Willingham v. Morris Plan Bank

Felton, J. The Morris Plan Bank of Georgia sued H. S. Willingham, alleging that the defendant had' fraudulently induced the plaintiff to make a loan to one E. L. Pearce by falsely representing that the defendant, an indorser on Pearce’s note, was over 31 years of age; the contention being that-the-loan word'd not have been *204 made without the defendant’s indorsement. The petition further alleged that at the November, 1938, term of Cobb superior court the bank had filed a suit on the note against the defendant, being at the time unaware that the defendant was a minor; that Willing-ham had filed a plea of infancy and that thereupon the plaintiff had satisfied itself that the defendant had been a minor when he signed the note and had done no act to affirm the contract upon reaching majority, and the plaintiff accordingly had permitted the suit to be dismissed for want of prosecution and had paid the costs therein. Among other things, the defendant’s defense was that the plaintiff was estopped to maintain the present action because it had brought the previous suit on the contract with notice that the defendant had been a minor at the time of the execution of the note and after the defendant had repudiated the contract, and that the plaintiff had accordingly made an election of an inconsistent remedy. The evidence showed that the defendant, before the suit on the contract was filed, had given the agents of the plaintiff information as to his minority at the time he had indorsed the note, and that he had refused to pay the note, but it appeared that they assumed that the defendant was “stalling,” and did not investigate the truth of his statement until he filed his plea in the action which had been brought on the contract. The law in foreign jurisdictions is conflicting on the question whether a suit on a contract and a suit in tort for deceit for the fraudulent inducement of the contract are inconsistent. It would seem, on principle, that the effect of the rulings in Georgia courts is that they are not consistent. Dye v. Wall, 6 Ga. 584; Larey v. Taliaferro, 57 Ga. 443; Peel v. Bryson, 72 Ga. 331; Brooke v. Dole, 108 Ga. 251 (33 S. E. 849); Curry v. Washington National Life Insurance Co., 56 Ga. App. 809 (194 S. E. 825). See 120 A. L. R. 1157-8, note 13. Bacon v. Moody, 117 Ga. 207 (43 S. E. 482), is not authority to the contrary because the statement in that decision that the remedies are consistent is obiter. Nothing to the contrary was decided in Commercial City Bank v. Mitchell, 25 Ga. App. 837 (105 S. E. 57), Orr Shoe Co. v. Upshaw, 13 Ga. App. 501 (79 S. E. 362), or Levy v. Kiser Co., 31 Ga. App. 113 (120 S. E. 34). The last two cases were actions in assumpsit, and the allegations of fraud were permitted on the' very material question as to whether the debts were discharged in bankruptcy. *205 When the Morris Plan Bank had notice of the substantial fact, the claim of infancy by the defendant, when it proceeded to file the suit on the contract without investigating, it acted at its peril, and the choice of the one alternative proceeding operated as final and absolute. Land v. Hall, 46 Ga. App. 404 (167 S. E. 711). The facts in this case show conclusively that the plaintiff did not elect to rely on the contract after its repudiation, but that it ratified and concurred in its disaffirmance by deliberately permitting the suit on the contract to be dismissed after ascertaining that the defendant’s plea of minority was true. The plaintiff would have been entitled to enforce the contract if the minor, of the age of discretion, had fraudulently procured its execution and acceptance, if the plaintiff had not estopped itself by failure to exercise diligence, because the minor would have been estopped to disaffirm the contract. It appears from the record in this ease that the defendant signed a written statement to the.bank, before the loan was made, in which he represented that he was thirty years of age, and that he was employed by the State Revenue Commission of Georgia in the auditing department at the State Capitol at a fixed salary of $150 per month. This statement was calculated to, and no doubt did, lead the bank to believe that the defendant was competent to make a valid and binding contract, and in fact the uncontroverted evidence showed that the bank relied on the representations in this statement in making the loan. Whatever the status of the law on this subject in other jurisdictions, it is settled in this State that a minor is estopped to plead his infancy if the contract was procured by his fraud. In Hood v. Duren, 33 Ga. App. 203 (125 S. E. 787), Judge Jenkins discussed the conflict in the authorities on the question and specifically demonstrated that the apparent holding to the contrary in McKamy v. Cooper, 81 Ga. 679 (8 S. E. 312), is not authority for a contrary conclusion. While in the Duren case the minor received and retained benefits, there is no logical distinction between a case where the minor did and one where he did not receive benefits. It is the causing of another to act to his injury that is the fundamental basis of estoppel, and not the receipt of benefits. In Harris v. Collins, 75 Ga. 97 (2), 106, it was held that “the law places persons non sui juris under disabilities for the purpose of protecting their rights, but not to enable them to invade or assail the rights of *206 others/’ and the maxim that the infant’s privilege is given as’a shield and not as a sword was approved. Since the plaintiff in this case could have proceeded to judgment on the contract, this remedy was not a mistaken remedy, and the rule in such cases does not apply. The appellate division of the civil court of Fulton County erred in affirming the judgment of the trial judge in favor of the plaintiff, and denying a new trial. Judgment reversed. Sutton, J., concurs.