Jones v. Cedartown Supply Company

The plea and answer of the defendant, under which an abatement in the purchase-price was sought against two promissory notes sued on by the plaintiffs, representing the balance due on an agreed purchase-price of a tract of land sold by the plaintiffs, set up an issuable defense. Accordingly, the court erred in sustaining the general demurrer and in dismissing the defendant's plea and answer; and all proceedings thereafter were nugatory. SUTTON, J., dissents.

DECIDED JUNE 5, 1941. Cedartown Supply Company, a corporation, and Mrs. Pauline P. Pickett brought suit against B. M. Jones, alleging, that he was indebted to them on two promissory notes of $1000 each, dated May 29, 1939, one due and payable on November 15, 1939, and the other on January 15, 1940, each of them bearing interest at eight per cent. per annum from maturity, a copy of each being attached to the petition; that the notes were given as part of the purchase-price of a tract of land located in the seventh district and fifth section of Haralson County, Georgia, as described in a bond for title, executed and delivered to the defendant by the plaintiffs, and in the notes; that the defendant had failed and refused to pay said notes and that plaintiffs, by their attorney, had given notice to defendant of their intention to bring suit and that ten per cent. of the principal and interest due on said notes would be demanded as attorney's fees as provided in said notes; and that the defendant was indebted to the plaintiffs $2000 on said notes, with interest and the said attorney's fees. The plaintiffs prayed for judgment in those sums, and for a special lien on the land described in said notes, and that the defendant be required to produce the bond for title which the plaintiffs had delivered to him. The description of the land in question, as appears from a copy of each of the notes sued on, was as follows: "Land lots 109 and 140, all of lot No. 139 except 100 acres, and the north fifty acres of lot 141, all in the 7th district and 5th section of Haralson County, Georgia, as described in bond for title of even date."

The defendant admitted the execution of the two notes sued on, and that the plaintiffs were the legal holders of them; but he denied liability, setting up, by plea as amended, substantially the following: B. M. Jones bought through the agents of the Cedartown Supply Company, a corporation, and Mrs. Pauline P. Pickett a tract of land containing 557 1/2 acres, for a consideration of $5500. He has paid $3500, and the sellers are the legal holders of the two unpaid promissory notes of $1000 each sued on, representing the balance of the purchase-price, which notes Jones admits he duly executed and delivered. He received a bond for title to a described tract of land containing 557 1/2 acres, and was put in possession of the land, and he attaches to his plea a map or plat of such land which he admits comprised 557 1/2 acres. He alleges that when negotiating for the purchase of 557 1/2 acres of land there were pointed out to him by the agents of the sellers 22 3/4 acres of land as part of the tract to be conveyed, and he says that he entered into the contract principally because of the fact that the 22 3/4 acres contained valuable timber which would have afforded him a substantial profit in the sawing and marketing thereof, whereas the timber on the land which he actually obtained was of inferior quality and such that the sawing and marketing thereof, whereas the timber on the land which he actually obtained was of inferior quality and such that the sawing and marketing thereof would not yield more than the cost of production; that he entered upon the 22 3/4 acres containing valuable timber, and after obtaining a large order for lumber he learned that the sellers had no title to it, but that it belonged to Mr. Mitchell, and he was compelled to vacate and could not supply the lumber which he had contracted to sell, and he sustained an expense of $1000; that he is unable to say that the sellers, at the time they represented to him that the 22 3/4 acres were included in the tract sold, knew that their representation was false, or whether it was made by accident or mistake, but he says that, regardless of what they knew or intended, he was defrauded; and he seeks an abatement in the price agreed to be paid, which he avers is the value of the land and timber he did not receive, in the amount of $2000, and also seeks a judgment for $1000 as damages. In short, he sets up that the sum of the two notes sued on in the amount of $2000 should be offset by the value of the 22 3/4 acres not received, which he alleges is $2000, and that he should have judgment for $1000 as damages for expense sustained by him in his preparations for cutting the timber on the 22 3/4 acres.

The plaintiffs demurred to the plea, on the grounds: (a) that no issuable defense to the petition and notes sued on was set out; (b) that the plea attempted to vary the terms of the written contract without setting out sufficient allegations to support and constitute fraud, or to show that the defendant was prevented from investigation, or was in any way induced to enter into the contract of purchase without investigation on his part, or that he exercised any care or diligence whatever to ascertain for himself what he was buying, but chose to rely completely on the representations of those whom he alleges to be the agents of the plaintiffs; (c) that the defendant admits in his answer and amendments thereto all of the facts alleged in the petition which are material to the issue and essential to the maintenance of the plaintiffs' case, and that no issue is made by the answer as amended; that all allegations contained in said answer are immaterial and irrelevant; that the defendant purchased 557 1/2 acres of land and received the same; (d) and that the answer as amended admits the signing of the notes sued on, and presents no defense to the suit. Various paragraphs of the plea and answer as amended were specially demurred to. The court, without passing on the special demurrers, sustained the general demurrer and struck the plea and answer as amended.

At the trial, after the plaintiffs had proved the execution and delivery to them of the two notes sued on, as well as service of notice of intention to bring suit and ask for attorney's fees, verdict and judgment were rendered for $2000 principal, $147.96 interest, and $214.79 attorney's fees. The defendant excepted, assigning error on the sustaining of the demurrer to the plea and answer as amended. While counsel for the defendants in error treat the case as if the special as well as the general demurrer was sustained, the order of the court specifically shows that only the general demurrer was passed on; and the sole issue here presented is whether or not the court erred in sustaining the general demurrer and in dismissing the plea and answer of the defendant. While the purchaser does not allege the value of the land he acquired and the value of the tract with the 22 3/4 acres included, so that it may be determined in what proportion he should be allowed an abatement in the purchase-price, according to the rule laid down in Smith v. Kirkpatrick,79 Ga. 410 (2) (7 S.E. 258), and Doss v. Wooten, 139 Ga. 561,564 (77 S.E. 793), in the event it should be held that under the facts otherwise disclosed he is entitled to a reduction in the purchase-price, the separate value of the 22 3/4 acres not being the measure of damages as the cited cases rule, still it is well settled that "A mere failure of a petition to allege facts showing the correct measure of damages does not render the petition bad as against general demurrer, where the petition otherwise sets out a cause of action. Where it appears from the allegations of the petition that the plaintiff is entitled to recover, and the amount of plaintiff's damage is alleged, the petition is good as against general demurrer." A. C. L. RailroadCo. v. Tifton Produce Co., 50 Ga. App. 614 (3) (179 S.E. 125), and cit. Accordingly, in the present instance the failure of the defendant to set up the proper measure of damages in his plea and answer would not bar him from relief if it is shown that he is entitled to some damages or abatement in the purchase-price and some amount of damage is alleged. Whether he is entitled to any relief will be determined according to the law and the allegations of his plea and answer. "Where a vendor agrees to sell a designated tract of land to another and points out to the latter its boundaries, and the purchaser relies upon the representations of the vendor as to the boundaries, and where such boundaries include lands to which the vendor has no title, in consequence of which the purchaser loses the same, the purchaser, when sued on notes given for the purchase-money, can set off at law the value of the portion of the land so lost, against the purchase-money. This would be true whether the misrepresentations were designedly made by the vendor to deceive the purchaser, or were innocently made, if the vendee relied upon such misrepresentations in making the purchase and was thereby damaged." Gibson v. Alford, 161 Ga. 672 (2-c) (132 S.E. 442). See Smith v. Kirkpatrick, supra; Folsom v. Howell,94 Ga. 112 (21 S.E. 136); Duncan v. Bailey, 162 Ga. 457 (3, 6) (134 S.E. 87). Many other decisions to the same effect, where the pointing out of boundaries was involved, could be cited. In Cohron v. Woodland Hills Co., 164 Ga. 581 (2) (139 S.E. 56), it was held that "A false representation by the sales agent of the seller to the purchaser that a lot was located on a named avenue, which was made to induce the purchaser to buy the lot, and, with the same purpose, was repeated in the sales contract and in the bond for title given by the maker to the purchaser, with knowledge of its falsity, was such a fraud as would entitle the buyer to rescind the contract of sale, and she will not be precluded from so doing by reason of her failure to investigate and inform herself of the truth of the representation before entering into the contract of sale, although such investigation would have shown that such representation was false."

In the present case it is not claimed that the sellers were guilty of actual fraud. Only an instance of legal fraud is presented. In this respect it was said in Gibson v. Alford, supra: "Where the vendor sues the purchaser on notes given by the latter to the former for the purchase-money of land, the purchaser can defend at law by alleging and proving that at the time of the contract of purchase the vendor misrepresented to him the location of one of the boundaries of the tract purchased, whereby he failed to get a portion of the land which he contracted to buy, where such representation was made by the plaintiff to the defendant knowingly and wilfully, and for the purpose of deceiving the latter, and did deceive him to his damage. Brannen v. Brannen, 135 Ga. 590 (69 S.E. 1079). The rule would be the same if the misrepresentation was made innocently by the vendor, if the vendee relied upon such misrepresentation in making the purchase and was damaged. Fraud may exist from misrepresentation by one party which does actually deceive the other party, though the party making it was not aware that his statement was false. Civil Code (1910), § 4113 [Code of 1933, § 96-202]. In the forum of conscience a misrepresentation of the former kind is of a deeper dye than one of the latter kind; but in the forum of law both constitute fraud, the former positive fraud, and the latter legal fraud." The relief afforded the buyer in all of the reported cases is, of course, based on the fact of misrepresentation and the reliance thereon by him to his detriment. It appears in the allegations of the defendant's plea as amended that the plaintiffs, through their agents, pointed out to the defendant a specific tract of land of a specific number of acres. This allegation is sufficiently definite as an identification of the land, even though it is not specifically alleged that the boundaries of the land were pointed out. We are of the opinion that the plea set up a defense against the notes sued on. The court erred in striking the plea. The subsequent proceedings resulting in a verdict and judgment for the plaintiffs were nugatory.

Judgment reversed. Stephens, P. J., and Felton, J., concur.