Gulf Oil Corp. v. Spriggs Enterprises, Inc.

• Decision Date: 19 September 1980
• Citation: 388 So.2d 518
• Parties: GULF OIL CORPORATION, a corp. v. SPRIGGS ENTERPRISES, INC., a corp. DIAMONDHEAD CORPORATION et al. v. SPRIGGS ENTERPRISES, INC., an Alabama corp. 78-863, 78-864.
• Court: Alabama Supreme Court

Page 518

388 So.2d 518

GULF OIL CORPORATION, a corp. v. SPRIGGS ENTERPRISES, INC., a corp.

DIAMONDHEAD CORPORATION et al. v. SPRIGGS ENTERPRISES, INC., an Alabama corp.

78-863, 78-864.

Supreme Court of Alabama.

Sept. 19, 1980.

Wesley Pipes of Lyons, Pipes & Cook, Mobile, Douglas Arant and Samuel H. Franklin of Bradley, Arant, Rose & White, Birmingham, and Taylor D. Wilkins of Wilkins & Bankester, Bay Minette, for appellant Gulf Oil Corp.

Broox G. Holmes and James J. Ward, Jr., of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, Norborne C. Stone, Jr. of Stone & Partin, Bay Minette, for appellants Diamondhead Corp. and Lake Forest, Inc.

E. E. Ball of Owen & Ball, Bay Minette, for appellees.

PER CURIAM.

On June 21, 1972, Lake Forest, Inc., a real estate developer which is a wholly-owned subsidiary of Diamondhead Corporation, sold some real property along U.S. Highway 98 just off I-10 in Baldwin County to Dixon Shell Service Station, Inc. (That corporation later became Spriggs Enterprises, Inc.) During the negotiations prior to the sale, Spriggs and Dixon, the initial partners in this enterprise, obtained a commitment in a personal letter ¹ from Ralph Prince, who was at that time national sales manager for Diamondhead, that Diamondhead would not sell any of its property north of and between the Spriggs property and I-10 for the purpose of "an automotive service station," making the Spriggs station the first station off I-10. Spriggs recorded this letter in the office of the Judge of Probate in Baldwin County. In November, 1972, Spriggs opened its service station, supplied with Shell products by Mothershed Oil Co., Inc.

In November, 1976, Diamondhead began negotiations to sell the property between Spriggs' Shell station and I-10 to Gulf Oil. Although Diamondhead and Lake Forest contended at trial that the Prince letter had no binding effect, the deed executed by Lake Forest to Gulf in December, 1976, specifically stated that the purchaser agreed and it became a covenant running with the property that the land sold would be used solely for the construction of "one convenience store with no more than two islands for self-service gasoline pumps." This deed was also recorded. The property was cleared but the Gulf station has not yet been built.

On January 27, 1977, Spriggs and Mothershed sued Gulf, Lake Forest, and Diamondhead, seeking declaratory and injunctive relief with regard to the conveyance to Gulf and compensatory and punitive damages for alleged fraud, breach of contract, tortious interference with Spriggs' business or with his contract with Lake Forest, and a civil conspiracy to interfere with Spriggs' business. In addition to damages, the plaintiff also asked the court to set aside the deed from Lake Forest to Gulf and to specifically enforce the Prince letter. It asked the court to permanently enjoin Lake Forest from conveying the property for the purpose of erecting a service station. Gulf answered and also requested a declaratory judgment on the respective rights of Spriggs and Gulf as to the Gulf property. Mothershed was dismissed as a party prior to the end of the trial.

At the close of the evidence, the trial court made the following statement to the jury and made it a part of the record:

The Court finds as a matter of law that the deed to Gulf Oil Corporation may not be set aside in this action.

The Court further finds as a matter of law that the Defendant, Gulf Oil Corporation had notice of the declaration contained in the Plaintiff's Exhibit No. 4 (the Prince letter) and is bound by the agreement, if any there is between Spriggs Company and Lake Forest and Diamondhead; and under the petition of Defendant Gulf the Court construes the deed to Defendant Gulf Oil Company to be a deed under and subject to the declaration in Plaintiff's Exhibit No. 4 (the Prince letter). It is therefore ORDERED, ADJUDGED and DECREED that Defendant Gulf Oil Corporation be and it hereby is allowed to construct one convenience store with not more than two self service fuel pump islands; It is further ORDERED, ADJUDGED and DECREED that Defendant Gulf Oil Corporation be and it hereby is enjoined and restrained against selling monthly POL products and TBA items in a gross dollar volume greater than the gross dollar volume sales of convenience store sales. It is further ORDERED, ADJUDGED and DECREED that Defendant Gulf Oil be and it is further enjoined and restrained from displaying signs fairly inviting attention to the sales of POL products and TBA items greater than to convenience store sales item.

This injunction is to be placed of record and will run with the land.

The jury then returned two general verdicts against Gulf, Diamondhead, and Lake Forest. Two hundred fifty thousand dollars in actual damages and $1,000,000 in punitive damages were awarded to Spriggs. Defendants Gulf, Lake Forest, and Diamondhead filed motions for new trial and, in the alternative, for judgment notwithstanding the verdict, which were not acted on by the trial court and were thus deemed denied pursuant to ARCP 59.1. Gulf, Lake Forest, and Diamondhead appealed. We reverse and remand.

The trial court's conclusion of law and the order entered thereon in patently inconsistent with the jury verdicts. It is also inconsistent in its terms. If it purports to grant specific performance of the Prince agreement, allowing Gulf to pump gas on the premises seems to conflict with it. Additionally, there is no evidence to support the injunction against selling "POL products and TBA items in a gross dollar volume greater than the gross dollar volume sales of convenience store sales."

But more basically, one cannot have a decree for specific performance and damages for breach of the same contract. Nor may the court award damages for the tort of fraud and misrepresentation and, at the same time, grant specific performance of the agreement. The theories of recovery are inconsistent, both legally and factually, and, therefore, the court's decree and the jury's verdict cannot coexist. U.S. Fidelity & Guaranty Co. v. McKinnon, 356 So.2d 600 (Ala.1978).

A party defrauded in a contractual setting is afforded a number of remedies in our system, and may pursue several in the same action. However, he cannot have multiple redresses. At 37 Am.Jur.2d Fraud and Deceit § 327 (1968), this rule is stated as follows:

In pursuance of the rule that a contract or transaction induced by fraud is ordinarily merely voidable, a defrauded party is, upon discovery of the fraud, put to an election. The legal system offers him a choice of several courses of conduct and remedies to redress the effect of the fraud and false representations. He may elect whether to proceed ex contractu or ex delicto.

And at 25 Am.Jur.2d Election of Remedies § 26 (1966):

As a general rule, the doctrine of election is fully applicable where one of the two actions involved is at law and the other is in equity.

Spriggs is not entitled to have the Prince agreement specifically enforced and, at the same time, recover damages for fraud. Although the trial court seems to have ordered specific performance in a modified form, this too is inconsistent with the jury verdicts either based on tort or on breach of contract.

We do not mean to suggest to Spriggs which of the remedies available it must elect. We hold only that it cannot have both the relief granted by the trial court and the jury verdict as well.

On retrial, the plaintiff must make an election at the latest before the case goes to the jury as to which of its inconsistent theories it elects to proceed on.

Because the trial court's conclusion of law and its order are inconsistent with the jury verdicts, the judgment denying the motions for new trial are reversed, and the cause is remanded for a new trial.

REVERSED AND REMANDED.

MADDOX, JONES, ALMON, SHORES, EMBRY and BEATTY, JJ., concur.

TORBERT, C. J., and FAULKNER, J., concur in the result.

FAULKNER, Justice (concurring in the result to reverse and remand).

These appeals are from a judgment for Spriggs Enterprises, Inc., in an action involving fraud, civil conspiracy, interference with business or contractual relations, and breach of contract claims.

On June 21, 1972, Lake Forest, Inc., a real estate developer which is a wholly-owned subsidiary of Diamondhead Corporation, sold some real property along U.S. 98 just off I-10 to Dixon Shell Service Station, Inc. (That corporation later became Spriggs Enterprises, Inc.) During the negotiations prior to the sale Spriggs and Dixon, the initial partners in this enterprise, obtained a commitment in a personal letter from Ralph Prince, who was at that time national sales manager for Diamondhead, that Diamondhead would not sell any of its property north of or between the Spriggs property and I-10 for the purpose of "an automotive service station," making the Spriggs station the first station off of I-10. Spriggs recorded this letter in the office of the Judge of Probate in Baldwin County. In November, 1972, Spriggs opened its service station supplied with Shell products by Mothershed Oil Co., Inc.

In November, 1976, Diamondhead began negotiations to sell the property between Spriggs' Shell station and I-10 to Gulf Oil. Even though Diamondhead and Lake Forest felt that the Prince letter had no binding effect, the deed executed by Lake Forest to Gulf in December, 1976, specifically stated that the purchaser agreed and it became a covenant running with the property that the land sold would be used solely for the construction of "one convenience store with no more than two islands for self-service gasoline pumps." This deed was also recorded. The property was cleared but the Gulf station has never been built.

On January 27, 1977, Spriggs, Inc. and Mothershed sued Gulf, Lake Forest, and Diamondhead, seeking declaratory and injunctive relief with regard to the conveyance to Gulf and compensatory and punitive damages for alleged...