Arey v. Davis, 29570

• Decision Date: 18 February 1975
• Docket Number: No. 29570,29570
• Citation: 233 Ga. 951,213 S.E.2d 837
• Parties: William G. AREY v. Baxter L. DAVIS et al.
• Court: Georgia Supreme Court

Page 837

213 S.E.2d 837

233 Ga. 951

William G. AREY v. Baxter L. DAVIS et al.

No. 29570.

Supreme Court of Georgia.

Feb. 18, 1975.

Rehearing Denied March 17, 1975.

Savell, Williams, Cox & Angel, J. Caleb Clark, III, Edward L. Savell, Atlanta, for appellant.

Davis, Matthews & Quigley, Baxter L. Davis, L. Brown Bivens, Atlanta, for appellees.

Omer W. Franklin, Jr., Atlanta, for State Bar of Georgia.

Syllabus Opinion by the Court

INGRAM, Justice.

Plaintiff appeals the trial court's grant of a summary judgment in favor of defendants in this equitable action seeking either cancellation and rescission of a warranty deed from plaintiff to defendants or the imposition of a resulting or constructive trust on the property to the extent of plaintiff's claimed interest therein.

The plaintiff's complaint is in two counts. Count 1 alleges that plaintiff was the assignee of a sales contract for the purchase of land by R. Stewart Johnson from Jewel C. Gooch; that the defendant lawyers were employed to examine the title to the property and to represent the plaintiff at the closing of the sale; that at the sale closing in defendants' offices, it was agreed that R. Stewart Johnson, the original purchaser under the contract, would contribute $38,500 toward the purchase price and the balance of approximately.$19,000 was to be paid by plaintiff; that plaintiff paid his share to the defendant lawyers, but that the check given defendant lawyers by Mr. Johnson to close the sale was later returned unpaid by the bank due to insufficient funds; that the defendant lawyers paid funds to make up the deficiency of $38,500 and then demanded that both Mr. Johnson and plaintiff pay them the $38,500, but neither was able to do so.

Plaintiff's complaint further alleged that 'in reliance upon the advice of defendant law firm through Ronald L. Quigley, Johnson and plaintiff executed a demand note for $38,500, payable to the firm members, and a deed to secure debt on subject property and delivered same to the defendant law firm.' Plaintiff also alleged that subsequently the defendants initiated foreclosure proceedings which were withdrawn because '(R)elying upon instruction from the defendant law firm . . . plaintiff executed and delivered a warranty deed conveying all right, title and interest in the property to the members of the firm.'

Plaintiff alleges that at all times material hereto he was the client of the defendant lawyers and '(A)ll actions of plaintiff were based upon legal advice from defendants to plaintiff upon which plaintiff relied. Plaintiff was never advised by defendants to seek independent counsel.' Count 1 of the complaint contends that under the facts alleged in it, the defendants' acquisition of the property was fraudulent. Count 2 incorporates the allegations of Count 1 and alleges that because of the attorney-client relationship between the parties, 'it was against principles of equity and justice for defendants to acquire fee simple title to subject property without recognizing any right, title or interest in plaintiff . . .' Plaintiff prayed for a jury trial and the specific relief described earlier.

Without detailing all of the evidence considered on the defendants' motion for summary judgment, we find no dispute as to the following material facts: Plaintiff employed defendants to examine the title to the property he was purchasing from Jewel C. Gooch as the assignee of R. Stewart Johnson and to close the sale. Defendants made the title search, prepared the necessary documents to close the sale from the purchaser to plaintiff and handled the receipt and disbursement of funds at the closing of the sale in their offices. At closing, defendants anticipated a check in the amount of $48,500 from plaintiff for the seller. However, Mr. Johnson, the original purchaser on the contract, came with plaintiff to the closing and informed defendants that plaintiff was going to give his check for $10,000 and that he, Mr. Johnson, was going to pay the balance of $38,500 on behalf of plaintiff to close the sale. These two checks were accepted by defendants and deposited in their secrow account. The seller was then given a check for $48,500 by defendants from their escrow account and the seller executed and delivered a warranty deed and other closing documents to the plaintiff as the purchaser. Plaintiff expended other sums under the contract prior to closing, making his total investment in the property approximately.$19,000.

Subsequent to the closing, Mr. Johnson's check for $38,500 was returned by his bank unpaid due to insufficient funds and defendants borrowed the money to make their escrow check good to the seller. Defendants were never paid as attorneys for their services. Upon learning Mr. Johnson's check for $38,500 was not honored by his bank, defendants immediately contacted Mr. Johnson in regard to it. Plaintiff testified in his deposition that Mr. Johnson told him, 'there had been a problem with the check and it was going to be necessary to sign a note-and Rock Johnson told me that my signature on the note was necessary because I had been listed as the purchaser on the property, but that he accepted full responsibility for the fact that the check had not gone through and that he would in fact be able to secure funds to make the check good.' Plaintiff further testified that Mr. Johnson told him it would be necessary to go to defendants' offices to sign the note. Plaintiff and Mr. Johnson came to defendants' offices and signed a demand note and plaintiff signed a security deed covering the property in favor of defendants. According to defendants, they 'did not advise (plaintiff) to sign the deed to secure debt or the note, but were making a courteous insistence that he do so.' Defendants did not at any time advise p...