Brown v. Ragsdale Motor Co. Inc

• Decision Date: 31 July 1941
• Docket Number: No. 28839.,28839.
• Citation: 16 S.E.2d 176
• Parties: BROWN. v. RAGSDALE MOTOR CO., Inc.
• Court: Georgia Court of Appeals

16 S.E.2d 176

BROWN.

v.RAGSDALE MOTOR CO., Inc.

No. 28839.

Court of Appeals of Georgia,

Division No. 1.

July 31, 1941.

Syllabus by the Court.

1. "A material misrepresentation constituting actual fraud may give rise to an independent action in tort for deceit, to recover for damage thus occasioned." (Italics ours.) Penn Mutual Life Ins. Co. v. Taggart, 38 Ga.App. 509, 144 S.E. 400.

2. Such an action must be grounded on actual fraud.

3. The essential elements of such an action are as follows: (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 upon such representations. (5) That the plaintiff sustained the alleged loss and damage as the proximate result of their having been made.

4. One of the provisions of the written contract in question was as follows: "Said property is purchased solely on judgment of vendee without any warranty or representations from the vendor except that the title Is unencumbered. This contract and said note, together with all stipulations and agreements therein are to be construed together and they constitute the entire contract of purchase and sale of said property. All prior or contemporaneous conditions and agreements are therein merged."

5. When the contract with the provision quoted in the preceding headnote therein was tendered in evidence duly signed by the buyer, it was admissible, and when admitted the evidence demanded a finding that the plaintiff did not rely upon the representations of the defendant. Hence, the fourth essential element of those numerated in headnote 3 necessary to sustain the action was not proved and the buyer could not recover.

6. The judge did not err in directing a verdict for the defendant.

GARDNER, J., dissenting.

Error from Civil Court, Fulton County; T. O. Hatcher, Judge.

Action for fraud by Steve Brown against the Ragsdale Motor Company, Incorpo-rated. To review a judgment for defendant, plaintiff brings error.

Affirmed.

This was an action on a tort for fraud and deceit in which the plaintiff Steve Brown alleged in his petition that he purchased a certain Hudson automobile from Ragsdale Motor Company, Incorporated, defendant. He traded in his old car on the new car, was allowed $450 therefor, and gave notes for the balance due for $744, payable $31 per month for 24 months. He alleged that at the time he bought the car defendant falsely and fraudulently represented to him that the car was a new car. The defendants had sold the car to one W. G. Patton of Ben Hill, Georgia, several months before and had turned back the speedometer so that the car appeared to be new and had not been driven at all. The price of a new Hudson sedan which plaintiff understood he was buying was $1,036, whereas as a second hand car it was worth only $673.40, and the plaintiff was damaged in the sum of $362. "Plaintiff alleges that the said representations of the defendant Ragsdale Motor Company, Incorporated, and of his said agent and servant Al Ragsdale were false and fraudulent and were made for the purpose of deceiving plaintiff and did actually deceive plaintiff and by reason of said fraud and deceit practiced on plaintiff by the defendant Ragsdale Motor Co., Inc., and the aggravated nature of the wrong, plaintiff is entitled to punitive damages in the amount of $2,000."

The defendant's answer in effect denied the essential allegations of the plaintiff's petition and further stated that the car had only been driven from the freight depot to their place of business and was in truth a new car as represented by them. They further say that they had previously sold the car to the said W. G. Patton of Ben Hill, Georgia, which was black in color and obtained a tag for it, but when Patton and his wife called for the car, Patton's wife changed her mind as to the color, wanting instead a blue one and the car in question was never moved from the salesroom by Patton or anyone else and the true mileage was revealed on the car's speedometer, all of which was explained to the defendant and his counsel prior to the filing of this suit.

The evidence for the plaintiff was in effect that the car had been driven several thousand miles before it was sold to the plaintiff; that the speedometer had been to the defendant and unknown to the plaintiff; that the defendant knowingly fraudulently represented to the plaintiff that the car was brand new and induced the plaintiff to enter into the contract to his damage. However, the defendant's evidence constituted the contract of sale which provided in part: "Said property is purchased solely on judgment of vendee without any warranty or representations from vendor except that the title is unencumbered. This contract and said note, together with all stipulations and agreements therein, are to be construed together and they constitute the entire contract of purchase and sale of said property. All prior or contemporaneous conditions and agreements are therein merged."

At the conclusion of the evidence the judge of the superior court directed a verdict for the defendant in the following language: "There being no repudiation of the contract out in the plaintiff's petition, and no offer to rescind, the court is of the opinion that the petition should be construed as standing on the contract, and a verdict is hereby directed, in view of the introduction of the contract, for the defendant in the case."

Winfield P. Jones and F. L. Breen, all of Atlanta, for plaintiff in error.

E. Harold Sheats, of Atlanta, for defendant in error.

MacINTYRE, Judge.

"A material misrepresentation, constituting actual fraud, may give rise to an independent action in tort for deceit, to recover for damage thus occasioned." (Italics ours.) Penn Mutual Life Ins. Co. v. Taggart, 38 Ga.App. 509, 511, 144 S.E. 400, 402. It might be well to bear in mind that the action here is an affirmative one in which the party against whom the alleged fraud was committed was on the offensive seeking redress by instituting the original proceeding in the form of a suit in tort for deceit occasioned by actual fraud. This is not one of those classes of cases where the injured party was merely attempting to defend himself against the attack of a suit brought by the party who made the misrepresentation. An independent affirmative action in tort based upon fraudulent misrepresentations in orderto be actionable (furnish legal ground for an action) must be based upon actual fraud. Code, § 105-302; Penn Mutual Life Ins. Co. v. Taggart, supra. The petitioner (the injured party) before he can recover in such an action must show or prove: (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 upon such representations. (5) That the plaintiff sustained the alleged loss and damage as the proximate result of their having been made. Young v. Hall, 4 Ga. 95, 98. "Fraud or duress, by which the consent of a party has been obtained to a contract of sale, renders the sale voidable at the election of the injured party." Code, § 96-201; Code, § 20-502. 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 S.E. 600; ...