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HILL v. STEWART.
36099.
Action for damages. Before Judge Perryman. Taliaferro Superior Court. January 20, 1956.
NICHOLS, J.
The petition set forth a cause of action against the defendant for fraud and deceit, and the trial court did not err in overruling the defendant's general and special demurrers.
Carrlton Stewart brought an action against C. J. Hill, in which he alleged the following: On November 13, 1953, in consideration of the sum of $1,000, the defendant gave the plaintiff an option to purchase certain land for $38,000 cash, such option to expire at midnight on the night of November 24, 1953. At the same time and place the plaintiff gave to Wisham & Hall, a partnership, an option to purchase the timber on this same tract of land for $29,000. The consideration for the second option was $1,000, and the option expired at the time the first option expired. Both options were set forth as exhibits to the petition. On or about November 19, 1953, the defendant falsely and fraudulently stated and represented to Wisham & Hall that the plaintiff had shown them some 450 acres of timber that belonged to a neighbor and adjoining land owner of the defendant, that this was some of the best timber showed to the said Wisham & Hall, that Wisham & Hall could not afford to deal with a man of plaintiff's type; that then and there the defendant and Wisham & Hall made an oral agreement whereby the defendant and Wisham & Hall would deal with the plaintiff just as though Wisham & Hall were going to exercise the option held by the partnership, but that just as soon as the option had expired the defendant would sell to the partnership the timber on the said tract for $25 per 1,000 feet; and that the defendant would return to the partnership the $1,000 that the partnership had paid on the option agreement. The defendant knew that the representations made by him to Wisham & Hall were false and fraudulent, and were made to induce Wisham & Hall not to exercise their option to purchase the timber from the plaintiff; that the defendant knew that the partnership had cruised the timber and were ready, able, and willing to exercise the option to purchase the timber, and were going to carry out the option; that the false and fraudulent statements and representations were made by the defendant to the partnership for the purpose of preventing the sale of the timber; that the plaintiff did not know of the false and fraudulent representations made by the defendant to the partnership; but that, if he had known of the agreement between the defendant and the partnership, he could have raised the entire sum of $38,000, the purchase price of the land, and could have enforced his option with the defendant and obtained title to the property. On the morning of November 24, 1953, the defendant falsely and fraudulently represented to the plaintiff that Mr. Hall, of Wisham & Hall, was in Crawfordville, Georgia, on November 23, 1953, and would return on November 24, 1953, to close the deal; that it had been previously agreed between the parties (the partnership, the plaintiff, and the defendant) that the deal would be closed in the office of the defendant's lawyer; that about noon on November 24, 1953, the defendant entered the law office where the deal was to be closed and informed the plaintiff that the said Mr. Hall, of the partnership, had told him to inform the plaintiff that he (Mr. Hall) would arrive about four o'clock that afternoon to close the deal; that the plaintiff waited in said law office until about six o'clock that evening, when the defendant returned to the said law office and stated that the said Hall had advised him that he had to go to Savannah, Georgia, to raise a part of the $29,000; and that he must have had car trouble; but that the
defendant had no reason to worry about the option expiring because the said Mr. Hall would be there in due time. The defendant then turned to his attorney and informed him, in the presence of the plaintiff, to receive the said $38,000 for him when the said Mr. Hall arrived, and to advise the said Mr. Hall that he would execute the papers and close the deal the following morning. The defendant did not, at this time or any other time, advise the plaintiff of the false and fraudulent representations that he had made to Wisham & Hall, or of the agreement that the defendant had with the said Wisham & Hall. The plaintiff believed the said representations made by the defendant to be true and relied on them, thereby being lulled into a sense of security, believing that the said Mr. Hall would arrive during the day or night of November 24, 1953, and exercise his option to purchase the timber and pay the plaintiff the sum of $29,000; that the plaintiff had raised only $9,000; that the defendant knew this; and that the plaintiff was expecting to receive the $29,000 from the partnership in order to close the deal, and it would be impossible for the plaintiff to raise $29,000 in cash at night after the banks had closed. The options expired at midnight on November 24, 1953, and during that same week, November 28, 1953, the defendant sold the timber on the land to the partnership for $26,000, and the partnership was given credit for the $1,000 that the partnership had paid to the plaintiff for the option, which was never exercised. A copy of this contract was attached to the petition as an exhibit. The petition as finally amended shows the value of the land, not including the timber, to be purchased by the partnership to be worth $28,390; that the plaintiff would have received $30,000 for the timber after paying $39,000 for the land with the timber thereon; that the net cost of the land to the plaintiff would have been $9,000; and that, except for the fraud and deceit practiced on him by the defendant, he would have received the land for this sum; and that, because of this fraud and deceit, he has been injured in the sum of $19,390, the difference between the market value of the land with the timber thereon, and the price that the plaintiff would have paid for the land with the timber thereon. (Emphasis ours.)
1. This court, in the case of Cosby v. Asher, 74 Ga. App. 884, 886 (41 S. E. 2d 793), set forth the elements that must be present in a petition in order to set forth a cause of action for fraud and deceit. These elements are as follows: "(a) that the representations were made by the defendant; (b) that they were knowingly and with design false; (c) that they were made for the purpose and intent to deceive and defraud; (d) that they did deceive and defraud; (e) that they related to an existing or past fact; (f) that the party to whom the false statements were made did not know that they were false; (g) that he relied on their truth and suffered a loss." The petition in the present case alleges that, after the defendant had made certain false representations to the partnership that held the option from the plaintiff to purchase the timber on the land, and, after the defendant and the partnership (because of these false representations), entered into an oral agreement under which the partnership would purchase the timber from the defendant for a less price than the partnership would have had to pay for this timber under its option from the plaintiff; that the defendant and the partnership would continue to deal with the plaintiff as though the partnership intended to exercise its option.
The allegations of the petition are merely background and tend to show the reasoning (according to the petition) why the defendant was later guilty of fraud and deceit as to the plaintiff. It cannot be said that the plaintiff acted on these allegations and suffered a loss. See Rogers v. Sinclair Refining Co., 49 Ga. App. 72 (174 S. E. 207).
The only allegations of fraud and deceit that the plaintiff could leave acted on so as to bring the action within the provision of (g), above -- "that he relied on their truth and suffered a loss" -- are the allegations of the petition with reference to the day the option expired. These allegations are that the defendant informed the plaintiff that a member of the partnership would be in town to close the deal on that day, that the defendant told the plaintiff that one of the partners had to go to Savannah to raise a part of the money, and would be there to close the deal around four o'clock that afternoon, and the allegation that the defendant told the plaintiff that the said partner must have had car trouble, but that he would be there in time to close the deal. The plaintiff contends that, if the defendant had not made these false representations to him, he could have raised the money to exercise his option before the same expired; but that, since he relied on the truth of these representations, he was unable to raise the money and his option expired.
There is no allegation in the petition that the partnership had any contact with the plaintiff after the alleged oral agreement was made between the defendant and the partnership to let partnership's option expire; and the only contact alleged between the plaintiff and the defendant was that which occurred on the day the option expired. The petition alleged in part that the plaintiff "was induced to believe that Wisham & Hall would arrive during the day and night that the option would expire." (Emphasis ours.) This shows that the "fraud and deceit" on which the plaintiff's action is based was as to a future event, and ordinarily an action will not lie for fraud and deceit under such circumstances; however, it has been held by this court that an action will lie when a false representation as to a future event is made when the person making such representation knows that such event will not take place; and in view of the allegations of knowledge on the part of the defendant in the present case that no member of the partnership would arrive, and did not intend to arrive, to exercise its option with the plaintiff, the petition was good as against the defendant's general demurrer. See Floyd v. Morgan, 62 Ga. App. 711 (9 S. E. 2d 717), and cases cited.
2. The defendant's special demurrer as to the measure of damages is without merit, inasmuch as the petition did show, in effect, that the measure of damages was the difference between the market value of the land including the timber, less the amount the plaintiff would have had to pay for the land or net, $19,390.
3. In view of what has been said in the first division of this opinion with reference to the allegations of the petition concerning the defendant's transactions with the partnership, the trial court did not err in overruling the defendant's special demurrers to such pleadings.
FELTON, C. J., concurring specially. I concur in the judgment of affirmance. However, it seems to me that the allegations of the petition show a great deal more than facts showing a liability for technical "fraud and deceit." The allegations show a malicious and unjustifiable interference with the plaintiff's right to make a contract and a scheme of fraud and concealment to conceal the wrong so as to produce injury. The overwhelming weight of authority is to the effect that "The act of maliciously inducing a person not enter into a contract with another, which he would otherwise have entered into, is actionable if damages result." 30 Am. Jur. 83, 33; 86 C. J. S. 955, 43; 99 A. L. R. 12 and subsequent annotations; Braden v. Haas, Howell & Dodd, 56 Ga. App. 342 (192 S. E. 508).
Earle Norman, contra.
Clement E. Sutton, Harold F. Richards, for plaintiff in error.
DECIDED APRIL 9, 1956 -- REHEARING DENIED APRIL 27, 1956.
Saturday May 23 02:26 EDT


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