Kyser v. Southern Building & Loan Ass'n

• Decision Date: 14 April 1932
• Docket Number: 2 Div. 4.
• Citation: 141 So. 648,224 Ala. 673
• Parties: KYSER v. SOUTHERN BUILDING & LOAN ASS'N.
• Court: Alabama Supreme Court

141 So. 648

224 Ala. 673

KYSER v. SOUTHERN BUILDING & LOAN ASS'N.

2 Div. 4.

Supreme Court of Alabama

April 14, 1932

Rehearing Denied May 26, 1932.

Appeal from Circuit Court, Dallas County; Thomas E. Knight, Judge.

Action by Alice Ashby Kyser against the Southern Building & Loan Association. From a judgment of nonsuit, plaintiff appeals.

Affirmed.

Rescission of contract for fraud or undue influence must be asserted promptly after fraud is discovered or undue influence ceases to operate.

Counts 3 and 4 of the complaint are as follows:

"Count 3. The plaintiff claims of the defendant the refund of to-wit, $2,965.00; and plaintiff avers that on October 1 1928 and prior thereto, for the purpose of inducing plaintiff to subscribe for units of the full participating capital stock of defendant a duly authorized agent or two agents of defendant, Flint and/or Oberholtzer respectively, being the names of the two agents of defendant in question, whose names are not otherwise known to the plaintiff, while acting within the line and scope of their authority as such agents, represented to plaintiff in substance that such subscriptions and payments of money thereon were deposits of that much money in or with the defendant, at interest, just as in cases of deposits in a savings bank, that the money so deposited and would bear interest at a rate of at least eight per cent. per annum and probably as much as twelve or sixteen per cent. and would inevitably double, at which time it would have to be withdrawn, and that the Association did by its subscription contracts, permit the money so deposited to be withdrawn at any time before it doubles, whenever plaintiff wished so to withdraw it, but that no interest would be paid on the money so deposited if it were to be withdrawn at any time before it had doubled; whereby plaintiff was induced to subscribe for two hundred units on to-wit, September 24 1928, and for three hundred units on to-wit, October 1 1928, of the full participating capital stock of defendant and to pay into the 'surplus fund' of defendant $1,000.00 on to-wit, September 24, 1928 and $1,500 on to-wit, October 1, 1928, and to pay to the defendant on a date or dates which plaintiff does not now recall, but which are shown on her passbook which is in the possession of defendant, the sum of to-wit, $6,000.00 to be credited on the passbook of plaintiff with defendant; plaintiff hereby admits withdrawals from her passbook account with defendant of all but to-wit, $465.00; "Plaintiff further avers that said representations were false, and then known to be false or ought to have been known to be false by said agent or agents of defendant;

"Plaintiff further avers that at the time said representations were made, she was ignorant of the fact that they were false, but, to the contrary, believed them to be true, and relied upon them as true; and that she did not discover that they were false until to-wit, October 1, 1930;

"Plaintiff further avers that seasonably, after discovering said fraud on to-wit, October 1st, 1930, plaintiff rescinded her said contracts with defendant, and demanded the refund of the money she had paid into the defendant, as evidenced by said 'surplus certificates' and said passbook, less the interest credited to her in said passbook, and less the amount of her withdrawals, and tendered then and there to the agent of defendant in its office in Selma, Alabama, her 'surplus certificates' No. A-613 and A-622, her passbook and all other papers held by her in or with defendant; and plaintiff does hereby now tender to defendant all of said papers and said certificate and passbook;

"Plaintiff further avers that on to-wit, March 11, 1931, the defendant then and there having in its possession said passbook and all other papers held by her in or with the defendant except said 'surplus certificates,' plaintiff's attorney, S. F. Hobbs, tendered said 'surplus certificates' to the agent of defendant then and there in charge of its office in Selma, with the request for the refund aforesaid, that said refund was refused, but said 'surplus certificates' were accepted by said agent of defendant, said 'surplus certificates' being later returned by attorneys for defendant;

"Plaintiff further avers that her tender of said 'surplus certificates,' passbook and other papers made on to-wit, October 1, 1930, was refused, and that her demand for the refund of the net amount of her money paid into defendant by her was refused;

"Plaintiff further avers that the $2,965.00 sought to be recovered in this suit nor any part thereof has ever been paid or refunded to her.

"Count 4. The plaintiff claims of the defendant the refund of to-wit, $2,342.99; and plaintiff avers that on October 1, 1928 and prior thereto, for the purpose of inducing plaintiff to subscribe for units of the full participating capital stock of defendant, a duly authorized agent or two agents of defendant, Flint and/or Oberholtzer, respectively, being the names of the two agents of defendant in question, whose names are not otherwise known to the plaintiff, while acting within the line and scope of their authority as such agents, represented to plaintiff, in substance, that such subscriptions and payments of money thereon were deposits of that much money in or with the defendant, at interest, just as in cases of deposits in a savings bank, that the money so deposited would bear interest at a rate of at least eight per cent. per annum and probably as much as twelve or sixteen per cent. and would inevitably double, at which time it would have to be withdrawn, and that the Association did by its subscription contracts, permit the money so deposited to be withdrawn at any time before it doubled, whenever plaintiff wished so to withdraw it, but that no interest would be paid on the money so deposited if it were to be withdrawn at any time before it had doubled; whereby plaintiff was induced to subscribe for two hundred units on to-wit, September 24, 1928, and for three hundred units on to-wit, October 1, 1928, of the full participating capital stock of defendant, to pay into the 'surplus fund' of defendant $1,000.00 on to-wit, September 24, 1928 and $1,500.00 on to-wit, October 1, 1928, and to pay or deposit to the defendant on to-wit, September 24, 1928, $2,000.00 and on September 27th, 1928, $3,550.00, as shown on her passbook No. A-613 which is in the possession of defendant, the sum of said two payments or deposits being to-wit, $5,550.00, to be credited on the passbook of plaintiff with defendant; plaintiff hereby admits withdrawals from her said passbook account with defendant of all but to-wit, $450.00;

"Plaintiff further avers that said representations were false, and then known to be false or ought to have been known to be false by said agent or agents of defendant;

"Plaintiff further avers that at the time said representations were made, she was ignorant of the fact that they were false, but, to the contrary,

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