Wilkes v. Rankin-Whitten Realty Co.

16 S.E.2d 170 | Ga. Ct. App. | 1941

Lead Opinion

The petition as amended did not set out a cause of action.

DECIDED JULY 16, 1941. Sam B. Wilkes instituted suit against Rankin-Whitten Realty Company and Everett P. Thomas, alleging that the defendants were indebted to him in the sum of $650 by reason of the following facts: On or about May 26, 1939, the plaintiff purchased for $1500 cash a certain lot in a real-estate subdivision in Fulton County. The defendants acted as selling agents, and represented the owners at the time the plaintiff purchased this lot. The defendant Thomas and J. H. Whitten, as officers and agents of the realty company, represented to the plaintiff at the time he purchased the lot that the company was exclusive agent for the subdivision in which this lot was located, and that no lot therein had been offered for sale or sold for less than $1500. Thomas and Whitten further represented that the company would remain as exclusive agent of such property and that no lot would be sold at a price lower than $1500. These representations were false, and were known to be false at the time they were made, for that the company had offered lots for sale at the price of $1200, and such representations were further false and known to be so by the defendants for that the company thereafter gave up the agency of the subdivision and the remainder of the lots therein were then offered to the public for $1000 each. At the time such representations were made the defendants knew they were false, and they made them for the purpose of deceiving the plaintiff and causing him to pay more for the lot purchased by him than it was worth, and they caused him to pay a greater price therefor than the price at which it was the intention of the defendants thereafter to offer the remainder of the lots for sale. The plaintiff relied on these representations and believed them to be true, and was thereby deceived to his injury and damage in the sum of $500. The defendants further represented that gas for cooking and heating purposes had already been piped by or into the lot and that gas was immediately available on the usual application to the gas company. This representation was false and was known to be false by the defendants at the time the plaintiff purchased the lot, because no gas main had been laid nearby or on the property. Because of this misrepresentation the plaintiff was unable to inhabit the house which he constructed on the lot, and he was forced to reside at a hotel until the gas main could be constructed, and as a result of being without gas the plaintiff was caused an expense of $100. The defendants further represented to the plaintiff that water mains and sewers were already available, and that the only cost the plaintiff would incur in connection with the matter would be the cost of a meter, "but . . petitioner was required to pay the sum of $50 . . for the privilege of tapping on to said sewer." All of these representations were false and were known by the defendants to be false, and were made for the purpose and with the intention of deceiving the plaintiff. The plaintiff relied on these representations to his injury and damage in the sum of $150. The plaintiff relied on each and every representation which the defendants made, to his injury and damage, and he has been damaged in the sum of $650.

The realty company demurred to the petition on the ground that it failed to set forth a cause of action against it. Thomas demurred to the petition on the ground that the allegations thereof set forth no cause of action against him and on the ground that no cause of action was set out therein.

The plaintiff amended his petition by attaching thereto a copy of the warranty deed to the lot purchased by him, which deed recited a consideration of $10 and "other valuable considerations." This deed contained no covenants or warranties other than those usual in and essential to the ordinary warranty deed. The plaintiff further amended and alleged that the representations made by the defendants, as alleged in the original petition, were false and known to be false at the time they were made, and that the defendants made such representations for the express purpose of deceiving the plaintiff, and the plaintiff relied on such representations and was deceived thereby. The plaintiff further alleged that the defendants represented to him that the realty company would continue to represent the owners of the subdivision, and that no lot would be offered for sale at any price less than $1500, and at the time these representations were made the defendants knew they were false, such representations were made for the express purpose of deceiving him, and that he relied thereon, believed such representations to be true, and acted on them to his injury. The plaintiff alleged that there was occasioned a loss of $500, as alleged in the original petition, by reason of the fact that the conduct of the defendants was contrary to the representations made to the plaintiff, in that "shortly after plaintiff purchased the said lot" the company gave up the agency of the subdivision, and "the owners immediately reduced the price of the remainder of the lots" to $1000, and this reduction in price caused the plaintiff's lot to depreciate to the sum of $1000. The plaintiff further alleged that each and every misrepresentation alleged in the petition and amendment was made with the intention of deceiving and defrauding him, and that such misrepresentations accomplished the results intended, and that the misrepresentations as to future events were made with the express purpose of inducing the plaintiff to buy the lot when the defendants then and there knew that such representations were false.

The judge sustained the demurrers and dismissed the action. The plaintiff excepted. 1. The amended petition, construed most strongly against the plaintiff, did not set forth a cause of action. The petition did not allege that the lot purchased was not worth $1500 when purchased, and the allegation that the selling of adjoining lots at a price less than $1500 caused the lot to depreciate in value is an allegation of damage too remote, speculative, and conjectural, especially in view of the fact that a house has been built on the lot involved subsequently to its purchase.

2. The allegation of damage arising out of the alleged necessity to pay a hotel bill was demurrable for the reason that there were no circumstances alleged which would authorize the conclusion that such a damage was in the contemplation of the parties, or which showed that the plaintiff could not have discovered the facts complained of in time to avoid the consequences.

3. The requirement of the authorities with reference to the sewer connection privilege was a matter of governmental regulation, knowledge of which was imputable to the plaintiff. Injury from misrepresentation as to such a regulation and requirement is not actionable.

The court did not err in sustaining the general demurrer. Judgment affirmed. Sutton, J., concurs. Stephens, P. J.,dissents.

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Dissenting Opinion

This is not a suit against the former owners of the lot sold to recover damages on account of the alleged fraud, or to rescind the sale, but it is a suit against the real-estate agents of the owners to recover damages of them alleged to have been caused by false representations made by such agents to induce the plaintiff to purchase the lot and which did induce him to purchase it. Therefore the familiar principle of law that "`Where one purchasing real estate has the opportunity of examining it before buying, but, instead of doing so, voluntarily relies upon the statements of the vendor concerning its character and value, the contract will not be rescinded or set aside, or the purchase-price of the land abated, because of the falsity of such statements, unless some fraud or artifice was practiced by the vendor to prevent such examination," and "this is true even though the vendee in buying the land may have acted upon the misrepresentations of the vendor or his agent'" (Elliott v. Dolvin, 34 Ga. App. 788, 131 S.E. 300), is not applicable. The plaintiff has purchased the lot and paid for it. He is not seeking to recover of the former owners any portion of the purchase price. If he paid more than the lot was worth, he is not seeking to abate the purchase price or "welsh" on his bargain. He alleges that he made the trade and paid $1500 for the lot because of certain representations made by the real-estate agents, which were known by the agents at the time they made them to be false, and which were made with the express purpose of deceiving the plaintiff and causing him to buy the lot and pay more for it than it was worth.

"Wilful misrepresentation of a material fact, made to induce another to act, and upon which he does act to his injury, will give a right of action." Code, § 105-302. The section of the Code immediately preceding this section, Code § 105-301, provides: "Fraud by one, accompanied with damage to the party defrauded, in all cases gives a right of action." In Fenley v. Moody,104 Ga. 790 (30 S.E. 1002), the Supreme Court held that false representations, relating to real estate and affecting its value, which were made by the owner to another with intent to deceive and which actually did deceive such other to his injury and induce him to purchase the property for more than its value, gave a right of action of deceit to the vendee against the vendor, when the falsity of such representations could not have been ascertained by an examination of the premises purchased. An examination of the lot purchased by the plaintiff would not have disclosed that no "lot in said subdivision" had been sold or offered for sale for less than $1500.

The plaintiff alleges that the agents falsely stated that "no lots" in the subdivision had been sold or offered for sale for less than $1500, whereas lots therein had been sold and offered for sale for $1200. He alleges that the agents represented that the lots of the subdivision, including the lot sold to the plaintiff, were furnished with gas facilities, which was an untrue statement which the defendants knew to be false when made; that these agents represented that the lot was furnished with water facilities and sewer, and that this was untrue and known to be untrue at the time the defendants so represented; and that the plaintiff relied on these representations and purchased the lot for $1500 to his injury. It is alleged that the plaintiff was damaged in the sum of $500 by reason of the fact that the price of the remaining lots of the subdivision was thereafter reduced to $1000 and that lots were offered for sale at that figure. He alleges in effect that the value of the lot purchased by him was therefore but $1000, and that he sustained a loss of $500, by reason of the false statements and representations of the defendants, in the value of the lot he purchased. There was no special demurrer as to the measure of damages or as to any of the elements of damages alleged. If the allegations of the petition as amended show a right to recover any amount of damages on account of the alleged fraud the general demurrer was erroneously sustained.

An agent is personally liable for false representations made in the sale of his principal's property. An agent is personally liable for false representations which induced the purchasing of property of his principal which would not otherwise have been purchased. 20 A.L.R. 112, 114; American Law Institute, Restatement, Agency, § 348. All persons who are active in defrauding others are liable for what they do, whether they act in one capacity or another. It has been held that an agent for a vendor of land is liable to a purchaser for damages resulting from his fraud or misrepresentation in the sale of the land where he makes misrepresentations as to the land to be sold, and that a right to recover from the agent is not dependent on the plaintiff's being able to show that the owner of the land would be liable. See annotations, 99 A.L.R. 412. In Collins v. Philadelphia Oil Co., 97 W. V. 464 (125 S.E. 223), the Supreme Court of West Virginia held that the doctrine of caveat emptor was not a complete shield to all sorts of false bargaining, and that an agent for the sale of land would be personally liable for misrepresentations relatively to the price regardless of the liability of the owner therefor.

I do not concur in the judgment of the majority that the court properly dismissed the petition on general demurrer.