Court Opinion

ID: 9700284
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:18:36.270993+00
Date Added: 2024-06-11T18:21:06.676338
License: Public Domain

BLOODWORTH, Justice
(concurring specially).
I concur in so much of the opinion authored for the Court by Justice Embry— which holds that one who rescinds a contract induced by fraud (if the fraud was malicious, oppressive, or gross, the representations being made with knowledge of their falsity, or made so recklessly as to amount to the same thing, and with the purpose of injuring the plaintiff) may recover punitive damages if he is entitled to recover actual damages, although the latter may be merely nominal. I do not agree that “restitutionary damages” constitute “actual damages.” Caffey v. Alabama Machinery & Supply Co., 19 Ala.App. 189, 96 So. 454, cert. den. 209 Ala. 466, 96 So. 459 (1922); See also Alabama Machinery & Supply Co. v. Caffey, 213 Ala. 260, 104 So. 509 (1925); Pihakis v. Cottrell, 286 Ala. 579, 243 So.2d 685 (1971); Loch Ridge Construction Company, Inc. v. Barra, 291 Ala. 312, 280 So.2d 745 (1973); § 389 Fraud and Deceit, 37 Am.Jur.2d, p. 527.
The general rule is stated in Glass v. Cook, 257 Ala. 141, 57 So.2d 505 (1952) to be that one defrauded has an election either to affirm the contract and sue for damages for the deceit or disaffirm and sue for his money back but that he may *67not do both. Although a number of cases express the rule in the same or slightly different, language [see Fraud, Vol. 10A, Alabama Digest, <®=31], a better statement of it is found in Kennedy v. Collins, 250 Ala. 503, 35 So.2d 92 (1948). Justice Stakeley qualified this general statement of the rule by pre-fixing the word “ordinarily.” This is the key to the rule. While “ordinarily,” one must, of course, give up the property and restore the benefits he has received if he rescinds or disaffirms and then sue for his money back — this does not preclude an action for damages for the fraud practiced by the other party in procuring the contract. (In the present case, there was no restoration by plaintiff of possession or benefits because he received neither.)
The doctrine of the two Caffey cases, supra, clearly permits, upon disaffirmance, a suit for recovery of the money paid under the contract and the recovery of punitive damages, if the pleading and proof justify it. This is an exception to, or perhaps further refinement of, the general rule and does not conflict with it. The Caffey cases have never been overruled and have been cited as recently as 1973 in the Loch Ridge case, supra.
JONES, J., concurs.