Title: Cities Service Oil Co. v. Griffin

State: alabama

Issuer: Alabama Supreme Court

Document:

357 So. 2d 333 (1978)
CITIES SERVICE OIL COMPANY, a corporation
v.
Thomas F. GRIFFIN.
SC 2505.

Supreme Court of Alabama.
April 7, 1978.
*335 John H. Morrow, Birmingham, Barry N. McCrary, Talladega, for appellant.
Robert S. Vance and James N. Brown, III, Birmingham, for appellee.
BEATTY, Justice.
This is an appeal by Cities Service Oil Company (Citgo) from a judgment entered against it based upon a jury verdict awarding the plaintiff, Griffin, $70,000.00 damages. We affirm.
The plaintiff filed this action obviously intending to charge Citgo with legal fraud as it is defined under Tit. 7, § 108, Alabama Code (Recomp.1958) (now Code of 1975, § 6-5-101):
His complaint included the following allegations:
The record discloses that Griffin became the distributor of Cities Service products in Talladega and St. Clair Counties in 1947 under a series of standard year-to-year contracts. These contracts did not renew if either party gave the other written notice of non-renewal at least 120 days before expiration. On the contract in question the renewal date was March 1, 1973.
Citgo had formulated a new marketing policy in 1971 which, when implemented, would reduce the number of their distributorships, including that of Griffin. In the summer of 1972 the company experienced supply shortages and began to implement the new program. Having become aware of some distributorship cancellations in other areas, about March of that year Griffin made inquiries to Citgo representatives on the possibility of his contract being terminated. In response he was given assurances of contract renewal. However, on or about October 10, 1972 he was told by Ira Hughes, a Citgo employee, that his contract would not be renewed, and this was followed "a few days" after October 19, 1972 by a written notice to Griffin from Citgo of its election not to renew their distributorship contract. When he received this notice Griffin immediately contacted Bob Moore, the marketing vice-president of Citgo, concerning that decision. Griffin expressed to Moore his concern over the possibility of other people coming into his territory in competition with him before he had an opportunity to sell his business. A couple of weeks later (approximately November 4) he was assured by Moore that such a situation would not occur. Nevertheless, about two weeks later (approximately November 18) Citgo signs were being displayed in his territory by other dealers who were selling gasoline for less than Griffin's dealers were selling it. Thereafter his attempts to obtain another source of supply were unsuccessful due to the gasoline shortage, and the value of his business was harmed. Ultimately he sold his business for the aggregate amount of $32,000.00, although during the previous summer and up to October it had been worth $100,000.00, calculated by an industry-recognized method of valuation which allowed $1.50 per monthly gallon.
The trial court denied Citgo's motion for a directed verdict and its motion for judgment N.O.V., in both of which Citgo maintained *337 that the fraud claim was barred by the statute of limitations of one year. We quote from the defendant's motion for a directed verdict:
And the following grounds were asserted in the defendant's motion for judgment N.O.V.:
It is Citgo's position that Griffin's action for misrepresentation fails because of the application of Tit. 7, § 42, Alabama Code (Recomp.1958) (now Code of 1975, § 6-2-3):
As the defendant insists, it is well settled that an action based upon fraudulent misrepresentation must be brought within one year of the discovery thereof or within one year of the time when it should have been discovered. Johnson v. Shenandoah Life Insurance Co., 291 Ala. 389, 281 So. 2d 636 (1973); State Security Life Insurance Co. v. Henson, 288 Ala. 497, 262 So. 2d 745 (1972).
When did the plaintiff discover that the defendant's representations to him were fraudulent? The defendant contends that the plaintiff knew of the misrepresentations with regard to the termination of his distributorship no later than October 10, 1972. Because the action was not brought until October 18, 1973, defendant maintains that it is barred by § 42. If there was no evidence supporting an inference that plaintiff's discovery of the fraud occurred after October 18, 1973, a jury question would not have been established and the defendant would have been entitled to a directed verdict. That is, if the evidence showed without conflict that more than one year before October 18, 1973 Griffin had knowledge of facts sufficient to put a prudent man on inquiry, which in the exercise of proper prudence and diligence would have enabled him to learn of the fraud, a directed verdict would have been proper. State Security Life Insurance Co. v. Henson, supra. On that issue we quote from the record:
*338 A. No, sir. Not a thing.
We believe this exchange furnishes a scintilla of evidence that Griffin was not put on inquiry until "a few days" after October 19, when he received the certified letter which actually "cut him off." Prior to that time he had been given both oral assurances of continuance and written encouragement to increase his sales. In fact, he had been placed on a supply allocation under his existing printed sales contract which he signed in early March, 1972. In *339 view of the nature of these prior dealings, it is a fair inference that any "notice" of the misrepresentations upon which a prudent person would have relied would have come to him through written, as opposed to oral, notice. This made the case one for the jury. Mitchell Homes, Inc. v. Tew, 294 Ala. 515, 319 So. 2d 258 (1975).
In addition, we should point out that under the plaintiff's allegations he was also relying upon another misrepresentation. Again we refer to the evidence:
As we have previously indicated and as this testimony discloses, Griffin did not know of and was not put upon inquiry concerning this particular misrepresentation until about November 18, 1972, or eleven months before the date upon which this action was filed. And because the quoted testimony would have allowed the jury to believe that Griffin's loss was due to this misrepresentation of Moore, a directed verdict would have been improper.
Citgo also contends that the trial court erred when it instructed the jury that Citgo had to satisfy the jury that the plaintiff's *341 claim was barred by the statute of limitations.
Under our decisions, when the statute of limitations is a defense the plaintiff has the burden of proving that the cause of action accrued within the period of the bar. Hatch v. Black Diamond Coal Mining Co., 253 Ala. 495, 45 So. 2d 291 (1950). The record does disclose that, initially, the trial court charged on the burden improperly:
Immediately following this portion of the oral charge, however, the trial court continued:
It is of course obvious that the first portion of this aspect of the oral charge contained an erroneous reference to the burden of proof. However, it is equally obvious that the trial court's further and more lengthy references to the same subject accurately stated the legal principle. In view of this corrective action, and having reviewed the oral instructions as a whole, we cannot conclude that the defendant was prejudiced. Wren v. Blackburn, 293 Ala. 393, 304 So. 2d 187 (1974). Had the defendant been concerned that the jury might have been misled or confused by the portion of the charge complained of, it could have requested an explanatory charge. Thompson v. Magic City Trucking Service, 275 Ala. 291, 154 So. 2d 306 (1963).
Citgo also contends that the trial court committed a reversible error when it permitted plaintiff's counsel to elicit from the defendant's witness, Moore, upon his cross-examination, evidence of Citgo's 1975 gross sales and 1970 net profit. Plaintiff maintains that this evidence was irrelevant to the issues and prejudicial to Citgo.
Moore's testimony on both is direct and cross-examination was extensive, aggregating fifty-one pages of the record. His evidence on direct examination established "very bad gasoline price markets (in 1971 and 1972) so the economics generally in business were very poor," prompting an analysis of the company's marketing methods and the ultimate decision to introduce a new distributor system. A part of this program included the closing of a refinery in East Chicago which diminished the company's supply of gasoline and affected the accounts which would not be renewed as well as the competitive price of their product. One of the problems the Company was attempting to solve was the effect upon it of distributors of private brand and unbranded products who marketed to large volume service stations.
On his cross-examination he disclosed that in 1971 the company sold gasoline at two prices, a branded price and an unbranded price, because some jobbers operated with both branded and unbranded products. Although he conceded that the company was selling to a few of the people who he complained were providing competition to his company, he maintained that "the competition was broader than the ones we weren't selling." At that point this exchange took place:
And later, Moore was asked:
Considering this testimony as a whole it is apparent that Moore's explanation of the marketing policy which led to the cancellation of Griffin's contract, and ultimately to this controversy, was a justification of the company's decision based upon *343 competitive factors. If the matters of the amount of the company's sales and profits were irrelevant and thus improper cross-examination in this fraud action, as the defendant contends, the subjects of sales and profits likewise would have been irrelevant on direct examination as well. Griffin's testimony on direct examination, however, dealt extensively with the company's marketing methods and poor economic position, a subject which intimately concerned the company's sales and profits. Assuming arguendo that these were irrelevant subjects for direct examination, because they were illicited at that stage of his examination Moore's cross-examination on the same subjects was proper. Irrelevant evidence may be admitted to rebut evidence of like character. Wilkinson v. Duncan, 294 Ala. 509, 319 So. 2d 253 (1975); St. Clair County v. Bukacek, 272 Ala. 323, 131 So. 2d 683 (1961); McElroy's Alabama Evidence § 14.01 (3rd ed.). And because Moore had painted a verbal portrait of the company's poor business position, we fail to see how any undue prejudice resulted to it when evidence of its gross sales and net profits was elicited from the same witness. Besides, defendant's counsel made only a general objection. We have shown that this evidence was admissible, hence the general objection was insufficient for the purposes of appeal. All American Life and Casualty Co. v. Dillard, 287 Ala. 673, 255 So. 2d 17 (1971).
Citgo also contends that the trial court erroneously permitted the jury to find that Citgo had breached a contract granting the plaintiff an exclusive distributorship, or conspired to breach it, when there was no evidence of any such contract, or of any conspiracy. The defendant insists that one cannot be charged with conspiring to breach his own contract.
We fail to find anything in the trial court's instructions to the jury authorizing such a finding. The defendant's argument on this point springs from the court's reading the plaintiff's complaint to the jury:
These were the only references to the contract and to conspiracy, and it is clear from the remainder of the charge that the issues submitted to the jury for their resolution concerned fraud, not breach of contract or conspiracy:
Nowhere in the oral charge did the trial court refer to the law of either contracts or conspiracy. To the contrary, it is clear from that charge that the case was submitted to the jury on the issues of willful or reckless misrepresentation. The references to breach of contract and conspiracy were part of the court's references to the contentions of the parties, a practice condoned in this jurisdiction. Miller v. Bryant, 25 Ala. App. 564, 151 So. 362 (1933). Not only is it clear that the issues submitted to the jury did not involve breach of contract or conspiracy, but also we fail to discern any prejudice to the defendant when the trial *346 court did not charge the jury on the law of the plaintiff's allegations, since the plaintiff would have been entitled to an instruction had he been relying upon them and had they been supported by evidence. Jones v. Blackman, 284 Ala. 684, 228 So. 2d 1 (1969). Indeed, there having been no evidence of either a breach of the contract or of a conspiracy, it would have been error for the trial court to have made either an issue for the jury. Cf. May-Bilt, Inc. v. Deese, 281 Ala. 579, 206 So. 2d 590 (1967), and Barber v. Stephenson, 260 Ala. 151, 69 So. 2d 251 (1953).
There being no reversible error, the judgment must be, and is, affirmed.
AFFIRMED.
BLOODWORTH, MADDOX, FAULKNER, JONES, ALMON, SHORES and EMBRY, JJ., concur.
TORBERT, C. J., dissents.
TORBERT, Chief Justice (dissenting):
I respectfully dissent. I believe that Griffin's cause of action based upon fraudulent misrepresentation was barred by the statute of limitations and that the trial court erred to reversal by failing to grant either Citgo's motion for a directed verdict or its motion for judgment notwithstanding the verdict.
Pursuant to the provisions of Title 7, section 42, Code of Alabama 1940 (§ 6-2-3, Code 1975), the statute of limitations for fraud is one year from the date that such fraud is discovered or should have been discovered. State Security Life Insurance Co. v. Henson, 288 Ala. 497, 262 So. 2d 745 (1972). Further, facts which provoke inquiry in the mind of a person of reasonable prudence and which, if followed up, would have led to discovery of the fraud, constitute sufficient evidence of discovery. Johnson v. Shenandoah Life Insurance Company, 291 Ala. 389, 281 So. 2d 636 (1973).
In the case at bar, Griffin discovered the alleged fraud more than one year prior to the commencement of his suit. Griffin's own testimony, which is quoted at length by the majority, shows that Citgo made allegedly fraudulent representations to Griffin during the summer of 1972 with respect to the renewal of his contract, that Griffin relied upon these representations by failing to obtain another source of gasoline and by failing to sell his business to a competitor during that summer when the business was still profitable and readily saleable, and, finally, that because of market fluctuations due to the gasoline shortages between the summer of 1972 and the first of October, 1972, Griffin suffered a $70,000.00 loss on the eventual sale of his business. Most importantly, however, this same testimony reveals without conflict that Griffin had knowledge of, and therefore discovered, the falsity of Citgo's representations no later than October 10, 1972, the date on which he received oral notification that his contract with Citgo would not be renewed.
Thus, from a review of the foregoing evidence, I cannot agree with the majority that the discovery of the alleged fraud did not occur until Griffin received written notification that his contract was to be terminated. Griffin was put on notice of the fraudulent nature of Citgo's representations by the oral statement of Ira Hughes just as effectively as by the written letter sent to him on October 18, 1972. The substance of both communications was the same, i. e., Griffin's distributorship agreement would not be renewed when his current contract expired.
In summary, I believe that Griffin's cause of action accrued, without dispute, no later than October 10, 1972, the date of the discovery of the alleged fraud. Thus, as the complaint was filed on October 18, 1973, Griffin's suit was clearly barred by the statute of limitation. I would hold, therefore, that a directed verdict would be proper in this case and would reverse. See State Security Life Insurance Co. v. Henson, supra.