Vintage Enterprises, Inc. v. Cash

• Citation: 348 So.2d 476
• Parties: VINTAGE ENTERPRISES, INC. d/b/a Colonial Mobile Homes v. A. E. CASH and Helen Cash. SC 2087.
• Decision Date: 22 July 1977
• Court: Supreme Court of Alabama

Page 476

348 So.2d 476

VINTAGE ENTERPRISES, INC. d/b/a Colonial Mobile Homes v. A. E. CASH and Helen Cash.

SC 2087.

Supreme Court of Alabama.

July 22, 1977.

Rehearing Denied Aug. 19, 1977.

Phillip A. Laird and Henry C. Wiley, Jr., for Elliott, Laird & Wiley, Jasper, for appellant.

J. William Thomason, Birmingham, for appellees.

EMBRY, Justice.

This is an appeal from a judgment entered on a jury verdict in favor of the plaintiffs, A. E. and Helen Cash, in the amount of $11,500 and a directed verdict in their favor in the amount of $1,500 under the Truth in Lending Act. Defendant, Vintage Enterprises, Inc. d/b/a Colonial Mobile Homes, filed its motion for new trial, which was denied, and defendant now appeals.

The case arose from the sale of a mobile home by Vintage, which had been repossessed from a previous purchaser, to A. E. and Helen Cash.

The Cashes claimed damages for breach of warranty, fraud and violation of the Federal Truth in Lending Act. The complaint charges that Vintage made an express warranty that the mobile home was "like new" and "had never been lived in"; that Vintage impliedly warranted the mobile home to be of merchantable quality and fit for the particular purpose of use as a residence; that the representations made by defendant that the mobile home was "like new" and "had never been lived in" were made for the purpose of inducing the Cashes to purchase the mobile home; and that Vintage fraudulently concealed from the Cashes the fact that the mobile home was damaged or defective. Furthermore, plaintiffs alleged that defendant failed to inform them of the annual percentage rate and finance charge applicable to the transaction in violation of the Federal Truth in Lending Act.

The defendant assigns the following as grounds for reversal:

1. The trial court erred in directing a verdict for plaintiffs in connection with the count which claimed damages for the alleged violation of the Federal Truth in Lending Act.

2. The trial court erred in failing to grant defendant's motion for new trial for continued improper comments to the jury by counsel for plaintiffs.

3. The trial court erred in submitting the question of fraud to the jury and allowing the jury to consider punitive damages.

4. The trial court erroneously charged the jury as to the proper measure of damages for breach of warranty.

We need consider only defendant's first ground for reversal the trial court erred in directing a verdict in favor of plaintiffs on Count G of the amended complaint (violation of the Truth in Lending Act) as we have concluded that ground requires reversing and remanding for a new trial.

Section 226.8 of Regulation Z, 12 C.F.R. p. 755, which was promulgated to carry out the purposes of the Truth in Lending Act, 15 U.S.C., § 1601, et seq., requires among other things the following:

"(a) General Rule. Any creditor when extending credit other than open end credit shall, in accordance with § 226.6 and to the extent applicable, make the disclosures required by this section with respect to any transaction consummated on or after July 1, 1969. Except as otherwise provided in this section, such disclosures shall be made before the transaction is consummated. At the time disclosures are made, the creditor shall furnish the customer with a duplicate of the instrument or a statement by which the required disclosures are made and on which the creditor is identified. * * * " (emphasis added)

Therefore, the question presented under this assignment of error is whether the trial court was correct in granting the plaintiffs' motion for directed verdict on Count G of the amended complaint. We hold the trial court erred in directing a verdict on that count.

Count "G" of the amended complaint alleges:

"2. On or about April 5, 1974, the Plaintiffs contracted with the Defendants for the sale and purchase of a mobile home to be used by Plaintiffs as a residence. The Defendants' contract with the Plaintiffs was a consumer credit transaction and the Defendants failed to inform Plaintiffs of the annual percentage rate and finance charge applicable to said transaction. Such failure to inform and disclose was a violation of the Federal Truth in Lending Act."

The tendencies of the evidence on this count were on April 5, 1974, the plaintiffs signed an "Assumption...