights against the defendant and the discount corporation be declared by the court; (5) that the plaintiff have judgment against the defendant for the Chevrolet and such damages and expenses as the plaintiff is entitled to recover; (6) that the loan contract covering the Plymouth be canceled in equity, and that the discount corporation be required to deliver up the contract and all related papers so that same may be canceled by a decree of the court; (7) for such other and further legal and equitable relief as the court deems meet and proper.
The court passed the following order: (1) Let the action be filed; (2) the defendant is restrained from disposing of or using the Chevrolet pending further order of the court; (3) the discount corporation and its agents are restrained from proceeding.
The defendant filed the following answer: (a) Paragraph 4 is admitted except as to the legal conclusions, and in addition it says that this paragraph is duplicitous; (b) that paragraph 5 is admitted; (c) paragraph 6 admits that the plaintiff bought the Plymouth after considerable negotiations, but denies that the defendant made any false and material representations to induce the plaintiff to purchase; (d) paragraph 7 is denied, and for further answer it is alleged that the plaintiff, accompanied by his wife, tried out the Plymouth on four occasions prior to the final consummation of the sale. The plaintiff knew the mileage on the Plymouth. He inspected the Plymouth and used it. The plaintiff voluntarily called the defendant to the defendant's place of business after business hours in order to consummate the sale. The plaintiff retained possession of the Plymouth after it was financed by the discount corporation. The plaintiff knew his contract would not be accepted by the C. I. T. and M. A. Russell, for the reason that the plaintiff desired to pay only $65 per month.
Paragraph 8 is denied, and it is further alleged that the defendant sold the Plymouth to the plaintiff for a price less than the price which would be quoted by a new-car dealer for the same Plymouth.
Paragraphs 9, 10, and 11 are denied, and further answering the defendant alleges that all of the negotiations with reference to financing the Plymouth were between the plaintiff and the discount corporation, the defendant merely going with the plaintiff for the purpose of showing the plaintiff the office of the discount corporation.
Paragraph 12 is neither admitted nor denied for lack of information.
Paragraph 13 is neither admitted nor denied for want of information, and it is further alleged that the plaintiff left the Plymouth at the defendant's place of business and notified the discount corporation, which sent and took possession of the Plymouth. From that time the defendant had no knowledge of what transaction had transpired between the plaintiff and the discount corporation.
Paragraphs 14, 15, 16, and 17 are denied.
Paragraph 18 is denied, and further answering it is alleged that the defendant does not have possession of the Chevrolet, it having been sold in the regular course of business prior to the institution of this suit. And further answering paragraph 18, the defendant alleges that on March 21, 1953, the plaintiff through his attorney filed a bail-trover suit in the City Court of Savannah, and all questions concerning the title or the right of possession of the Chevrolet as between the parties was fully and completely settled after a thorough investigation by the parties and the attorneys; that, after said investigation, the trover suit was dismissed upon the defendant paying the court costs to the plaintiff's attorney in the City Court of Savannah; that this transaction was a complete accord and satisfaction between the parties as to their respective rights, and no fact or circumstance has arisen since the accord and satisfaction.
The court directed a verdict in favor of the discount corporation, it appearing that by agreement the Plymouth was sold to satisfy the debt of the discount corporation. The Plymouth did not sell for a sufficient amount to pay the lien, but the discount corporation offered the lien to the trial court and canceled this debt. The jury returned a verdict for $725 against the defendant in favor of the plaintiff. The defendant filed his motion for new trial on the statutory grounds and added two special grounds. The court denied this motion, and the defendant assigns error on this judgment.
We do not deem it necessary to set forth the evidence in detail. The evidence for the plaintiff follows very closely the allegations of the petition, and the evidence for the defendant substantially follows the answer. We might here state that the testimony of the plaintiff revealed that the defendant sold him a new Plymouth from the floor of a Plymouth dealer; that the Plymouth was not a new car and was not purchased by the defendant from a Plymouth dealer, but was purchased at an auction sale in South Carolina; and that the Plymouth was damaged and had been repainted.
The testimony for the defendant was to the effect that he did not sell the Plymouth to the plaintiff as a new car, but that he informed the plaintiff that the Plymouth was "as good as new." This seems to be the gist of the evidence as to the allegations concerning fraud as alleged in the petition.
This is a peculiar case, in that originally it involved three parties, the plaintiff, the defendant, and the discount corporation. It was filed in a court of equity. The law which ordinarily applies to rescission of contracts between a seller and purchaser is not, under the nature of this case, solely involved here. The trial court so recognized and conducted the trial accordingly. The case is not one for damages for fraud. It sought rescission of the whole transaction concerning the three parties, the cancellation of certain papers, and the restoration to the plaintiff of the Chevrolet or damages therefor. Code § 37-122 reads: "Where law and equity have concurrent jurisdiction, whichever first takes jurisdiction shall retain it, unless a good reason shall be given for the interference of equity." Section 37-701 provides: "In all cases of fraud (except fraud in the execution of a will) equity has concurrent jurisdiction with the law." Code § 37-105 provides: "Equity seeks always to do complete justice; and hence, having the parties before the court rightfully, it will proceed to give full relief to all parties in reference to the subject matter of the suit, provided the court has jurisdiction for that purpose." At the time of the trial the defendant had disposed of the Chevrolet and it could not be returned to the plaintiff. Code § 37-111 provides: "A bona fide purchaser for value, and without notice of an equity, will not be interfered with by equity." It necessarily follows that a court of equity would submit the facts to a jury to determine the amount of recovery, if any, to which the plaintiff would be entitled under the principles of justice and equity. We might call attention in this connection to the provisions of Code § 37-706, as follows: "Fraud may not be presumed, but, being in itself subtle, slight circumstances may be sufficient to carry conviction of its existence." It is a jury question. See Walker v. Walker, 66 Ga. 253, and Keiley v. Citizens Savings Bank c. Co., 173 Ga. 11 ( 159 S.E. 527).
The evidence reveals that the defendant received as a part payment on the Plymouth the proceeds of the loan from the discount corporation. He also received $1,100 (less $287.43, the amount owed on the Chevrolet by the plaintiff) from the sale of the Chevrolet, a net sum of $812.57. The jury returned a verdict for $725. This amount is supported by the evidence, and in equity the plaintiff is entitled to this sum, according to this record. It will be noted that in the statutory grounds there is this provision: "Because the verdict is contrary to law and the principles of justice and equity." The reverse of this principle is true in the instant case. The assignment of error on the general grounds is without merit.
2. (a) We come next to consider the special grounds. We will deal with them together. They are: Ground 1. Because the court erred in refusing to give the following requested charge: "I charge you that in order for the plaintiff to recover in an action of this kind, he must first prove an effective and legal rescission of the sale, and to do this he must prove that he restored or offered to restore the defendant to the position he was in before the sale. In this case, such restoration would require the plaintiff to have returned or to have offered to return to the defendant Rountree the 1953 Plymouth with a good and clear legal title thereto, and to have returned or to have offered to return the amount of money paid by the defendant to pay off the mortgage on the plaintiff's Chevrolet. If you believe from the evidence that the plaintiff made a tender as just described, then you would be authorized to find that the rescission was effective. If on the other hand, you believe from the evidence that an effective tender was not made, then your verdict would be for the defendant Rountree without regard to other aspects of this case." Error is assigned as follows: "The above requested charge was pertinent and applicable to the evidence of the case, and the defendant submitted such request to charge in writing before the jury retired to consider their verdict. Defendant shows that said written request to charge was accurate and sound as a proposition of law, and that the request was not accurately covered or substantially covered by the general charge. The particular matter in issue to which the written request to charge was particularly adjusted was: The necessity for the plaintiff to have returned or to have offered to return to the defendant Rountree the 1953 Plymouth with a good and legal title thereto, and to have returned or to have offered to return the amount of money paid by the defendant Rountree to pay off the mortgage on the plaintiff's Chevrolet in order for the plaintiff to have restored the defendant to the position he was in before the sale, and the refusal so to charge was prejudicial and harmful to the defendant Rountree for the following reason: The jury was not clearly advised of these things which the plaintiff had to do in order to have legally and effectively rescinded the contract of sale, which was a necessary prerequisite to a recovery in this case."
Ground 2 complains because the court erred in charging the jury as follows: "I charge you that in order for buyer to recover in an action of this kind, he must first prove an effective and legal rescission of the sale, and to do this, he must prove that he restored or offered to restore the defendant to the position he was in before the sale, unless defendant owed petitioner sufficient money to cover any claim defendant might have upon it; that is to say, gentlemen, if the defendant, the man who has the car, if he had advanced money on it in order to try to help along with the case or to perfect his title, if he had done that and improved the value of the property or removed the lien on it, why, then, the party claiming rescission must refund that money first, unless the circumstances are such that the man who did the advancing of the money of the other party which he can legitimately use to pay the obligation or pay himself back for the advances he has made."
Error is assigned on this excerpt as follows: "Defendant shows that said charge was erroneous and injurious to him because it was misleading and confusing to the jury. The charge was misleading, confusing and prejudicial to the defendant because it injected into the abstract principle of law facts which were neither alleged in the petition nor proved by the evidence, namely that the defendant Rountree had money of the plaintiff's in his possession at the time the plaintiff attempted to rescind the contract of sale by abandoning the Plymouth on the defendant's lot, which money he could use to pay back such advances made by the defendant for the plaintiff. Defendant avers that said charge was erroneous and not sound as an abstract principle of law." It might be well in this connection to set forth the judgment of the trial court in denying the motion for new trial as amended, since the judge deals with the special grounds and the general grounds. That order reads: "The first ground of the amended motion complains of the failure of the court to make a requested charge as quoted therein. The court did not think this request was adapted to the evidence and revised the request quoted so as to make the charge in line with the evidence and the law — quoted in ground two of the amended motion. The Chevrolet being sold by plaintiff for $1,100.00 on May 2nd and suit filed May 12, 1953, the court figured that Mr. Rountree should have had in his hands at the time the suit was filed and on the trial of this case, not only sufficient money to pay the amount required to clear the $287.43 due a third party loan company but he should have had that and more than the amount of the verdict. It would be vain and useless to require plaintiff to pay to defendant, $287.43 when the defendant had in his hands at the time the suit was filed and tried, several times that amount. The court is of the opinion both special grounds of the amended motion for new trial should be overruled. What is said above will apply to the general grounds of the amended motion. The questions of fact were for the jury. The court is of the opinion that the law was fairly and fully charged. Thereupon, the court overrules all grounds of the motion for new trial as amended. And it is so ordered."
(b) We have studied the many cases cited by counsel for the defendant, which primarily deal with rescission for fraud, under the evidence and the charge of the court. They are Walters v. Hagen, 53 Ga. App. 547 ( 186 S.E. 563); Haynes v. Elberton Motors, 57 Ga. App. 247 ( 194 S.E. 884); Brown v. Ragsdale Motor Co., 65 Ga. App. 727 ( 16 S.E.2d 176); East Tenn., Va. c. Ry. Co. v. Hayes, 83 Ga. 558 ( 10 S.E. 350); Code § 20-906; Roberts v. Southern Ry. Co., 73 Ga. App. 759 ( 38 S.E.2d 48). It will be observed that in the Roberts case the court stated: "That, generally a restoration or offer to restore must be made promptly upon the discovery of the fraud." (Italics ours.) Restoration is not an absolute rule. The facts and circumstances of the instant case, to our way of thinking, is a clear example. There seems no reason why one who has defrauded another should receive money from one defrauded when the fraudulent party has received benefit from the transaction and has at the time of the trial many times the amount the fraudulent party contends should be restored to him. Accordingly, the defendant in the instant case has no just or equitable grounds upon which to stand. Counsel also cite Jordy v. Dunlevie, 139 Ga. 325 ( 77 S.E. 162); Williams v. Fouche, 157 Ga. 227 ( 121 S.E. 217). None of the cases cited by counsel for the defendant supports the contention of the defendant. The facts in the instant case are different from those in the cases cited. The cases are, it is true, somewhat analogous in that they deal with rescission and fraud and restoration.
The court did not err in denying the amended motion for new trial.
Judgment affirmed. Townsend and Carlisle, JJ., concur.