COLEMAN, Justice.
The defendants appeal from a judgment for plaintiff in an action to recover damages for fraud and deceit.
In outline, the case for plaintiff is that she inquired of one Mason about obtaining a loan to be secured by a mortgage on certain real estate owned by plaintiff. Mason drove plaintiff to Birmingham where she saw defendant Louis Pihakis who was president of the defendant corporation. The result of her meeting with Pihakis was an understanding that the defendant corporation would lend her $7,500.00 to be secured by a mortgage on her property. Subsequently, on January 12, 1968, Pihakis went to Decatur and met plaintiff at her home. Pihakis had an instrument which he represented to be a mortgage; and plaintiff, relying on that representation, signed the instrument without reading it and delivered it to Pihakis. The instrument was a deed to two persons, husband and wife, who are not parties to this lawsuit. Approximately two weeks after she had signed
The case for defendants, in outline, is that Pihakis did not misrepresent the character of the instrument to plaintiff; that she read it, and knew what she was signing; that because of plaintiff's age, a ten-year loan such as she desired was not available; that the deed was made to grantees who were younger and could obtain the loan; that on closing of the loan, the real estate would be conveyed back to plaintiff by a conditional sale contract; and that plaintiff was informed of the procedure and agreed to it.
As hereinafter discussed under Assignment 2, subsequent to the telephone conversation in which plaintiff told Pihakis to "drop" the loan, Pihakis sent to plaintiff by mail a quitclaim deed. In the quitclaim deed, plaintiff is the grantee, and the quitclaim deed purports to have been executed by the grantees named in the deed signed by plaintiff. The complaint was filed February 1, 1968. Subsequently, Pihakis sent to plaintiff a warranty deed in which plaintiff is the grantee. The warranty deed purports to have been executed by the same grantees named in the deed signed by plaintiff. The warranty deed appears to have been acknowledged by the grantors named therein on May 23, 1968. Pihakis sent to plaintiff a check for $8.00 together with the quitclaim deed, and also a second check for $8.00 together with the warranty deed. The checks were to pay the cost of recording the respective deeds.
Assignment 1.
Defendants assign as error the trial court's action in overruling defendants' demurrer to the amended complaint which recites:
"The plaintiff further alleges that the aforesaid reporesentation (sic) made by the defendant Pihakis was made by him as the agent, servant or employee of the defendant Alabama Equity Corporation of Birmingham, acting within the line and scope of his authority as such agent, servant or employee, and was willfully made, knowing the same to be false, and was made for the purpose of deceiving the plaintiff and did deceive the plaintiff, for which the plaintiff claims damages, and the plaintiff also claims punitive damages."
Defendants argue that the complaint is defective because it ". . . . does not allege the manner in which the plaintiff was damaged or the extent of any damage."
The only grounds of demurrer, which appear to point out either of the defects upon which defendants now rely in argument, are grounds 4 and 10 which recite:
Grounds 4 and 10 do assert that the complaint fails to show that plaintiff sustained any damage as the result of the fraud charged against defendants, and we will consider whether the allegations of the complaint sufficiently show that plaintiff was damaged as a result of the fraud.
As to the second defect now urged by defendants that the complaint fails to show the "extent" of plaintiff's damage, or the "amount" of the damages to plaintiff, the second defect does not appear to be pointed out by any ground of the demurrer and will not be considered. Defendants cite Bates v. Turney, 26 Ala.App. 98, 153 So. 782, to support their argument with respect to failure to allege "the amount of damages to plaintiff," but further consideration of Bates is unnecessary since the defect with respect to the amount of damages is not pointed out by the demurrer.
Damage to plaintiff being an essential element of actionable fraud, the inquiry here is whether the facts alleged in the complaint support the conclusion that plaintiff did suffer injury as a result of the fraud alleged.
The facts alleged are that defendant Pihakis represented to plaintiff that a certain
The alleged facts show that by plaintiff's action in reliance on the alleged false representation and the subsequent recording of the deed by one of the defendants, a cloud has been cast on plaintiff's title of record. This court has said:
In a suit to cancel an option as a cloud on the title of complainants, who had granted the option, this court said:
Under the facts alleged, the deed executed by plaintiff purports, on its face, to convey title to the grantees named therein, although the deed conveyed nothing when all the alleged facts are known. Under the authorities last quoted, such a recorded deed is a cloud on plaintiff's title, obstructs plaintiff's alienation of her property, and tends to depreciate its value. The cases quoted are cases in equity, but the quotations illustrate the nature and effect of the facts alleged in the complaint and lead to the conclusion that the facts so pleaded do show that plaintiff has sustained injury as the result of her action in reliance on the false representations allegedly made by defendants. Accordingly, the court did not err in overruling the grounds of demurrer to the amended complaint on which defendants rely, and Assignment 1 is without merit.
Assignment 2.
Assignment 2 recites:
Defendants say in brief:
Defendants are correct in saying that plaintiff did not prove that she had paid, or become obligated to pay, any specific sum of money as a proximate result of the alleged fraud. As hereinafter stated, however, we are of opinion that the evidence does show that plaintiff is entitled to recover nominal damages and that the right of plaintiff to recover nominal damages is sufficient to sustain the recovery of punitive damages.
The testimony shows that plaintiff first applied to the defendant corporation through Mason in 1967 for a loan. On this first application, plaintiff paid a fee of $25.00, part of which went to the defendant corporation to pay the cost of processing plaintiff's application. This first application, however, lapsed or was abandoned by plaintiff. Several months later, plaintiff again sought a loan from the defendant corporation in either late 1967 or early 1968. She was not required to pay a second application fee. In the course of events which followed, the alleged misrepresentation was made on January 12, 1968. We wish to make it clear that the $25.00 payment made by plaintiff in 1967 as a loan application fee does not constitute injury or damage to plaintiff resulting from the misrepresentation allegedly made on January 12, 1968. Plaintiff's payment of the $25.00 fee in 1967 cannot be the result of a misrepresentation which was not made until the following year, 1968, and had no existence whatever until several months after the payment was made.
Defendants contend further that the undisputed evidence shows that plaintiff had received the two deeds executed by the grantees named in the deed executed by plaintiff and also a check for $8.00 with each of the two deeds, which checks were sufficient to pay all costs of recording the two deeds. Defendants argue that, without any cost to plaintiff, she can record the two deeds and thus be placed in the same position in which she was prior to January 12, 1968.
Some years ago, in reviewing the trial of an action for breach of contract, the Supreme Court of the United States said:
The evidence showing the delivery of the two deeds and checks to plaintiff appears to have been admissible to reduce the amount of plaintiff's recovery but not to defeat plaintiff's right to recover. The evidence supports a finding that plaintiff signed the deed as alleged and that defendant Pihakis recorded the deed. As stated above under Assignment 1, if plaintiff's evidence be believed by the jury, the events occurring January 12, 1968, gave rise to a cause of action and plaintiff became entitled to recover at least nominal damages.
Maring-Crawford was an action for fraud and deceit in which this court affirmed judgment for plaintiff and in consideration of Assignments 35 and 6 held that it was not error to refuse a requested charge to effect that punitive damages cannot be awarded where no actual or compensatory damages have been shown by plaintiff. This court said:
In Maring-Crawford, this court explained Mobile Building & Loan Ass'n v. Odom, 232 Ala. 19, 166 So. 698, and Oates v. Glover, 228 Ala. 656, 154 So. 786, both of which are cited by the instant appellant. The explanation in Maring-Crawford appears to be adequate and will not be repeated here.
This court has said:
To recover compensatory damages for fraud and deceit, plaintiff must show that he has suffered an actual pecuniary loss as the result of the fraud.
To recover punitive damages for fraud and deceit, plaintiff must show that the fraud is of the character described in Alabama Great Southern Railroad Co. v. Sellers, supra, as justifying punitive damages, and that plaintiff has suffered actual damages as the proximate result of the fraud; but, as the terms actual and nominal are here used, nominal damages are actual damages, and punitive damages may be awarded although plaintiff's actual damage is purely nominal.
The evidence of plaintiff squarely contradicts the evidence for defendants. The jury apparently believed the plaintiff's evidence which supports an inference that defendant Pihakis wilfully and knowingly misrepresented to plaintiff the nature of the instrument with intent to deceive plaintiff; that plaintiff relied on the false representation and as a result a cloud was placed on her title which gave her a right to recover at least nominal damages, which right is sufficient to sustain an award of punitive damages.
The action of defendants in sending to plaintiff the two deeds and checks does not defeat plaintiff's cause of action.
In an action for fraud in plaintiff's purchase of shares of stock of a corporation, where defendants allegedly falsely represented that the corporation was solvent, this court said:
In an action for deceit in the sale of land, the Court of Appeals held that it was not error to refuse the following charge requested by defendant:
The Court of Appeals said:
In the instant case, defendants could not, by tender of the two deeds and checks, defeat plaintiff's cause of action after the right of action had accrued. Assignment 2 is without merit.
Assignments 3 and 4.
Assignments 3 and 4 raise the same points considered under Assignment 2 and are without merit for the same reasons.
Assignments 5, 6, and 7.
Defendants assign as error the action of the court in overruling those grounds of the motion for new trial which assert that the verdict for $22,500.00 is excessive and is the result of bias, malice, and prejudice on the part of the jury.
". . . . . . . . . . . .
Assignment 8.
Defendants assign as error the refusal of their requested Charge No. Six, which is to effect that the jury cannot find for plaintiff unless the jury is reasonably satisfied that plaintiff was caused to sign the paper by reason of the misrepresentations of defendants. Charge 6 appears to be adequately covered by the oral charge and error is not shown. Title 7, § 273.
Assignment 9.
Defendants' refused Charge 8 was adequately covered by defendants' given Charge Nine and the court's oral charge.
Assignments 10 and 11.
Defendants' refused Charges 1 and 2 are affirmative with hypothesis instructing the jury to find for defendants and were refused without error.
Assignment 12.
Plaintiff testified that on the occasion she and Mason went to the office of defendant Pihakis, Pihakis and Mason had a conversation. Plaintiff testified as follows:
"Q Was that in his office in your presence?
"Q Did he say how they was making all those millions of dollars?
"A Profits."
It is noted that defendant made no objection.
On direct examination of defendant Pihakis, the following occurred:
"Q What type of business organization is Alabama Equity Corporation?
"THE COURT: Overrule.
"Q (BY MR. POWELL) Go ahead, Mr. Louis.
"MR. LENTZ: I am going to move to strike that, its not responsive.
"A In mortgage loans on land or homes only.
"Q In what geographic areas does the company operate its business?
"A Throughout the State of Alabama.
"Q How long has it been in existence?
"A A little better than three years.
"MR. LENTZ: I object to that, its immaterial.
"THE COURT: I sustain that."
Defendants assign the last quoted ruling of the court as error. Defendants argue that the court erred in sustaining objection to the last question under the doctrine of curative admissibility stated as follows:
We think it apparent that whether the defendant, Alabama Equity Corporation, was making millions of dollars or not is irrelevant to the issues in this case. What defendant Pihakis said in the presence of plaintiff may or may not have been relevant, but that question is not presented because defendants did not object. As plaintiff argues, after plaintiff had gone into what Pihakis said in the presence of plaintiff, the defendants were then entitled to go into the entire conversation and defendants were also entitled to prove that Pihakis did not make the statement which plaintiff said he had made. We are not altogether persuaded that defendants were entitled to go into details as to how much money the corporation was making, but even if defendants were so entitled, the question to which objection was sustained did not have to do with the amount of money the corporation was making. The inquiry to which the court sustained objection was whether the corporation was set up with a capital endowment and how the corporation got the money it operated on. Answer to such an inquiry on its face does not appear relevant to the issue of how much money the corporation was making.
We are of opinion that objection to the question was sustained without error.
Affirmed.
HEFLIN, C.J., and SIMPSON, BLOODWORTH, and McCALL, JJ., concur.
Comment
User Comments