Laurel Auto Supply Co. v. Sumrall

• Decision Date: 09 January 1939
• Docket Number: 33412
• Citation: 185 So. 566,184 Miss. 88
• Court: Mississippi Supreme Court
• Parties: LAUREL AUTO SUPPLY Co. v. SUMRALL

185 So. 566

184 Miss. 88

LAUREL AUTO SUPPLY Co. v. SUMRALL

No. 33412

Supreme Court of Mississippi, Division A

January 9, 1939

APPEAL from the circuit court of Jones county HON.W. J. PACK, Judge.

Action by W. H. Sumrall against the Laurel Auto Supply Company for damages for fraud and deceit. From a judgment of the circuit court affirming a judgment of the county court for plaintiff defendant appeals. Affirmed.

Affirmed.

Welch &amp Cooper, of Laurel, for appellant.

It was understood by Sumrall that he was buying a car that had been used. The trouble is that he now says that he thought the car had been driven only about five thousand miles when in fact it had been driven fifteen thousand miles. That in short is the contention of the appellee and was his contention in the court below. Appellant contends that no matter what was said between the parties, that the result was that there was a solemn contract entered into between the parties and all representations made by the agent of the appellant were superseded by the written contract. Our court has many times so held.

J I. Case Threshing Machine Co. v. McCoy, 72 So. 138, 111 Miss. 715; McInnis v. Manning, 95 So. 250. 131 Miss. 119; Dowling v. Smyley, 116 So. 294, 150 Miss. 272; State Highway Dept. v. Duckworth, 178 So. 148; Belleville Supply Co. v. Dacey, 141 Miss. 569, 106 So. 818; Gerard Motor Co. v. McEachern, 150 Miss. 437, 116 So. 818; Pritchard v. Hall, 167 So. 629; J. B. Colt Co. v. Harris, 171 So. 695; Industrial Finance Corp. v. Wheat, 142 Miss. 536, 107 So. 382.

The clearest discussion that we have found on the right to rescind a contract and what must be done by a defrauded party who elects to rescind, is found in Vol. 6 R. C. L. under the subject of "Contracts, " Section 316.

For the purpose of this discussion, we are treating the matter as if there had been a perfect offer on the part of the appellee to rescind the contract. The record does not reveal this, but assuming that there was an offer to rescind and a tender of the automobile by the appellee (and the record certainly does not show this tender of the automobile by appellee), nevertheless, the appellee did not leave the automobile at the place of business of the appellant but continued to use it and treated it as his own. The rule is that where a purchaser after rescinding the contract of sale, held the goods in his possession, treated the property as his own, after the fraud is discovered, he has forfeited his proffered rescission. In other words, the situation is analogous to one who makes a tender of money. The tender must be kept alive. In this case the tender was not kept alive.

Comer v. Franklin, 53 So. 797; Everett v. Pickens, 83 So. 33; Tarkington v. Purvis, 9 L.R.A. 607; Jagers v. Griffin, 43 Miss. 134; Shade v. Diamond L. Service Station, 114 So. 260, 148 Miss. 157; Alig v. Lackey, 75 So. 139, 114 Miss. 392; Pritchard v. Hall, 167 So. 629, 175 Miss. 588; J. B. Colt Co. v. Harris, 171 So. 695, 177 Miss. 536.

A waiver of, or estoppel to exercise, the right of the buyer to rescind arises where, after discovering the fraud or defect, he retains the property without objection, or retains and uses or sells it, treats or deals with it as his own or exercises any acts of ownership over it.

55 C. J., sec. 254.

F. B. Collins, of Laurel, for appellee.

It is just as elementary and just as much "Horn Book" law that fraud vitiates everything into which it enters, even solemn written contracts, as the rule referred to by appellant's counsel.

Gross v. McKee, 53 Miss. 536.

One who obtains a written contract by means of false and fraudulent representations cannot shut out evidence as to such representations on the ground that it explains or contradicts the written instrument.

12 R. C. L. 397, sec. 145; Nash Miss. Valley Motor Co. v. Childress, 125 So. 709; Lizana v. Edward Motor Sales Co., 141 So. 295; Gross v. McKee, 53 Miss. 536; Hirschburg Optical Co. v. Jackson, 63 Miss. 21; Henry v. W. T. Rawleigh Co., 152 Miss. 320, 120 So. 188.

Counsel argues that it was error to admit the evidence of Stringer, the former owner of the car, to the effect that he had run the car 15, 000 miles while he owned it, and that it was in bad condition at the time he turned it back to the appellant. But in this counsel is in error because this goes to show the falsity of the representations made to appellee by Gartrell, appellant, president and general manager, at the time of the sale.

Nash Miss. Valley Motor Co. v. Childress, 125 So. 709.

An offer to rescind the contract is not necessary in order to entitle the purchaser to maintain an action for damages for the fraud. It is necessary where he seeks to recover back the consideration paid; then he must offer to return what he has received, and rescind the contract.

Myers v. Estelle, 47 Miss. 4.

Whenever fraud is perpetrated by one party to the injury of another, the offender is liable, and the most solemn transactions may be set aside and rendered inoperative. Accordingly, the defrauded party may elect to rescind and be restored to his former position. On the other hand, he may elect to affirm the transaction and sue either for the benefits to which he is entitled thereunder or for damages for the deceit.

12 R. C. L., page 406, sec. 153 and page 413, sec. 158.

OPINION

McGowen, J.

Sumrall, the appellee, brought an action against Laurel Auto Supply Company in the County Court of Jones County for damages for fraud and deceit. On the trial of the case the jury returned a verdict for $ 200. The case was appealed to the Circuit Court and affirmed, and appeal is prosecuted here.

The fraud alleged and proven almost conclusively was that the appellant sold a car, which had been used as a demonstrator, to Sumrall and accepted in payment therefor a used car owned by Sumrall as a payment of $ 200, and $ 36 cash. He executed an installment agreement, the substantial elements of which have been many times before this Court, and also his promissory note for the balance to he paid in monthly installments. The note was a negotiable instrument. It was transferred to a finance Corporation, a third party, without recourse by the appellant. Likewise, the conditional sales contract of Sumrall was assigned to the finance company.

The fraud proven was that while the car was sold as a used car it was likewise sold as a demonstrator car, and, at the time of the making of the contract between Sumrall and the automobile company, the speedometer on the car showed that it had been operated a mileage of 5, 341 miles. Gartrell, the general manager of the automobile company, told Sumrall, in the presence of witnesses, that the speedometer correctly represented the mileage. It was shown without contradiction that when the automobile company had repossessed the demonstrator car from the person to whom it was first sold, the...