Appellant-plaintiff Potomac Leasing Company is in the equipment leasing business. It does not, however, directly employ any leasing agents. Instead, appellant operates in the following manner: Salesmen, who are themselves actually employed by manufacturers or distributors of products, are provided with blank copies of appellant’s leasing documents and are instructed with regard to how those docu *884 ments are to be filled out. When a salesman visits a potential customer for his particular product, in addition to being authorized by his employer to negotiate a direct purchase, he is also authorized by appellant to negotiate a lease of the product to the customer. In connection with the customer’s lease of a product, the salesman will fill in appellant’s documents with the relevant information, secure the customer’s signature, and send the completed documents to appellant. If appellant accepts the lease as negotiated by the salesman of the product, appellant will purchase thе product from the salesman’s manufacturer or distributor. Appellant then receives the stipulated monthly rental from the customer.
Appellee-defendant was visited by a salesman who was directly employed by Omni Spеcialty Equipment Company (Omni). As the result of this visit, appellee did not purchase any equipment from Omni, but he did sign one of appellant’s lease contracts, whereby he agreed to rent an Omni ice cream machine. The lease of the equipment that Omni’s salesman negotiated with appellee was sent to and accepted by appellant. Appellant then purchased the equipment from Omni and began to recеive monthly rental payments from appellee. Shortly thereafter, appellee, asserting that the equipment had failed to perform as it had been represented by the Omni salesman, ceased to make rental payments and attempted the tender of the equipment back to appellant. Appellant refused the tender of the equipment and initiated this action to recover the balance due under thе terms of the written lease agreement negotiated by the Omni salesman. Appellee answered and included among his defenses fraud in the inducement of the lease.
The case came on for trial before а jury and, after appellant’s motion for a directed verdict was denied, a jury verdict in favor of appellee was returned. Appellant appeals, its sole enumeration being that the trial court erred in denying its motion for a directed verdict.
1. “A principal who accepts a contract procured by fraudulent conduct of an agent, regardless of such agent’s authority, is bound by such fraudulent conduct of the agent in prоcuring such contract.”
W. T. Rawleigh Co. v. Kelly,
*885
The denial by appellant’s witness of an agency relationship and the language in appellant’s lease document that the Omni salesman did not occupy the status of its agent are not necessarily conclusive as to the non-existence of such a relationship. The applicable legal principle is merely that such denials on the part of appellant “must be received as evidence of a fact which [can] not be overcome by bare assertions by a third party not supported by facts. [Cits.]”
Stewart v. Ga. Mut. Ins. Co.,
Appellant attempts to analogize the existing circumstances to that wherein a car salesman, who is directly employed by a dealership and who has misrepresented an automobile to a prospective purchaser, also assists the customer to secure the necessary financing for thе purchase through the extension of credit by an entity other than the dealership. In those circumstances, the alleged fraudulent conduct of the salesman occurred in connection with the initial sale of the рroduct itself, not the subsequent financing. The defrauded customer’s legal remedies are thus assertable only against the car dealership, as the salesman’s principal in the underlying sale, rather than against the financing еntity, whom the salesman may have represented in the subsequent extension of credit to the customer. In this case, however, there was no sale of equipment to appellee by Omni and no extension of credit by аppellant to appellee. Rather than the two-step process involved in a credit sale, the Omni salesman was authorized either to sell his employer’s product to a customer or to negotiate a lease from appellant. Appellee was not privy to appellant’s purchase of the equipment from Omni. Appellee merely entered into a lease of Omni equipment directly with appellаnt. In these circumstances, appellee’s legal remedies with regard to fraudulent inducement of the lease are assertable against appellant, as the lessor of the equipment and as the princiрal of the one whose misrepresentations allegedly induced the lease agreement. Appellant occupies the same position as does the dealership whose salesman induced the sale of a vehicle, not that of the innocent financier who extended credit. The trial court did not err in denying appellant’s motion for directed verdict on the ground that there was no evidence of agency.
2. As another ground in support of its directed verdict motion, appellant contended at trial and contends on appeal that the merger clause contained in the lease agreement should estop appellee from *886 asserting that he relied upon the Omni salesman’s misrepresentations.
With the exception of contracts controlled by the provisions of Article 2 of the Uniform Commercial Code, Georgia law recognizes that two actions are equally available to one who was fraudulently induced by misrepresentations into entering a contract. The defrauded party can “affirm the contract and sue in contract for breach or he [can] seek to rescind the contract and sue in tort for alleged fraud and deceit. [Cits.]”
City Dodge v. Gardner,
Fraud in the inducement of a contract, in addition to being assertable affirmatively as the basis for a cause of action, may also be pleaded as a defense to an action, at least in those casеs which are not controlled by the provisions of Article 2 of the Uniform Commercial Code. See generally
Nichols v. Lanier,
Judgment affirmed.