Crawford v. Williams , 149 Ga. 126 ( 1919 )

Gilbert, J.

1. The motion to dismiss the writ of error is withouf merit.

2 The case is on exception? to the dismissal, of the petition on generaL demurrer. The observations which follow are based on the familiar rule that the allegations of the petition considered on demurrer are accepted as true. This court has already held that the allegations in regard to the payments of money by Segers to Williams and the verbal agreement by Williams to convey designated lots of land to Segers set out a cause of action. Williams v. Segers, 147 Ga. 219 (93 S. E. 215). Upon proof of the facts alleged Segers would have been entitled to a decree placing the title in him as effectually as if Williams had executed a deed conveying the same. Segers was in possession. Crawford, relying upon the allegations made in the pleadings in the pending litigation between Williams and Segers, obtained a written contract of lease and option to purchase. The lease provided for the mining of minerals on a royalty basis, and the contract of purchase provided that it might be exercised upon payment of thirty-five hundred dollars in cash on or before August 3rd, 1918. The contract recited a “consideration of one dollar paid lessor by lessee and the mutual benefits which will flow to both parties hereto by the fulfillment of this lease.” This was not a unilateral contract, but on the contrary was supported by a valuable consideration including mutual benefits, and therefore was valid and binding. Nathans v. Arkwright, 66 Ga. 179, 186; Simms v. Lide, 94 Ga. 553 (21 S. E. 220); Black v. Maddox, 104 Ga. 157 (30 S. E. 723); Columbus R. Co. v. City Mills Co., 135 Ga. 626 (70 S. E. 242). Thereafter Williams and Segers settled their litigation upon terms mutually satisfactory to themselves, Williams obtaining a consent decree in his own favor for a sum larger than that sued for, while Segers received under the agreement the sum of three thousand dollars in cash. The consent decree provided that it should be a special lien on the land. The option contract was obtained by Crawford pending the litigation but prior to the decree. “Decrees ordinarily bind only parties and their privies; but a pending suit is a general notice of an equity or claim to all the world from the time the petition is filed and docketed; and if the same is duly prosecuted and is not collusive, one who purchases pending the suit is affected by the decree rendered therein.” Civil Code, § 4533. The pending suit was notice to Crawford, and he certainly would have been bound by any judgment duly prosecuted and not collusive. The allegation that the decree was obtained by consent does not necessarily negative the theory that it was duly prosecuted; but the petition affirmatively alleges that it was not duly prosecuted, that the judgment rendered in accordance with the agreement “was in fraud of plaintiff’s rights,” and that it was a collusive judgment. Whether or not these allegations were sufficient to withstand a special demurrer we do not decide, because the petition was dismissed on general demurrer, and it is with that judgment that we are called upon to deal. Accepting, therefore, as true the allegation that the agreement and the judgment rendered thereon was in fraud of plaintiff and was collusive, it cannot prevail over whatever rights Crawford obtained under his written contract with Segers. It is insisted, however, that Crawford had an adequate remedy at law. Even if the injury is reparable in damages, a money judgment against Segers would not bo adequate compensation, because he is insolvent No duty jested upon Crawford lo intervene, because he was not bound to anticipate fraudulent acts of the parties nor fraudulent conclusion of the litigation; upon the contrary'he had the right to assume that the litigation would be conducted fairly and honestly and duly prosecuted to the end sought in every legal investigation, that is, the discovery of truth. Since Williams obtained his consent agreement with full knowledge of the rights of Crawford, and since all of his vendees obtained their rights from Williams with full notice, none of the conveyances by Williams nor the judicial sale at which Williams was the purchaser can prevail against the legal rights to which Crawford was entitled under his written contract with Segers. Since all of the parties who have acquired conveyances of the land hold them in subjection to the rights of Crawford, a court of equity will compel them by proper decrees to carry out the contract of Segers, provided Crawford duly complies with his part of the contract. It is insisted, however, that Crawford has not made an unconditional tender, as required by law, of the thirty-five hundred dollars which he agreed to pay. We think there is no merit in this contention. The petition alleges a tender to both Segers and Williams. Prior to the filing of the suit Segers put .it beyond his power to comply with his contract. When Crawford filed his suit in equity, alleging his ability and willingness to pay and his readiness to comply with his contract, and asking for an adjudication of his rights, there was' a substantial compliance in the matter of tender. Kerr v. Hammond, 97 Ga. 567 (25 S. E. 337). It is contended that Crawford is privy to Segers, and that, Segers being estopped by his scheme with Williams to defeat and defraud his creditors, Crawford is also estopped from asserting any right or interest in the land. Under the allegations it is not clear that in entering into the scheme devised by Williams Segers did so with the intention of defrauding his creditors. The transaction, as alleged, has the appearance more of ignorance yielding to cunning for the benefit of the latter. If it be conceded, however,- that the bill of sale to the personal property made by Segers to Williams was made with fraudulent intent, it does not appear that the land was a part of tbe scheme. The excuse for delay In executing a conveyance by Williams to Segers of the land was that the papers were in a bank in Chattanooga and inaccessible at the time. The judgment may be res adjudicata as to Segers, because of his participation in the fraud and collusion against Crawford. “Such judgment' will bo open to attack whenever and wherever it may come in conflict with the rights or the interests of third persons. . . Fraud is not a thing that can stand, even when robed in a judgment.” Smith v. Cuyler, 78 Ga. 654, 660 (3 S. E. 406); Civil Code, § 5964. The fact that Crawford knew of the judgment after it was rendered, and allowed Williams to purchase the land at the sheriff’s sale and subsequently to convey it to other parties who went into possession and worked the same, will not constitute an estoppel against Crawford, when all of these facts were performed with full notice upon the part of everybody concerned.

The foregoing rulings are controlling as to the issues involved in the judgment sustaining the general demurrers. Those not specially dealt with are in the nature of special demurrers or are without merit.

Judgment reversed.

All the Justices concur.