Lacey v. Edmunds Motor Co.

• Decision Date: 25 June 1959
• Docket Number: 6 Div. 239
• Citation: 113 So.2d 507,269 Ala. 398
• Parties: James LACEY v. EDMUNDS MOTOR COMPANY, Inc. et al.
• Court: Alabama Supreme Court

Page 507

113 So.2d 507

269 Ala. 398

James LACEY v. EDMUNDS MOTOR COMPANY, Inc. et al.

6 Div. 239.

Supreme Court of Alabama.

June 25, 1959.

Kingman C. Shelburne, Birmingham, for appellant.

Dempsey F. Pennington, Birmingham, for appellee Edmunds Motor Co. Deramus, Fitts, Johnston & Mullins, Birmingham, for appellee Universal C. I. T. Credit Corp.

STAKELY, Justice.

In this case a bill in equity was filed by James Lacey (appellant) against Edmunds Motor Company, Inc., a corporation, and Universal C. I. T. Credit Corporation, a corporation (appellees). The bill was amended several times and demurrers were sustained by the court to the bill each time it was amended and to the bill as last amended. Thereupon the court dismissed the bill. The appeal here in from the final decree dismissing the bill.

The appellant, James Lacey, sought by his bill of complaint to rescind a contract of sale of an automobile on the ground that the contract was induced by fraud of the appellee, Edmunds Motor Company, Inc., and the contents of the contract were misrepresented to the complainant. According to the allegations of the bill, a salesman of Edmunds Motor Company agreed on the sale of the 1955 Ford owned by the complainant, it being specifically agreed, 'that the indebtedness against said 1955 Ford car would be transferred to said 1956 Ford car and that there would be added to said indebtedness the sum of $400.00 making a total of $1926.00, the complainant in addition to pay $100.00 cash directly to respondent Edmunds Motor Company.' The complainant then asked the salesman to telephone Associates Discount at its Birmingham office and get the manager on the telephone and introduce the complainant to the person answering the call. The complainant stated who he was and wanted to know what it would cost to finance an automobile in the amount of $1,923, explaining that he was buying a car from Edmunds of Motor Company, Inc., a 1956 Ford Victoria Sedan. He was told by the party on the other end of the line that they could finance it on the basis of $83.37 per month, the payments to be for 30 months. The salesman for Edmunds Motor Company then filled out a printed form bearing the name of 'Edmunds Mtr. Co.--Retail buyer's order' showing the details of the entire price that the complainant would be obligated to pay Associates Discount, Inc.

It was further alleged that the salesman handed to complainant a blank form and told complainant to sign his name at the bottom of same saying that said salesman would then give this to one of the stenographers of Edmunds Motor Company to insert by typewriter the proper figures showing amount payable by complainant, that the stenographers were busy on other matters at that time and that he would see that there was correctly transcribed on said form what was agreed on. It is then alleged that the complainant refused to sign his name on said form until the correct figures were written on said form. There was some discussion about filling out the form and then the manager of Edmunds Motor Company stated: 'Whatever is on the paper--we will stand behind that.' Thereupon the manager told said salesman and agent to write such a statement and give it to complainant. Complainant then signed his name on the blank financial form where he was told to sign it and took possession of said 1956 Ford automobile and drove it off.

It is further alleged that before the complainant took possession of the 1956 Ford he paid Edmunds Motor Company, Inc. the sum of $100 and was given a receipt for it.

It is further alleged that without the knowledge or consent of the complainant, the agent or agents of Edmunds Motor Company within the line and scope of their employment, fraudulently 'inserted or caused to be inserted in and on said paper, that complainant had signed in blank at the request and direction of said agent and salesman of respondent Edmunds Motor Company, figures and information to the effect that the payments to the finance company would be $111.21 per month for a period of 30 months and that the total amount payable to the finance company would be $3,336.30 and then in complete disregard of the instructions of the complainant gave, while acting within the line and scope of their employment, said paper to the Universal C. I. T. Corporation.'

It is further alleged that the acts and doings of said agents or agent of respondent Edmunds Motor Company were false and fraudulent and known by them to be so, the written showing or statement given by the said agent showing on its face that the payments of complainant were to be $83.37 per month for a period of 30 months or a total of $2,501.10, instead of $3,336.30.

It is further alleged that about two weeks thereafter complainant received through the United States mail a notice in writing from the Universal C. I. T. Corporation advising him that said company had financed complainant's 1956 Ford car. In this notice it was shown that the number of installments were 30 and the amount of each installment was $111.21. The total amount due to Universal C. I. T. Corporation was shown to be a total of $3,336.30.

It is further alleged that upon receipt of said notice to complainant from Universal C. I. T. Corporation complainant went to the manager of Edmunds Motor Company in Birmingham and told him that he wanted the matter straightened out so that the finance contract would speak the truth and that the complainant's instructions about the placing of the finance contract with Associates Discount had been disregarded by Edmunds Motor Company. Edmunds Motor Company refused to do anything about it and complainant then went to the office of Universal C. I. T. Corporation at Birmingham and made the same complaint there and contended that he only owed on his car $83.37 per month. Universal C. I. T. Corporation refused to give complainant any help except to tell him that they would sell the 1956 Ford car and apply the proceeds to the amount of their contract price.

It is further alleged that 'Thereafter and before the filing of this suit complainant tendered to the respondent and each of them the said 1956 Ford automobile and demanded that the money that complainant had paid respondent Edmunds Motor Company namely $100 be returned to him and that he be given back all the papers that he, the complainant had signed and given to Edmunds Motor Company and also that he be given the said 1955 Ford automobile that he had traded to Edmunds Motor Company heretofore alleged.'

We will not set out in detail the several amendments to the bill, it being sufficient to say that in the first amendment the complainant alleged that through a course of dealing that he was spelling out in detail in the amendment Edmunds Motor Company was acting as an agent for Universal C. I. T. Corporation in the transactions that it had with Lacey, complainant.

In the second amendment to the bill complainant alleged that 'the said actions and doings of salesman or agent of said Edmunds Motor Company were done without his knowledge; that the same were done without his consent and by someone or more persons not authorized by Complainant so to do and that Complainant had never consented to or ratified the said alleged acts and doings of said agents or agent of Edmunds Motor Company.'

The last amendment to the bill alleged, 'in the alternative,' that 'the contract now existing between the complainant and the respondent is usurious * * *.'

The appellees demurred to the bill as a whole and then, specially to several alleged aspects of the bill. The court ruled generally on the demurrers, sustaining them without setting out which grounds were apt. The effect of such a ruling was a ruling on the demurrer to the bill as a whole, for where a bill sets up several distinct equities, a decree sustaining a demurrer generally and making no reference to grounds of demurrer going to a part or aspect of the bill will be referred to the grounds of demurrer addressed to the bill as a whole. On appeal here only the grounds going to the sufficiency of the bill as a whole will be considered. City of Talladega v. Ellison, 262 Ala. 449, 79 So.2d 551, and cases cited therein.

It is a well-established principle in Alabama that a buyer alleging that he was induced by fraud to enter into a contract may rescind by restoring benefits and recover payments, or affirm, retain benefits, and sue in deceit for damages (Southern Building & Loan Ass'n v. Argo, 224 Ala. 611, 141 So. 545; Day v. Broyles, 222 Ala. 508, 133 So. 269) or he, the defrauded party, when sued by the party who perpetrated the fraud, may by appropriate plea set up such fraud as a defense to defeat the action (Southern Building & Loan Ass'n v. Bryant, 225 Ala. 527, 114 So. 367). However, the buyer must elect between his remedies and may not combine them. Glass v. Cook, 257 Ala. 141, 57 So.2d 505; Tollett v. Montgomery Real Estate & Ins. Co., 238 Ala. 617, 193 So. 127. It is also true that a court of equity has concurrent jurisdiction with a court of law to annul or rescind a contract induced by fraud. King v. Livingston Mfg. Co., 192 Ala. 269, 68 So. 897.

In this case appellant, James Lacey, chose to file his...