159 Ga. 736 | Ga. | 1925
The evidence demanded a finding that the contract was entered into, that the earnest money that was sued for was paid by the vendees (plaintiffs), and that the vendor (defendant) did not ever acquire a merchantable title that he could convey to the vendees. A controlling question made by the assignments of error in the petition for certiorari is, can the vendor in the circumstances above enumerated retain the earnest money ? Properly construed, the contract was not for an interest in the prior executory contract held by the vendor for purchase of the land, but was an unconditional contract to sell and convey by a warranty deed a merchantable title to the land, subject to “existing leases” and specified “reservations,” the passing of such title “to take place within” a named day, time being “of the essence of the” contract, the earnest money to be retained by the vendor “in case of breach” by the purchaser, and to be returned to the purchaser “if title to the premises are not merchantable.” In Wells, Fargo & Co. v. Page, 48 Oregon, 74 (82 Pac. 856, 3 L. R. A. (N. S.) 103), Benson and Hyde contracted to sell Gilbert certain land which they did not own at the time the contract was made, but which they promised to acquire and convey. It was provided that Gilbert should pay for the land as it should be conveyed to him in parcels,
In the opinion it was said: “The money in dispute was the property of Gilbert, and was deposited with the bank by him. He is therefore ■ entitled to its return, unless Benson and Hyde have a cause of action against him for a default in the performance of •the contract. He deposited the money as security for the performance of his contract, to be forfeited only in case of his default, and, whether it be regarded as liquidated damages, as security for actual damages sustained,, or as a sum to be forfeited to the vendors in case of the vendee’s default, is immaterial, unless he is liable for failure to comply with the contract. [Then follows a discussion of the evidence showing that Benson and Hyde did not acquire title to the land.] It thus appears that Benson and Hyde were at no time in a position, during the life of the contract, to require Gilbert to receive and accept the deeds, the delivery of which was made a condition precedent to the payment by him of the purchase-price and necessary to put him in default. They did not own, and could not have conveyed, or caused to be conveyed, the land which they had agreed to sell, and which Gilbert had agreed to purchase
In Smith v. Lamb, 26 Ill. 396 (79 Am. D. 381), it was held that
In Pearson v. Horne, 139 Ga. 453 (3 a) (77 S. E. 387), it was held: “Where'it was alleged that the owner of the property sold it to a third person without affording to the plaintiff an opportunity to purchase it in accordance with the terms of the contract, and thus put it out of her power to comply with the contract, no tender on the part of the plaintiff was necessary.” Applying the foregoing-principles to the case under consideration, the earnest money was the property of the plaintiffs, because the undisputed evidence showed that the defendant did not ever have or acquire title to the' property which he contracted to convey. It was essential that he should have such title at the time fixed by the contract for its conveyance, in order to give him any claim to the earnest money which he received as a part of the purchase-price. As he did not have such title, it was not necessary for the plaintiffs to have paid or tendered payment of the balance of the agreed purchase-price as a condition to a rescission or repudiation of the contract and a demand for the return of their money. As the evidence demanded a finding that the defendant did not have title which he could convey in pursuance of his contract, the trial judge properly directed a verdict for the plaintiffs, and the Court of Appeals erred in reversing that judgment. Judgment reversed.