Greene v. Kelly , 193 Ga. 675 ( 1942 )

Rulings on demurrer to petition for equitable relief. Dismissal of the action held erroneous.

No. 14009. MARCH 11, 1942. ADHERED TO ON REHEARING, MARCH 30, 1942. The plaintiff as vendee brought a petition against a vendor of land, seeking to set aside a foreclosure sale under a bond for title, to cancel the deed made by the seller to himself under the foreclosure, and to enjoin enforcement of dispossessory-warrant proceedings brought by the defendant against the plaintiff. The petition alleges, that the plaintiff made arrangements with the seller to take the purchase-money notes of a third person to whom the bond for title was executed; that the seller was informed of the fact that the plaintiff was to have a trust or equitable interest in the land in proportion to such part of the purchase-money as the plaintiff might himself pay; and that after a default on the notes signed by the third person, the defendant seller agreed with the plaintiff and the third person that he would withhold his then advertised foreclosure proceeding, provided that the plaintiff and the third person would make "a substantial payment on account of the unpaid purchase-price of the property, then amounting to $3,500," and that thereafter "the balance of the purchase-price then remaining unpaid could be paid . . in equal installments of $200, with interest thereon at 6 per cent. per annum." The petition does not allege that any of the $200 installments were paid, or that any payment was made before the foreclosure. It is alleged, that the foreclosure proceeded; that the seller bought in the property and executed the deed to himself; and that after such sale, while the defendant refused to accept new notes signed by the third person, under the new sale agreement, and to execute a new bond for title to him, the plaintiff and the third person, relying on the alleged new agreement, paid to the defendant $550, of which the plaintiff paid $250 and the third person paid the balance, which amounts the defendant accepted.

In an amendment to the petition the plaintiff prayed for a recovery of the $250, "less such sum, if any, as may properly be charged against plaintiff for his proportionate part, if any, of the reasonable rental value of the premises during the year 1940." By amendment and order the third person was made a party. The plaintiff expressly incorporated in his amendment every "allegation set forth in the body of plaintiff's answer to defendant's answer."

In the defendant's answer to the petition, the defendant alleged that he made a written contract, not with the plaintiff but with a third person, to rent the premises for the year 1940 for $250, only the third person signing the rent note; but that both the plaintiff and the third person executed a note to a bank for $266 for money to make the 1940 crop; and that the plaintiff and the third person induced the defendant to sign this note to the bank as security. The defendant further stated in his answer that he, as security, would have to pay a $150 balance due to the bank, besides losing the $250 of 1940 rent. The defendant also set forth in his answer that he had negotiations for the repurchase of the property with another person, the plaintiff's brother-in-law, who was made a party to the case, and to whom the original petition alleged the bond for title had been made by the defendant; that this brother-in-law made certain payments after the foreclosure sale, but later notified the defendant he would not go on with the purchase, and, in consideration of the defendant's agreement not to claim any deficiency judgment under the original bond for title and notes executed by the brother-in-law, executed to the defendant a release of all claims both to the land and to the payments made by the brother-in-law.

Looking to plaintiff's response to these averments indefendant's answer, which response alone is made part ofplaintiff's amendment to the petition, plaintiff does not refer to defendant's allegations with regard to the rental contract executed by a third person, or the alleged not executed by plaintiff and the third person to the bank for money to make a crop. Most of plaintiff's response to defendant's answer is limited to the alleged negotiations between defendant and plaintiff's brother-in-law after the foreclosure sale, and to the validity and legal effect of the alleged written release by the brother-in-law to the defendant, which plaintiff attacked as ineffective because without consideration.

With regard to the pertinent question whether or not plaintiff's response admitted any liability by him for the 1940 rental exceeding or equal to the $250 payments, made to defendant after the foreclosure sale, material references in the response are limited to the following averments: that defendant "would be entitled to deduct from the said $550 [total payments by plaintiff and his brother-in-law after the foreclosure sale] the reasonable rental value of the land . . which embraces the year 1940, and amounts in all to $125; and the amount of reasonable rental that he could deduct from the portion of [the $250] paid to him as above stated by plaintiff could not be for a greater proportion of the saidreasonable rental of $125 than the proportion which the purchase-price payment of $250, made by plaintiff, bears to the total amount of $550 paid on account of the purchase-price" by plaintiff and his brother-in-law; and that the $300 paid by the brother-in-law "must be availed of by the [defendant] to pay at least [the former's] proportionate part of the hereinbefore mentioned reasonable rental value of the said land during . . 1940;" and that "it would be inequitable, unjust, and improper to allow defendant to retain so much of the purchase-money paid to him by plaintiff as will enable him to pay therefrom the entire reasonable rental value of said land for the year 1940."

The defendant demurred on the ground that the original petition stated no cause of action, and that there was no equity in the petition or cause shown for equitable relief. After allowance of the amendment to the petition, subject to demurrer, the defendant demurred to the petition as amended, on the grounds that no cause of action was stated, and that the amendment set up a new and distinct cause of action; and renewed the original demurrer. After revoking an order sustaining all grounds of general demurrer to the petition as amended, the court entered a final order, that "on the merits of the case . . there is no equity in the bill," and dismissed both the original petition and the amendment. The plaintiff excepted.

With regard to plaintiff's prayer for a recovery of his alleged $250 payments, made to defendant after foreclosure, and the question whether plaintiff's averments show that this amount was offset by 1940 rental chargeable against plaintiff, the defendant contends that defendant's "answer to the original petition alleges that [plaintiff] gave [defendant] a rent note for $250 for the year 1940;" that plaintiff's response to defendant's answer "admits that allegation;" and that, since plaintiff incorporated his response to defendant's answer into the amendment to the petition, such admission, showing that plaintiff owed defendant as much as $250 rental, would offset the $250 claimed by the plaintiff, and "end the matter." 1. An equitable petition is not subject to dismissal on general demurrer, if it states a cause of action as to any equitable or legal relief prayed. Grant v. Hart, 192 Ga. 152 (14 S.E.2d 860), and cit.; Lyles v. Watson,189 Ga. 768 (7 S.E.2d 909).

(a) Where, on a renewed general demurrer, the judge dismissed the petition as amended, without passing on the propriety of allowing the amendment as setting up a new cause of action, that question, though raised by special demurrer, can not be considered on exceptions taken to the dismissal of the petition on general demurrer. See, in this connection, Laslie v. Gragg Lumber Co., 184 Ga. 794, 803 (193 S.E. 763), and cit.; Aycock v. Williams, 185 Ga. 585, 588 (196 S.E. 54), and cit.; Tingle v. Maddox, 186 Ga. 757 (198 S.E. 722).

(b) Nor does any question arise as to whether the petition stated a cause of action for a restraining order and injunction against the defendant's enforcement of dispossessory-warrant proceedings against the plaintiff, on the ground that the plaintiff because of poverty could not defend at law by giving the statutory bond (see Napier v. Varner, 149 Ga. 585 (2),101 S.E. 519; Hull v. Holmes, 42 Ga. 180), since, as conceded in the brief for the plaintiff in error, the injunctive relief claimed by the plaintiff has been refused; and no exceptions being taken, such refusal is "now final." The question as to any such equity in the petition is therefore moot.

2. The judge did not err in holding that there was no equity in the petition by an alleged vendee of land against the vendor, in so far as it sought to cancel the deed made by the defendant to himself after his foreclosure sale, since the petition fails to set forth sufficient definite terms of the alleged agreement whereby the foreclosure proceeding would be postponed, and for the further reason that the petition fails to show that the plaintiff on his part complied with the terms of the agreement so far as they were alleged. Nor does the petition set forth with any fullness or definiteness the terms of any alleged new contract of purchase and sale after the foreclosure, or any compliance, or tender in lieu thereof, as to the payment of any moneys then due under the alleged new agreement, such as would authorize a court of equity to recognize and enforce a valid new agreement.

3. While the petition was defective, as set forth in the preceding paragraph, it does allege that under some sort of agreement of repurchase, the defendant after the foreclosure sale accepted from the plaintiff the sum of $250, which he still retains. Since, as alleged, the defendant refuses to recognize the validity of the agreement under which the payment was made, he should be required to refund the amount received and held thereunder, less any proper amount that might be adjudged against the plaintiff as rental.

4. There is no merit in the contention of the defendant, under his general demurrer to the amended petition, that the amendment showed no right to a recovery of any part of the $250 paid by the plaintiff, for the reason that he expressly incorporated into hisamendment to the petition his response to the defendant's answer, and that this response admitted his liability for $250 rental. On examination of these pleadings, it appears that theplaintiff in his response does not admit any rent liability, unless it be for a stated proportionate part of $125.

Judgment reversed. All the Justices concur.