Crews v. Cisco Bros. Ford-Mercury, Inc., FORD-MERCUR

• Decision Date: 30 September 1991
• Docket Number: FORD-MERCUR,A91A1768 and A91A1802,INC,Nos. A91A1767,s. A91A1767
• Citation: 411 S.E.2d 518,201 Ga.App. 589
• Parties: CREWS v. CISCO BROTHERSet al. HOWARD v. CISCO BROTHERSet al. FETTIG v. CISCO BROTHERSet al.
• Court: Georgia Court of Appeals

Page 518

411 S.E.2d 518

201 Ga.App. 589

CREWS v. CISCO BROTHERS FORD-MERCURY, INC. et al.

HOWARD v. CISCO BROTHERS FORD-MERCURY, INC. et al.

FETTIG v. CISCO BROTHERS FORD-MERCURY, INC. et al.

Nos. A91A1767, A91A1768 and A91A1802.

Court of Appeals of Georgia.

Sept. 30, 1991.

Reconsideration Denied Oct. 23, 1991.

Certiorari Denied Dec. 4, 1991.

Stein & Cauthen, James E. Stein, Robert H. Cauthen, St. Marys, for appellants.

Stephen L. Berry, St. Marys, for appellees.

BIRDSONG, Presiding Judge.

Appellants are plaintiffs in suits for rescission of purchase contracts for fraud, fraudulent inducement to enter contract, breach of contract, and breach of warranty, all on account of appellants' respective purchases from Cisco Brothers of used vehicles. After purchasing the vehicles, plaintiffs discovered either that the vehicle had been previously wrecked, or that the odometer had been rolled back. In each case the trial court granted partial summary judgment to Cisco Brothers et al. on grounds that except for a statement in the complaint, plaintiff did not tender or even offer to tender back the purchased vehicle to Cisco Brothers pursuant to OCGA § 13-4-60 and therefore could not maintain an action for rescission; and that in each contract the "merger clause" which stated that any verbal promises by a salesman were waived and were not a part of the contract, prohibits each plaintiff from claiming fraudulent inducement to enter the contract, according to Brown v. Ragsdale Motor Co., 65 Ga.App. 727, 16 S.E.2d 176 and other cases. The trial court ruled that plaintiff in each case is therefore prevented from seeking punitive damages for fraud. Crews, Fettig and Howard appeal. Held:

1. False and fraudulent representations as to an existing fact which induced the signing of a sales contract give the purchaser the right to rescind the contract (City Dodge v. Gardner, 130 Ga.App. 502, 203 S.E.2d 729; Sumner v. Gen. Motors Acceptance Corp., 53 Ga.App. 630, 186 S.E. 747). One who seeks rescission of a contract for fraud must restore or offer to restore the consideration received thereunder, as a condition precedent to bringing the action (see Condios Inc. v. Driver, 145 Ga.App. 537, 244 S.E.2d 85); however, restoration by the purchaser is not an absolute rule, and does not require that the defrauding party be placed in exact status quo, but only that he be placed substantially in his original position and that the party rescinding derives no unconscionable advantage from the rescission. Fletcher v. Fletcher, 158 Ga. 899, 124 S.E. 722; National Old Line Ins. Co. v. Lane, 172 Ga.App. 519, 522, 323 S.E.2d 707; accord Jones v. Gaskins, 248 Ga. 510, 512, 284 S.E.2d 398; Henderson Warehouse Co. v. Brand, 105 Ga. 217, 224, 31 S.E. 551; Rountree v. Davis, 90 Ga.App. 223, 82 S.E.2d 716; see Cobb & Eldridge, Ga. Law of Damages (2nd ed.), § 17-4. One seeking to rescind a contract for fraud must restore or tender back the benefits received under the contract, or show a sufficient reason for not doing so; he need not tender back what he is entitled to keep, and need not offer to restore where the defrauding party has made restoration impossible ( Mutual Savings, etc., Ins. Co. v. Hines, 96 Ga.App. 442, 100 S.E.2d 466), or when to do so would be unreasonable. Smith v. McWhorter, 173 Ga. 255, 273, 160 S.E. 250; Berry v. Williams, 141 Ga. 642, 81 S.E. 881. Compare International Software Solutions v. Atlanta Pressure, etc., Co., 194 Ga.App. 441, 390 S.E.2d 659.

Appellant Crews and appellant Fettig contended and showed evidence that they did not offer to return the vehicles to Cisco Brothers because the purchase of their respective vehicles was financed through Ford Motor Credit and they were required to continue making monthly payments to the third party, Ford Motor Credit. Appellant Howard gave evidence that when he discovered his vehicle had been previously wrecked and could not be repaired acceptably, he contacted Ford Motor Credit, and was told that Cisco Brothers had stated that Howard's vehicle had been repaired and that the matter was settled he was refused relief from his obligation to pay Ford Motor Credit.

It is clear that in the facts of all these cases, the defendant Cisco Brothers had been paid by Ford Motor Credit and appellants were obligated to pay this third-party creditor. In each case, a return of the vehicle or even an offer to return the vehicle to Cisco Brothers would not result in automatic absolution of the debt each appellant owed to this third-party creditor. Although defendants in affidavit say Cisco Brothers would have accepted the vehicles if appellants had offered to return them, it is not suggested that this would automatically relieve appellants of their separate obligation to pay the third-party creditor.

It may be that after much trouble and expense the plaintiffs might have convinced the third party to recover its money from Cisco Brothers and relieve them of their debt, but this is a patently unreasonable solution, for it gives Cisco Brothers an unconscionable advantage in having received money from a third party who, being itself not accused of any fraud or breach, is not obliged to relieve the purchasers of their obligations by the fact that the seller, for some reason, had accepted a return of the vehicles. On the face of things, if each appellant had returned the vehicles, the defrauding party would then have both the money paid by the third party and the vehicles; the purchasers would be put to trouble and expense, and as shown in the case of appellant Howard, great uncertainty of success, to try to get the third party to absolve their debts, meanwhile having neither the vehicle...