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Complaint; from Washington Superior Court-- Judge Humphrey. February 22, 1950. (Application to Supreme Court for certiorari.)
Properly construed and under the law applicable there to the petition failed to state a cause of action for fraud and deceit and the trial court did not err in sustaining the defendant's demurrer thereto and in dismissing the petition.
Mrs. Pauline Mertz Watkins brought a suit against Grady E. Mertz and Dan Copeland in which she sought to recover damages for fraud and deceit.
The allegations of the petition are substantially: (3) The plaintiff resides in Fulton County, Georgia, and has so resided for the past thirty years and was not familiar with the land and timber value in Washington County, or elsewhere. On November 10, 1939, her uncle, James L. Kelley, deeded to the plaintiff 582 acres of land in Washington County, subject to a life estate of Mrs. Eugenia King Kelley, the wife of James L. Kelley. (4) Mrs. Kelley, the aunt of the plaintiff died on November 29, 1946, and full and complete title to the land in question vested absolutely in the plaintiff, and immediately, the defendant Mertz, the only brother of the plaintiff, commenced to insist that the plaintiff sell him the land, which included the timber thereon; that on the night her aunt lay a corpse, the defendant Mertz came into the room where the plaintiff was alone and made her an offer of $20 per acre for her land, which included the timber thereon; and, when the plaintiff refused, the defendant Mertz jumped up out of his chair like a madman, shaking his fist in the plaintiff's face and demeaning her. (5) On January 10, 1947, the defendant Mertz and the defendant Dan Copeland, and Charles L. Mertz, father of the defendant Mertz and of the plaintiff, came to the plaintiff home in Atlanta, at a time when the plaintiff was in no mental condition to make decisions in business matters (her aunt having died on November 29, 1946, and her mother having died on December 12, 1946) and did "so much fast talking and put so much high pressure on the plaintiff, for her to rent her land to the defendant Mertz for the year 1947, with an option to purchase for the sum of $42,082.00, that the plaintiff finally agreed to let the defendant Mertz have a rental contract, with option to purchase, upon the defendant Mertz's terms (the defendants having assured her that the timber on her land was not worth more than $5000). On January 16, 1947, the plaintiff met the defendant Mertz at an attorney's office in Sandersville for the purpose of having the rental contract and 90-day option to purchase prepared and signed. Still believing that the timber on her land was only worth $5000 as the defendants had assured her and represented to her, the plaintiff executed the rental agreement and option to purchase. (6) On February 6, 1947, the defendant Mertz exercised the option and paid the plaintiff $42,082 and she executed and delivered to him a warranty deed to the land, including the timber thereon. (7) On February 12, 1947, the defendant Mertz sold to Archer Lumber Company for $37,650 the timber on the land that the plaintiff had sold to him and the timber on other lands, but seventy percent of the timber sold this company was situated on the land which the plaintiff sold the defendant Mertz. (8) The plaintiff did not know until a few weeks after the defendant Mertz had sold the timber that the true value of the timber was $25,000 instead of $5000 as the defendant had falsely represented to her. (9) The defendant well knew the quantity and value of the timber on the land which the plaintiff sold the defendant Mertz but the defendant, contriving and fraudulently intending, craftily and subtly to deceive and injure the plaintiff, did falsely, fraudulently and deceitfully represent to
the plaintiff that the value of the timber was only $5000. (10) The plaintiff had no experience in business; did not know the value of her lands and timber; and not knowing to the contrary that the representations of the defendants were untrue, but believing that her only brother, the defendant Mertz, and the defendant Copeland, were truthful men who could be trusted, the plaintiff was induced to sell and convey her land and the timber thereon.
The defendants demurred to the petition and the court entered the following order: "Hearing on the written demurrer having this day come on regularly pursuant to order heretofore granted, and after argument of counsel for all parties, the within demurrer is hereby sustained and the petition of plaintiff is hereby dismissed, for it appears from the plaintiff's petition that she was the owner of the lands and flee timber located thereon, and she must be held to have had equal opportunities with the defendant of knowing the truth of the alleged representations by the defendant as to the amount and value of the timber located on the lands which she sold to defendant Mertz pursuant to the exercise of the option as agreed upon by the parties and as shown by the petition, and she failed to inform herself and she must take the consequences of her own neglect; however, the plaintiff is hereby given until February 15, 1950, to amend her petition."
The plaintiff thereupon amended her petition by adding to the original petition, which is set out above, six paragraphs numbered 11, 12, 13, 14, 15, and 16, in which she alleged substantially the following: (11) The timber on the land was of the value of $30,000. (12) The plaintiff had only owned the land and timber absolutely and in her own night for a period of 41 days prior to the time the defendants came to her on January 10, 1947, and insisted that she give the defendant Mertz a rental contract and option to purchase. (13) On January 10, 1947, when the defendants and Charles L. Mertz (the plaintiff's father) came to the plaintiff s home in Atlanta they were hardly seated before the defendant Mertz commenced talking fast and nagging the plaintiff to sell him her farm and the timber. The plaintiff refused, but offered to rent to the defendant Mertz for the year 1947, but Mertz kept talking fast and repeating that he wanted to buy the land and the timber and buy that day. The defendant told the plaintiff she had to agree to rent, with an option to buy, to the defendant Mertz and on that day. Charles L. Mertz, the father of the plaintiff and of the defendant Mertz was present and kept telling the plaintiff she should sell. to the defendant Mertz; that he was offering a good price. All of the fast-talking conversations were continued for at least an hour. The defendant Mertz would not give the plaintiff time to think the matter over or confer with her husband who was away from home. The defendant Mertz insisted that plaintiff sell him her land that very day. Finally the plaintiff, having a great deal of confidence in the defendant Copeland at that time since Copeland had been overseer on the farm in question for about fifteen years and knew the quantity and value of the land and the timber and since the defendant Copeland agreed with everything the defendant Mertz said and stated that there was no more than $5000 worth of timber on the plaintiff's land, the plaintiff upon his advice agreed to the rental and option contract. (14) The defendant Mertz owned land adjoining the plaintiff's land and had lived in the vicinity of the plaintiff's land all of his life. The plaintiff had not resided in that vicinity in thirty years. The defendants had more knowledge as to the value of the land and timber and the plaintiff did not have equal knowledge and equal means of knowledge that the defendants had and she was not dealing with them upon equal terms. (15) The defendant Mertz insisted that the plaintiff sell to him that very day, and, finally, under the terrible strain and pressure and representations as alleged in paragraph 13, the plaintiff, having exercised all reasonable diligence and exhausted all means at her command to ascertain the true values of the land and timber by making inquiry of the defendant Copeland, who she thought at the time was a fair and impartial person, the plaintiff finally relied upon all the representations of the defendants and her father, and her nerves being at the breaking point, agreed to give the defendant Mertz a rental contract for 1947 with an option to purchase. (16) Before the defendant came to the plaintiff's home in Atlanta on January 10, 1947, they had already ascertained for themselves, by a cruise or other wise, full information as to the quantity and value of the plain-
tiff's timber and the defendants well knew that their representations made to the plaintiff were false and were made to deceive and did deceive the plaintiff. Damages were prayed in the amount of $25,000. The rental contract with the option to purchase, the warranty deed from the plaintiff to the defendant, and the timber lease from the defendant Mertz to the Archer Lumber Company were attached and made a part of the petition. After the amendment of the petition by the addition of paragraphs 11 through 16, as set forth above, the defendants renewed their original demurrers and demurred to the amendment and to the petition as amended. The court sustained the demurrers and dismissed the petition as amended, and the plaintiff excepted.
The plaintiff seeks to recover for fraud and deceit. It is alleged in the original petition: that the defendants, Mertz, who is the plaintiff's only brother, Copeland, Mertz's overseer, falsely and fraudulently misrepresented to her the quantity and value of the timber on the plaintiff's land in Washington County, Georgia, and thereby induced the plaintiff to sell the land, including the timber thereon, to the defendant Mertz, her brother, to her injury and damage; that the defendants well knew the value and quantity of the timber on the plaintiff's land, but the plaintiff had no experience in business and did not know the value of her lands and timber and did not know that the representations of the defendants were untrue; that she sold the timber to the defendant Mertz for $5000 whereas she has since the sale discovered its real value to be $30,000. The trial court sustained the demurrers of the defendants to the original petition on the ground that it set forth no cause of action, but granted leave to amend. By attempting to amend to meet this ruling of the court, the plaintiff acquiesced in the ruling of the court that the original petition did not state a cause of action. Burruss v. Burruss, 196 Ga. 813 (2) (27 S. E. 2d, 748); Rivers v. Key, 189 Ga. 832 (1) (7 S. E. 2d, 732); Massell Realty Co. v. Washburn, 35 Ga. App. 707 (134 S. E. 798); Howell v. Fulton Bag & Cotton Mills, 188 Ga. 488 (4 S. E. 2d, 181). It became the law of the case, therefore, that, under the allegations of the original petition, the plaintiff's acceptance of the defendant Copeland's assurances as to the quantity and value of her timber was not sufficient diligence on her part. It remains only to determine then whether, by her amendment, the plaintiff added sufficient facts to show such diligence as would excuse her failure to otherwise inform herself of the true value of her property before selling to the defendant Mertz.
"It is an elementary rule of construction, as applied to a pleading, that it is to be construed most strongly against the pleader; and that if an inference unfavorable to the right, of a party claiming a right under such a pleading may be fairly drawn from the facts stated therein, such inference, on demurrer, will prevail in determining the rights of the parties." Moore v. Seaboard Air-Line Ry. Co., 30 Ga. App. 466 (118 S. E. 471).
Under such a construction of the petition, as amended, it appears that the plaintiff voluntarily accepted the representa- tions of her brother and the defendant Copeland as to the quantity and value of the timber on her lands in Washington County without investigation on her part. While it is alleged that she did not have an equal knowledge of timber values with the defendants or an equal opportunity with them to determine the quantity and value of her timber, it does not appear why this was so other than she lived in Atlanta and the defendants lived near her property and were familiar with the value of the timber since they had already, prior to the sale, ascertained for themselves, by a cruise or otherwise, the quantity and value of her timber. It is not alleged that they, or either of them, by fraud or otherwise, did anything to prevent her investigation of these matters, nor is it alleged that they, or either of them, by fraud or otherwise, did anything to prevent her having her timber cruised, scaled, and evaluated. True, it is alleged that she "exercised all reasonable diligence and exhausted all means at her command to ascertain the true values of [her land and timber," but it is alleged that she did this "by making inquiry of . . . Copeland, who she thought at that time was a fair and impartial person . . . and [had] been overseer of the land for fifteen years. There is no allegation that any confidential or fiduciary relationship existed between her and Copeland or her and her brother. The fact that the plaintiff and the defendant Mertz were brother and sister does not of itself create a confidential relationship such that she was entitled to rely upon his representations of the value of her property without investigation. There is no presumption of law that such relation exists between them solely from the fact of their kinship. Crawford v. Crawford, 134 Ga. 114 (67 S. E. 673). Nor does "the fact that she reposed trust and confidence in the defendant Copeland solely on the ground that she believed him to be a fair, impartial, and truthful man create a confidential relationship. It is alleged that at the time the representations were made Copeland was Mertz's overseer and if Copeland owed a duty to anyone by virtue of a confidential relationship, he owed it to Mertz, his employer. Opposite parties have trust and confidence in each other's integrity, in the majority of business dealings but there is no confidential relationship created by this alone. Dover v. Burns, 186 Ga. 19, 26 (196 S. E. 785).
No emergency or condition authorizing the plaintiff to rely upon the alleged misrepresentations without investigation is alleged and "the law does not afford relief to one who suffers by not using the ordinary means of information that may be at hand, whether his neglect be due to indifference or to credulity." Miller v. Roberts, 9 Ga. App. 511, 512 (71 S. E. 927); Salter v. Brown, 56 Ga. App. 792 (193 S. E. 903); Arthur v. Brawner, 174 Ga. 477 (163 S. E. 604); Smith v. Shinn, 31 Ga. App. 356 (120 S. E. 647); Tindall v. Harkinson, 19 Ga. 448; Allen v. Gibson, 53 Ga. 601.
The plaintiff alleges that she had no business experience, but it is not alleged that she was laboring under any mistaken belief as to the quantity and value of her timber, and that the defendants knowing this took advantage of her on that account.
691, 695, 58 S. E. 2d, 403), it should be sufficient to say that the father is not a party to this action, nor is he named as a conspirator with the defendants. Any fraud upon his part is not chargeable to the defendants in this case. Moreover, even if we assume that it was natural that the child seek the advice of the father, which she did not do, it nowhere appears from the petition that the father was for any reason better informed upon the subject of the quantity and value of the plaintiff's timber than she was herself, and the court cannot indulge in the presumption of knowledge of all things on the part of parents. That the father cast his moral support with his son rather than his daughter is not, in this case, excuse for lack of diligence on the plaintiff daughter's part.
The following cases, relied upon by counsel for the plaintiff, are distinguishable upon their facts as we shall presently indicate: Cline v. Nelson, 46 Ga. App. 600 (168 S. E. 70); Elliott v. Marshall, 179 Ga. 640 (176 S. E. 770); Summerour v. Pappa, 119 Ga. 1 (5) (45 S. E. 713); Benson v. May, 149 Ga. 555 (101 S. E. 177); Thompson v. Bank of Arlington, 44 Ga. App. 686 (162 S. E. 647); Fenley v. Moody, 104 Ga. 790 (38 S. E. 1002); Pilcher v. Thompson, 29 Ga. App. 493 (116 S. E. 49). In none of these cases do the pleadings show upon their faces, or by reasonable inference, that the party pleading fraud was, as a matter of law, lacking in reasonable diligence. In the Cline case Nelson was induced to part with title to his land upon a misrepresentation of a material fact peculiarly within the knowledge of Cline. Cline obtained the land at a lower price than he would have obtained it, had he not misrepresented the purpose for which he intended to use the land. Nelson was willing to sell at the price agreed upon only upon condition that his land was used for a dairy farm. Cline assured him that this was the use to which the land was to be put, whereas Cline sold the land to the Georgia Power Company at a considerable profit. Cline's intention existed in his mind and could not be investigated by Nelson. The diligence required by the law to prevent the perpetration of fraud upon one is not that of a detective. Only reasonable diligence is required and the trial court was held in that case to have properly overruled the general demurrer to the petition. The misrepresentation in that case did not involve the quantity, quality or value of the property. In the Elliott case, Marshall sought to have a lease on his property canceled. The lease was made to Elliott upon Elliott's representation that a lease upon the property was a condition precedent to Marshall's obtaining a loan on his property. As a matter of fact the existence of the lease prevented the loan being made to Marshall. This misrepresentation was not as to a defect in the property discoverable by examination of the premises. Moreover, Marshall went to Elliott who was "an expert real estate and loan man" for advice and was not dealing upon equal terms or equal means of knowledge. The court in that case left the question of Marshall's diligence under the circumstances to the jury, as the petition did not show upon its face lack of diligence.
In the Summerour case, Summerour and a Mrs. McClure entered into an agreement with Pappa to exchange their lands in Texas for Pappa's lands in Georgia. The exchange was to be made upon the basis of the first cost per acre to the parties. Pappa testified that this first cost was represented to him as $4 per acre whereas it was in fact only $3.50 and that it was upon this representation that he was induced to sign the contract to exchange. Although there was evidence that the deeds from Summerour and Mrs. McClure showed the total acreage and the total first price such that mere division would have shown the first cost to be $3.50 per acre instead of $4, there was also evidence that these deeds were not delivered to Pappa until after he had bound himself to exchange lands under the contract and while the court said that under such evidence it could not say as a matter of law whether the plaintiff Pappa was guilty of lack of diligence in determining what the defendants paid for their land, the question before the court seems to have been whether he was guilty of laches in not discovering the fraud after the deeds were delivered to him upon the consummation of the transaction. In the Benson case, the plaintiff was seeking to rescind the deed in question; the vendor had misrepresented the amount of the debts outstanding against the property which amount the vendee was to assume as a part of the consideration. The amount of these debts was peculiarly within the knowledge of the vendor, and the vendee was entitled to rely upon the vendor's positive statement of this amount and to rescind for misrepresentation even if made by mistake or innocently. In the Thompson case, Thompson was induced by the president of the Bank of Arlington to indorse the note of a principal upon the representation of the president that the indorsement was a mere formality and was without risk to the indorser since the bank held a lien upon the principal's property affording ample security for the payment of the note. In that case the parties did not have equal means of knowledge of the existence of the lien represented. The president of the bank was chargeable with such knowledge and unless there had been circumstances warning the plaintiff of reliance upon the president's statement he was entitled to rely thereon. In the Fenley case, the misrepresentation was as to the existence of easements on the land affecting its value which could not be ascertained by an examination of the property. In the Pilcher case the misrepresentation was made by an automobile dealer of the list price designated by the manufacturer and the dealer was in a better position to know the manufacturer's price than the purchaser. The parties were not under the allegations of the petition dealing with an equal means of knowledge.
Construing the petition against the pleader on demurrer, the plaintiff failed to show a right to recover for fraud and deceit under the allegations of the petition and the law applicable thereto, and the court did not err in sustaining the defendant's demurrer or in dismissing the petition.
Judgment affirmed. Gardner, J., concurs. Townsend, J., concurs in the judgment, but not in all that is said in the opinion.
D. E. McMaster, I. L. Evans, E. T. Averett, for defendants.
J. D. Godfrey, Casey Thigpen, for plaintiff.
Saturday May 23 06:21 EDT

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