Anderson v. R. H. Macy & Co.

• Decision Date: 09 June 1960
• Docket Number: No. 1,No. 38264,38264,1
• Citation: 115 S.E.2d 430,101 Ga.App. 894
• Parties: Kathleen M. ANDERSON v. R. H. MACY & COMPANY, Inc
• Court: Georgia Court of Appeals

Page 430

115 S.E.2d 430

101 Ga.App. 894

Kathleen M. ANDERSON v. R. H. MACY & COMPANY, Inc.

No. 38264.

Court of Appeals of Georgia, Division No. 1.

June 9, 1960.

Rehearing Denied June 24, 1960.

Syllabus by the Court

1. The petition sufficiently alleges the elements of an action for fraud and deceit and presents a question for the jury as to whether plaintiff could have ascertained the falsity of the representations by proper diligence.

2. The court did not err in overruling the general and special demurrers.

R. H. Macy & Company, Inc., doing business as Davision-Paxon Company, filed its petition in the Civil Court of Fulton County against Kathleen M. Anderson, seeking to recover damages and attorney's fees allegedly caused by the fraud and deceit of the defendant. The pertinent allegations of the petition are as follows: '2. That on October 24, 1957, defendant opened an account with petitioner and was issued a charge plate to be used in making purchases from petitioner's store. 3. That thereafter defendant made purchases with said charga plate according to a sworn itemized statement attached hereto, marked Exhibit A and made a part hereof by reference. 4. That in the course of making said purchases, defendant learned that if purchases were made from petitioner's sales clerks for a sum exceeding $15 that said clerks would check with the credit office to determine if the account was in a satisfactory condition, but contrarywise if defendant picked out merchandise having a sales price under $15 that said sales clerks would not check with petitioner's credit office, but would complete the sale solely with the use of the charga plate. 5. That in May, 1958, at a time when defendant was wholly insolvent, defendant began a systematic scheme of making hundreds of small purchases under said limit, with no present purpose of paying for them, and in contemplation of filing a petition in bankruptcy, thereby defrauding petitioner out of the sum of four hundred twenty and 22/100 ($420.22) dollars. 6. That on August 4, 1958, petitioner acting through its agent, demanded of defendant that she surrender the charga plate in that said account was closed and any further purchases would constitute fraud. 7. That defendant informed petitioner's agent that she had lost said charga plate which representation was falsely made with intention of deceiving petitioner to its damage. 8. That thereafter and until October 17, 1958, with said charga plate, defendant made thirty nine purchases all under said $15 limit through the use of said charga plate which defendant had falsely represented she had lost. 9. That in furtherance of said fraudulent scheme, on November 18, 1958, defendant was adjudicated a bankrupt in Case No. 36129, United States District Court for the Northern District of Georgia, and thereafter discharged from the obligations listed therein. 10. That by virtue of the fraud and bad faith on the part of defendant, the obligation set forth hereinbefore is not an obligation dischargeable in bankruptcy, and petitioner is entitled to recover the sum of three hundred ($300) dollars as reasonable attorneys' fees for bringing this action. Wherefore, petitioner prays that process issue as required by law, and that petitioner have judgment and recover of the defendant the sum of four hundred twenty and 22/100 ($420.22) dollars plus three hundred ($300) dollars attorneys' fees, together with all costs of this action.' The defendant's general and special demurrers were overruled, and she assigns error.

Abraham J. Walcoff, Atlanta, for plaintiff in error.

Schwall & Heuett, Atlanta, for defendant in error.

FELTON, Chief Judge.

1. In Gaultney v. Windham, 99 Ga.App. 800, 806, 109 S.E.2d 914, 918, this court after an exhaustive study of the principles involved stated: 'To recapitulate, in an independent affirmative action for fraud and deceit, which must be predicated upon actual fraud, the plaintiff must allege and prove the following essential ingredients: (1) the defendant made the representation; (2) at the time he knew they were false (or what the law regards as the equivalent of knowledge, a fraudulent or reckless representation of facts as true, which the party may not know to be false, if intended to deceive, Code, § 105-302); (3) the defendant made the representations with the intention and purpose of deceiving the plaintiff; (4) the plaintiff relied upon such representations; (5) the plaintiff sustained the alleged loss and damage as the proximate result of their having been made; and (6), an element frequently omitted in the cases enumerating the essentials, 'want of knowledge by the party alleged to have been deceived that the representation was false.'' In addition to the cases cited in that opinion the following decision have stated various elements of an action for fraud and deceit: Cosby v. Asher, 74 Ga.App. 884, 886, 41 S.E.2d 793 and cit.; Norris v. Hart, 74 Ga.App. 444, 445, 40 S.E.2d 96; Eastern Motor Co. v. Lavender, 69 Ga.App. 48, 51, 24 S.E.2d 840; Edwards v. Stiles, 81 Ga.App. 138, 137, 58 S.E.2d 260; McBurney v. Woodward, 84 Ga.App. 807, 814, 67 S.E.2d 398; Aderhold v. Zimmer, 86 Ga.App. 204, 206, 71 S.E.2d 270. See also Code §§ 105-301, 105-302.

A petition which sufficiently alleges these elements may yet be subject to general demurrer on another ground. 'It is well settled that fraud cannot form the basis of an action or a defense thereto, in the absence of any trust or confidential relationship, if it appears that the person relying on the fraud as a basis for the action or in defense thereto had equal and ample opportunity to prevent the happening of the occurrence, and made it possible through a failure to exercise proper diligence.' Millender v. Looper, 82 Ga.App. 563, 569, 61 S.E.2d 573, 578. 'While it is true that the question of whether the person to whom the alleged false and fraudulent representations were made was negligent in relying upon such representations would ordinarily be a question for a jury * * * if it is apparent from the pleading of a person relying on such false and fraudulent representations that he was negligent in so doing, and such pleading is properly attacked by demurrer, it is the duty of the court to so decide as a matter of law.' Love v. Nixon, 82 Ga.App. 445, 452, 61 S.E.2d 423, 427. For recent applications of this principle to petitions on general demurrer, see Watkins v. Mertz, 83 Ga.App. 115, 62 S.E.2d 744. Skinner v. Melton, 84 Ga.App. 98, 65 S.E.2d 693 and Scott v. Fulton National Bank, 92 Ga.App. 741, 89 S.E.2d 892. An amplification of rules applicable to the situation where the plaintiff does not have equal and ample opportunity to prevent the happening of the alleged fraudulent occurrence is found in Deibert v. McWhorter, 34 Ga.App. 803, 804, 132 S.E....