Southern Building & Loan Ass'n v. Hughs

• Decision Date: 05 March 1931
• Docket Number: 3 Div. 950.
• Citation: 133 So. 685,222 Ala. 648
• Parties: SOUTHERN BUILDING & LOAN ASS'N v. HUGHS.
• Court: Alabama Supreme Court

133 So. 685

222 Ala. 648

SOUTHERN BUILDING & LOAN ASS'N v. HUGHS.

3 Div. 950.

Supreme Court of Alabama

March 5, 1931

Rehearing Denied April 23, 1931.

Appeal from Circuit Court, Butler County; A. E. Gamble, Judge.

Action for fraud by J. J. Hughs against the Southern Building & Loan Association. From a judgment for plaintiff, defendant appeals. Transferred from Court of Appeals.

Affirmed.

Lange Simpson & Brantley and Reid B. Barnes, all of Birmingham, for appellant.

Powell & Hamilton, of Greenville, for appellee.

BOULDIN J.

Count 1 of the complaint reads:

"1. The plaintiff claims of the defendant One Thousand and No/100 ($1000.00) Dollars, as damages for that on to-wit the 30th day of October, 1928, the defendant, through its agent and representative, E. H. Logan, who was then and there acting within the scope of his agency, for the purpose of inducing plaintiff and one J. B. Hughs to purchase stock of the defendant, represented to the plaintiff and J. B. Hughs that he, as agent of the defendant, was selling to plaintiff and J. B. Hughs each twenty shares, or ten units of the capital stock of the defendant of the par value of One Thousand Dollars and by reason of such representations obtained from the plaintiff and the said J. B. Hughs the sum of One Thousand Dollars.

"The said representations were false and then known to be false, or ought to have been known by said agent of the defendant, who was then and there acting within the scope of his employment.

"Said representations and said transactions whereby said money was obtained were in Butler County, Alabama."

The misrepresentations relied upon relate to the subject-matter of the sale. It is alleged they were false, and made to induce the purchase, and by reason thereof money to the amount sued for was obtained.

It states a substantial cause of action for actionable fraud under our statutes. Code, §§ 8049, 5676; Cartwright v. Braly, 218 Ala. 49, 117 So. 477.

Evidence tended to show defendant's agent negotiated with plaintiff, J. J. Hughs, and his brother, J. B. Hughs, in one transaction; that they agreed to purchase capital stock of the value of $1,000, carrying withdrawal privileges, and issued a check on their joint savings account for $1,000 in full payment; that a receipt was issued for full amount to plaintiff, who could not read and write, showing the payment was made into the surplus fund of the association at the rate of $5 per unit on 200 units in accordance with the terms of subscription indorsed on the back. This indorsement called for _____ units of the capital stock, par value $100 per unit, together with $5 per unit (cash) to be placed in the surplus fund and not part of withdrawal value of the stock. The stock was to be paid for in full in cash or installments of not less than 50 cents per month for each unit.

Accordingly written subscriptions were also taken for one hundred units, $10,000, stock by each of them. These subscriptions were signed, one, J. B. Hughs, the other, J. J. Hughs, by J. B. Hughs. "Surplus certificates" were later issued....