Mazer v. Brown, 6 Div. 469

• Decision Date: 30 June 1953
• Docket Number: 6 Div. 469
• Citation: 259 Ala. 449,66 So.2d 561
• Parties: MAZER v. BROWN.
• Court: Alabama Supreme Court

Page 561

66 So.2d 561

259 Ala. 449

MAZER v. BROWN.

6 Div. 469.

Supreme Court of Alabama.

June 30, 1953.

Rehearing Denied Aug. 6, 1953.

A. Leo Oberdorfer and E. M. Zeidman, Birmingham, for appellant.

Wm. C. Barber and Barber & Barber, Birmingham, for appellee.

PER CURIAM.

This is an action for deceit by appellee against appellant, resulting in a verdict and judgment for appellee for $6,000.

We will treat contentions made as to error in the order in which they appear in appellant's brief. The first relates to the demurrer to count IV, one of the two counts which were submitted to the jury.

There is much detail set up in the count. Appellant is alleged to have been an officer and director of Mazer Roofing and Heating Company, a corporation. That he repaired and repainted dwellings using the name of the corporation in making contracts. That appellee owned a dwelling house in which he lived, which needed repairing and repainting. That he contacted appellant who told him to contract with said corporation to do the work; that appellant willfully, falsely and fraudulently suppressed and fraudulently concealed from appellee, with the intent to deceive and defraud appellee, the following material facts: that said corporation was insolvent, or rapidly becoming insolvent, was unsafe financially to make good its work; that it was unable to perform in a good and workmanlike manner the work agreed upon under said contract, and that its management and employees were incapable, inexperienced, incompetent and unable to do and complete the work under said contract in a good and workmanlike manner. That appellee relied upon the good faith of appellant and did not know of said willful, false and fraudulent concealments and suppressions of material facts which appellant was under obligation to communicate to him, and as a proximate result thereof he entered into a contract and was caused to pay said corporation $7,106.50 pursuant to said contract. That the corporation under said contact did not perform and complete the job in a good and workmanlike manner but that it was poorly, incompletely and carelessly done, so that the market value of the dwelling was substantially depreciated. The count then gives a detailed statement of the defects and deficiencies of the work, and that the material and work were of inferior quality and carelessly and negligently done; that said corporation is insolvent and in bankruptcy and unable financially to make good its work to the damage of appellee as claimed. This count undertakes to follow section 109, Title 7, Code.

The first contention made with respect to the demurrer to this count is that it fails to show a duty to disclose the alleged material facts set forth in it.

We agree that the count should show such a duty. Einstein v. Marshall, 58 Ala. 153; National Park Bank of New York v. Louisville & Nashville R. R. Co., 199 Ala. 192, 74 So. 69(23); Mudd v. Lanier, 247 Ala. 363, 377(24), 24 So.2d 550; section 109, Title 7, Code. That principle has been held to apply to a buyer of goods on credit when he is insolvent or has no reasonable expectation of being able to pay for them, and he fails to disclose to the seller his condition and the seller is ignorant of it. Loeb v. Flash, 65 Ala. 526; McCormick v. Joseph, 77 Ala. 236; LeGrand and Hall v. Eufaula National Bank, 81 Ala. 123, 1 So. 460; Kyle v. Ward, 81 Ala. 120, 1 So. 468.

Likewise a duty exists on the part of the seller to disclose to a purchaser certain material facts. Jordan v. Pickett, 78 Ala. 331; Standard Motorcar Co. v. McMahon, 203 Ala. 158, 82 So. 188; Southern Land Development Co. v. Meyer, 230 Ala. 40, 159 So. 245; Metropolitan Life Ins. Co. v. James, 238 Ala. 337, 191 So. 352. This applies to parties entering into contracts generally. American Traders' National Bank v. Henderson, 222 Ala. 426, 133 So. 36; Metropolitan Life Ins. Co. v. James, supra.

According to the complaint, appellant was not a disinterested stranger to the transaction. He was financially interested in the business of the corporation. His interest imposed the same duty to make disclosure to appellee as would be imposed on the corporation. The material facts relied on are sufficiently alleged together with the fact that they were material and that they existed but were not disclosed. Those facts relate to the time when the contract was made. The count sufficiently shows that they then existed and were not disclosed.

The next contention made relates to the demurrer to count V. Most of the contentions here made are the same as those applicable to count IV, supra. The chief difference is that in count V, allegations are made not of concealment, but of false representations made by appellant inducing appellee to contract with the corporation, with the result as stated in count IV, when appellant was a stockholder and director of the corporation. The allegation in that respect is in substance that appellant willfully, falsely and fraudulently represented to appellee with the intent to deceive and defraud him that the corporation was capable of and would do a fine and workmanlike job on said dwelling according to the contract; that the management and employees of said corporation were capable, experienced and competent to do and complete the work under said proposed contract. That appellant then and there well knew that the corporation was not capable of and would not do a fine and workmanlike job on said dwelling according to the proposed contract; that the management and employees of the corporation were incapable, inexperienced and incompetent to do and complete the work under said proposed contract. (Some immaterial matter has been omitted.) The count then alleges reliance upon the truth of those representations, alleging appellee did not know of their falsity but was deceived by them into making the contract with the corporation, with the result as alleged in count IV.

That count embraces the requirements of section 110, Title 7 of the Code, which is an enactment of the common law. Hudson v. Moore, 239 Ala. 130, 133(9), 194 So. 147.

The facts alleged import an intention to deceive by the representation of material facts known by appellant to be false, expecting and intending for them to induce the execution of a worthless contract and that they did induce such action to the damage of appellee. Such allegations are sufficient to require a duty to know the facts and to be truthful. Metropolitan Life Ins. Co. v. James, supra; Einstein v. Marshall, supra.

Count V may contain some matter which is expressive of opinion or forecast of future occurrences; but even those allegations are accompanied with others sufficient to make them material. Hudson v. Moore, supra; Cartwright v. Braly, 218 Ala. 49, 117 So. 477; Cartwright v. Hughes, 226 Ala. 464, 147 So. 399; Shepherd v. Kendrick, 236 Ala. 289, 181 So. 782.

The next contention is with reference to a motion to strike certain parts of counts IV and V, which was overruled by the court. The argument is that a motion and not a demurrer properly raises the question of the right to certain damages claimed in the complaint or other material matter. That is a true statement of the law. Cartwright v. Hughes, supra, but it appeals to the discretion of the trial court which is not subject to review on appeal. Woodstock Iron Works v. Stockdale, 143 Ala. 550, 39 So. 335; National Surety Co. v. O'Connell, 202 Ala. 684, 81 So. 660; Blumberg v. Speilberger, 209 Ala. 278, 96 So. 191. Appellant's contention in that respect cannot be sustained.

In his opening statement appellee's counsel observed that appellant said he would stand behind the deal personally: with a further observation that appellee expects the evidence to show that the repairs were not only poorly made, etc.

As to opening statements, the rule approved by this Court is that in it the parties are entitled to outline what they expect to prove unless it is manifest that such proof is incompetent. Atlanta Life Ins. Co. v. Canady, 225 Ala. 377, 143 So. 561; Prudential Ins. Co. v. Calvin, 227 Ala. 146, 148 So. 837.

Just what appellant said as an inducement to the execution of the contract by appellee cannot be said to have been manifestly incompetent. Whether evidence of it is sufficient to prove the complaint is another and different question. Objection was also made to proof by appellee that appellant did make statements to appellee that he would stand good for the work. The objection was on the ground that this suit is not based on an agreement but for deceit. The court later gave charges D-12...