Southern Loan & Trust Co. v. Gissendaner

• Decision Date: 09 April 1912
• Citation: 4 Ala.App. 523,58 So. 737
• Parties: SOUTHERN LOAN & TRUST CO. v. GISSENDANER.
• Court: Alabama Court of Appeals

58 So. 737

4 Ala.App. 523

SOUTHERN LOAN & TRUST CO. v. GISSENDANER.

Court of Appeals of Alabama

April 9, 1912

Appeal from City Court of Montgomery; William H. Thomas, Judge.

Action by Mrs. A. M. Gissendaner against the Southern Loan & Trust Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Ball & Samford, of Montgomery, for appellant.

Stakely & Vardaman, of Montgomery, for appellee.

DE GRAFFENRIED, J.

1. A corporation can only act by an agent and, when acting through an agent, the agent may be treated as the corporation itself provided the act of the agent is for the corporation and is in the line and scope of his employment.

The appellant is a corporation organized and doing business in the state of Georgia and, it appears from the evidence, makes loans to parties who purchase its stock. Its stock, it appears, is usually sold upon the installment plan, and no loan can be made upon any of its stock until a certain limited number of installments have been paid upon such stock. We presume that a loan is ordinarily made by it upon a mortgage on real estate, with the stock of the borrower in the corporation pledged as collateral security to the loan.

One Dorsey was the agent of appellant for the state of Alabama with authority to solicit purchasers for its stock. In and about the business of soliciting purchasers for the stock of appellant it is not denied that Dorsey was, as to the parties with whom he dealt, authorized to bind appellant. The appellee is a married woman residing in Montgomery, and she desired to buy a house and lot in said city known as No. 45 Robinson street, and to that end obtained an option on the lot, which option expired on October 1, 1909. The option was obtained some time in August, 1909, and, as she did not have sufficient money to pay for the lot, she applied to Dorsey as the agent of appellant for a loan of $3,000 to be made to her by appellant on a first mortgage on said lot. It appears from the evidence without dispute that Dorsey and Mrs. Gissendaner had known each other from childhood, and that Dorsey expressed to her during the negotiations much affection saying that he would treat her as a brother, telling her to trust him, and calling her by her Christian name. While the evidence is in sharp dispute as to what really did occur between Mrs. Gissendaner and Dorsey, the evidence shows without dispute that Mrs. Gissendaner was informed by Dorsey that, in order to obtain the loan, she would have to subscribe to a certain number of the shares of stock of appellant, and that to secure the loan she would have to sign an application and pay at the time of signing the application the sum of $30 and later $300 more. The evidence further shows without dispute that appellee paid the $330, that certain shares of stock of appellant were mailed to her, and that she signed the application. Dorsey claims that appellee read over the application at the time she signed it, but appellee claims that she signed the application in Dorsey's office with no one present except himself, and that at the time she signed the same he stated to her that it was unnecessary for her to read it, that all she had to do was trust him, and that if she would do so he would see that the loan was made to her by October 1st, and that she did not read it.

At the time of the payment of the money above referred to, and at the time it is alleged he made the agreement, Dorsey had not even inspected the house and lot known as No. 45 Robinson street, and had not been furnished with any abstract of title thereto. As he was the agent of appellant in and about the sale of the stock, Mrs. Gissendaner was authorized to rely upon his statements as to what the company would and would not do in the event she purchased the stock, and she also had a right to presume that Dorsey was acquainted with the business conditions of the corporation and familiar with the terms of the contract which, according to appellee's testimony, he induced her to sign. Dorsey was the company itself in these negotiations, and, so far as the questions presented by this record are concerned, his representations and statements in this action are to be treated as the representations and statements of the company itself provided appellee accepted them as true.

After the money had been paid, Dorsey confessed to appellee that he did not himself understand the company's contracts. On this subject Dorsey says that he told Mrs. Gissendaner "So far as knowing the contract, I did not; there were about 1,700 pages of legal law that pertain to the contract business, and that I was not, and very few lawyers were, competent and qualified to give explanation pertaining to some contracts. I told Mrs. Gissendaner I was going to Atlanta, and, if I could possibly get off, in a couple of weeks; it was somewhere in September, and if I could possibly make an arrangement by which I could secure her money that I would do so. I went to Atlanta and I made every effort that I could in her behalf. It was impossible for the company to secure enough matured contracts that had been reached for a loan to take up her contract."

This latter information was not communicated to Mrs. Gissendaner until after she had made the contracts and paid out the money, and we think that, under all the circumstances of this case, it is plainly inferable that Mrs. Gissendaner would never have entered into any contract with Dorsey if the above information which we have quoted from his testimony had been given to her by him before the contract was made. In other words, if the testimony of appellee is true, the consideration for her subscription to the stock of appellant was the agreement on the part of the appellant's agent that she would get a loan of $3,000 on the lot above described and on the stock to be issued to her before October 1, 1909. While there is evidence in the record from which the jury were authorized to infer that Dorsey, in all that he did and said, was acting in good faith in his negotiations with appellee, nevertheless, giving a fair consideration to all the evidence, there was some evidence from which the jury were authorized to infer that Mrs. Gissendaner was overreached in the transaction, and that, when the agent promised to lend $3,000 on property he had not then inspected, he made that promise, not with the intent of fulfilling the same, but as an inducement to secure a sale of appellant's stock. Dorsey's later admission that he did not understand the contracts he was selling tended to show that, at the time he sold the stock and promised the loan, he made the statement to deceive appellee into signing the application and paying the money to him as the company's agent, or that the statements were so recklessly made without knowledge on his part as in law to amount to fraud or deceit. Code, § 4298. The controlling motive for Mrs. Gissendaner to purchase the stock was to secure the loan of $3,000. The controlling motive for Dorsey's promise to make the loan was to secure the sale of the contracts to her. She dealt with him as the...