Case Name: SNELLGROVE v. DINGELHOEF; and vice versa
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 1920-05-12
Citations: 25 Ga. App. 334
Docket Number: 10771, 10794
Parties: SNELLGROVE v. DINGELHOEF; and vice versa.
Judges: Smith, J., concurs. Jenkins, P. J., concurs specially.
Reporter: Georgia Appeals Reports
Volume: 25
Pages: 334–341

Head Matter:
10771, 10794.
SNELLGROVE v. DINGELHOEF; and vice versa.
Decided May 12, 1920.
1. An executed sale may be rescinded on account of actual fraud; and, since fraud voids all contracts, no title to the property passes under such sale. Also, under a contract of sale where the property actually delivered is materially different from that contracted for, its acceptance by the buyer in ignorance of such material difference constitutes no sale, and no title passes.' In either case the buyer may, upon the discovery of the fraud, rescind the contract of sale, and, upon making or offering restitution, recover from the seller the purchase-money which has been paid to the seller.
2. Where a seller agrees with a buyer to sell to the latter a new automobile, and afterwards, in pursuance of this agreement, and upon receipt of the purchase-price, delivers to the buyer a second-hand automobile, which has been repainted and worked over to resemble one that is new, with intent to deceive the buyer, ■ such conduct on the part of the seller may amount to actual fraud, and the buyer, having been deceived thereby, may upon discovery of the fraud rescind the sale; and, upon restoring or offering to restore the property to the seller, "the buyer is entitled to recover the purchase-money paid to the seller.
Complaint; from Fulton superior court — Judge Bell. June 14, 1919.
Snellgrove contracted with Dingelhoef for the purchase of an automobile, but no particular automobile was selected at the time. It was expressly agreed and understood that a new automobile was later to be delivered. In pursuance of this agreement Dingelhoef later, on receipt of the purchase-money from Snellgrove, delivered to the latter’s representative an automobile which Snellgrove received while ill, but after his recovery and after using the automobile, he discovered, on close inspection, that, instead of being a new one as contracted for, it was an old or second-hand one, repainted and worked over to resemble a new one. Snellgrove immediately upon this discovery tendered it back to Dingelhoef and demanded of him the return of the purchase-money. Dingelhoef refused to accept the automobile or to return the purchase-money. Snellgrove thereupon brought suit to recover the money. Upon the trial of the case, the evidence having shown the foregoing state of facts, the judge nonsuited the plaintiff; and the plaintiff excepted. The petition, which alleged substantially the same facts, was sustained as against the defendant’s general demurrer, and he excepts by cross-bill.
Hines, Hardwick & Jordan, for plaintiff.
Little, Powell, Smith & Goldstein, W. J. Davis Jr., for defendant.

Opinion:
Stephens, J.
(After stating the foregoing facts.)
No title passes to the vendee where an executed sale of personal property has been induced by actual fraud on the part of the seller. Johnson v. Harley, 121 Ga. 83 (48 S. E. 685), and cases there cited. "Fraud voids all contracts." Civil Code (1910), § 4254. "Fraud may exist from misrepresentation by either party, made with design to deceive, or which does actually deceive the other party; and in the latter case such misrepresentation voids the sale. . . Such misrepresentation may be perpetrated by acts as well as words, and by any artifices designed to mislead." . . Civil Code (1910), § 4113.* " Concealment of material facts may in itself amount to a fraud . . where one party knows that the other is laboring under a delusion with respect to the property sold or the condition of the other party, and yet keeps silent," or " where the concealment is of intrinsic qualities of the article which the other party, by the exercise of ordinary prudence and caution, could not discover." Civil Code (1910), § 4114. "Where one party to a contract of sale knows that the other is laboring under a delusion or mistake with respect to a material fact affecting the value of the property, and not only keeps silence with respect thereto, but, by artifice, adds color and credence to the delusion or mistake, he is guilty of fraud equivalent to an express misrepresentation." Marietta Fertilizer Co. v. Beckwith, 4 Ga. App. 245 (1) (61 S. E. 149).
While the fraud must arise out of a false representation of an existing fact, such representation may at the same time be a warranty. Larey v. Taliaferro, 57 Ga. 443; Dye v. Wall, 6 Ga. 684; Newman v. Claflin Co., 107 Ga. 89, 93 (32 S. E. 943); 14 Am. & Eng. Ency. Law (2d ed.), 168. While a breach of warranty will not annul an executed sale (Civil Code of 1910, § 4136), yet where the warranty also amounts to a fraud, which voids all contracts, such sale may be annulled and rescinded. Whether or not the defendant warranted the automobile to be a new one, he certainly, by his conduct in delivering to the plaintiff an automobile repainted and worked over to resemble a new one and which deceived him, represented the automobile which he sold as being new. This was a false representation of an existing fact; and, if it was material and induced the plaintiff to accept something entirely different from that which he had contracted for, it clearly was a fraud which, upon its discovery and a tender of the property back to the seller, entitled the plaintiff to rescind the trade and recover the purchase-money. See, in this connection, Silvey v. Tift, 123 Ga. 804 (51 S. E. 748, 1 L. R. A. (N. S.) 386; Hoyle v. Southern Saw Works, 105 Ga. 123 (31 S. E. 387); Cohen v. Lasky, 102 Ga. 846 (30 S. E. 531); East Tennessee &c. Ry. Co. v. Hayes, 83 Ga. 558, 560 (10 S. E. 350).
Where the plaintiff contracts to buy one thing and the vendor delivers to him a thing entirely different, there is no contract of sale as respects' the property actually delivered, and therefore no passing of the title to such property. In Varley v. Whipp (1900), 1 Q. B. 513, "the plaintiff agreed to sell and the defendant to buy a reaping machine, which the defendant had never seen, and which the plaintiff stated to have been new the previous year, and to have been used to cut only fifty or sixty acres. The machine was delivered and shortly afterwards the defendant wrote complaining that it did not correspond with the plaintiff's statements. After some further correspondence the defendant returned the machine. In an action to recover the price: Held, that there was a contract for the sale of goods by description, within the meaning of the Sale of Goods Act, 1893, s. 13, and therefore, by that section, there was an implied condition that the goods should correspond with the description, that there had been no acceptance of the machine by the defendant, within the meaning of s. 35, that the property had not passed to the defendant, within the meaning of s. 17, and the plaintiff was not entitled to recover." Channell, J., in the opinion, said: "The case turns on a fine point, namely, whether the words used by the seller with regard to the machine were part of the description, or merely amounted to a collateral warranty. If the property in the machine passed prior to July 2 [the date upon which the buyer undertook to re scind the sale], nothing that the buyer could do afterwards would divest it. The question is, did the property pass? The machine which was to be sold had never been seen by the buyer, and it was not the property of the seller at the time. It was described as being at Upton, as being a self-binder, as being nearly new, and as having been used to cut only about fifty or sixty acres. Ail these-statements were made with regard to the machine, and we have to consider how much of these statements was identification of the machine, and how much was mere collateral warranty. . . Then when did the property pass? Not when the machine was put on the railway, for the vendor could not make the property pass by putting on the railway that which did not fulfil the implied condition. The earliest' date therefore at .which the property could be said to pass would be when the machine was accepted by the purchaser. But it never was accepted." While the sale in that case was one by description under the "Sale of Goods Act," we think the principle there laid down is applicable to the case now under consideration. In Cushman Motor Works of Canada v. Laing, 49 D. L. R. (1919) 1, it was held: "It being a condition of the sale that a threshing engine shall be a 25 h.p. engine, the purchaser is entitled to have the contract rescinded and the deposit returned to him upon the admission of the vendor, in an action brought by him to recover the balance of the purchase price, that the machine was in fact a 22 h.p. standard machine, although the purchaser has retained and used the machine through two seasons upon the vendor's continued assurance that he would put it in good working order, if the purchaser did not know until the trial that the machine was not in fact a 25 h.p. machine such as he had contracted to purchase." See also 33 Harvard Law Review, 602, note; 16 Id. 465 et seq.
The trial Judge erred in granting a nonsuit, and properly overruled the defendant's general demurrer to the petition.
Judgment reversed on the main hill of exceptions, and affirmed on the cross-hill.
Smith, J., concurs. Jenkins, P. J., concurs specially.