154 Ga. App. 206 | Ga. Ct. App. | 1980
Mr. and Mrs. Bridgers (Sellers) brought suit alleging default and seeking to recover $180,994.30 plus interest and attorney fees on a promissory note executed by Investors America, Inc. (Buyer)
It appears from the evidence that on September 6, 1974 the parties contracted for the sale of low income rental property; that the sales contract required the property be in the same condition at closing as at the date of said sales contract except for natural wear and tear; and that this condition was met. The sales contract is silent as to housing code compliance. Buyer inspected the property prior to signing the sales contract. At closing on October 1, 1974 Mr. Bridgers was asked among other things whether the property met the requirements of the housing code. There is conflicting testimony as to his response, Buyer contending that he stated the property was in compliance with the housing code. Sellers contend that he said the property substantially met everything, but that "you can never get these properties 100 percent to meet the housing code at any one time.” Nonetheless, at closing Buyer executed the subject promissory note as well as a security deed to the property. On March 1, 1975 Buyer set forth its allegation of misrepresentation in a letter to Sellers and requested rescission or a money settlement sufficient to make the repairs necessary to bring the apartment units into compliance with the housing code. Neither rescission nor a money settlement was reached. Buyer had considerable difficulty making timely payments and was faced with foreclosure on three separate occasions before ultimately ceasing performance under the note in October of 1976.
Sellers enumerated as error the trial court’s denial of their
In support for their motions for directed verdict, Sellers contend that the sales contract required only that the property be in the same condition at closing as at the date of said contract and that there were no other warranties concerning the property. Sellers argue that the alleged misrepresentation at closing could not become part of the sales contract because this would amount to modification of the contract without valid consideration. Buyer counters that it has a separate cause of action for fraud and deceit by virtue of Seller’s alleged misrepresentation and that its being bound to purchase the property prior to the alleged misrepresentation is irrelevant. Buyer’s contention is without merit.
In order to recover on its counterclaim for fraud and deceit, Buyer must allege and prove that it sustained loss and damage as a proximate result of Sellers’ alleged misrepresentation. See Gaultney v. Windham., 99 Ga. App. 800 (109 SE2d 914) (1959). Generally, a party may recover for fraud where he has sustained some pecuniary damage or injury whereby he is put in a position worse than he would have occupied had there been no fraud. However, fraud inducing a party to perform his legal obligations, such as the performance of a binding contract, is nonactionable as not causing damage. 37 CJS 289, Fraud, § 41; see Hinton v. Mack Purchasing Co., 41 Ga. App. 823 (155 SE 78) (1930). There was no allegation nor evidence of representations being made as to housing code compliance prior to execution of the sales contract on September 6. Therefore, Buyer was legally obligated to purchase the property notwithstanding any misrepresentation Sellers may have made at the October 1 closing.
Judgment reversed with direction.