Southern Building & Loan Ass'n v. Waldrop, 7 Div. 799.

• Decision Date: 16 June 1931
• Docket Number: 7 Div. 799.
• Citation: 135 So. 418,24 Ala.App. 362
• Parties: SOUTHERN BLDG. & LOAN ASS'N v. WALDROP.
• Court: Alabama Court of Appeals

135 So. 418

24 Ala.App. 362

SOUTHERN BLDG. & LOAN ASS'N v. WALDROP.

7 Div. 799.

Court of Appeals of Alabama

June 16, 1931

Appeal from Circuit Court, Calhoun County; R. B. Carr, Judge.

Action for fraud by J. A. Waldrop against the Southern Building &amp Loan Association. From a judgment for plaintiff, defendant appeals.

Reversed and remanded.

Lange Simpson & Brantley, of Birmingham, for appellant.

Blackmon & Carter, of Anniston, for appellee.

SAMFORD J.

Plaintiff entered into a written contract with the agent of defendant for the purchase of 50 units of the full participating capital stock of defendant's company, for which he paid $250 cash, as the initial payment. This transaction was had on January 18, 1929. Plaintiff claims that the contract and money was obtained from him by fraud and misrepresentation of the contents of the contract on the part of defendant's agent. To the complaint, as filed, defendant, among other pleas, pleaded the statute of limitations of one year. This was admittedly a good plea. To this plea plaintiff filed replication that he did not discover the fraud until April 1930, which date was within the period of limitation. On the facts the defendant requested the general charge, which was refused.

It will not be necessary to consider any questions involved other than the refusal of the court to give the general charge as requested.

Where there has been fraud in inducing the making of a contract the party defrauded may either rescind and sue to recover the money paid thereunder, or affirm the contract and sue in an action for deceit. Fairbanks, Morse & Co. v. Dees et al., 220 Ala. 41, 126 So. 624.

The burden is on the plaintiff in this case to show by the evidence, to the reasonable satisfaction of the jury, an offer to rescind the contract under which the money was paid, and an offer to return the consideration received, promptly after the discovery of the fraud. Berman Bros. I. & M. Co. v. State Savings & Loan Co. (Ala. Sup.) 130 So. 555 . The further burden rests upon the plaintiff of proving that the discovery of the fraud occurred within twelve months from the bringing of the action. Code 1923, § 8966.

We have sought diligently to find in the record evidence tending to prove a rescission of the contract and a demand for the return of the money on the ground of fraud. The only demand for a return of the money is contained in a letter written April 15, 1930, and signed by plaintiff more than twelve months after the stock had been issued and based upon an alleged contractual relation between the parties. There is no evidence as to when the fraud, if any, was discovered by plaintiff. The evidence in this record as to a demand for the return of the money presents a very similar case to that made by plaintiff's replication No. 3 in Berman Bros etc., v. State Savings & Loan Co., 130 So. 554, 556, in which the Supreme Court, speaking through Bouldin, J., said: "We may add the replication does not show with any certainty that defendant was ever notified of a purpose to rescind for fraud. The demand for refund is averred in connection with promises so to do, the contractual averments of the...