Concealed Bed Corp. v. Williams

36 Ga. App. 462 | Ga. Ct. App. | 1927

Stephens, J.

1. Where a person represents that he has authority to negotiate in behalf of another a contract containing certain stipulated terms, that he has the ability to procure the other person to sign and execute as a contract a certain written instrument containing the stipulated terms referred to, that it is the present intention of the person making the representations to procure the signature ol the other person to the written instrument, and that it is also the present intention of the other person to sign the written instrument and thereby execute it as/ a contract, the representations constitute representations of present existing facts, and may amount to a fraud. Atlanta Skirt Mfg. Co. v. Jacobs, 8 Ga. App. 299 (68 S. E. 1077).

2. Where such representations are false and the person making them, with knowledge of their falsity, induces another, who relies upon them as true, to pay out, in consideration of the execution of the contract, a sum of money which he does not owe, and where the person whose signature to the contract was to be procured afterwards refuses to sign it and the contemplated contract is never executed, and the party paying the money receives no consideration therefor, such representations amount to a fraud perpetrated upon the person who pays out the money, and the latter, in parting with the money, relying upon such false representations, is thereby defrauded.

3. The facts outlined in paragraphs 1 and 2 above as being sufficient to set out a cause of action for fraud and deceit are in effect contained in the allegations of a petition where it is alleged: that the plaintiff was a stockholder in a corporation A, which was^ indebted either to the defendant or to a corporation B in a certain sum of money, that the defendant, by and through a named person, who was its president, represented to the plaintiff that, if the plaintiff would pay A’s indebtedness, both the defendant and B would agree to ship to A certain articles of merchandise, that such agreement was evidenced by a written instrument which the defendant, through its said president, signed and executed, but which was not signed and executed by B, that the defendant, through its said president, represented to the plaintiff that the defendant and its said president had authority from B to negotiate the said contract, and it was B’s intention to sign and execute the contract and thereby ratify the defendant’s negotiations, and the defendant would procure B’s ratification of the agreement; and where it is further alleged that the plaintiff, relying upon these representations as true, paid the indebtedness of A, that the representations made by the defendant through its said president were false and were known to the defendant to be false, that B lias never signed or executed the contract, and that neither the defendant nor B has ever performed any of the obligations contained in the contract, but have failed and refused to ship any of the merchandise as provided for in the contract; although repeatedly requested by the plaintiff to do so, and where it is further alleged that the plaintiff has received nothing whatsoever for and in consideration of the money thus paid out in reliance upon the alleged false and fraudulent representations of the defendant, and that as a result of such alleged false and fraudulent conduct on the part of the defendant the plaintiff has suffered a total loss in the amount of the money paid .out.

Decided February 24, 1927.

4. The petition set out a cause of action and the demurrer thereto was properly overruled.

Judgment affirmed.

Jenlcvns, P. J., cmd Bell, J., concur. Walter S. Dillon, for plaintiff in error. Troutman & Troutman, contra.