WHITELEY v. DOWNS, guardian

Supreme Court of Georgia1932-05-13No. No. 8951

174 Ga. 839

Summary · law.co

Holding. The trial court's order overruling the demurrer was affirmed. The petition stated sufficient facts to excuse restitution as a condition of rescission for mental incompetency, and the superior court possessed proper jurisdiction to grant the affirmative equitable relief sought.

Petitioner Whiteley, acting through a guardian, sought to rescind a motor vehicle purchase contract on grounds of mental incompetency at the time of contracting. The defendant Downs demurred on two grounds: first, that Whiteley failed to offer restitution of benefits received, and second, that the court lacked jurisdiction. The trial court overruled both demurrers. Regarding restitution, the petition sufficiently alleged that the automobile had been returned in substantially the same condition as when purchased, with only minor use and a payment of approximately six hundred pounds of peanuts made toward the price. The court held that while a mentally incompetent person must ordinarily restore benefits received to rescind a contract, the burden of restitution is excused when such restoration is impossible or when no benefit remains in the party's possession or control.

On the jurisdictional issue, the court determined that the trial court properly exercised equity jurisdiction because Whiteley sought affirmative relief beyond mere vacation of a judgment—specifically, an injunction against execution and foreclosure proceedings and an order voiding the underlying judgment. The petition therefore constituted a direct attack on the judgment rather than a collateral challenge, and venue properly lay in the county where the defendant resided.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether mental incompetency permits rescission of a contract without full restitution of benefits
Whether restitution is required when goods have been substantially restored to their original condition
Whether equity courts have jurisdiction over a direct attack on a judgment when affirmative relief is sought

Procedural posture

The defendant filed a demurrer to the petition for equitable relief challenging jurisdiction and alleging failure to tender restitution, which the trial court overruled.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Gilbert, J.

The first, second, third, and fourth head-notes do not require elaboration.

One ground of the demurrer is that the petitioner does not offer to do equity, and seeks relief from liability on the note without offering to restore the benefits received under his contract of purchase. The petition alleges that Downs returned the automobile to the defendant, that a payment had been “made thereon of about six hundred pounds of peanuts, and the said automobile not [ ?] having been used very little, the said Whiteley Motor Company has been put in as good condition with reference to the purported sale of said automobile as when the purported sale was made.” “It is a condition precedent, for a mentally incompetent to relieve himself from a contract made during his incapacity, to restore the benefits received by him, if such benefits are still in his possession or control. In other words, he must place the grantee, in all respects, as far as possible, in statu quo. Arnold v. Richmond Iron Works, 67 Mass. 434; Ricketts v. Joliff, 62 Miss. 440; Williams v. Sapieha, 94 Texas, 430 (61 S. W. 115); Hudson v. Union Mercantile Trust Co., 148 Ark. 249 (230 S. W. 281); Rea v. Bishop, 41 Neb. 202 (59 N. W. 555); Flach v. Gottschalk Co., 88 Md. 368 (41 Atl. 908, 42 L. R. A. 745, 71 Am. St. R. 418), and eit. The incompetent is relieved of the necessity to make restitution or tender, where he shows that such restitution or tender is impossible. Where no benefit has been received, the parties are already in statu quo.” Fields v. Union Central Life Ins. Co., 170 Ga. 239 (6 a, b) (152 S. E. 237). Under the facts alleged, the petition is not subject to this ground of demurrer.

The sixth headnote does not require elaboration.

The demurrer which challenges the jurisdiction was properly overruled. “Equity cases shall be tried in the county where a defendant resides against whom substantial relief is prayed.” Civil Code (1910), § 6540. “The venue of the equitable petition to enjoin the levy of an execution and the advertisement of the land levied upon, and to set aside the judgment on which it issued, and where no complaint of misconduct on the part of the levying officer is alleged, is the county of the residence of the judgment plaintiff, if a resident of this State. Malsby v. Studstill, 127 Ga. 726 (56 S. E. 988); and see Bruce v. Neal Bank, 147 Ga. 392, 396 (94 S. E. 241).” Bank of East Point v. Dupre, 152 Ga. 547 (107 S. E. 484); Herrington v. Bryan, 169 Ga. 382 (150 S. E. 555). This is not a mere-motion to set aside a judgment, provision for which is made by the Civil Code (1910), § 5962, where no affirmative relief was sought, as in Dixon v. Baxter, 106 Ga. 180 (32 S. E. 24), Perry v. Fletcher, 174 Ga. 180 (162 S. E. 285). Here such affirmative relief is sought. The attack on the judgment is direct, not collateral; and accordingly the superior court of Warren County, in the exercise of the equitable powers, has jurisdiction, and may, if the evidence so authorizes, treat the judgment as void. Civil Code (1910), §§ 5965, 5968; Johnson v. Peoples Bank, supra.

Judgment affirmed.

All the Justices concur, except Hines, J., absent for providential cause.