Judgments
Adhered to After Rehearing July 23, 1936.
Syllabus by Editorial Staff.
In suit
for specific performance of contract giving plaintiff option
to buy land, rejection of amendment to one defendant's
answer enlarging upon former allegations of fraud on part of
plaintiff in procuring contract which had been stricken and
offering to return payments received for option held
error.
Where
bank held two duly recorded security deeds to certain land
fact that second security deed represented interest on amount
secured by prior deed held not to destroy its
efficacy as security.
Where
bank was holder of duly recorded security deeds to land, one
of which was executed prior to date of plaintiff's option
to buy such land, bank's interest held superior
to plaintiff's alleged claim of right to specific
performance of option contract.
Petition
in action for specific performance of option contract
held not to state cause of action as against
defendant bank holding duly recorded security deeds conveying
same land under which it had interest superior to
plaintiff's.
Where
reviewing court had determined that plaintiff's petition
did not state cause of action against defendant bank
plaintiff's assignments of error objecting to allowance
of amendment to bank's answer thereby became immaterial.
Error
from Superior Court, Burke County; A. L. Franklin, Judge.
Suit by
D. Ford McCormick against W. H. Franklin, the First National
Bank of Milledgeville, and others. To review an adverse
decree, defendant Franklin brought error and plaintiff and
the defendant National Bank assigned error in separate
cross-bills of exceptions.
Judgment
on the main bill of exceptions and on the cross-bill of the
National Bank reversed, and the cross-bill of exceptions of
plaintiff dismissed.
In suit
for specific performance of contract giving plaintiff option
to buy land, rejection of amendment to one defendant's
answer enlarging upon former allegations of fraud on part of
plaintiff in procuring contract which had been stricken and
offering to return payments received for option held error.
Omitting
formal parts, the following paper, attested by two witnesses
(one of them a notary public), was executed by the purported
maker, and was subsequently recorded in the county as deeds
to land are required to be recorded: "This agreement
made and entered into this the 29th day of May, 1931, by and
between W. H. Franklin of Burke County, Georgia, and D. Ford
McCormick of Staunton, Virginia, witnesseth that the said W
H. Franklin, for and in consideration of the sum of two
hundred fifty dollars ($250.00) cash in hand paid, the
receipt whereof is hereby acknowledged, does grant, bargain,
and sell unto the said D. Ford McCormick, the sole right to
drill and prospect upon the property of the said W. H.
Franklin in Washington County, Georgia, consisting of four
hundred ninety-nine and one-half (499 1/2) acres, more or
less, and known as the Captain J. I. Thomason place in
Deepstep District 99 in Washington County, Georgia; it being
the intent of this agreement to grant all the rights herein
granted as to all the land of the said W. H. Franklin in said
Washington County, Georgia, whether specifically included in
the foregoing description or not. And the said W. H. Franklin
does grant, bargain, and sell to the said D. Ford McCormick
the right and option to purchase the whole of said property
at and for the sum of fourteen thousand ($14,000.00) dollars
to be paid in cash upon the exercise of this option and
delivery of the deed as herein provided, and * * * the right
to purchase any number of acres of said land that the said D.
Ford McCormick elects to purchase at and for the sum of forty
($40.00) dollars per acre for all acceptable clay lands, and
thirty ($30.00) dollars per acre for all other lands which
the said D. Ford McCormick may so elect to purchase. The
question as to which are acceptable clay lands is to be
determined by the result of the drilling by
the said D. Ford McCormick and his heirs, representatives,
and assigns, and the judgment of the said D. Ford McCormick
as to what are acceptable clay lands shall be accepted as
final. This option is to terminate at the expiration of six
(6) months from the date hereof; but it is agreed that if the
said D. Ford McCormick shall pay to the Atlanta Joint Stock
Land Bank for the said W. H. Franklin two hundred ten
($210.00) dollars that will be due by the said W. H. Franklin
to said bank on August 10, 1931, then this option shall be
extended for an additional six (6) months. And if the said D.
Ford McCormick shall pay to the said bank two hundred ten
($210.00) dollars due by the said W. H. Franklin on April 10,
1932, this option shall be extended for another additional
six (6) months. And if the said D. Ford McCormick shall pay
to the said bank two hundred ten ($210.00) dollars due by the
said W. H. Franklin on October 10, 1932, this option shall be
extended for another additional six (6) months. If while this
option is in force and effect the said D. Ford McCormick
shall notify the said W. H. Franklin of his election to
exercise this option and purchase either all or any part of
said property, the said W. H. Franklin binds himself to make
to the said D. Ford McCormick good and sufficient title in
fee simple by warranty deed to the property so purchased,
upon the payment of the purchase-price in cash. It is
expressly understood and agreed that if the said D. Ford
McCormick shall exercise this option to purchase the whole or
any part of said property, all sums paid by the said D. Ford
McCormick hereunder as a consideration for this option shall
be credited upon and reduce the amount of said
purchase-price. It is further distinctly understood and
agreed that this option is binding upon the heirs,
representatives, and assigns of the said W. H. Franklin and
shall be assignable by the said D. Ford McCormick to inure to
the benefit of his heirs, representatives and assigns."
D. Ford
McCormick instituted suit against Franklin, the Atlanta Joint
Stock Land Bank (hereinafter referred to as the Land Bank),
the First National Bank of Milledgeville (hereinafter
referred to as the National Bank), and other named defendants
not necessary here to state. The action was for specific
performance of the contract on the part of Franklin and for
marshaling assets as between the other defendants as his
creditors holding liens on the land. The petition was several
times amended, subject to demurrer. Franklin demurred to the
petition, and to the amendments, and to the petition as
amended. He also filed an answer. The petitioner demurred to
certain paragraphs of the answer. The judge overruled the
demurrers interposed by the defendant, and sustained the
demurrers to the answer. This judgment was affirmed.
Franklin v. McCormick, 180 Ga. 170, 178 S.E. 441.
After that decision the case came on for further hearing
during the May term, 1935, of the trial court. At that trial
Franklin offered an amendment to his answer, which was
disallowed, and he excepted pendente lite. The answer before
amendment, in so far as relates to fraud of the plaintiff in
procuring the contract and offer to restore money paid to the
defendant by the plaintiff on the contract, alleged
substantially the following:
"And
for further plea and answer this defendant says that he is
not bound to specifically perform said contract, * * * in
that the plaintiff perpetrated a fraud upon petitioner in
obtaining said option, * * * said fraud being committed in
the following manner. Defendant is a farmer and cultivates
the land described in the petition, and on or about the
second day of October, 1930, he was approached by the
petitioner, who represented himself as an expert in judging
clays, mineral and clay lands, and obtained from him an
option to purchase the mineral rights, or all or any part
of the clay land of said property, for the price of $100 an
acre, said option contract being for ninety days from date,
with the right and permission to drill and test the clays
and minerals of the same; and later at instance of
petitioner an extension of this option was granted at the
instance of petitioner for ninety additional days making
the final expiration thereof to March 1, 1931. During this
time petitioner, his agents, engineers, and servants went
upon said property and drilled the same, removing therefrom
large quantities of clay in the process of prospecting and
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