Southern Building & Loan Ass'n v. Weaver

SAMFOBD, Judge. One of the counts of the complaint (count 4) waived the tort and claimed for money had and received. As to this count defendant filed a plea in abatement challenging ^he venue of the Lowndes county circuit court and averring that defendant was not doing business in Lowndes county at the time of the filing of the complaint, and was not doing business in said county at the time the alleged cause of action arose. Issue was joined on this plea and the evidence showing without conflict that the two transactions, which are the basis of this litigation, were had in Lowndes county by a sale by one of defendant’s agents of defendant’s corporate stock to plaintiff, the court, at the request of plaintiff, in writing, instructed the jury to find the issue in favor of plaintiff. Our Statute, Code 1923, § 10471, provides that: “A foreign or domestic corporation may be sued in any county in which it does business by agent, or was doing business by agent at the time the cause of action arose.” It is not denied that defendant’s agent had the transaction complained of in Fort Deposit, in Lowndes county, but it is insisted by appellant that a sale of appellant’s corporate stock is not a corporate function and therefore is not a doing of business within the meaning of the above statute. In this connection we are cited several Alabama authorities, notably Friedlander Bros. v. Deal, 218 Ala. 245, 118 So. 508; Int. C. S. Oil Co. v. Wheelock, 124 Ala. 367, 27 So. 517; Beard v. U. & A. Pub. Co., 71 Ala. 60, as to what is a “doing of business,” within the meaning of the statute. These opinions seem to draw a distinction between exercising the powers of the corporation and. the carrying on the functions of the corporation, or acts done in the exercise of corporate functions. In the Deal Case, supra, the Supreme Court cites and quotes from many decisions illustrating this distinction, and therefore we may say that it is the law that, if the sale of corporate stock of defendant’s corporation is not a doing of business, the venue of the action set up in count 4 is not in Lowndes county. On this question we seem to have direct authority upholding the trial court in its ruling. It is withiii the powers granted that defendant should sell its stock that it might obtain funds with which to make loans. So, on both reason and authority, we hold that the sale of stock, of a building and loan association whereby the purchaser becomes a member of the association is a doing of business, within the meaning of Code 1923, § 10471. Jones v. Martin, 15 Ala. App. 675, 74 So. 761; Langston v. Phillips, 206 Ala. 174, 89 So. 523. [10] From what has been saicl above it follows that the trial court did not err in permitting plaintiff to interrogate the secretary of defendant, while he was testifying as a witness, as to sales of other stock sold by defendant to other parties in Lowndes county about the time the stock in this ease was sold to plaintiff. Oount 4 of the complaint claims of the defendant $500 as for money had and received. In answer to this count, defendant filed plea 7, setting up a sale and delivery to plaintiff of certain surplus certificates issued by defendant in conjunction with the sale of its stock, which said surplus certificates entitled plaintiff to certain interests in defendant’s company, as a member thereof. It is further averred that the money claimed in count 4 was received by defendant in accordance with a written application of plaintiff, and that in compliance with the application the surplus certificates were delivered by defendant and accepted by plaintiff. The defense set up by plea 7 presents an answer to count 4 of the complaint, and was not tested by demurrer. If issue had been joined on this plea, the defendant would have been entitled to recovery on proof of the facts alleged. So, as long as the contract set out in plea 7 was not rescinded, there could be no recovery under count 4. Berman Bros., etc., Co. v. State Savings & L. Co., 222 Ala. 9, 130 So. 554. In reply to defendant’s plea 7, plaintiff set up a fraud on the part of defendant, through its agent, in obtaining the contract pleaded by it. To this replication (b) defendant demurred, pointing out, among other grounds, that there is no averment of a demand for a refund of the money or an offer promptly made to rescind the contract after the discovery of the fraud. The general rule is, when one is induced by fraud to enter into a contract, he has a right to rescind the contract and sue for his money back, in which event he must aver that he acted promptly and gave up or offered to give up possession of the property obtained and restore all benefits he received under it. The action declared on in count 4 cannot be sustained, except upon the basis of a rescission. Day v. Broyles, 222 Ala. 508, 133 So. 269; So. B. & L. Ass’n v. Argo, 224 Ala. 611, 141 So. 545; Bynum v. So. B. & L. Ass’n, 223 Ala. 392, 137 So. 21; So. B. & L. Ass’n v. Waldrop, 24 Ala. App. 362, 135 So. 418. But in the instant case it appears from plea 7 that at the time of the bringing of this suit the surplus certificates numbered A-61S and A-669, issued to plaintiff by defendant, were worthless and of no value. Where this is the case, an offer to return the certificates to defendant was unnecessary. The ground of demurrer raising that point was properly overruled. 2 R. C. L. 778-34; King v. Livingston Manufacturing Company, 192 Ala. 269, 68 So. 897; Lowe & Armstrong v. Shinault, 201 Ala. 593, 79 So. 22. Defendant’s pleas A and B, claimed of plaintiff by way of recoupment certain sums of money due . under the contract whereby plaintiff became a member of defendant’s corporation subject to all the rules and regulations of the company. Plaintiff’s replication (b) was a complete answer to these pleas. If the contract set out in pleas A and B was obtained by fraud, the defendant could have no recovery under it, and it would not be necessary in replying to a plea of recoupment claiming under the contract to allege a rescission. Fraud vitiates the contract and precludes a recovery. So. B. & L. Ass’n v. Wales, 24 Ala. App. 542, 138 So. 553. Upon the issue of fraud in the sale of surplus certificates to plaintiff by agents of defendant, the evidence was in conflict. This made a question for the jury. The general charge requested by defendant was properly refused. When the two excerpts from the court’s oral charge, to which exceptions were reserved, are taken and considered in connection with the entire oral charge, there is no error. The refusal to give, at the request of defendant, charge 27, was in line with the foregoing opinion, and was without error. We think that there is sufficient evidence tending to show that the plaintiff did not discover the true meaning of the transaction until within twelve months of the bringing of this suit and hence defendant’s charg'e 24 was properly refused. It follows from the above that the judgment must be affirmed. Affirmed.