City Dodge, Inc. v. Gardner

• Decision Date: 03 September 1974
• Docket Number: No. 28676,28676
• Citation: 232 Ga. 766,208 S.E.2d 794
• Parties: , 71 A.L.R.3d 1054, 15 UCC Rep.Serv. 598 CITY DODGE, INC. v. Franklin C. GARDNER.
• Court: Georgia Supreme Court

Page 794

208 S.E.2d 794

232 Ga. 766, 71 A.L.R.3d 1054, 15 UCC

Rep.Serv. 598

CITY DODGE, INC. v. Franklin C. GARDNER.

No. 28676.

Supreme Court of Georgia.

Sept. 3, 1974.

Rehearing Denied Sept. 24, 1974.

Webb, Parker, Young & Ferguson, Paul Webb, Jr., John Tye Ferguson, Atlanta, for appellant.

Harmon & Smith, Archer D. Smith, III, Tyrone M. Bridges, Matthew Dwyer, Atlanta, for appellee.

Syllabus Opinion by the Court

INGRAM, Justice.

A suit in tort by a buyer against a seller for an alleged fraudulent misrepresentation of the seller's agent resulted in a jury verdict and judgment for the buyer and on appeal by the seller the Court of Appeals affirmed. Certiorari was granted to review this decision and we have determined the judgment of the Court of Appeals should be affirmed.

In this case, the buyer contended that he purchased a used automobile with the understanding that the vehicle had never been wrecked. The seller denied that this representation was made by his agent (salesman) to the buyer. The buyer signed a sales agreement which contained the words, 'no other agreement, promise or understanding of any kind pertaining to this purchase will be recognized.' In addition, the purchase agreement stated that the car is said 'as is.' Subsequent to the purchase, the buyer discovered that the automobile had been wrecked, tendered the car to the seller, unilaterally rescinded the contract and brought the present action in tort for fraud and deceit.

In our review of the case, we accept the jury's factual determination that the seller's agent knowingly misrepresented the car as never having been wrecked. See Central R. Co. v. Ferguson & Melson, 63 Ga. 83, 85; M & G Textile Company, Inc. v. West Point-Pepperell, Inc., 126 Ga.App. 43, 189 S.E.2d 878. In addition, we conclude this representation that the car had never been wrecked is an express rather than an implied warranty. Code Ann. § 109A-2-313; Jacobs Pharmacy Co. v. Gipson, 116 Ga.App. 760, 762, 159 S.E.2d 171. See also, White, Sales Warranties under Georgia's Uniform Commercial Code, 1 Ga. State Bar Journal 191, 192 (1964). We, also, conclude that the 'as is' language used here is ineffective to negate an express warranty. Code Ann. § 109A-2-316(3) (a).

The decisive issue we address is whether the language of the merger clause that 'no other agreement, promise, or understanding of any kind-pertaining to this purchase will be recognized,' was legally effective to prevent the buyer from claiming that he relied on the seller's misrepresentation. It has been recognized that § 2-202 of the Uniform Commercial Code (Code Ann. § 109A-2-202) was intended to allow sellers to prevent buyers from making false claims of oral warranties in contract actions. See, Note, 54 Minn.L.Rev. 846, 849 (1970). Thus, in contract actions the effect of merger and disclaimer clauses must be determined under the provisions of the Uniform Commercial Code.

However, under Georgia law, traditionally two actions have been available to a buyer in which to sue a seller for alleged misrepresentation in the sale. The buyer could affirm the contract and sue in contract for breach or he could seek to rescind the contract and sue in tort for alleged fraud and deceit. See, Brown v. Ragsdale Motor Co., 65 Ga.App. 727, 16 S.E.2d 176; and, Eastern Motor Co. v. Lavender, 69 Ga.App. 48, 24 S.E.2d 840. Our threshold question in this tort case is to determine whether the adoption of the Uniform Commercial Code (Code Ann. Title 109A) left available in Georgia a buyer's historic remedy in tort. The passage of the Uniform Commercial Code by the legislature evinced an intent to have that body of law control all commercial transactions. Code Ann. § 109A-1-102. However, while the Code is an attempt to make uniform the law among the various jurisdictions regarding commercial transactions, the draftsmen realized that it could not possibly anticipate all situations. Thus, § 1-103 (Code Ann. § 109A-1-103) states:

'Unless displaced by the particular provisions of this Act, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause shall supplement its provisions.'

In addition, Code Ann. § 109A-2-721 provides that:

'Remedies for material misrepresentation or fraud include all remedies available under this Article for nonfraudulent breach. Neither rescission or a claim for a rescission of the contract for sale nor rejection or return of the goods shall bar or be deemed inconsistent with a claim for damages or other remedy.'

The commentary by the drafters of the Uniform Commercial Code on this section states: 'Thus the remedies for fraud are extended by this section to coincide in scope with those for non-fraudulent breach. This section thus makes it clear that neither rescission of the contract for fraud nor rejection of the goods bars other remedies unless the circumstances of the case make the remedies incompatible.' See, Official Comment, Uniform Commercial Code, § 2-721.

We conclude from this language that neither the draftsmen nor the legislature intended to erase the tort remedy for fraud and deceit with the adoption of the Uniform Commercial Code in Georgia. In support of this conclusion, we find many Georgia cases subsequent to the adoption of the Uniform Commercial Code which recognize the tort remedy. (E.g., Wade Ford, Inc. v. Perrin et al., 111 Ga.App. 794, 143 S.E.2d 420; Rogers-Farmer Metro Chrysler-Plymouth, Inc. v. Barnett, 125 Ga.App. 494, 188 S.E.2d 122. No authority to the contrary has been cited to us, and we note that many of our sister states also provide a tort remedy. See, e.g., Clements Auto Co. v. Service Bureau Corp., 444 F.2d 169 (8th Cir. 1971); Sauerman v. Stan Moore Motors, Inc., 203 N.W.2d 191 (Iowa 1970); Chester v. McDaniel, 264 Or. 303, 504 P.2d 726 (1972). For additional supportive authority, see 3A Bender's U.C.C. Service, § 14.10, and White & Summers Handbook of the Law under the Uniform Commercial Code, § 8-1, p. 248. The latter treatise notes that, ...