Gignilliat v. Borg

• Decision Date: 14 February 1974
• Docket Number: No. 48730,3,2,Nos. 1,48730,s. 1
• Parties: William R. GIGNILLIAT, III v. Jeanette L. BORG
• Court: Georgia Court of Appeals

Page 479

205 S.E.2d 479

131 Ga.App. 182

William R. GIGNILLIAT, III v. Jeanette L. BORG.

No. 48730.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Feb. 14, 1974.

Rehearing Denied March 7, 1974.

Rees R. Smith, Atlanta, for appellant.

Heyman & Sizemore, W. Dan Greer, William B. Brown, Atlanta, for appellee.

Syllabus Opinion by the Court

EBERHARDT, Presiding Judge.

Gignilliat, the appellant, and Orr contracted to purchase from Mrs. Borg certain land in Gwinnett County, delivering Orr's check for $5,000 to Mrs. Borg as earnest money. The purchasers defaulted in closing under the contract terms, and Orr's check was returned by the bank with a notation thereon 'account closed.' Mrs. Borg then sued Gignilliat and Orr to recover the earnest money which, under the sales contract, she was entitled to retain because of the default of the purchasers. Orr did not defend, but Gignilliat answered, asserting that the purchasers had negotiated with a son-in-law of Mrs. Borg in arriving at the sales contract and that he had represented to them that the land was zoned under Gwinnett County ordinances as R-100 for residential development, when, in fact and in truth about two-thirds of it, lying adjacent to the Chattahoochee River, was zoned F-H or flood hazard, and for that reason it could not be developed, that there had been reliance upon this representation in entering into the sales contract, and that if the purchasers had known the true facts they would not have agreed to buy the property.

Mrs. Borg moved for summary judgment against Gignilliat, and from the grant of her motion Gignilliat appeals. Held:

1. Zoning is a legislative function of the county. Barton v. Atkinson, 228 Ga. 733(3), 187 S.E.2d 835. Thus, whether land has been zoned, and if so, the uses which may be made of the land under the applicable law or ordinance is a matter of law.

2. The contract of sale was expressly made 'subject to zoning ordinances affecting (the land),' and thus put the purchasers on notice of whatever ordinances Gwinnett County may have adopted applicable to the particular land. The ordinances were equally accessible to the seller and the purchasers for determining what their effect on use of the land might be.

The sales contract provided for time and opportunity to the purchasers to make full investigation concerning the land, including the making of a survey by a registered surveyor, an examination of the title by counsel and the procuring of title insurance. These investigations would logically lead to an investigation of the status of the land under the zoning ordinances, and this is particularly true since the contract was expressly made subject to them. But whether the purchasers did so or not, 'with equal opportunities for knowing the truth, a party grossly failing to inform himself must take the consequences of his neglect.' Dortic v. Dugas, 55 Ga. 484, 496(6). See also, Salter v. Brown, 56 Ga.App. 792(1), 193 S.E. 903; Lewis v. Foy, 189 Ga. 596, 6 S.E.2d 788.

One is presumed to know what zoning regulations do or do not permit. Maloof v. Gwinnett County, 231 Ga. 164, 166, 200 S.E.2d 749.

3. A misrepresentation as to the status of the law, or as a matter of law, or as to its effect upon the subject matter of a contract is a statement of opinion only and can not afford a basis for a charge of fraud or deceit in the making of the contract. Thus, it has been held that a representation that a Mexican divorce would be valid did not constitute fraud or deceit, though a party had relied upon it in securing the divorce and subsequently entering into a marriage to one who had made it. (Christopher v. Whitmire, 199 Ga. 280, 34 S.E.2d 100); nor did a representation that it would be necessary to convey title to one who engaged in growing tobacco on a farm in order to sell it under the government allotment program. (Dixon v. Dixon, 211 Ga. 557, 562(2), 87 S.E.2d 369); nor a representation that a contract was a valid and legal one. (Beckmann v. Atlantic Refining Co., 53 Ga.App. 671, 187 S.E. 158); nor a representation to a seller of peanuts that the purchaser must pay a processing tax thereon, and thus must reduce the price to be paid (Salter v. Brown, 56 Ga.App. 792, 193 S.E. 903, supra); nor a representation that liquor stored in a residence (rather than in a warehouse) was not subject to a government floor tax (Bernstein v. Peters, 69 Ga.App. 525, 26 S.E.2d 192); nor was an insurance agent's representation to the insured that he had a stated coverage under his policy, when in fact no such coverage existed (Fields v. Fire & Cas. Ins. Co. of Conn., 101 Ga.App. 561, 114 S.E.2d 540; Brown v. Mack Trucks, Inc., 111 Ga.App. 164, 141 S.E.2d 208); nor a representation that certain merchandise purchased out of the state would not be subject to the use tax (Drake v. Thyer Mfg. Corp., 105 Ga.App. 20, 123 S.E.2d 457). In each of these cases it was contended that the misrepresentation was as to a material fact upon which there had been reliance in entering into a contract, and thus constituted fraud and deceit, but we held the representation to have been one of law only, which afforded no basis for a charge of fraud and deceit.

In a situation closely analogous to that here it was held in Levin v. Kissena Manor Corp., 17 Misc.2d 746, 184 N.Y.S.2d 863, affirmed in 10 A.D.2d 649, 199 N.Y.S.2d 408, that 'Failure of vendors under contract to sell land, to reveal to purchasers that there had been a change in zoning classification of land, after (the) contract was signed but before the closing, could not constitute fraud where there was no confidential or fiduciary relationship between (the) parties and where (the) contract of sale provided that (the) premises were conveyed subject to zoning regulations and ordinances and amendments thereto.' And see Scott v. Wilson, 15 Ill.App.2d 456, 146 N.E.2d 397, where it was held that a representation that occupancy of a basement apartment did not violate the city building ordinance was not one of fact but one of law, with respect to which the purchaser of the building had equal opportunity with the seller of informing himself, and that it afforded no basis for a claim of fraud and deceit.

Nor does the case of Flannagan v. Clark, 207 Ga. 345, 61 S.E.2d 485 require a different judgment here. In that case Mr. Flannagan was operating a stable and barn where horses were to be kept and boarded and trained for owners who kept them for riding, for fees of $50 per month, and $75 if training were required. He proposed a sale of a one-half interest in the business, including the property itself, to Mrs. Clark, representing to her that he had contracts for 150 horses and showed her horses on the premises, and detailed to her plans for enlarging the facility by construction of additional barns, a clubhouse and a booth for selling tickets, and that the property was zoned and being used for that purpose. She purchased the half interest, paying $3,846.15 in cash, received a warranty deed, and executed a deed to secure debt on the half interest back to Flannagan for $3,750, balance of the purchase price. Thereafter she learned that the horses which had been shown to her were those of Flannagan, and not those of customers, that he had no contracts for the boarding, keeping and training of horses, that the barns had previously been used for a dairy and that by a zoning resolution it had been provided that when the dairy use ceased the land would be restricted to residential use.

She brought suit against Flannagan to rescind the contract and to recover the cash payment which she had made, charging fraud and deceit on the part of Flannagan in the making of the several representations concerning the business. The matter was submitted to a jury, and a verdict for the plaintiff was returned, and this was affirmed.

There are several differences in that case and that with which we deal here. In the first place, there were false representations of fact as to the status of the business in which Flannagan was selling a half interest, and these were material. He represented that he had a substantial business based upon contracts with owners for the keeping and boarding of 150 horses each of which would bring in from $50 to $75 each per month, when, in truth and in fact he had no such contracts and had no business at all.

That he may also have made a misrepresentation concerning the zoning status, and thus expressed a legal opinion which was erroneous does not alter the situation. Moreover, a careful reading of the case reveals that no point was made as to whether this representation was one of fact or of law, nor did the court pass on it.

4. 'All persons, of course, are presumed to know the law.' Carnes v. State, 115 Ga.App. 387, 393, 154 S.E.2d 781, 787; Smith Realty Co. v. Hubbard, 124 Ga.App 265(3), 183 S.E.2d 506. "Misrepresentations as to a question of law 'can not constitute remedial fraud, because every one is presumed to know the law and therefore can not in legal contemplation be deceived by erroneous statements of law, and such representations are ordinarily regarded as mere expressions of opinion.' (citation). And this is especially so where there is no confidential relationship between the parties. (Citations)." Swofford v. Glaze, 207 Ga. 532, 535, 63 S.E.2d 342, 344.

The cases of Fenley v. Moody, 104 Ga. 790, 30 S.E. 1002; Waldon v. Stokes, 23 Ga.App. 428, 98 S.E. 367, and others of like tenor, do not require a different result. Those cases deal with a misrepresentation as to the existence of a contract relating to easements or appurtenances to land. In Fenley it was falsely represented that the landowners on...