McMillan v. Benfield , 159 Ga. 457 ( 1924 )

Hines, J.

1. Where B. and M. agree upon a parol exchange of lands, under which B. is to give to M. a tract of 160 acres, and M. is to give to B. an equal number of acres to be carved out of a larger tract, the same to be selected by B.; and where, before this oral agreement is performed in whole or in part by the parties, B. and others on the same day and occasion and immediately after the making of such oral agreement for the exchange of their lands, and before the oral agreement of exchange is performed by either, purchase from M. the larger tract, paying part of the purchase-money, giving their notes for the balance of the purchase-money, and taking from M. his bond for title, under which he is to convey to B. and his associates such larger tract upon the payment of their said notes for its purchase-money, the contract of sale amounts to a novation of the contract of exchange, and the latter contract is at end. Civil Code (1910), §§ 3543, 3682, 4226; Whatley v. Marshall, 139 Ga. 148 (76 S. E. 1025).

2. The subsequent written cancellation of the written contract of purchase, by the mutual consent of the parties thereto, did not have the effect of reviving the oral agreement between B. and M. for the exchange of their lands; and under such circumstances B. would not be entitled to specific performance of such oral agreement of exchange, or damages for its breach, in case M. was unable to convey to B. the land which he was to get under such agreement.

3. Under the allegations of the petition as amended, the plaintiffs do not make a case for the cancellation of the contract of purchase by B. and his associates from M., on the grounds (1) of fraud, (2) of minority of one of the purchasers who disaffirmed the contract on arriving at his majority, (3) of mistake of law, or (4) of the inability of M. to comply with his part of the contract.

4. Usually rescission is in toto, leaving the rights of the parties to be determined by a court of equity, and not by the abrogated contract. If on rescission the vendor keeps his land, he must account to the vendee for purchase-money paid in part performance of the contract by the vendee. On such rescission the vendee is to be charged with any damages occasioned by his breach of the contract, and a fair rental value of the land under the agreement. Lytle v. Scottish American Mortgage Co., 122 Ga. 458 (50 S. E. 402); Couch v. Crane, 142 Ga. 22 (82 S. E. 459). Where under such contract M. had received from B. a tract of land in part payment of the purchase-money of M.’s land, which tract So received by him he had sold, upon the rescission of the contract M. should account to B. for the price at which M. was to take the samé or its fair market value at that time.

(a) The written contract of cancellation merely rescinds the contract of purchase, and does not provide that M. is entitled to keep the land of B. This leaves the rights of the parties to be determined by a court of equity.

(h) Plaintiffs’ petition alleges the facts hereinbefore stated, and in addition alleges that “plaintiffs stand ready to do equity in the premises and to account to M. for any and all- rents that may be due him” on the Wilson tract, being the tract embraced in the written contract of purchase aforesaid; and they pray that “should it be determined by the court and jury that plaintiffs are not entitled to specific performance at the hands of McMillan, or in lieu thereof damages, that then and in that event they be entitled to recover of the said McMillan the reasonable market value of the Morrison place,” being the place which M. had received from B. in part payment for M.’s land. Held, that, properly construed, plaintiffs’ petition prays for alternative relief; that is specific performance of the oral agreement for the exchange of their lands, or for damages in lieu thereof, or for the reasonable value of B.’s land which M. had received from B. in part payment of his lands; and that under these and other allegations of the petition, B. was entitled to recover the market value of his lands on the rescission of the contract of purchase. So holding, we think the petition set forth a cause of action for this purpose, and the trial judge did not err in overruling the general demurrer to the petition.

No. 4531. December 12, 1924. Rehearing denied January 17, 1925.

5. The court charged the jury as follows: “If you find for the plaintiff —that is, that Mr. Benfield is entitled to recover, you would find out how much the reasonable market value of that property was at the time of this trade or negotiations, and you would get that from the evidence; and if he is entitled to recover, he would be entitled to recover interest on it from the time it was taken possession of and used by Mr. McMillan; you would then compute that interest at seven per cent, down to date.” This charge was assigned as error, because plaintiffs would not be entitled to any interest during the period "they occupied and enjoyed the lands purchased under the contract of purchase by B. and his associates from M. Held, that the plaintiffs would not be entitled to recover the value of the land which B. conveyed to M. in part payment of the purchase-money of the land of the latter, with interest thereon, but there should be deducted therefrom the rental value of the premises while they were occupied and enjoyed by B. and his copurchasers. While the charge was erroneous in this respect, its harmfulness can be cured by requiring the plaintiffs to write off the interest from the verdict; and if the plaintiffs will so do on or before the remittitur of this court is made the judgment of the court below, the judgment of the court below will be affirmed; otherwise it will be reversed.

0. Under the rulings announced in the foregoing headnotes, other assignments of error do not require the grant of a new trial.

Judgment affirmed on condition.

All the Justices concur. Egbert Beall, McMillan & Erwin, and I. H. Button, for plaintiff in error. J. 0. & H. E. Edwards, contra.