Leyden vs. Hickman

Supreme Court of Georgia1885-12-22

75 Ga. 684

Summary · law.co

Holding. The court reversed the trial court's judgment, holding that Leyden's allegations of fraudulent misrepresentation were sufficient to support an equitable action to rescind the land sale and recover his payments, where Leyden offered to return the land and account for rents received.

Hickman sold land to Leyden in Catoosa County and later sued to recover it through ejectment when some purchase money remained unpaid. Leyden defended by alleging that Hickman had made false and fraudulent representations about the property—specifically that it contained six hundred acres when it actually contained only about three hundred acres, that fenced land near Catoosa Springs did not belong to Hickman, and that the buildings were in good repair when they were actually dilapidated. Leyden claimed he paid $2,500 in cash and gave a note for $7,500, spent substantial sums repairing the premises, and was prevented from inspecting the property before purchase because Hickman locked the buildings and kept the keys. Leyden sought to rescind the entire contract and recover his payments and repair expenses, offering to return the land and account for any rents received.

The trial court sustained Hickman's demurrer and struck Leyden's plea without reaching the merits. The appellate court reversed, holding that Leyden's allegations of direct and positive fraud were sufficient to support an equitable claim to rescind the contract. The court reasoned that fraud vitiates contracts regardless of the defendant's solvency, and that courts of equity will set aside fraudulently induced contracts and restore parties to their prior positions. The court distinguished this case from prior precedent because Leyden actually offered to rescind and return the land rather than seeking to retain it while avoiding payment, and because the fraud allegations were particularly explicit and concrete.

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

Key issues

Whether allegations of fraud in inducing a land sale are sufficient to maintain an equitable action for rescission without proving the defendant's insolvency
Whether a buyer offering to rescind and return the land may recover purchase money and repair expenses paid in reliance on the seller's fraudulent representations
Whether the superior court of the county where the action was brought has jurisdiction over a defendant residing in a different county

Procedural posture

Hickman brought an ejectment action in the superior court of Catoosa County to recover land sold to Leyden; Leyden pleaded fraud and sought rescission; the trial court sustained Hickman's demurrer and struck Leyden's plea; Leyden appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Blandeord, Justice.

Hickman brought his action of ejectment to recover a certain tract of land in Catoosa county which he had sold to Leyden, and given his bond for titles, some of the purchase money being unpaid. Leyden pleaded to this action that he was induced to purchase this land by the false and fraudulent representations of Hickman, that the tract of land contained six hundred acres, when, in fact, it only contained a little over three hundred acres; also that a certain portion of the land enclosed under fence near the Catoosa Springs, did not belong to Hickman, and that this in great part destroyed the value of the spring’s property; and that the premises were represented to be in good repair; and that he was prevented from examining the same by reason of Hickman’s having locked up the houses and carried off the keys, until after the contract had been made ; that he paid down cash twenty-five hundred dollars, and gave his note for seventy-five hundred dollars balance of the purchase money; that when he examined the premises, he found the same outof repair and in a very dilapidated condition; that he expended a large sum of money to fix up and repair the premises; and that the purchase was induced and made by reasonof these false and fraudulent representations of Hickman. Leyden prayed a rescission of the contract, and that the plaintiff, Hickman, be decreed to pay him the several sums paid out for the repairs of the premises and the purchase money paid for the premises, he offering to account for and pay the rents. To this plea Hickman demurred on several grounds. The demurrer was sustained and the plea stricken by the court, and Leyden excepted, and this is (he error assigned.

Are the allegations in the plea sufficient 1 o maintain a bill in equity to set aside this sale ? Wo think that they are, notwithstanding that there is no allegation of insolvency. Fraud vitiates all contracts and renders them void. The allegations of fraud are direct and positive, and these are admitted to be true by the demurrer. A contract which is procured to be made by a solvent person by false and fraudulent representations cannot be permitted to stand any more than if such person were insolvent. This contract is void, and Hickman will not be permitted to reap any benefit from it. A court of equity will set aside such a contract, and restore the parties, as nearly as may be, to the condition they were in before the contract was made.

Leyden does not propose to hold on to the land and refuse to pay the purchase money, but he offers to rescind the contract, the effect of which is to give up the land to Hickman, and all he asks is that the money he has paid out by reason of the fraud of Hickman be decreed to be paid him, he offering to account for rents. This case differs from those cases in 59 Ga., 455; 53 Id., 18; 60 Id., 337, in this, that in neither of those cases was there any offer to rescind and give up the land, and also there were no such direct and positive allegations of fraud as are in the present case.

It is further insisted by the learned and able counsel for defendant in error that, as Hickman does not reside in Oatoosa county, but in Richmond county, in this state, the superior court of Oatoosa county has no jurisdiction to render a decree against him under Leyden’s plea. We do not think that this objection is well founded. Hickman brought the action in Oatoosa county; this gives that court, under any proper plea by defendant, jurisdiction to hear and determine the same. See Markham vs. Huff, 72 Ga., 874.

Judgment reversed.