Collier v. Sinkoe

• Decision Date: 02 September 1975
• Docket Number: No. 2,No. 50513,50513,2
• Citation: 218 S.E.2d 910,135 Ga.App. 732
• Parties: J. T. COLLIER, Jr. v. E. A. SINKOE
• Court: Georgia Court of Appeals

Page 910

218 S.E.2d 910

135 Ga.App. 732

J. T. COLLIER, Jr. v. E. A. SINKOE.

No. 50513.

Court of Appeals of Georgia, Division No. 2.

Sept. 2, 1975.

Rehearing Denied Sept. 19, 1975.

Lipshutz, Macey, Zusmann & Sikes, Winston H. Morriss, Gus H. Small, Jr., Atlanta, for appellant.

Hayes, Hayes & Gaskill, Mose S. Hayes, Jr., Atlanta, for appellee.

PANNELL, Presiding Judge.

Eldred A. Sinkoe brought a complaint against James T. Collier, Jr., seeking recovery of a balance due upon a promissory note, plus interest and attorney fees. The attorney fees were subsequently eliminated. Defendant Collier in his answer denied the material allegations of the complaint and other than the defense of failure to state a claim attempted to set up the following defenses: That complainant, on or about February 23, 1972, sold to defendant certain improved real estate, being two buildings containing apartment units, for the sum of $67,000; that defendant executed and delivered to Peachtree Federal Savings & Loan Association a note and first loan deed to the property to secure the note in amount of $52,000, the proceeds of which were paid to complainant as a part of the purchase price of the property, and in addition thereto executed and delivered to the complainant a $12,000 note and second loan deed to secure the same, as a part of the consideration, and also paid complainant an additional sum in excess of $3,000; that, thereafter, Peachtree Federal Savings & Loan Association foreclosed its loan deed on the property and bought the property in itself but never had the sale confirmed. The answer then complains that complainant's failure to require confirmation of the sale 'and to thereby obtain fair market value' (alleged to be enough to pay both debts) 'constitutes payment, release, and discharge of the note sued upon.

Defendant further alleged that the second loan deed and note 'was or is a 'dry mortgage' the parties never intending said transaction to impose personal liability of defendant' to complainant.

The defendant also interposed a counterclaim seeking recovery of money spent on repairs of $3,000 and the loss of $4,000 on the sale of the property because of his reliance upon a representation of complainant that the property was 'in good rentable condition.'

Upon the trial, a verdict was directed for the complainant for principal and interest on the note sued upon and against the defendant on his counterclaim. Defendant appealed.

1. The Act of 1935 (Ga.L.1935, p. 381; Code Ann. § 67-1503) providing that when any real estate is sold on foreclosure without legal process, no action may be taken to obtain a deficiency judgment unless the Judge of the Superior Court of the County in which the land lies confirms and approves such a sale, applies only where a deficiency is sought after sale by the security holder. In the present case, the first security holder had foreclosed and sold the property. The complainant here was the holder of a second security instrument and was not a party to the sale under the first, and could properly sue on the note for which his instrument was given to secure, this not being an action for a deficiency judgment. See in this connection Langley v. Stone, 112 Ga.App. 237, 144 S.E.2d 627; First Nat. Bank & Trust Co. v. Kunes, 128 Ga.App. 565, 197 S.E.2d 446, affirmed First Nat. Bank & Trust Co. v. Kunes, 230 Ga. 888, 199 S.E.2d 776.

2. 'While the doctrine of caveat emptor applies to the sale of realty, and there are no implied warranties as to title or the physical condition of the property sold and ordinarily a purchaser buys at his own risk (Walton v. Petty, 107 Ga.App. 753, 131 S.E.2d 655), this strict rule has been modified in a number of instances where fraud has been involved; as to title, where fraudulent representations are made, Rice v. Warren, 91 Ga. 759(2), 17 S.E. 1032; Holliday v. Ashford, 163 Ga. 505, 136 S.E. 524; fraudulent representation as to encumbrances, Leyden v. Hickman, 75 Ga. 684; Oliver v. O'Kelley, 48 Ga.App. 762, 173 S.E. 232; false representations as to easements and appurtenances, Waldon v. Stokes, 23 Ga.App. 428(1), 98 S.E. 367; Fenley v. Moody, 104 Ga. 790, 30 S.E. 1002; fraudulent representations as to quality of land sold, Smith v. Kirkpatrick, 79 Ga. 410(2), 7 S.E. 258; Estes v. Odom, 91 Ga. 600, 18 S.E. 355; false representations as to type of tenancy, Bridges v. Pafford, 6 Ga.App. 689, 65 S.E. 700; false representations as to boundary, Duncan v. Bailey, 162 Ga. 457, 134 S.E. 87; Puckett v. Reese, 203 Ga. 716, 48 S.E.2d 297; false representations as to quality of lumber in house, Griffin v. Butler, 45 Ga.App. 771, 166 S.E. 60; false representations as to water supply, Pressley v. Jones, 64 Ga.App. 419, 13 S.E.2d 394; fraudulent concealment or nondisclosure of large sewer on the premises resulting in damage to house constructed thereon and to the land itself, Davis v. Hopkins, 50 Ga.App. 654, 179 S.E. 213.' Whiten v. Orr Construction Co., Inc., 109 Ga.App. 267, 268, 136 S.E.2d 136, 137.

3. 'Under repeated rulings of the courts of this State, where a purchaser of real estate who inspected it was not prevented by fraud on the part of the seller from inspecting it properly, or from making any other inquiry or investigation with respect thereto, and failed to exercise diligence in doing so, he cannot have an abatement of the purchase price because of false representations of the seller with respect to its character or value, although in buying the land he may have acted upon misrepresentations of the seller touching these matters under an express assurance from the seller that he would be safe in doing so. Tindall v. Harkinson, 19 Ga. 448; Allen v. Gibson, 53 Ga. 600; Newbern v. Milhollin, 31 Ga.App. 247, 120 S.E. 637, and citations. In other words, the courts, in such a case, will not rescue him from that against which by reasonable diligence he could have protected himself. The purchaser, however, is not obliged to exhaust all means at his command before relying upon the...