Republic Mortg. Corp. v. Beasley, 43297

• Decision Date: 09 February 1968
• Docket Number: No. 43297,No. 3,43297,3
• Citation: 160 S.E.2d 429,117 Ga.App. 303
• Parties: REPUBLIC MORTGAGE CORPORATION v. Ben T. BEASLEY, Jr., et al
• Court: Georgia Court of Appeals

Page 429

160 S.E.2d 429

117 Ga.App. 303

REPUBLIC MORTGAGE CORPORATION v. Ben T. BEASLEY, Jr., et al.

No. 43297.

Court of Appeals of Georgia, Division No. 3.

Feb. 9, 1968.

Rehearing Denied Feb. 23, 1968.

Certiorari Denied April 9, 1968.

Syllabus by the Court

1. Where a petition was filed, general demurrers interposed and sustained with leave to amend, an amendment filed, and the original demurrers renewed to the petition as amended, all prior to September 1, 1967, it was not error for the trial court, on September 6, to pass on such demurrer rather than declaring them moot under the new Civil Practice Act.

2. An action for fraud and deceit must affirmatively allege, among other facts, some action taken by the plaintiff which was directly induced by the defendant's misrepresentations. This petition fails to show any act done by the plaintiff which would have made it possible for the defendant to implement the alleged misrepresentations.

3. Where an act alleged to be a breach of the attorney-client relationship might or might not with equal consistency have been the cause of the plaintiff's loss, the petition fails to show that such act was the proximate cause of the loss.

Republic Mortgage Corp. filed suit against McLean and his attorney, Beasley, alleging generally in a two count petition that it had been damaged by the failure of the latter to record a security deed executed to the plaintiff by Federal Mortgage & Discount Co., Inc., as a result of which the maker of the note and deed to secure debt, who is insolvent, sold the property to an innocent purchaser and plaintiff lost its security. The petition shows generally that McLean, represented by Beasley, had obtained a judgment against Townsend, president of Federal Mortgage & Discount Co. and Berger, president of Republic Mortgage Corp., in their individual capacities. The judgment debtors were anxious that the judgment not be placed on the execution docket, and an agreement was entered into by which Townsend would pay off the judgment at the rate of $1,000 per month and that defendants would not have it recorded. Beasley had physical possession of the security deed which also was not recorded. Some time later Republic Mortgage Corp. sought to foreclose on the property described therein and it was discovered that it was presently owned by the Salvation Army, an innocent purchaser, thus destroying the lien of the unrecorded security instrument. The plaintiff contends in Count 1 that as consideration for allowing Townsend to pay off the judgment by installments and as additional security for McLean the defendants demanded physical possession of the security deed and also that the plaintiff executed and delivered an assignment of the deed to secure debt to him by virtue of a 'Moratorium and Hypothecation Agreement' which is attached as an exhibit to the petition, that Beasley assured Berger, plaintiff's president and one of the judgment debtors, that he would promptly record the same and that he was given a check by the trustee in bankruptcy for this purpose; plaintiff relied on Beasley to record the deed; Beasley represented that he would do so, but falsely and fraudulently and with the present intention of deceiving plaintiff, took the deed and did not record it because he hoped this would generate friction between Berger and Townsend which he might use to the advantage of other clients. Count 2 alleges that on March 30, 1965, (more than a year later) Republic Mortgate Corp. employed Beasley to foreclose its security deed against Federal Mortgage & Discount Co; Beasley did nothing until April 12, 1965, at which time he wrote the plaintiff advising it that on the previous Firday, Williams Street Realty Co., transferee of the property from Federal Mortgage Discount Co., had recorded a deed in favor of the Salvation Army, a bona fide purchaser for value. With the letter Bealsey returned the retainer which had been given him on March 30, This count proceeds on the theory that Beasley, as attorney for the plaintiff in this transaction, was acting in a fiduciary capacity toward it and was negligent in failing to record the deed, failing to advise that the deed had not been recorded, failing to act for approximately two weeks following his employment, and accepting employment in a situation where he had a conflict of interests.

The trial court sustained the general demurrers as renewed to the petition as amended and plaintiff appeals.

O'Kelley, Hopkins & VanGerpen, William C. O'Kelley, Atlanta, for appellant.

Hugh G. Head, Jr., Cotton & Katz, Richard A. Katz, Atlanta, for appellees.

DEEN, Judge.

1. Code Ann. § 81A-186 provides that after September 1, 1967, the Civil Practice act shall be effective in all further proceedings in actions then pending 'except to the extent that in the opinion of the court its application in a particular action pending when this Title takes effect would not be feasible or would work injustice, in which event the former procedure applies.' The trial court thus has an option as to which law to apply to proceedings pending on the effective date of the Act. Where, as here, prior to such date a petition had been filed, general demurrers thereto sustained with leave to amend, an amendment filed and the original demurrers renewed to the petition as amended, it was not error to apply the same rules on September 6, 1967, in passing on the renewed demurrers as in passing on the original demurrers. This court on appeal will consider the same rules of procedure followed by ...