Epps v. Waring

Lumpkin, Justice. Waring brought suit against Epps upon a promissory note which was one of a series given for the purchase of a city lot. The note contained this sentence: “ This note is given for the purchase money of a lot in Madison, Ga.” The defendant filed certain special pleas, which were stricken on motion of the plaintiff", and a verdict was then rendered in favor of the latter, the defendant introducing no evidence. The material allega 766 tions of the special pleas were, in substance, as follows: The defendant had purchased from the plaintiff the lot in question under a parol contract, by the terms of which Waring undertook and agreed to build upon the same a good, substantial, properly constructed and appointed dwelling-house, to cost not less than $400.00 and to be actually worth not less than that sum, and also to cause a street to be opened so as to give the defendant access to the property. Without the house and the opening of the street, the lot was practically worthless, and these undertakings by the plaintiff were the sole consideration which induced the defendant to enter into the contract for the purchase of the lot. It was expressly understood and agreed that the contract was not to be completed and executed until the house was erected and finished to the satisfaction of the defendant, and the street was opened. Some weeks after the terms of the contract had been agreed upon, the plaintiff’s agent represented to the defendant that the house was actually in process of construction, and that the street would be opened according to contract; and relying upon these representations, the defendant paid a part of the purchase money and gave several promissory notes for the balance, one of which is the note now in suit, and accepted from the plaintiff’s agent a bond for titles to the property. After executing the notes, the defendant discovered that the street had not been opened, and that the plaintiff' had not complied with his agreement with reference to the house, but instead of so doing had erected a smaller house, which was meanly constructed, at a cost of not exceeding $150.00, and that in consequence of the failure to open the street, there was no way of ingress to and egress from the lot. The defendant had never taken possession of the premises, and upon making the discoveries above mentioned, immediately notified the plaintiff he would not accept the property, offered to surrender the bond 767 for titles he had received and rescind the contract, and demanded from the plaintiff'the return of the notes defendant had given for the purchase of the lot, together with the cash he had paid. The plaintiff declined to rescind, and the defendant refused to take possession of the property. The representations of the plaintiff’s agent above set forth were false and fraudulent, and were made for the express purpose of inducing the defendant to sign the notes and paya part of the purchase money. There were prayers for a rescission of the contract, a cancellation of the bond for titles and the purchase money notes, and that the plaintiff' be required to pay back that portion of the purchase money which he had received, with interest. In our judgment, these special pleas set up a good defence to the plaintiff’s action, and ought not to have been stricken. The trial judge struck the pleas upon the idea that, accepting as true the allegations therein made, the plaintiff was attempting by parol to vary the terms of an absolute written contract. At first glance, this may seem to be true, but a more careful examination will lead to a contrary conclusion. In the first place, it is evident from the facts alleged in the pleas that the note in suit does not contain the entire contract between the parties. There were other notes and a bond for titles; and besides, the main stipulations between the parties lay in parol, and it was not their intention that these stipulations should be merged in and covered by the writings. But independently of all this, the pleas distinctly allege that the notes were fraudulently procured by representations falsely made; and if all the allegations of the pleas are true, the deliberate purpose of these representations was to deceive the defendant. If this be so, there is no principle, either of law or justice, which will allow the plaintiff to enforce payment of the notes in palpable violation of the terms of the real con 768 tract between himself and the defendant, and this is true although that contract was in parol and depends for its establishment upon parol evidence. It is a universally recognized doctrine, supported by all respectable text-writers and upheld in every well considered case bearing upon this subject, that where a party has been induced to enter into a contract by a willful fraud on the part of the other party, calculated to deceive and which does deceive, the defrauded party may set up the fraud in his defence to an action upon the contract. The facts alleged in the pleas in the present case constituted sufficient grounds for rescission, and the effect of a rescission would be to defeat a recovery by the plaintiff upon the purchase money notes, including the one now in controversy. Judgment reversed.