Fletcher v. Fletcher
| Decision Date | 30 September 1924 |
| Docket Number | 4080,4093. |
| Citation | 124 S.E. 722,158 Ga. 899 |
| Parties | FLETCHER v. FLETCHER ET AL. FLETCHER ET AL. v. FLETCHER. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
Under the oral contract between T. Y. Fletcher and E. L. Fletcher by which they agreed to exchange lands, for the failure of T Y. Fletcher to perform his agreement therein to lift the incumbrance on his tract, so that the same could be conveyed to E. L. Fletcher free therefrom, and to build thereon a dwelling, E. L. Fletcher could, without the consent of T. Y Fletcher, rescind the incompleted contract of exchange, upon restoring the latter to the condition in which he was before the contract was made, T. Y. Fletcher being insolvent and unable to respond to E. L. Fletcher in damages for the breach of his agreements in the respects mentioned. Civil Code 1910 § 4306.
The right of one party to rescind a contract for nonperformance by the other party of his obligations thereunder is not confined to covenants in their strict legal sense, but extends to agreements other than such covenants. Sentell v. Mitchell, 28 Ga. 196; Willingham v. Hooven, 74 Ga. 233, 58 Am.Rep. 435; Williams Mfg. Co. v. Warner Refining Co., 125 Ga. 408, 412, 54 S.E. 95; Georgia Supply Co. v. Coffee, 8 Ga.App. 502, 69 S.E. 1083.
This case does not come within the rule that an absolute deed of conveyance will not, at the instance of the grantor, be canceled merely because of a breach by the grantee of a promise made by him in consideration of which the deed was executed (Brand v. Power, 110 Ga. 522, 36 S.E. 53; Christian v. Ross, 145 Ga. 284, 88 S.E. 986; Moore v. Turner, 146 Ga. 197 [3], 91 S.E. 13; Whidby v. Willis, 151 Ga. 43, 105 S.E. 470) because the present suit is not one to cancel an absolute conveyance, and because the vendor in this case is insolvent. In cases of covenants a breach thereof, coupled with insolvency of the covenantor, will authorize a decree of cancellation of an absolute deed of conveyance, although the instrument contains no condition upon the happening of which the estate is to determine. McCardle v. Kennedy, 92 Ga. 198, 17 S.E. 1001, 44 Am.St.Rep. 85; Wyatt v. Nailer, 153 Ga. 72, 111 S.E. 419. By parity of reasoning, a court of equity will more readily decree the rescission of an incomplete and unconsummated oral agreement for the exchange of lands, where one of the parties fails to perform his part of the contract, upon performance of which the oral agreement was to be consummated by the execution of proper instruments of conveyance.
The erection by a party to an oral agreement for the exchange of lands of valuable improvements on the tract which he receives and takes possession of under the exchange, such party taking possession and making such improvements relying upon the promise of the other party to perform his obligations under the agreement, upon the performance of which the trade was to be consummated by the execution of the necessary papers, will not prevent such party from seeking a rescission of such oral agreement, for the nonperformance by the other party of his obligations thereunder, in consequence whereof such party entirely loses the tract which he was to get under the exchange, the party so failing to perform having become insolvent and unable to respond in damages to the party seeking the rescission. Restoration does not require that the opposite party shall be placed in the exact situation in which he was before the exchange, but only that he be placed substantially in his original position, and that the party rescinding shall derive no unconscionable advantage from the rescission. 4 R.C.L. 511, § 23. The rescinding party, not being in default, would be entitled to an allowance for the value of permanent, substantial improvements erected by him on the land of his adversary. Lytle v. Scottish American, etc., Co., 122 Ga. 458(12), 50 S.E. 402. Likewise, the fact that the plaintiff had disposed of timber on the land so received by him under the exchange, and that one of the mules received by him under the exchange had died, would not deter him from rescission, he offering to account for the value of the timber and the mule.
The petition sufficiently alleges that the plaintiff notified the defendant of his intention to disaffirm the contract, and that he had offered to restore the status before the institution of this suit.
Where the defendants took possession of the land of the plaintiff under the parol contract of exchange hereinbefore mentioned and received therefrom rents and profits sufficient to discharge the debt secured by the plaintiff's deed to the defendant, Fletcher, the plaintiff, by appropriate equitable pleadings could sue for a rescission of the parol contract of exchange, and an accounting and recovery of the land, the last relief being based on the ground that such rents and profits were sufficient to discharge the debt; and if on the hearing it should appear that the plaintiff was entitled to rescission of said contract, and that the secured debt had not been wholly discharged, a verdict may be rendered fixing the amount of the debt remaining unpaid, and finding the property for the plaintiff on payment of such amount. Waller v. Dunn, 151 Ga. 181, 106 S.E. 93. An accounting between the parties being necessary to fix the amount of the secured debt, no formal tender of the actual amount which may be due the defendant and grantee in the security deed was necessary; and it was sufficient for the plaintiff in his petition to offer to pay whatever amount might be found to be due to the defendant Fletcher, upon an accounting. Wynne v. Fisher, 156 Ga. 656, 119 S.E. 605.
The equity under a contract for value is superior to that of a mere volunteer. Civil Code 1910, § 4525. It follows that the equity of a party to an oral contract for the exchange of lands, who is entitled to a rescission of such contract for nonperformance by the other party thereto of his covenants thereunder, is superior to the equity of a donee who claims under gift from the party in default the land of the party seeking to rescind the contract, and to recover the land which he was to exchange for the land of the party so in default.
The plaintiff's amendment to his petition did not set up a new and distinct cause of action, and the trial court properly overruled an objection to its allowance on this ground.
Applying the above principles, the court below erred in sustaining the demurrer, either upon its general or special grounds.
Error from Superior Court, Ben Hill County; D. A. R. Crum, Judge.
Action by E. L. Fletcher against T. Y. Fletcher and others. Judgment for defendants and plaintiff brought error, and defendants cross-error. Reversed on main bill of exceptions, and affirmed on cross-bill.
In 1912 E. L. Fletcher owned a lot of land of 333 acres in Irwin county and wanted to borrow money thereon. His brother, J. E. Fletcher, also owned land, and wanted to borrow money. Both brothers thinking that the financial standing of J. E. Fletcher was such that he could better succeed in getting loans for both by having the title to E. L. Fletcher's land in his name, E. L. Fletcher made an unconditional deed to his land to J. E. Fletcher for the purposes stated. J. E. Fletcher carried out the plan as agreed and succeeded in getting the desired loan for E. L. Fletcher, and also a loan for himself. E. L. Fletcher remained in possession of his land. At the time of the above agreement J. E. Fletcher was indebted to his brother, T. Y. Fletcher, and later became still further indebted to T. Y. Fletcher. In consideration of his then and further indebtedness to T. Y. Fletcher, E. L. Fletcher agreed to have J. E. Fletcher convey the title to said land to T. Y. Fletcher, with the understanding and agreement that the latter hold the title as security for such indebtedness as E. L. Fletcher owed or might afterwards owe to T. Y. Fletcher; the conveyance, however, being subject to a loan of $3,300 on E. L. Fletcher's land, which had been borrowed by him in accordance with the agreement with J. E. Fletcher. The deed from J. E. Fletcher to T. Y. Fletcher was made on July 10, 1912, being a regular warranty deed of conveyance, subject to the loan deed of $3,300 which had been made by George M. Forman, and was accepted by T. Y. Fletcher to be held only as security for the indebtedness due by E. L. Fletcher to T. Y. Fletcher, and any further indebtedness to him, with the agreement that T. Y. Fletcher would reconvey the property to E. L. Fletcher upon the payment of such indebtedness. At the time of this agreement E. L. Fletcher was in actual possession of this land, and T. Y. Fletcher knew that the title had been originally conveyed to J. E. Fletcher for the purposes above stated.
In January, 1918, T. Y. Fletcher owned, subject to loan deed or deeds, a large body of land, consisting of various lots in Irwin, Turner, and Tift counties. Among them was a lot of land known as No. 15 in the second district of Turner county containing 550 acres. T. Y. Fletcher had conveyed this body of land, embracing said lot, by deeds to secure debts amounting to $83,000. T. Y. Fletcher...
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