Ramsey-Fender Motor Co. v. Chapman

168 S.E. 92, 46 Ga. App. 385, 1932 Ga. App. LEXIS 135
Court of Appeals of Georgia·Decided October 28, 1932·No. 22160·Published·Cited by 19 cases

Opinion

ON SECOND MOTION EOR REHEARING.

Jenkins, P. J.

Counsel for plaintiff in error file a second motion for rehearing, in which they very earnestly but courteously insist that the court has still failed to draw the proper distinction between eases where the consideration is expressed as a mere recital, and those eases where, as here, it is contended that “the consideration is a necessary term of the contract, which is complete within itself and signed by both parties.” It is contended that “the court overlooked the fact that the failure or lack of consideration for the contract in this case is shown only by a direct contradiction and denial of a positive statement in the contract which the contract itself shows was a vital and necessary term, in that the contract shows that the obligation was for the purchase-price of an automobile and the parol testimony shows that this was not the case.” They further insist that “the court overlooked the fact that its opinion holds that the statement in a retention-of-title contract that property is bought and sold is not a necessary term, but a mere recital, and vitiates every such contract in existence, and puts it in the power of every signer of such a contract to dispute and deny the validity thereof.” They contend that the ruling is in direct conflict with the Georgia authorities, especially Middlebrooks v. Dunlap-Huckabee Auto Co., 44 Ga. App. 543, which was cited in the original decision.

The original syllabus of the court has been elaborated on the rehearing already granted. If we are correct in our conception as to [390] the law governing this case, there is little that we can add to what lias previously been said. It may be due to state, however, that counsel’s strongly-put argument and further consideration of the legal principles involved have led us to change a portion of the language heretofore used. As previously pointed out, so far as what is now sued for is concerned, the- instrument on which the proceeding is grounded is, according to the undisputed evidence, but a mere accommodation paper, given for the purpose of enabling the plaintiff to borrow money for his own benefit on the maker’s credit. That all purported contracts must be supported by a consideration, in order to be valid and enforceable, is a proposition which need be no more than stated. The question here is not whether the contract is thus supported, since the evidence shows that the purported sale was a mere fiction, but whether the defendant had the right to prove such fact, where the instrument itself states that it was given for the purchase-money of an automobile, and is accompanied by a sale agreement signed by both parties, setting up such a sale and the terms thereof. Nothing is better settled than the general rule that the consideration of a contract is ordinarily open to inquiry. Does the instant ease come within any exception which would preclude the defendant from showing that, as between the parties, there was a want of consideration? In our opinion, the fact that the note purports on its face to represent the purchase-price of an automobile, and the further fact that an instrument was contemporaneously executed purporting to set forth such a sale and the terms thereof, do not prevent the promisor as purported purchaser from showing, as he did without dispute, that no such sale was actually made, but that the proceeding was merely a device whereby the promisor, as purported purchaser, might lend his credit to the payee. Of course, as regards a holder in due course, he would be bound; but, as between the parties themselves, there being in fact a fatal lack of consideration, we do not think that mere language setting up such a consideration would preclude him from showing that no consideration in fact existed. As previously stated, the questions here involved were thoroughly gone into in Rheney v. Anderson, 22 Ga. App. 417 (supra). It is needless to repeat at length the discussion there made, but it will be seen that the conclusion there arrived at was that, while the validity of an unconditional promise in writing may be attacked on the ground that it is not [391] supported by a valid consideration, such an inquiry into the consideration can not be used as a pretext to alter or in any way vary the terms or conditions of the contract itself. A number of cases were cited in the Rheney case, supra, in which an effort was made under the guise of inquiring into the consideration, to set up a condition to an unconditional promise. This can not be done, nor can the consideration be inquired into, unless it be expressed by recital only, for the purpose of showing that the true consideration was different from that recited, and that such different but true consideration has failed. The defendant in the instant case could not be heard to deny that he made the promise precisely as made. He has not attempted to do so. But he can be heard to say that the admitted promise was not binding upon him for the reason that it lacked consideration. The case of Hawkins v. Collier, 101 Ga. 145 (28 S. E. 632), cited in the Rheney case, was very similar in nature. There the promisor signed an agreement to pay a certain amount of money for rent for a certain definitely described parcel of land. On a distress-warrant proceeding the court held that it was competent for the maker of the note to plead and prove that the payee did not really own the land for the rent of which the note was given, and that he had no control over the same, and was not entitled to the possession thereof, and had no right to rent it, and never attempted to deliver possession thereof to the maker of the note, and that consequently he had never become the maker’s landlord.

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Ramsey-Fender Motor Co. v. Chapman, 168 S.E. 92, 46 Ga. App. 385, 1932 Ga. App. LEXIS 135 (Ga. Ct. App. 1932).

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