Eastern Motor Co. v. Lavender

• Decision Date: 10 March 1943
• Docket Number: 29766.
• Citation: 24 S.E.2d 840,69 Ga.App. 48
• Parties: EASTERN MOTOR CO. v. LAVENDER.
• Court: Georgia Court of Appeals

24 S.E.2d 840

69 Ga.App. 48

EASTERN MOTOR CO. v. LAVENDER.

No. 29766.

Court of Appeals of Georgia, Division No. 1.

March 10, 1943

Syllabus by the Court.

Where buyer was induced to enter into contract of conditional sale of automobile by actual fraud consisting of material, false and fraudulent misrepresentations, buyer could elect to rescind contract and bring an action in tort for deceit.

Deceit vitiates all contracts, and is, of itself, a substantive ground of action.

An action for deceit must be grounded on actual fraud.

The elements necessary to establish cause of action for "deceit" are that defendant made false representations with actual or constructive knowledge that they were false, that he made representations with intention and purpose of deceiving plaintiff, that plaintiff relied upon such representations, and sustained the alleged loss as the proximate result of representations having been made.

Where buyer elected to rescind contract of conditional sale of automobile because of actual fraud and to sue for deceit parol evidence that seller induced buyer to purchase automobile by false representations that automobile had never been damaged in a wreck was admissible to deny existence of a valid written contract, though contract provided that no warranties, representations, promises or statements had been made by seller unless indorsed on contract in writing. Code §§ 38-501, 38-503.

Conflicting evidence as to whether buyer was induced to purchase automobile by seller's fraudulent misrepresentations that it had never been damaged in a wreck or whether buyer purchased with knowledge of automobile's true condition which allegedly was reflected in excessive allowance on used automobile turned in by buyer, authorized verdict for buyer in action for deceit.

Where charge embraces the general principles of law applicable to the facts, a timely written request for any amplification of such principles, or for a more specific instruction with reference to a particular matter must be submitted.

1. "Fraud vitiates all contracts, and is, of itself, a substantive ground of action." Dye v. Wall, 6 Ga. 584 586.

2. An action for deceit must be grounded on actual fraud.

3. When the written contract of the conditional sale of the automobile is voided, and not binding on the buyer, who is the defrauded party, he, having elected to rescind the contract on account of actual fraud, consisting of alleged material, false and fraudulent, misrepresentations which induced him to enter into the agreement, may consider the contract as a nullity and bring an action in tort for deceit.

4. One of the provisions in the conditional sale contract is "No warranties, express or implied, representations promises or statements have been made by the seller unless indorsed hereon in writing." This provision, as well as all of the other provisions in the contract, is void, for the buyer had nullified and rescinded the entire contract on the ground of actual fraud.

5. "Parol contemporaneous evidence is inadmissible generally to contradict or vary the terms of a valid written instrument." Code, § 38-501. (Italics ours.)

6. "Parol evidence shall be admissible to show that the writing was either originally void [not valid] or subsequently became so." Code, § 38-503.

7. Parol evidence here was admissible to deny the existence of a valid written contract and not to contradict it.

8. The evidence authorized a finding of actual fraud, that the contract having been rescinded was a nullity, and that all the elements of deceit, an action for a tort, were proved. Jewell v. Norrell, 66 Ga.App. 11, 16 S.E.2d 797.

In an action for deceit Lavender sought damages from the Eastern Motor Company. A verdict was returned for an amount smaller than that sued for. The plaintiff's evidence, in effect, showed the following: On July 19, 1939, plaintiff purchased from defendant one new Oldsmobile automobile for $1,267.12, against which price was credited a cash payment of $30 and an allowance of $460 on a used Oldsmobile, leaving an unpaid balance of $777.12. A copy of the sales invoice was shown. The unpaid balance was covered by twenty-four notes of $32.38 each, and a conditional-sale agreement, which was assigned to General Motors Acceptance Corporation. Before the consummation of said sale the plaintiff was assured by Leon Ferst, president of said company, that the car was new, having been used as a demonstrator only, and that it had never been wrecked, or damaged in any way except through natural wear and tear. On or about July 21, 1939, plaintiff was informed by a service station operator in Columbia, South Carolina, that the car had been in a bad wreck. He pointed out the repairs that had been made on it in various places. Plaintiff carried the car back to the dealer the following day and demanded that the defendant accept its return. The defendant recognized plaintiff's claim and agreed to a rescission of the contract, but asked plaintiff to keep the car on defendant's account until he would be furnished with a new car, as there were twenty-nine unfilled orders ahead of him. From time to time plaintiff returned to defendant's place of business and each time was assured by Leon Ferst that as soon as a new car could be obtained it would be turned over to him. Finally despairing, plaintiff left the car at defendant's place of business and demanded his money back, which Ferst refused.

The defendant's evidence was to the following effect: The sale was not of a new car, but of an automobile that had been driven 5,383 miles, as set out in the invoice attached to the petition, with a new-car guaranty, that is, upon the same basis as the warranty given on a new car. The defendant advised the plaintiff that the car had been wrecked and in an accident and had been...