Title: Hammac v. Skinner
Citation: 89 So. 2d 70
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: May 24, 1956

89 So. 2d 70 (1956)
Roy HAMMAC
v.
Bert SKINNER et al.
2 Div. 365.

Supreme Court of Alabama.
May 24, 1956.
Rehearing Denied August 2, 1956.
Pitts &amp; Pitts, Selma, for appellant.
Pettus, Fuller, Reeves &amp; Stewart, Selma, for appellees.
PER CURIAM.
On this appeal the important question is whether the bill in equity shows a right of complainants on the rescission of a transaction to recover expenses which they incurred in preparing to utilize the property purchased.
Complainants, to whom we will refer as appellees, and respondent to whom we will refer as appellant, made an agreement, exhibit A to the bill of complaint, which is as follows:
The $10,000, above mentioned, was paid. It was later agreed for appellee to pay the sum of $28,000 cash and execute a note for $22,000. Appellees also executed another note in the sum of $63,561.75. Those notes were executed on May 5, 1953. To secure the note for $63,561.75 appellees, on May 18, 1953, executed a mortgage on a half interest in certain property. In July 1953 appellant advised appellees that he was unable to get good title to the tract referred to as the "first tract", and could not consummate the trade, but that he had located a "second tract" which he could purchase for their joint interest; that the purchase price would be $2,000 more than the purchase price of the "first tract", which he would pay and that appellees would be obligated to pay the same amount as for the "first tract," $123,561.75 for a half interest and to be paid in the same manner, that is, $38,000 cash already paid, a promissory note for $22,000, and a note for $63,561.75 secured by a mortgage on a half interest in the "second tract". Appellees agreed to the arrangement to purchase the "second tract," and they executed a new note dated July 11, 1953, and a mortgage of the same date on a half interest in the "second tract". The former note and mortgage, dated May 5, 1953 and May 18, 1953, respectively, were returned to appellees. Appellant still holds the note and mortgage of July 11, 1953. Appellant then delivered to appellees a full warranty deed dated July 11, 1953, purporting to convey to appellees a half interest in the "second tract".
Paragraphs 10 and 11 of the amended bill of complaint are as follows:
Paragraphs 9 and 16 of the bill of complaint are as follows:
Paragraph 14 of the bill is as follows:
The prayer seeks the relief specified in paragraphs 14 and 16, supra.
On the facts alleged, it is clear that appellees are entitled to a rescission and cancellation of the transaction with a restoration to each of what he is entitled to recover as an incident to such result, all of which is available in this suit in equity. We do not understand that appellant controverts that result upon the basis of the facts alleged. The bill is well drawn and contains all the essential elements of fraud in inducing the execution of the contract by appellees, their right to rescind and cancel it on that ground and that they duly elected to do so. Calloway v. McElroy, 3 Ala. 406; Bullard Shoals Mining Co. v. Spencer, 208 Ala. 663, 95 So. 1; Wood v. Master Schools, 221 Ala. 645, 130 So. 178; Bullen v. Trulove, 224 Ala. 677, 141 So. 671. The bill as a whole is not subject to any ground of demurrer insisted on.
The chief contention is whether having elected to rescind and cancel the transaction for fraud in its inducement, appellees can recover the amount of the expense incurred by one of them in going to the Republic of Panama and shipping his household effects there (and return) in preparation of using the land as contemplated and agreed should be done by appellees.
In this connection it is well settled that in a suit for rescission and cancellation general damages for deceit or fraud may not be recovered by the defrauded party, but there are claims which may be recovered such as waste and other claims necessary to a restoration of the status quo, Tollett v. Montgomery Real Estate &amp; Ins. Co., 238 Ala. 617, 193 So. 127, including expenses incident to the contract, 17 C.J.S., Contracts, § 442, p. 926, note 73; Sidney Stevens Implement Co. v. Hintze, 92 Utah 264, 67 P.2d 632, 111 A.L.R. 331; Sylvania Industrial *74 Corporation v. Lilienfeld's Estate, 4 Cir., 132 F.2d 887,145 A.L.R. 612, Judge Parker; Equitable Life Assur. Soc. of United States v. Kushman, 276 N.Y. 178, 11 N.E.2d 719. But there is a difference of opinion whether the nature of the expense here involved is one which is incidental to the contract and recoverable, or is an item of damage which is solely recoverable in an action of deceit.
The ruling of the trial court was favorable to appellees by the decree overruling the demurrer to that aspect of the bill as well as to the bill as a whole. We may pause here to observe that usually the claim of an item of damage in a suit in equity does not render it subject to demurrer though the claim is not shown to be recoverable. This is not a suit for damages, but only a claim of restoration to a status. This claim is controlled by a state of facts applicable to it alone. The parties have treated that feature of the bill as an aspect. We are not disposed to take a different view to reach an easy conclusion in this suit. We will therefore treat the merits of the claim.
Appellees rely on a principle which is thus stated in Black on Rescission and Cancellation, in section 695, page 1653, as follows:
The above authority cites the case of Holland v. Western Bank &amp; Trust Co., 56 Tex.Civ.App. 324, 118 S.W. 218. We find that case fully supports the text and we quote from it as follows:
On the other hand, there are cases cited by appellant which seem to conflict and reach a different result. In the case of Carpenter v. Mason, 181 Wis. 114,193 N.W. 973, 974, there was no agreement to cover such an expense above referred to. We quote as follows:
And in Stanford v. Smith, 163 Ark. 583, 260 S.W. 435, 438, there was no agreement shown that the purchaser who resided in Arkansas would go to Texas and reside on the land; nor what use was intended to be made of the land. The court observed:
There is a difference between the instant case and the cases relied upon by appellant. It is that the allegations of the bill, which we have quoted, make it plain that, as an incident to the agreement and a feature of it, the land was to be jointly owned by appellees and appellant and that one of the appellees was to move his family to the Republic of Panama and conduct the logging operations on said land for their mutual benefit, and that this expense was incurred pursuant to that agreement and before the fraud was discovered. So that, the expense was incurred as contemplated by the parties.
The Texas case, supra, and Black on Rescission and Cancellation, supra, do not make it necessary that the special damages be incurred pursuant to the intent of the parties to be recoverable on rescission. They make the distinction that general damages are not recoverable on rescission but that certain special damages are recoverable. We do not find it necessary at this time to take a position on that distinction for in *76 this case the right to claim the amount of such expense is controlled by an agreement and the intent of the parties. In the Wisconsin case, supra, it is observed that there was no such agreement.
All we decide here is that we think the bill sufficiently shows a right to have restored to appellees the expense they incurred as alleged in paragraphs 9 and 16 of the bill of complaint and because of the facts there alleged. The name given to such claim in the bill is not controlling.
The decree of the trial court should be affirmed.
The foregoing opinion was prepared by FOSTER, Supernumerary Justice of this Court, while serving on it at the request of the Chief Justice under authority of Title 13, § 32, Code, and was adopted by the Court as its opinion.
Affirmed.
LIVINGSTON, C. J., and LAWSON, STAKELY and MERRILL, JJ., concur.
Counsel for appellant are very urgent that we failed to give consideration to his contention as to paragraph 12 of the bill of complaint. That paragraph is as follows:
It is insisted that as a plea of the law of a foreign nation it is subject to the objection that it states a conclusion of the pleader and not the substance of the law itself as a fact. The form of the allegations may not be strictly up to the requirements of good pleading as interpreted in Equitable Life Assur. Soc. of United States v. Brandt, 240 Ala. 260, 198 So. 595, 134 A.L.R. 555, in not alleging what the law on the subject is in the Republic of Panama, but only what the effect of it is upon complainants as applied to the transaction involved. Counsel insist that as a feature of the charge of fraud its insufficiency renders the bill subject to demurrer as to that aspect of it charging fraud in procuring the contract. Properly considered the bill has but one aspect, to annul and vacate a transaction for fraud in its procurement. Other features of the bill are supplementary to that. We agree that if the allegations of paragraph 12 of the bill are essential to the charge of fraud, they ought to be well pleaded and that a failure in that respect would subject the bill to appropriate demurrer. We did not discuss that question because we thought, and still think, that the charge of fraud and its effect upon the transaction was complete without paragraph 12 as set out. All the elements of fraudulently procuring the contract from complainants are set out in the bill by the facts on which the charge is based, and they are sufficient and well pleaded without paragraph 12. "Sometimes it is necessary at law to prove all the allegations of a count to sustain the cause of action as laid. Mazer v. Brown, 259 Ala. 449(14), 66 So. 2d 561. * * * But that is not to be confused with the principle well settled that in equity it is not necessary to accurately prove every detail of averment as alleged provided that proof is made of such averments as are essential to the relief sought". Bobo v. City of Florence, 260 Ala. 239, 69 So. 2d 463, 465, citing Mutual Service Funeral Homes v. Fehler, 257 Ala. 354, 58 So. 2d 770; Ellis v. Womack, 247 Ala. 254, 23 So. 2d 859. The older cases are cited in the above authorities. Since it is not necessary to prove the law of the Republic of Panama in the respect here material, it is *77 not necessary for it to be alleged in the bill according to the requirements for pleading such a law. The bill is not subject to the demurrer interposed in that respect.
On the original submission we treated the chief controversy as we understood it and as fully as we thought necessary and feel like it was correctly disposed of.
The application for rehearing should be overruled.
The foregoing opinion was prepared by FOSTER, Supernumerary Justice of this Court, while serving on it at the request of the Chief Justice under authority of Title 13, § 32, Code, and was adopted by the Court as its opinion.
Application for rehearing overruled.
LIVINGSTON, C. J., and LAWSON, STAKELY and MERRILL, JJ., concur.