Middlebrooks v. Lonas

Decision Date25 November 1980
Docket NumberNo. 36460,36460
Citation246 Ga. 720,272 S.E.2d 687
PartiesMIDDLEBROOKS v. LONAS et al.
CourtGeorgia Supreme Court

William A. Alexander, Marshall M. Bandy, Jr., Ringgold, for appellant.

Lindsey H. Bennett, Jr., Hubert E. Hamilton, III, Rossville, for appellees.

JORDAN, Presiding Justice.

Mary Middlebrooks filed a complaint against W. L. Lonas and Elvira Lonas, her parents, alleging that, in reliance on their promise to repay, she had loaned them $25,000 which they had since used to build a home on land which they owned, that they now refused to repay said loan and that, "The above and foregoing transactions, promises, and delays constitute fraud and as such the defendants herein hold the said $25,000 through and by constructive and implied trust in favor of the plaintiff." The plaintiff further alleged that, "The defendants herein have pledged, mortgaged and borrowed money upon the land ... as well as all improvements thereon."

The defendants moved for summary judgment on the ground that the plaintiff's complaint failed to state a claim upon which equitable relief could be granted and on the ground that they had factually pierced the plaintiff's allegation that they had promised to repay the $25,000 without a present intent to do so. The trial court granted said motion and the plaintiff appeals. We reverse.

1. Appellee's motion to dismiss the appeal as premature is denied. We decline to overrule the holding in Gillen v. Bostick, 234 Ga. 308, 215 S.E.2d 676 (1975). See Elwell v. Nesmith, 246 Ga. 430, 271 S.E.2d 827 (1980).

2. Code Ann. § 108-106 states that "Trusts are implied ... where, from any fraud, one person obtains the title to property which rightly belongs to another." (Emphasis supplied.)

A promise made without a present intent to perform is a misrepresentation of a material fact and is sufficient to support a cause of action for fraud. Hayes v. Hallmark Apts., 232 Ga. 307, 309, 207 S.E.2d 197 (1974).

Thus, assuming that the remedies at law are inadequate, if a plaintiff proves that a defendant promised to repay a loan and did so without a present intent to perform, the plaintiff can "enforce either a constructive trust or an equitable lien on the fund," Dobbs, Remedies, Ch. 5, § 5.16, p. 423 (1973), and, further, if a plaintiff proves that the fraudulently procured funds were used by the defendant to purchase other property, the plaintiff can reach the other property "by a proceeding in equity, and ... can enforce a constructive trust or an equitable lien." Pittman v. Pittman, 196 Ga. 397, 409, 26 S.E.2d 764 (1943); Accord, U. S. Fidelity & Guaranty Co. v. Richmond County, 174 Ga. 599, 600, 163 S.E. 482 (1931).

In the present case, it is undisputed that the defendants used the $25,000 to build a home on land which they already owned. Accordingly, assuming that the plaintiff's remedies at law are inadequate, if the plaintiff proves that the defendants promised to repay the $25,000 and did so without a present intent to perform, the plaintiff would be entitled to an equitable lien on the home and land. See, Dobbs, supra, at pp. 11-12, 249-50, 424; Restatement of Restitution, § 206, p. 837 (1937).

"A remedy at law, to exclude appropriate relief in equity, must be ... the substantial equivalent of the equitable relief. It is not enough that there is a remedy at law. It must be plain and adequate, or, in other words, as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity." Atlantic C. & R. Co. v. Gunn, 185 Ga. 108, 110, 194 S.E. 365 (1937).

Regarding the inadequacy of her remedies at law, the plaintiff alleged that the defendants had mortgaged the home and lot. "A creditor of a mortgagor who obtains his judgment (at law) subsequently to the execution of a mortgage which has been duly registered takes it...

To continue reading

Request your trial
22 cases
  • Amusement Industry, Inc. v. Stern
    • United States
    • U.S. District Court — Southern District of New York
    • March 1, 2010
    ...repay a loan and did so without a present intent to perform, the plaintiff can enforce ... an equitable lien on the fund." Middlebrooks, 246 Ga. at 721, 272 S.E.2d 687 (citation and internal quotation marks omitted). Moreover, "if a plaintiff proves that the fraudulently procured funds were......
  • Vann v. DeKalb County Bd. of Tax Assessors
    • United States
    • Georgia Court of Appeals
    • January 20, 1988
    ...as the remedy in equity, it will exclude appropriate equity relief. Sherrer v. Hale, 248 Ga. 793(2), 285 S.E.2d 714; Middlebrooks v. Lonas, 246 Ga. 720(2), 272 S.E.2d 687, citing Atlantic Coast Line R. Co. v. Gunn, 185 Ga. 108, 194 S.E. 365. OCGA § 48-5-311 provides a plain and adequate rem......
  • Mitsubishi Intern. Corp. v. Cardinal Textile Sales, Inc.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • February 9, 1994
    ...contrary. In Watkins v. Watkins, 256 Ga. 58, 344 S.E.2d 220, 221 (1986), the court explained that: This court in Middlebrooks v. Lonas, 246 Ga. 720(2), 272 S.E.2d 687 (1980), held that a constructive trust or equitable lien can be imposed to obtain repayment of a loan when the loan was frau......
  • Hunnicutt Const., Inc. v. Stewart Title and Trust of Tucson Trust No. 3496
    • United States
    • Arizona Court of Appeals
    • November 19, 1996
    ...1128-29 (9th Cir.1990) (applying Washington law); In re Marriage of Allen, 724 P.2d 651, 658 (Colo.1986); Middlebrooks v. Lonas, 246 Ga. 720, 722, 272 S.E.2d 687, 689 (1980); Frankel v. Otiswear, Inc., 216 Ill.App.3d 204, 214-215, 160 Ill.Dec. 1, 576 N.E.2d 955, 961-62 (1991); Cox v. Waudby......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT