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Eastern Motor Co. v. Lavender

Court of Appeals of Georgia
Mar 10, 1943
24 S.E.2d 840 (Ga. Ct. App. 1943)




Complaint; from Richmond superior court — Judge Franklin. May 2, 1942.

Nathan Jolles, Isaac S. Peebles Jr., for plaintiff in error.

Starkey S. Flythe, J. Paul Stephens, Henry J. Heffernan, contra.

1. "Fraud vitiates all contracts, and is of itself a substantive ground of action." Dye v. Wall, 6 Ga. 584, 586.

2. An action for deceit must be grounded on actual fraud.

3. When the written contract of conditional sale of the automobile is voided, and not binding on the buyer who is the defrauded party, he (having elected to rescind the contract on account of actual fraud consisting of alleged material, false, and fraudulent misrepresentations which induced him to enter into the agreement) may consider the contract as a nullity and bring an action in tort for deceit.

4. One of the provisions in the conditional-sale contract is: "No warranties, express or implied, representations, promises, or statements have been made by the seller, unless indorse hereon in writing." This provision, as well as all of the other provisions in the contract, is void; for the buyer had nullified and rescinded the entire contract on the ground of actual fraud.

5. "Parol contemporaneous evidence is inadmissible generally to contradict or vary the terms of a valid written instrument." Code, § 38-501.

6. "Parol evidence shall be admissible to show that the writing was either originally void [not valid] or subsequently became so." Code, § 38-503.

7. Parol evidence here was admissible to deny the existence of a valid written contract, and not to contradict it.

8. The evidence authorized a finding of actual fraud; that the contract, having been rescinded, was a nullity; and that all the elements of deceit, an action for a tort, were proved.


In an action for deceit, Lavender sought damages from the Eastern Motor Company. A verdict in an amount smaller than that sued for was returned. The plaintiff's evidence, in effect, showed the following: On July 19, 1939, he purchased from the defendant one new Oldsmobile automobile for $1267.12, against which price was credited a cash payment of $30 and an allowance of $460 on a used Oldsmobile, leaving an unpaid balance of $777.12. A copy of the sales invoice was shown. The unpaid balance was covered by twenty-four notes of $32.38 each, and a conditional-sale agreement, which was assigned to General Motors Acceptance Corporation. Before the consummation of sale the plaintiff was assured by Leon Ferst, president of said company, that the car was new, having been used as a demonstrator only, and that it had never been wrecked, or damaged in any way, except through natural wear and tear. On or about July 21, 1939, the plaintiff was informed by a service-station operator in Columbia, South Carolina, that the car had been in a bad wreck. He pointed out the repairs that had been made on it in various places. The plaintiff carried the car back to the dealer on the following day, and demanded that the defendant accept its return. The defendant recognized plaintiff's claim, and agreed to a rescission of the contract, but asked plaintiff to keep the car on defendant's account until he would be furnished with a new car, as there were twenty-nine unfilled orders ahead of him. From time to time plaintiff returned to defendant's place of business and each time was assured by Leon Ferst that as soon as a new car could be obtained it would be turned over to him. Finally despairing, plaintiff left the car at defendant's place of business and demanded his money back, which Ferst refused.

The defendant's evidence was to the following effect: The sale was not of a new car, but of an automobile that had been driven 5383 miles, as set out in the invoice attached to the petition, with a new-car guaranty; that is, upon the same basis as the warranty given on a new car. The defendant advised the plaintiff that the car had been wrecked in an accident and had been repaired, and that it had been driven 5383 miles; but, in order to permit the purchaser to buy the automobile on a twenty-four monthly-installment basis, the car was sold to him on the terms of a demonstrator, because the finance company would not finance a used car for more than eighteen months, and Lavender had to have the car financed on a twenty-four months basis in order that the payments should be in amounts that he could pay. The bill of sale showed an excessive allowance on his traded-in automobile, which meant a discount on the car sold to him. He understood it, and signed the bill of sale, the invoice, and the conditional-sale contract which was recorded.

Lavender testified that Jarrett, a salesman for the defendant, told him that there had not anything happened to that car except the handle had been knocked off one of the doors; that there was not anything wrong with that; that he came to Augusta four times to the Eastern Motor Company and talked to them before he finally left the car, which was some time in January, 1940; that he signed the bill of sale, the recorded contract, and the conditional-sale agreement, which were introduced in evidence and identified. The recorded contract, identified as Exhibit 1, contained the following provision: "Title to said property remains in the seller or seller's assignee until said deferred balance agreed to be paid by the purchaser is paid in full according to the terms and tenor of the contract executed contemporaneously herewith," and provided, among other things, that the purchaser should not transfer any interest therein or in said property or encumber the same. The invoice, identified as exhibit 2, was dated July 19, 1939, and contained this statement over the signatures of plaintiff and defendant: "Speedometer reading upon delivery, 5383 miles. Said car being sold as a demonstrator with the knowledge that car has been driven and the allowance for used car being excessive, which amounts to a discount on the 1939 model, said car, which we guarantee up to 9383 miles on the basis as a brand-new one under the Standard National Warranty." The conditional-sale agreement, which was identified as exhibit 3 and which was signed by both purchaser and seller, contained the following provision: "No warranties, express or implied, representations, promises, or statements have been made by seller, unless indorsed hereon in writing."

Leon Ferst called by the plaintiff, testified that the purchaser knew that the car had been in an accident and had been repaired, and that it had been driven 5383 miles; that it was sold to him on a twenty-four months payment basis, and therefore had to be shown as a demonstrator, which was agreeable to the purchaser; that he made every effort to satisfy the purchaser in reference to the car; that he had it repainted for him; but that he would not accept it and left it at his place of business, and the finance company then foreclosed and sold the car to satisfy the balance due on the purchase-price to the General Motors Acceptance Corporation.

The verdict was in favor of the plaintiff on his suit in tort for deceit. The defendant's motion for new trial was overruled, and it excepted.

1. The controlling issue is whether the buyer of an automobile who brings an independent action for deceit, and who is seeking to repudiate and rescind the contract of conditional sale which contains a clause that "No warranties, express or implied, representations, promises, or statements have been made by the seller, unless indorsed hereon in writing," may, under the facts in this case as found by the jury, repudiate and rescind the contract on account of actual fraud, and rely for recovery on his suit in tort, which suit is denominated in the law of pleading as an action for deceit. The defendant contends that on account of said clause in the written contract parol evidence was inadmissible to contradict or vary this provision of the contract. The defendant's contention would be correct if the jury had found that the written contract was valid. However, the plaintiff contended that he had repudiated the contract on the ground of actual fraud consisting of material and fraudulent misrepresentations which induced him to enter into the agreement. The plaintiff was not seeking to recover on the contract, for he had rescinded it, and after such rescission he had no contract on which he could sue. Hence he brought his suit on "deceit," a tort the essential elements of which are: "(1) That the defendant made the representations; (2) that at the time he knew they were false (or what the law regards as the equivalent of knowledge); (3) that he made them with the intention and purpose of deceiving the plaintiff; (4) that the plaintiff relied on such representations; (5) that the plaintiff sustained the alleged loss and damage as the proximate result of their having been made." Brown v. Ragsdale Motor Co., 65 Ga. App. 727 (3) ( 16 S.E.2d 176). The written contract of conditional sale, so far as it relates to substantive ground of the action for deceit, stands as if it had never been made, and none of its terms or conditions are binding on the plaintiff; for in the eyes of the law the written contract is nothing when it has been voided by a rescission on account of actual fraud; and parol evidence is admissible to show that the writing was either originally void or has subsequently become so. Code, § 38-503; Dye v. Wall, supra; Jewell v. Norrell, 66 Ga. App. 11, 14, 15 ( 16 S.E.2d 797). Thus, if the plaintiff pleaded and proved his action for deceit, the provision in question, stated in the conditional-sale contract, after the rescission of the contract would be of no force and effect. And if the injured party proved by parol the five elements necessary to sustain his suit in tort for deceit, based on actual fraud as stated above, he would be entitled to recover. We think the verdict of the jury in so finding was authorized by the evidence.

2. The charge to the jury, when considered in its entirety, embraced the general principles of law applicable to the facts in the case. If any amplification of the general principles which the charge contained, or a more specific instruction with reference to the particular matter, had been desired, a timely written request for such instruction should have been submitted.

Judgment affirmed. Broyles, C. J., and Gardner, J., concur.

Summaries of

Eastern Motor Co. v. Lavender

Court of Appeals of Georgia
Mar 10, 1943
24 S.E.2d 840 (Ga. Ct. App. 1943)
Case details for

Eastern Motor Co. v. Lavender

Case Details


Court:Court of Appeals of Georgia

Date published: Mar 10, 1943


24 S.E.2d 840 (Ga. Ct. App. 1943)
24 S.E.2d 840

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