12 S.E.2d 585 | Ga. | 1940
1. A misrepresentation by a vendor of land that it is free of liens is material; and if the vendee is thereby induced to enter upon the contract of purchase and sale, he may, upon discovering the fraud, rescind the contract and recover the portion of the purchase-price paid. In such case it is immaterial that the lien has not in fact been enforced.
2. In a suit of the above character the court did not err in repelling evidence offered by the vendor that the annual rental value of the property was approximately the amount of the yearly instalments to be paid on the purchase-price.
3. The court did not err in overruling the demurrer to the petition, and the motion for new trial.
It was alleged, that during the negotiations which led up to the execution of the contract the defendant represented to the plaintiff that the land belonged to him, and that there were no liens whatever against it; that the plaintiff relied upon this representation by the defendant, and executed the contract believing in good faith that the land was unencumbered; that in fact there was an outstanding security deed executed by the defendant, which conveyed the property to the Land Bank Commissioner to secure a debt of $4500, that the representation made to the plaintiff was false, was made with intent to deceive and did actually deceive him, in that, relying on such representation, he entered upon the contract of purchase and sale and paid $800 of the purchase-price; *290 that the plaintiff had not entered into possession of the property under the contract; and that on November 26, 1938, after the contract was executed on November 2, 1938, the plaintiff notified the vendor of his intention to rescind the contract, and thereupon demanded a return of the portion of the purchase-price which had been paid. The plaintiff prayed that the contract be canceled, and that he have judgment against the defendant in the amount which he had been paid.
The defendant's demurrer to the petition was overruled. The jury returned a verdict in favor of the plaintiff. The defendant excepted to the overruling of his demurrer and his motion for new trial.
1. Counsel for both sides properly treat the contract as one of purchase, and not of lease. See Lytle v. Scottish AmericanMortgage Co.,
The fact is that if, after discovery of the security deed the plaintiff had recognized the contract by entering into possession of the land and making payments thereunder, awaiting pecuniary damage to himself by enforcement of the security deed against the property, he would have been estopped to claim a rescission because of the fraudulent representation, and would have been relegated to an action for damages. Gibson v. Alford, supra;Pruden v. Middleton,
The above views seem to be in accord with the former rulings of this court and the Court of Appeals. Coffee v. Newsom,
In Coffee v. Newsom, supra, it was held: "Where the vendee went into the possession of a settlement of land purchased of the vendor upon the faith of his representations as to the title thereto, which representations were false and fraudulent, and known to have been so by the vendor at the time of making them, . . a court of equity would retain a bill at the instance of the vendee to rescind the contract, notwithstanding the vendee had not been evicted from the possession of the premises, nor abandoned the possession thereof, nor had offered to do so." InSouthwestern Railroad v. Papot, supra, it was said: "Complainants brought their bill against defendants, to recover certain stock or its value, the consideration of which was certain work performed by them in completing a railroad and a transfer to defendants of stock therein. Defendants sought relief by cross-bill, on the ground that they had been led to purchase such stock and make such contract by the *293
representations of complainants that the road was free of incumbrances or debts, and that the object of the contract was to obtain a controlling interest in such road free and unincumbered and operate the same in connection with their line, that the representations were false and fraudulent, that liens existed, and in fact the road had been sold thereunder: Held, that to support such defense and entitle defendants to relief, it would be sufficient to show, that the misrepresentations or suppression of facts were of such a nature that the property purchased was of no value to the purchasers for the purposes for which it was bought, or that the purchasers would not have bought had theyhad knowledge of the defect. The defense is not rendered nugatoryby a failure to prove an actual sale under the existing liens."
(Italics supplied.) If the defendant had paid off the security deed prior to notice from the plaintiff of his intention to rescind, and had thus rectified his misrepresentation so that it was no longer a misrepresentation in fact, the plaintiff would not have been entitled to rescind, Summer v. Hogsed,
It has been held that "A purchaser of land, who is in possession, can not have relief in equity, against his contract to pay, on the mere ground of a defect of title, without a previous eviction." McGehee v. Jones,
2. The court did not err in repelling evidence offered by the *294 defendant, to the effect that the annual rental value of the premises was approximately the amount of the yearly instalments to be paid on the purchase-price. This evidence was immaterial, because the contract was one of purchase, and not a contract of lease; and whether or not the amounts to be paid under the contract over a period of years constituted more or less than the fair rental value of the property did not, in view of what has been said, affect the right of the plaintiff to rescind. The court did not err in overruling the demurrer and the motion for new trial.
Judgment affirmed. All the Justices concur.