Walker v. Galt, 12343.

• Decision Date: 07 March 1949
• Docket Number: No. 12343.,12343.
• Citation: 171 F.2d 613
• Parties: WALKER et al. v. GALT et al.
• Court: U.S. Court of Appeals — Fifth Circuit

171 F.2d 613 (1948)

WALKER et al. v. GALT et al.

No. 12343.

United States Court of Appeals Fifth Circuit.

November 17, 1948.

As Amended on Denial of Rehearing December 23, 1948.

Writ of Certiorari Denied March 7, 1949.

Thomas H. Anderson, of Miami, Fla., for appellants.

James M. Crum and C. A. Hiaasen, both of Ft. Lauderdale, Fla., for appellees.

Before HUTCHESON, SIBLEY, and WALLER, Circuit Judges.

Writ of Certiorari Denied March 7, 1949. See 69 S.Ct. 656.

SIBLEY, Circuit Judge.

Appellee Galt and his wife, citizens of Illinois, sued W. H. Meeks and wife and Horace E. Walker and wife, who are citizens of Florida, to cancel a deed to certain land in Florida made by the Galts to the Meeks on Nov. 18, 1946, and one from the Meeks to the Walkers made on Nov. 30, 1946, both duly recorded Dec. 2, 1946. The suit was filed Jan. 6, 1947, and offered to do equity by depositing the consideration received by the Galts in court for its disposition. The answer of the Walkers, the Meeks not defending, denied the fraud alleged, and set up that since acquiring the land and prior to the institution of the suit they had expended $15,000 in making alterations and repairs to the building. There were no prayers in the answer.

The court found that Walker, though not personally known to the Galts, who owned for subdivision purposes a large tract of mostly undeveloped land fronting the Intracoastal Canal on its east side and traversed by U. S. Highway No. 1 on the west side, had trespassed by tying up on the Galts' land his "Showboat", which was a floating house of prostitution, and had trespassed by making a road from the highway across the Galts' land to a public house of Walker also reputed to be used for prostitution, concerning which the Galts had filed a suit against Walker on Sept. 12, 1946; so that the Galts would under no circumstances have sold Walker the land now in controversy, five acres on the highway on which during the Florida boom of 1926 had been erected a substantial building of twenty rooms besides a large public room, to serve as the Administration Building for the intended subdivision. Besides the personal hostility, Walker's reputation was such that his presence and ownership near the center of the Galts' land would discourage buying on the part of others and hurt sales. This was known to Walker, who testified he had tried without success to buy this very piece of property for several years. Galt's properties were in charge of a local real estate dealer, Hoskins, who negotiated all sales including this one, and Hoskins would not have recommended a sale to Walker, but did recommend the sale to Meeks whom he knew favorably, and who said he was going to buy it and improve and fit it for a hotel and public restaurant, and live there with his wife. There was some conflict between the testimony of Meeks and Hoskins as to which approached the other, but none that Meeks bought for Walker and with Walker's money, though stating his intentions as above, and that Hoskins and Galt believed they were selling to Meeks. The court accepted Hoskins' account, and found there was collusion between Meeks and Walker, operating both by suppression of the truth and misrepresentation of it. It was decreed that the deeds be cancelled, the $25,000 paid by Walker paid, without interest, into court, and that a mortgage put on the property by Walker dated Dec. 2, 1946, for $8,000, and another on Feb. 14, 1947, for $7,500 be paid therefrom with costs of litigation, and the remainder, less than $9,000, paid over to Walker on his vacating the property. It was held that Walker was not entitled to anything for repairs and improvements on the property, and the evidence about them was cut short.

1. The decree of cancellation was justified. "The vendor has the right to select the person to whom he will sell and may rescind if intending to sell to one person he is deceived as to the purchaser's identity and thus induced to enter into a contract with one to whom he did not intend to sell. In other words, fraud may be predicated upon misrepresentations as to the identity of the purchaser or as to the person for whom the ostensible purchaser acts, where the vendor would not have entered into the contract had he known the true identity of the purchaser." 55 Am.Jur., Vendor and Purchaser, Sec. 96. Thompson v. Barry, 184 Mass. 429, 68 N.E. 674. The materiality as an element of fraud, of deceit as to the identity of one offering to contract, as a ground for equitable relief, was sustained in Florida in the recent case of Bell v. Smith, Fla., 32 So.2d 829, 175 A.L.R. 695, though the remedy sought was not cancellation but the declaration of a constructive trust.

2. The deed of the Galts contains covenant restrictions as to the use and occupancy, one being that the property should be used solely for residence, hotel, restaurant, or other legitimate business purposes and no part thereof for any illegal or immoral purpose; and another being that no part of the premises should be sold to or used or occupied by a person of any race or descent other than Caucasian, White or Aryan. Walker urges that these provisions safeguard the property from any...