Pollock v. Skelton, 15 Ga. App. 1

15 Ga. App. 1 | Ga. Ct. App. | 1914

Lead Opinion

Wade, J.

(After stating the foregoing facts.) 'On the general grounds it is unnecessary to say more than that the evidence in behalf of the defendants was sufficient to support the allegations made in their plea and the verdict rendered by the jury, and while there was evidence to the contrary, any consideration or discussion of that evidence is concluded by the verdict.

The 1st, 2d, 3d, 4th, 5th, 6th, 7th, 11th, 12th, and 13th special grounds of the motion for a new trial are addressed to the proposition that the court erred in admitting certain evidence offered in behalf of the defendants, to establish the relation of principal and agent between them and the plaintiffs, and evidence as to whether the defendants would have entered into the contract to purchase the bottling plant, had they been apprised of the fact that the price paid for it by the plaintiffs was only one half as much as the price stipulated to be paid to the plaintiffs by the defendants, and evidence as to the experience or knowledge the defendant Skelton had of bottling-works machinery, and testimony to the effect that .one of the plaintiffs had specifically stated to the defendant Skelton that the plaintiffs had saved the defendants $500, since they had effected the purchase of the bottling plant for the sum of $4,000, and evidence that the defendant Skelton was relying on the plaintiffs to purchase the property, and in fact all the conversations between the plaintiffs and the defendant Skelton; it being contended that all of such evidence was inadmissible as contradicting by parol the written contract between the parties, which showed a direct sale from the plaintiffs to the defendants, and negatived the idea of agency altogether.

Counsel for the plaintiffs insist that since the defendants pleaded the written contract with them, and made no effort to rescind, cancel, or void it, the defendants were bound by, its terms; and that since the written .contract establishes a direct sale between the plaintiffs and the defendants, with no reference whatever to 'agency, all testimony toirching the antecedent negotiations, representations, or agreements between them were merged in the contract as actually signed; and that, since it did not appear that any confidential relations existed between the parties, the contract could not be avoided on the ground that it was procured by fraud. It is perhaps true that with the exception of the allegations noted in paragraph 10 of the defendants’ plea, given above, fraud is not charged eo nomine, but it is likewise true that the defendants allege specific acts and misrepresentations on the part of the plaintiffs amounting to fraud, and clearly charge an abuse of the confidential relation alleged by the defendants to have existed between the plaintiffs and themselves, which would amount to fraud if proved; and the jury evidently considered the proof sufficient. The fact that the pleader did not in so many words label the alleged misrepresentations (which were declared to be fraudulent) as fraud that voided the contract induced thereby is not material, for the allegations themselves plainly spelled out “fraud,” and that in capital letters.

If the contract of purchase between the plaintiffs and the defendants was obtained by fraud, proof of the fraudulent acts or misrepresentations which induced the defendants to sign it could be shown by parol evidence, without violating the principle that parol contemporaneous evidence is not admissible to contradict or vary the terms of a valid written instrument. Since fraud voids all contracts, if Skelton and Bruce were induced to sign the agreement by the representation that the property - then and there conveyed to them was or would be purchased from the West Point Wholesale Grocery Company for $4,000, when in point of fact it had already been purchased-by Smith and Pollock from the grocery company for- $2,000 only, and if, without this misrepresentation, Skelton and Bruce would not have made the purchase, then the contract was obtained by and based upon fraud, and hence legally was a mere nullity, having absolutely no binding effect upon Skelton and Bruce; and none of the terms of such a void instrument can be considered in fixing and determining the a'ctual relations between the parties, and the jury were relegated to the oral testimony to determine what those relations were. The jury evidently concluded that the contract wás obtained by fraud, and therefore was an absolute nullity as to all its terms; and this written contract having been in this way extinguished, erased, or eliminated, the jury then resorted to parol testimony to determine the relation between the parties, and, accepting the testimony in favor of the defendants; found that the plaintiffs, in purchasing the plant, originally were acting as agents for the defendants, that they had violated the trust imposed upon them by their confidential relation to the defendants, and had thereby obtained from the defendants the note for $1,000 without consideration, and1 had otherwise damaged, them in the amount of $1,000 additional.

“There is a wide difference' between varying the terms of the written contract by parol or other extrinsic evidence, and showing by parol or other extrinsic evidence that a contract never existed, because of fraudulent representations, arts, or devices by which it was induced. The parol evidence in the latter case does not alter, vary, or contradict the contract, blit absolutely destroys it.” State Historical Association v. Silverman, 6 Ga. App. 560 (65 S. E. 293). See also Williams v. Moore-Gaunt Co., 3 Ga. App. 756 (60 S. E. 372). “The fraud may consist in a misrepresentation of the thing which is the subject-matter of the contract; especially is this true where there is nothing in the terms of the contract which actually contradicts the facts about which the misrepresentation is alleged to have been made.” State Historical Association v. Silverman, supra; and see Janes v. Mercer University, 17 Ga. 515; Epps v. Waring, 93 Ga. 765 (20 S. E. 645); Barrie v. Miller, 104 Ga. 312 (30 S. E. 840, 69 Am. St. R. 171). “The relationship of principal and agent, being confidential and fiduciary in character, demands of the agent the utmost loyalty and good faith to his principal. Any. breach of this good faith whereby the principal suffers any disadvantage and the agent reaps any benefit is a fraud of such nature as to preclude the agent from taking or retaining the benefit; also from claiming his commissions. A contract, no matter how solemnly expressed, obtained by an agent from his principal through a violation of the loyalty and good faith imposed by the confidential relation, is void and is not enforceable in law or in equity.” Williams v. Moore-Gaunt Co., supra.

The fraud in this case consists in the misrepresentation as to the purchase-price paid or agreed to be paid by the plaintiffs to the grocery company, a subject-matter of the contract, but there is nothing in the terms of the contract itself which actually contradicts the fact that only $2,000 was paid for the bottling plant by the plaintiffs, and that the plaintiffs represented to the defendants that the plant cost $4,000; and it does not distinctly appear from the terms of the contract that the relation between the parties was then and had always been that of vendor ¿nd vendee, and the testimony declaring the original relation between them to have been that of principal and agent contradicted no express statement in the contract. So, if the contract was actually obtained by fraudulent representations and was absolutely void, there was nothing to prevent the introduction of parol testimony to show what the actual relation between the parties was. “Inadequacy of price is not per se sufficient to set aside a sale, unless it is so gross as, when combined with other circumstances, to amount to fraud; but if it be great, it is of itself a strong circumstance to evidence fraud, and this is true where it is attended by any other fact showing the transaction to be unfair, or unjust, or against good conscience.” Oswald v. Johnson, 140 Ga. 62-65 (78 S. E. 333), citing Parker v. Glenn, 72 Ga. 637. The converse must be equally true, that a gross excess in price over and above the actual value of property sold might be a circumstance indicating fraud, especially where the relations between the parties to the contract of purchase and sale are confidential in their nature, and more especially where the evidence shows that false representations were made as to the value of the property conveyed, knowingly and wilfully, which induced the contract; and the jury must have found in this case that such representations had been made. “Fraud voids all contracts (Civil Code, § 4254), and the law is liberal in allowing ways and means for relieving from the consequences of fraud, provided the presence and evil of the alleged fraud are'first shown.” Harrison v. Lee, 13 Ga. App. 346 (79 S. E. 211).

The 14th, 15th, 16th, 17th, 18th, 19th, and 21st grounds of the motion for a new trial complain of alleged errors in the charge of the court, but in view of our ruling as to the admissibility of the testimony in reference to the means by which the contract of purchase was obtained from the defendants and the fraud practiced-upon them by the plaintiffs, and the relation actually existing between the parties, there is no substantial merit in any of these exceptions; and the charge fairly submitted to the jury the contentions of the parties and the law governing their consideration of the case. It is claimed, for example, in one of these exceptions that the court, in charging the jury as to the defenses set up by the defendants, erred in stating that they contended that the Cherry Nectar Company, or Pollock and Smith, “approached” the defendant Skelton. It is insisted that no evidence authorized this charge. The record, however, shows that on one occasion Pollock and Smith invited Skelton to their office by telephone, and that they then and there made to him the first definite proposition in regard to the purchasing of the said West Point plant; and this certainly authorized the charge on this point, regardless of the fact that Skelton may have theretofore approached them.

The exception in the 21st ground is that the court erred in charging the jury that “The intention of the parties may differ among themselves. In such case the meaning placed on the contract by one party, and known to be thus understood by the other party at the time, shall be held as the true meaning.” It is not contended that this instruction (which is in the language of the Civil Code, § 4267) is not a correct statement of the law, but it is insisted that it had no application to the evidence; that in the instant case the terms of the contract are plain and unambiguous, and there was no evidence of misunderstanding on the part of the defendants as to the meaning of the contract of sale, signed by defendants and plaintiffs. Admitting, for the sake of the argument, that this is true, it does not appear that the plaintiffs suffered any injury by the charge in question. The verdict rendered involves a finding that this contract was a nullity on account of the fraud practiced by the plaintiffs in order to procure it, and since, under our ruling hereinbefore stated, parol evidence was admissible to set up the only actual contract made (this written contract obtained by fraud being a mere nullity from its very inception), no injury resulted to the plaintiffs from this charge.

The plaintiffs in one of these grounds complain that the court referred to the Cherry Nectar Company in connection with the contract of sale to the defendants, and that no evidence warranted this reference. This could not authorize a reversal, since there' was much evidence from which the jury might infer a very close connection in interest between that company and the plaintiffs, Pollock and Smith, the president and the secretary of the company; and, after all, the charge objected to merely stated the contentions of the defendants as set out in their plea.

On the whole, as stated above, we see no substantial merit in any of the objections to. the charge of the court; and since our ruling as to the extent that parol evidence was admissible to set aside and void the written contract covers in effect the only real issue raised by these various exceptions to the charge of the court, it would be useless to attempt a detailed discussion of the exceptions. The mere statement of the seven exceptions referred to occupies eight pages of the type-written record, more or less argumentative, and such a discussion would require exhaustive and exhausting comment altogether unnecessary.

In the 30th ground of the motion for a new trial it is contended that the verdict is contrary to the charge of the court, since the court charged the jury: “If you find in this case, therefore, that it might have been understood by one of the parties that they were to buy the property for them, for the defendants, and not so understood by the others, there would have been no contract of agency existing between them; the relation of principal and agent between them would not exist.” It is contended that the evidence showed without contradiction that the plaintiffs did not understand that they were acting merely as agents for the defendants, and there was no statement in the evidence for either side that the plaintiffs were in fact to act as agents in purchasing the plant. We think this contention is not well founded, since the testimony of Skelton would have authorized the jury to infer that both he and the plaintiffs understood that the plaintiffs were to act as agents for him, or for him and Bruce; and this notwithstanding that Skelton testified that he did not remember that the plaintiffs had said in so many words that they would act as agents; for he testified that they agreed 'to buy the plant for him, and, taking his testimony as true, it establishes that he understood that the plaintiffs were to act as his agents, and the plaintiffs knew that he so understood the matter. This may or may not have been the fact, but there was evidence from which the jury might have so inferred, and they so found.

In the 22d and 23 d special grounds of the motion for a new trial the plaintiffs “insist” that the court did not construe for the jury and give in charge to them the legal construction of the written contract of sale from the plaintiffs to the defendants which was introduced in evidence, and failed to charge the jury that this contract, prima facie, showed a sale directly from the plaintiffs to the defendants of the bottling plant involved. It does not appear that there was any timely written request for a charge of this character; and it appears that the contract referred to was plain and unambiguous, and needed no construction by the court. Besides, no construction of this contract could possibly have availed anything to the plaintiffs, since the jury found it to be void on account of fraud in its procurement, and it would have no binding effect upon the defendants, no matter what the court might have construed it to mean.

Eeviewing the entire case and all the evidence adduced, it is impossible, and it would not be proper for us, to suggest whether in our opinion the ajiparent weight of the evidence was on the one side or the other. It may be that the verdict deprived the plaintiffs of a $2,000 profit to which they were entitled under the letter of the law, but since we find no material error committed by the trial court, and the jury declared in' favor of the defendants, and the trial judge in his discretion saw fit to overrule the motion for a new trial, his judgment refusing the motion is

Affirmed.

Roan, J., absent.

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Rehearing

ON MOTION TOR REHEARING.

Bussell-, C. J.

After a very careful consideration of the motion for rehearing the court is constrained to deny it. It is evidently predicated upon a misapprehension, either of the record or of the previous decisions of this court. The case is so fully covered by the opinion of Judge Wade, in behalf of the court, that we refer only to one phase thereof. Counsel for the plaintiffs in error insist .that this court has decided the ease upon an issue not made in the lower court, and conclude by saying that “if the court is of the opinion that the question of the contract being void, because procured by fraudulent representations, is properly in the case, then the case should be returned to the lower court, in order that this issue may be submitted to and decided by the jury, under proper instructions as to the law governing such questions.” As already pointed out by Judge Wade, the case before us is, in effect, a simple suit upon a note (though based on a prior attachment), and not an action based upon the contract to which the defendants’ plea referred. The contract was attached to the defendants’ answer, as an exhibit explanatory of the alleged fraudulent conduct of the plaintiffs in the procurement of the note. The answer contains sufficient allegations of fraud, though it is not denominated eo nomine, and hence the trial court was clearly right in admitting evidence touching the consideration of the note. The consideration of a note may always be inquired into. If, to secure a contract conceived in fraud, and for no other purpose, the defendants were induced to sign the note, and so, by reason of the fraud, the defendants received no consideration, that fact could be shown—as it appears to us it was shown—to the satisfaction of the jury.

We bear in mind that one who has been fraudulently induced to enter into a contract must either affirm, or disaffirm and offer to rescind, upon discovery of the fraud, but the answer of the defendants in this ease amounted to a declaration of their acceptance of the contract, with a demand for damages. If the testimony of the defendants as to agency wás credited by the jury, the damages, of course, would be the difference between the amount actually paid •for the property by Pollock and Smith as the defendants’ agents, and the amount which Pollock and Smith falsely and fraudulently reported to Skelton they had paid.

The insistence of counsel that our decision was based upon an issue foreign to the case appears to be based upon the fact that the trial judge, in his instructions to the jury, made no reference to the contract being void, and did not charge in reference to fraudulent representations, or fraud in the procurement of the contract, or instruct the jury what fraud would void the contract. Without referring to the charge of the court, and conceding the fact upon which this contention rests to be correctly stated, it would in no sense affect the ruling here. The case and the issues are formed by the pleadings, and depend for their support upon the evidence adduced. If, upon the issues thus presented, the evidence authorized the conclusion reached by the jury, it becomes entirely immaterial what instructions were given or omitted by the trial judge, unless such instructions or the failure to give instructions can reasonably be said to have contributed to a result which ought not to have been reached. “The validity of a verdict is to be tested by the law as it is written, and not by the law as it is given in charge.” Spence v. State, 7 Ga. App. 825 (68 S. E. 443). “If the result reached by the jury would have been the correct conclusion of the case had the judge ruled or charged in accordance with the contentions of one of the parties to the ease, the verdict will not be set aside merely because the judge erroneously . . . omitted to give in charge to the jury a principle which should appropriately have been included within his instructions. In other words, if the result reached would have been the same had the court ruled properly, and if the jury found rightly in spite of judicial error, the finding will not be set aside in order that the same result may be reached by a proceeding free from legal error.” Birmingham Fertilizer Co. v. Dozier, 13 Ga. App. 760 (79 S. E. 927). See also Young v. State, 10 Ga. App. 116 (72 S. E. 935); Register v. State, 10 Ga. App. 633 (74 S. E. 429); Jones v. State, 12 Ga. App. 135 (76 S. E. 1070). The contract in this case is merely collaterally involved; the suit was upon a note; the validity of the consideration was subject to parol proof; and certainly, therefore, it was-admissible for the defendants to refer to the contract which was in a sense ancillary to the parol evidence of fraud, in pointing out how the note was without consideration.

Reheating denied.

Roan, J., absent.