Johnson v. Sherrer

• Decision Date: 08 March 1944
• Docket Number: 14753.
• Parties: JOHNSON v. SHERRER et al.
• Court: Georgia Supreme Court

29 S.E.2d 581

197 Ga. 392

JOHNSON v. SHERRER et al.

No. 14753.

Supreme Court of Georgia

March 8, 1944

Syllabus by the Court.

1. The allegations of the petition were sufficient, as against general demurrer, to show that the deed the plaintiff sought to cancel was procured by fraudulent representations on the part of the defendant, while acting as agent, together with a suppression of material facts in reference to the value of the land and timber, and that there was no such lack of diligence on the part of the grantor as to bar a recovery.

2. The allegations of the petition as amended were sufficient, as against general demurrer, to state a cause of action for the cancellation of a deed.

3. The ground of demurrer, complaining that the plaintiff was not a proper party to question the validity of the deed because the petition failed to allege she was an heir at law of the grantor, was met by amendment.

4. The objections set forth in the exceptions pendente lite, (1) that the amendment added a new party, (2) a new cause of action, (3) it was an attempt to vary the terms of the deed and (4) it did not allege a sufficient tender, cannot be passed upon, for the reason that such questions were not included in the original demurrer or in its renewal to the petition as amended, and the record does not show that they were passed upon by the trial judge.

5. The evidence was sufficient to authorize a charge on the question of whether the deed was procured by fraud, and the court did not err in charging the jury the language of the Code sections relating to fraud, as complained of in special grounds 1 to 6, of the motion for new trial.

6. The instruction, 'If you believe under the evidence, * * * that [defendant] was not in possession of this property, even though he held the deed, that he was not in possession * * * under a complete and full title, * * * you would be authorized to consider parol testimony as to whether he was holding under a warranty deed or a security deed, regardless of the question of fraud,' was not an incorrect statement of the law. On the contrary, it was merely a charge that if the jury should believe under the evidence that defendant was not in possession 'under a complete and full title,' but as agent for the grantor, then under the law the grantor would still be in possession, in which event a deed absolute in form could be shown to have been made to secure a debt.

7. The exceptions to the charge, because the court only gave the jury two general forms for their verdict, and because the jury found a general verdict without passing on the question of fraud, are without merit, since it does not appear that the defendant requested any additional instructions, or objected at the time the jury returned a general verdict.

8. Parol evidence is admissible to show that what appears to be an absolute deed is void on account of fraud in its procurement.

9. The evidence, though conflicting, was sufficient to support the verdict.

Mrs Ellen Sherrer filed a petition in Taliaferro superior court against M. L. Johnson seeking cancellation of a deed as a cloud upon her title.

On October 29, 1929, J. A. Sherrer (petitioner's husband) purchased a described tract of land containing 146 acres, for a consideration of $1,000, received a deed under which he entered into possession, and held possession until he died on September 10, 1940. Eighteen days later the defendant had recorded a deed dated March 5, 1940, which purported to convey the land from petitioner's husband to the defendant.

The prayers were for process, that the deed dated March 5, 1940 be cancelled as a cloud upon plaintiff's title, and for general relief.

A demurrer was interposed by the defendant on the grounds: (1) The petition does not set out a cause of action. (2) The value of the property, being land and timber, the grantor had an equal opportunity to ascertain the value, and neither he nor any one in privity with him can plead fraud or mistake in the sale. (3) Plaintiff, not being an heir at law of the grantor (such fact not being pleaded), is not a proper party to question the validity of the deed. The trial judge sustained the 3rd ground of the demurrer, with leave to the plaintiff to amend, and overruled the other grounds.

Plaintiff amended her petition by alleging that the grantor died intestate, leaving petitioner as his surviving widow and leaving one minor child.

On November 4, 1940, the property in question was set apat as a year's support for the petitioner and her minor child. Since the last mentioned date, the petitioner has been in possession. The minor child, Willis H. Sherrer, by Mrs. Ellen Sherrer as next friend, was added as a party plaintiff.

The defendant filed exceptions pendente lite to the judgment overruling the 1st and 2nd grounds of his demurrer.

The plaintiff was also allowed to amend her petition by alleging that if the deed was delivered it was not intended as an absolute deed, but as a deed to secure debt.

Defendant renewed his demurrer to the petition as amended, which was overruled, and filed exceptions pendente lite.

The jury found a verdict in favor of the plaintiff, and that the deed be cancelled upon the payment of $400 to the defendant.

The exception is to an order overruling the defendant's motion for a new trial as amended. Error is also assigned in the bill of exceptions on the exceptions pendente lite.

J. A. Mitchell of Crawfordville, and W. A. Slaton, of Washington, for plaintiff in error.

Osgood O. Williams and Hawes Cloud, both of Crawfordville, for defendants in error.

ATKINSON, Justice (after stating the foregoing facts).

1. The petition contained substantially the following allegations in reference to fraud: The grantor had resided in North Carolina for many years before and at the time the alleged deed was purported to have been executed, was not familiar with conditions in Georgia, and did not know the value of the land and timber. If the deed was delivered it was for the purpose of allowing the defendant to act as agent for the grantor in selling the land; or the deed was procured by fraudulent means, in that, for the purpose of deceiving the grantor, who had no opportunity to observe, the defendant wilfully misrepresented that there was no timber growing on the land, though in fact there were about two hundred thousand feet of sawable timber worth five dollars per thousand. Defendant represented to the grantor that similar land had sold for less than two dollars an acre, whereas the land in question was worth $2500. There was a great inadequacy between such value and the consideration which was stated as 'thirty dollars, and all taxes and other costs,' together with a suppression by the defendant of material facts, and representations made by the defendant which were acted upon by the grantor. There was a confidential relation because the defendant was a brother-in-law of the grantor. The relation being such, the grantor relied on the defendant, and the latter exercised a controlling influence over the former. In the circumstances the deed was obtained by fraud.

As against general demurrer, the allegations were sufficient to show that the deed the plaintiff sought to cancel was procured by fraudulent representations on the part of the defendant, while acting as agent, together with a suppression of material facts in reference to the value of the land and timber, and that there was no such lack of diligence on the part of the grantor as to bar a recovery. While a party must exercise reasonable diligence to protect himself against the fraud of another, he is not bound to exhaust all means at his command to ascertain the truth before relying upon the representations. Ordinarily the question whether the complaining party could ascertain the falsity of the representations by proper diligence is for determination by the jury. Elliott v. Marshall, 179 Ga. 639(1), 176 S.E. 770.

There is no presumption that a confidential or fiduciary relation exists between brothers-in-law solely from the fact that they are so related. Crawford v. Crawford, 134 Ga 114(1), 67 S.E. 673, 28 L.R.A.,N.S., 353, 19 Ann.Cas. 932; Bryan v. Tate, 138 Ga. 321, 323, 75 S.E. 205; Ellis v. Hogan, 147 Ga. 609(1), 95 S.E. 4; Stephens v. Walker, 193 Ga. 330, 332, 18 S.E.2d 537. Accordingly, if a confidential or fiduciary relation exists between brothers-in-law, it must be shown by proof, and the burden is upon the party asserting the existence of such relationship to affirmatively show the same. This principle is in harmony with the decision in Sims v. Ferrill, 45 Ga. 585(5), cited in 136 A.L.R. 1301, where this court held: 'Trust and confidence reposed in a brother-in-law by his widowed sister-in-law required the utmost good faith and fair dealing in any contract of sale between them. A misrepresentation of the law by the brother-in-law to his sister-in-law, whereby she is led to believe that her title to property held by her is invalid, and on this account she sells it to him, which sale is much to his advantage, vitiates the sale at her election, even though such misrepresentation was made in good faith.' Furthermore, in the case at bar the defendant was also alleged to be the agent of his brother-in-law. In Williams v. Moore-Gaunt Co., 3 Ga.App. 756(1), 60 S.E. 372, it was said: 'The relationship of principal and agent, being confidential and fiduciary in character, demands of the agent the utmost loyalty and good faith to his principal. Any breach of this good faith whereby the principal suffers any disadvantage and the agent reaps any benefit is a fraud of such nature as to preclude the agent from taking or retaining the benefit.' And the Code,§ 4-204, declares: 'Without the express consent of the...