Bill Spreen Toyota, Inc. v. Jenquin

• Decision Date: 07 September 1982
• Docket Number: No. 64351,64351
• Parties: , 35 UCC Rep.Serv. 419 BILL SPREEN TOYOTA, INC. v. JENQUIN.
• Court: Georgia Court of Appeals

Page 533

294 S.E.2d 533

163 Ga.App. 855, 35 UCC Rep.Serv. 419

BILL SPREEN TOYOTA, INC. v. JENQUIN.

No. 64351.

Court of Appeals of Georgia.

Sept. 7, 1982.

Stephen H. Block, Atlanta, for appellant.

Carol D. Sweet, Atlanta, for appellee.

DEEN, Presiding Judge.

Amy Jenquin made a trade with the defendant appellant, turning in her car and purchasing a second hand vehicle described in the sale contract as a "used 1974 Celica Toyota coupe, identification number RA21-129922" for a total price of $3,792.14. The bill of sale specified "AS IS" and, under comments, "No warranty expressed or implied." Plaintiff discovered 10 weeks after the sale and after the vehicle began leaking badly that it was not the vehicle represented in the bill of sale, but that the original vehicle described as the Toyota coupe RA21-129922 had, prior to this transaction, been badly wrecked, which resulted in the car being "clipped" or "sectioned"; that is, the rear end from the front windshield posts and along the inner floor pan behind the front seats had been cut off and the rear half of some other unidentified vehicle had been welded onto the front half, after which the car had been repainted and damage hidden as far as possible, with bonding, repainting, removal of identifying numbers on the rear portion of the vehicle, and so on. The jury returned a verdict in favor of the plaintiff for actual and punitive damages and attorney fees. Defendant appeals.

1. "Fraud ordinarily gives the injured party the right either to rescind the contract, or, by affirming the same, to claim damages. Barfield v. Farkas, 40 Ga.App. 559 (150 SE 600); Wright v. Zeigler, 70 Ga. 501 (5)." Brown v. Ragsdale Motor Co., 65 Ga.App. 727, 730, 16 S.E.2d 176 (1941). " '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 suffered by reason of the fraud.' Tuttle v. Stovall, 134 Ga. 325, 329 (67 SE 806, 20 AC 168); Gem City Motors, Inc. v. Minton, 109 Ga.App. 842 (l c) (137 S.E.2d 522)." Central Chevrolet, Inc. v. Campbell, 129 Ga.App. 30 (2), 198 S.E.2d 362 (1973). That the plaintiff may elect whether to rescind the contract for fraud or to affirm it and sue for damages, see Preiser v. Jim Letts Oldsmobile, Inc., 160 Ga.App. 658, 661, 288 S.E.2d 219 (1981); Manget v. Cunningham, 166 Ga. 71, 143 S.E. 543 (1927); F.N. Roberts Pest Control Co. v. McDonald, 132 Ga.App. 257 (1), 208 S.E.2d 13 (1974). In this action based on actual fraud the plaintiff elected to affirm the contract and sue for the resultant actual and punitive damages and attorney fees.

2. Here, the contract of sale contains a disclaimer of warranties and a statement that the vehicle is being purchased as is. Such a statement does not, however, negate the subject matter of the sale, and when a vehicle is sold under a sale contract which, while disclaiming warranties, represents that the car is either new or a demonstrator as opposed to one previously owned by a purchaser, an action for fraud is not precluded by the disclaimer of warranty. Gem City Motors, Inc. v. Minton, 109 Ga.App. 842, 137 S.E.2d 522 (1964). The term "sold as is" means sold in its present condition without any warranty as to soundness of condition or suitability for the purpose intended, and a fraud action cannot rest on a contradictory oral representation. Findley v. Downing Motors, Inc., 79 Ga.App. 682, 54 S.E.2d 716 (1949). A "waiver of all warranties" does not waive the language of the invoice purchase order or bill of sale which sets out the terms of sale. "These terms constitute the very subject matter of the sale, without which there would be none. The seller could not, thus binding himself to the sale of a Pontiac automobile [as the bill of sale described the vehicle], substitute therefor a cheaper make and contend that the purchaser had waived one of the terms of sale contained in the instrument itself." Nichols v. Williams Pontiac, Inc., 95 Ga.App. 752 (4), 98 S.E.2d 659 (1957). See also Aderhold v. Zimmer, 86 Ga.App. 204, 71 S.E.2d 270 (1952). As Judge Sognier stated in Century Dodge, Inc. v. Mobley, 155 Ga.App. 712, 272 S.E.2d 502 (1980) (cert. denied): "[W]e hold it is unreasonable to allow an express warranty contained in a contract (the description as 'new') to be negated by a disclaimer of warranty in the same contract, for the two provisions are not consistent with each other."

Under the "AS IS" on the bill of sale in the present case is a statement that the dealer disclaims all warranties including implied warranties of merchantability or fitness for a particular purpose. This is almost the exact language of the Campbell case, 129 Ga.App. 30, 198 S.E.2d 362, supra, where it was held that a disclaimer of implied warranty of merchantability or fitness for a particular purpose did not overcome a contrary description of the article by name, year and serial number as the latter "is an express warranty, not as to the condition but as to the identity of the goods sold." Here, the disclaimer of warranty has no effect on the statement of the subject matter of this sale as a "Used 1974 Toyota 2 dr cpe Celica, Identification # RA21-129922." The purchaser did not receive the car which was the subject matter of the sale, the only vehicle manufactured of the stated year, model and identification number. It received one half of the described subject matter of the sale welded to one half of another unidentified and identifiable automobile. In this condition the misidentification of goods sold is far greater than merely writing in an erroneous year model or an erroneous "N" indicating the vehicle is a new car rather than having been used. We accordingly conclude that the disclaimer of warranties is not a sufficient defense against this action for deceit. The conclusion is different where it appears from the contract that the purchaser relied entirely on his own inspection of the merchandise. White v. General Discount Corp., 60 Ga.App 186, 3 S.E.2d 214 (1939). Culverhouse v. Wofford, 86 Ga.App. 58, 70 S.E.2d 805 (1952) cited by the appellant is irrelevant as it dealt only with a question of pleading under former demurrer rulings which no longer obtain.

It might further be noted, if one were to argue that the reconstituted vehicle sold to the plaintiff was as described, that it also lacked all identification numbers on the back half, and their location had in fact been concealed by filling and paint, involving a removal and concealment of identifying marks. The knowing possession of a car so reassembled except under a license to rebuild is a felony. Code § 68-9916, and see Martin v. State, 160 Ga.App. 275, 287 S.E.2d 244 (1981). The identification (VIN) numbers of automobiles make up the very essence of the individual article being marketed, and it is clear that some are concealed in inconspicuous parts of the vehicle in an attempt at prevention of the very act carried out on this car. Such evidence will not, of course, bolster an action based on constructive fraud on the ground that the seller's knowledge and experience is greater than that of the buyer. Derryberry v. Robinson, 154 Ga.App. 694, 269 S.E.2d 525 (1980). It may, however, be relevant to the question of whether an inference against the innocence of the seller might properly be drawn from the facts stated, since knowing possession of such a vehicle may be a crime, a fact which it may be presumed dealers in used cars are aware of on the basis that everyone is presumed to know the law.

3. Since there is no accusation or hint that the defendant here actually performed the "clip" uniting the halves of two presumably wrecked vehicles, the appellant contends that plaintiff has proved neither scienter nor intent to defraud, necessary ingredients of this tort action. Cheney v. Barber, 144 Ga.App. 720, 242 S.E.2d 358 (1978); Leatherwood v. Boomershine Motors, Inc., 53 Ga.App. 592, 186 S.E.2d 897 (1936). "In all cases of deceit, knowledge of the falsehood constitutes an essential element. A fraudulent or reckless representation of facts as true, which the party may not know to be false, if intended to deceive, is equivalent to a knowledge of the falsehood." Code § 105-302; Lively v. Garnick, 160 Ga.App. 591, 287 S.E.2d 553 (1981). To be actionable the misrepresentations must be made with the intention of deceiving another, and the defendant at the time must either know they were false or what the law regards as the equivalent of knowledge. McLendon v. Galloway, 216 Ga. 261 (2), 116 S.E.2d 208 (1960). What one may not do is to turn his head away and blind himself to the truth or falsity of a condition which he recklessly represents to his own advantage. Such refusal to know, like admitted knowledge, involves actual, moral guilt. Wooten v. Calahan, 32 Ga. 382, 386; (1961); Penn Mutual Life Ins. Co. v. Taggart, 38 Ga.App. 509, 511 (1-b), 144 S.E. 400 (1928); Dundee Land Co. v. Simmons, 204 Ga. 248 (1), 49 S.E.2d 488 (1948). Knowledge is an essential element, but "the reference ... to fraudulent or reckless statements represented as true, which the party may not know to be false, if intended to deceive, is intended to declare what may amount to knowledge." Camp v. Carithers, 6 Ga.App. 608 (4), 65 S.E. 583 (1909). "The intention to deceive and the immoral element are supplied by knowledge of the falsity of the representations when they were made." Bagley v. Firestone Tire & Rubber Co., 104 Ga.App. 736, 740, 123 S.E.2d 179 (1961). The intent which constitutes an essential element of fraud is an intent that the representation be acted upon by the other party. Daugert v. Holland Furnace Co., 107 Ga.App. 566, 130 S.E.2d 763 (1963). It is a jury question except in plain and palpable cases. Brown v. Techdata Corp., Inc., 238 Ga. 622, 234 S.E.2d 787 (1977). Likewise, whether...