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HENNESSY v. WOODRUFF et al.
18600.
HAWKINS, Justice.
Specific performance. Before Judge Fort. Muscogee Superior Court. March 13, 1954.
Ed J. Hennessy filed, in the Superior Court of Muscogee County, Georgia, his equitable petition against J. W. Woodruff, Sr., The First National Bank of Columbus, W. E. McHugh, William S. Baugh, Louise D. Baugh, and Richard Peebles. The First National Bank of Columbus and J. W. Woodruff, Sr., separately demurred generally to the petition, but the only question now before this court for decision is the judgment of the trial court sustaining the general demurrer of J. W. Woodruff, Sr., and dismissing the petition.
The petition is voluminous, and we shall not attempt to set out the various allegations in detail, but it is clearly shown: that on November 18, 1952, Hennessy, an agent and employee of Woodruff, entered into an agreement with Woodruff, who was the owner of two described vacant lots, whereby the lots would be conveyed by warranty deed to Hennessy, who should obtain plans and specifications from Peebles looking toward the construction of a dwelling house on each lot, and upon receipt of Peebles' estimate of construction costs, Hennessy would make application for FHA commitments for the purpose of determining reasonable value and the amount of insurable loan on each dwelling and in the event commitments were obtained for amounts sufficiently in excess of Peebles' estimate of construction cost to justify construction of the dwellings, Hennessy should enter into a contract or contracts with Peebles for the construction of a dwelling house on each lot; that, since Peebles would require payment in instalments as construction progressed, Woodruff could pay or advance the necessary funds to meet such instalment payments, that Hennessy should endeavor to Bell each house and lot, the prospective purchasers being expected to pay the purchase price in cash oil a part in cash and the balance to be obtained by loans through the use of FHA insurance commitments, and upon such sales being consummated the purchase price, less necessary expenses incurred and less five percent cominission to Hennessy, should be delivered to Woodruff. The record is silent as to whether or not this contract was in writing, but it is clear that the parties have seen fit, to enter into later written contracts with one another, and with third parties, which completely change the terms of the original contract.
The prayers of the petition were: (1) that the bill be sanctioned and ordered filed; (2) that Peebles be enjoined from foreclosing his claim of lien; (3) that The First National Bank of Columbus be enjoined from foreclosing its security deed; (4) that the court by appropriate order and decree determine the rights, liabilities, duties, and obligations so determined; (5) that Woodruff be required to specifically perform his contract with petitioner; (6) that petitioner have judgment against Woodruff for amounts advance by petitioner and together with sales commissions of five percent of sales price of said lots and dwellings; (7) that the costs of the proceeding be taxed against Woodruff including an amount of $600 as attorney fees for petitioner's and order be served on each defendant; that Peebles and The First National Bank be temporarily restrained from foreclosing their respective instruments; (9) for general relief, and (10) for process.
Woodruff's demurrer was based on the grounds that: (1) no cause of action was set forth; (2) the petition shows on its face that petitioner has a full, adequate, and complete remedy at law; (3) it affirmatively appears that plaintiff's obligations are in writing, and the purpose of the petition is to vary the terms of written instruments; (4) it affirmatively appears that plaintiff can obtain complete relief so far as defendant Woodruff is concerned by simply paying the debts he owes; and (5) it affirmatively appears that plaintiff is in possession of the property described in the petition, and no reason appears why he cannot put prospective purchasers in possession. Held:
1. "An existing contract is superseded and discharged whenever the parties subsequently enter upon a valid and inconsistent agreement completely covering the subject-matter embraced by the original contract. . . . Such a subsequent agreement, amounting to a substitution of the former contract, may be collected from several different contemporaneous writings which when taken together constitute a new and complete agreement." Hewlett v. Almand, 25 Ga. App. 346 (103 S. E. 173).
2. "Parties may by mutual consent abandon a contract so as to make it not thereafter binding. . . . A contract may be rescinded by agreement, although the evidence thereof may be by conduct and not by words." Shoup v. Elliott, 192 Ga. 858, 861 (16 S. E. 2d 857).
3. "Where parties reduce their agreement to writing, all oral negotiations antecedent thereto are merged in the writing, and even though the writing does not express the contract actually made, the parties must stand by it until it is reformed in a proper way by a competent tribunal." Weaver v. Stoner, 114 Ga. 219, 224 (52 S. E. 2d 838).
4. "A security deed, although conveying the legal title, does so for the purpose of security only, and, upon the satisfaction of the obligation which it is given to secure, is automatically extinguished in effect and can be canceled of record without any reconveyance by the grantee in accordance with the provisions of the Code, 67-1306." Waldroup v. State, 198 Ga. 144, 146 (30 S. E. 2d 896, 153 A. L. R. 914).
5. "Upon payment of the amount due under the terms of a deed to secure debt, it is the duty of the grantee in such deed to surrender and deliver it to the grantor with a proper entry showing payment, and the grantor may thereafter have it 'satisfied' of record. A petition seeking to have the above rule complied with by a grantee is based upon a statutory right." Bank of LaFayette v. Giles, 208 Ga. 674 (2) (69 S. E. 2d 78).
6. The petition alleges that Woodruff is causing petitioner to be subjected to personal liability on petitioner's contracts with Peebles, the Baughs, McHugh, and The First National Bank of Columbus. In other paragraphs of the petition it is admitted by petitioner that he entered into contracts with these parties in his own name, without disclosing any agency, and thereby assumed personal liability; and it is further alleged that the Baughs and McHugh stand ready and willing to perform their contracts to purchase the houses and lots in question for $9,500 and $9,259 respectively, upon delivery of unencumbered conveyances. The original contract, by actions of the parties evidenced in writing, has been changed to a sale of the two lots in question by Woodruff to Hennessy for $2,000 each, with the latter assuming all obligations of the original venture and apparently entitled to all profits, if there be any. Since petitioner alleges he is the holder of warranty deeds, he is entitled to sell the property subject to the outstanding security deeds and liens. By the application of a part of the proceeds of one sale the lien of Peebles could have been discharged, and, by the further application of a sufficient amount of the proceeds of the two sales to cover the debts secure, the security deeds would be rendered functus officio. Baldwin v. Atlanta Joint Stock Land Bank, 189 Ga. 607 (7 S. E. 2d 178). It thus appears that the plaintiff, by the payment of the notes secured by the deeds executed by him can do for himself what he asks the court to do for him, and that an appeal to a court of equity is wholly unnecessary.
7. Under the above rulings of law as applied to this case, the petition failed to state a cause of action against Woodruff, and the trial judge did not err in sustaining his general demurrer.
Powell, Goldstein, Frazer & Murphy, Hatcher, Smith & Stubb, Dan S. Beeland, Ernest C. Britton, contra.
John G. Cozart, for plaintiff in error.
ARGUED JUNE 14, 1954 -- DECIDED JULY 13, 1954.
Saturday May 23 03:38 EDT


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