Bagwell v. Bagwell , 72 Ga. 92 ( 1883 )

Hall, Justice.

Any fact showing that a contract is unfair, or unjust, or against good conscience, will justify a court of equity in refusing to decree its specific performance. Code, §3190. The exercise of the jurisdiction of a court of equity to decree a specific performance, or the recission of a contract, is not a matter or right in either party, but is a matter of sound and reasonable discretion in the court, which governs itself, as far as it may, by general rules and principles, but, at the same time, which withholds or grants relief according to the circumstances of each particular case, when these rules and principles will not furnish any exact measure of justice between the parties. Story’s Eq., §742.

Courts of equity will not decree a specific-performance in cases of fraud or mistake; or where the decree would produce injustice; or where it would compel the party to an illegal or immoral act; or where it would be against public policy; or where .it would involve a breach of trust. Id, 769; Mortback vs. Buller, 10 Ves., 292 ; Ord vs. Noel, 5 Madd., 438 ; Bridges vs. Rice, 1 J. and W., 74 ; and numerous other cases, cited by annotator in notes to Woollam vs. Hearn, 2 White and T. Lead. Cases, pt. 1, p. 376, marg. This rule embraces constructive as well as actual fraud. Ib., American Notes, p. 593, top.

The bill, in this instance, makes this case : The complainant was the surviving member of a firm, and also the administrator of the deceased partner both, the firm and the individual members thereof were insolvent; the firm was deeply involved,, as was also the deceased member on his personal account; in fact, his estate was wholly inad equate to pay his individual debts. The property in question was sold as the individual property of deceased, by'the complainant,-as his administrator, and was bid oil for the respondent, who subsequently transferred his bid to the complainant, upon condition that the complainant would pay him a note which he held against this insolvent firm. Only a portion of the purchase money, so-called, was paid by complainant, in pursuance of this contract, to the estate he represented; the balance of the same, or a large portion thereof, was paid on the claim held by defendant against this insolvent firm, and was thus diverted, from ’the proper course of administration, the partnership assets being primarily liable to partnership debts, and the individual effects to the personal debts of the members. Code, §1918. That a court of equity will not decree a specific performance of such a contract, is too plain to admit of question or doubt; it would be assisting in a direct breach of trust; would be aiding in a violation of the settled policy of the law, and would be countenancing and upholding a constructive fraud. 9 Paige’s Ch. R., 650 ; Fleming et al. vs. Foran et al., 12 Ga., 594, et seg., especially what is said by Lumpkin, J., on pp. 596, 597, 598, 599.

There was, therefore, no error in sustaining the demurrer to this bill; it was without equity,: and showed upon its face that the contract it sought to have specifically performed was in violation of public policy, was founded on a breach of trust, and was, to say. the least of it, a constructive fraud.

Judgment affirmed.