Court Opinion

ID: 9581758
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:18:23.852793+00
Date Added: 2024-06-11T13:37:13.772825
License: Public Domain

Felton, Chief Judge, Nichols, Presiding Judge, Jordan and Frankum, Judges,
dissenting. We think that the court erred in *546sustaining the plaintiff’s oral motion to strike the various paragraphs of the defendant’s answer. Code § 37-707 provides: “Any relations shall be deemed confidential, arising from nature or created by law, or resulting from contracts, where one party is so situated as to exercise a controlling influence over the will, conduct, and interest of another; or where, from similar relation of mutual confidence, the law requires the utmost good faith; such as partners, principal and agent, etc.” The above Code section does not attempt to comprehensively enumerate the cases wherein the relation of mutual confidence is present. We are mindful of the cases which hold that where parties are dealing at arm’s length and there is no fiduciary or confidential relation, a party who can read must read, or have read to him, the provisions of instruments which he signs, where there is no emergency excusing his doing so unless the signature is procured by trick or artifice which prevents the reading of the instrument. Dover v. Burns, 186 Ga. 19 (196 SE 785); Lewis v. Foy, 189 Ga. 596 (6 SE2d 788); Pirkle v. Gurr, 218 Ga. 424 (128 SE2d 490) and cit. Code § 37-704 is as follows: “Suppression of a fact material to be known, and which the party is under an obligation to communicate, constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case.” We are of the opinion that the relationship between the defendant in the trial court and the plaintiffs’ agent, Mason Mobley, was in the nature of a confidential one within the meaning of the Code section next above. .The parties were not at arm’s length, in the ordinary signification of that expression. The stricken paragraphs show that the defendant had known the agent of the plaintiffs for a long time and that he understood that what he was doing was employing the agent of the plaintiffs as his agent to list and sell his property. It seems to us that it would be most unreasonable to say, where a man intends to enter a confidential relationship with another, that his acts in selecting his confidential agent are at arm’s length the instant before he employs him, and that the parties occupy a fiduciary and confidential relationship the instant after the employment is made. It therefore very forcibly strikes us that in such a situation the *547agent was under an obligation to the defendant not to mislead him as to the nature of the contract he was signing under the facts alleged. We believe that the obligation to communicate the truth arose from the particular circumstances of this case which show that the defendant had already decided to entrust the agent with his business and was in process of appointing the agent to sell his land on commission. Such a misrepresentation as is here alleged amounts to a trick or artifice, for the reason that the defendant, under the circumstances, had a right to rely on the truthfulness of the representations. Code § 37-805 is as follows: “Mere inadequacy of price, though not sufficient to rescind a contract, may justify a court in refusing to decree a specific performance; so also any other fact showing the contract to be unfair, or unjust, or against good conscience.” Not only is there alleged in said answer an inadequacy of price but, in addition thereto, there is alleged a disparity of mental capacity between the plaintiffs’ agent and the defendant. While the above Code section on inadequacy of price justifies a court of equity in refusing to decree a specific performance, the action at law in this case amounts to a partial decree of specific performance insofar as the plaintiffs and the defendant were concerned.
The majority opinion is based on the erroneous premise that a legal relationship involving fiduciary duties must be shown to give rise to a confidential relationship. We do not believe that this premise is correct. The showing of a relationship in fact which justifies the reposing of confidence by one party in another is all the law requires. Code § 37-704 expressly goes beyond the strict fiduciary relations of the parties and states that the obligation to communicate may arise “from the particular circumstances of the case.” The same is true as to Code § 37-707. It would seem that the law with reference to confidential relationship is not as restricted as contended by the majority. Such a strict rule would bar one of a couple engaged to be married from reposing confidence in the other, even one minute before the marriage ceremony. “A man occupies a relation of trust and confidence toward a woman whom he is engaged to marry, and is bound to act fairly and in good faith in his dealings with her. Jekshewitz v. Groswald, 265 Mass. 413 (164 NE 609, 62 *548ALR 525); Eaton v. Eaton, 233 Mass. 351 (124 NE 37, 5 ALR 1426).” 23 Am. Jur. 764, Fraud and Deceit, § 14, n. 12. A valid analogy to that situation is presented by the facts in this case. The real estate salesman is agreeable to being appointed as a listing agent. The owner is willing to appoint the agent in such a capacity. In the process of the appointment the alleged misrepresentation is made. A stronger case for a basis of trust and reliance could hardly be imagined unless it is the engaged couple situation. We maintain that the Code sections cited are in accord with the weight of authority in this country, and the majority have cited no cases to show the contrary. The following quote from 23 Am. Jur. 763, Fraud and Deceit, § 14, states our contention which we think should prevail in this case: “The term 'fiduciary or confidential relation’ is a very broad one. Courts of equity have carefully refrained from defining the particular instances of fiduciary relations in such a manner as to exclude other and perhaps new cases. The cases of parent and child, guardian and ward, trustee and cestui que trust, and principal and agent are familiar instances in which the principle of fiduciary relationship applies in its strictest sense. Its operation, however, is not confined to the dealings and transactions between parties standing in these relations, but extends to all relations in which confidence is reposed, and in which dominion and influence resulting from such confidence may be exercised by one person over another. It is settled by an overwhelming weight of authority that the principle extends to every possible case in which a fiduciary relation exists as a fact, in which there is confidence reposed on one side and the resulting superiority and influence on the other. The relation and the duties involved in it need not be legal. It may be moral, social, domestic, or merely personal. Hence, the rule embraces both technical fiduciary relations and those informal relations which exist wherever one man trusts in, and relies upon, another. The origin of the confidence is immaterial. It has been held, however, riot to apply to relations of mere friendship or to cases of natural relationship, such as parent and child, except where the relation of guardian and ward is also involved, as in the case of one just come of age making a gift to the father. Constructive fraud often exists *549where the parties to a transaction have a special confidential or fiduciary relation which affords the power and means to one to take undue advantage of, or exercise undue influence over, the other. A course of dealing between persons so situated is watched with extreme jealousy and solicitude; and if there is found the slightest trace of undue influence or unfair advantage, redress will be given to the injured party. No part of the jurisdiction of the court is more useful than that which it exercises in watching and controlling transactions between parties standing in such a relation of confidence to each other. Where a confidential or fiduciary relationship exists, it is the duty of the person in' whom the confidence is reposed to exercise the utmost good faith in the transaction and to refrain from abusing such confidence by obtaining any advantage to himself at the expense of the confiding party. Should he obtain such advantage, he will not be permitted to retain the benefit; and the transaction will be set aside even though it could not have been impeached had no such relation existed, whether the unconscionable advantage was obtained by mispresentations, concealment or suppression of material facts, artifice, or undue influence. A confidential relation must be shown to have existed at the time when it is claimed that a fraud has been committed by the violation of it; but the termination of an artificial relation created by the operation of law or course of business, such as that of guardian and ward, attorney and client, and the like, does not necessarily put an end to the application of the rule, which will apply until the dominating influence has been completely removed.” (Emphasis supplied.) Code § 37-212 provides: “The negligence of the complaining party, preventing relief in equity, is that want of reasonable prudence, the absence of which would be a violation of legal duty. Belief may be granted even in cases of negligence by the complainant, if it appears that the other party has not been prejudiced thereby.” (Emphasis supplied). We think that this section applies to this case. It is true that it states an equitable principle, but defendants in law cases and law courts may resort to equitable principles to the extent of defeating a plaintiff’s claim. While the section was codified from a decision, its principles are not confined solely to mutual mistake *550cases. The ruling in the case would be the law if the principle had not been codified, and the broad principle stated could be applied to other situations. The principle stated in the Code section calls for a more rigid application in cases of fraud than in cases of mutual mistake. There is no evidence of prejudice in this case unless being deprived of the fruits of one’s fraud can be called being prejudiced.
Ingram v. Rooks, 221 Ga. 701 (146 SE2d 743), cited by the majority, is not authority contrary to the conclusion we reach.' All that case holds is that there was no relationship shown which' gave the complaining party a right to rely on the representations of a party at arm’s length at the time of the representations. The fact that a testator trusted a person enough to name him or her as executor or executrix does not constitute a confidential relationship which will authorize a devisee to rely on the representations of one named as executrix before the probate of the will because the devisee cannot base confidential relationship on the reposing of trust in the named executrix by the testator. It is our opinion that the Code sections hereinbefore referred to are not as narrow as the majority contends, and that if any court decision is contrary to the Code sections the Code sections prevail. However, as we construe the decisions, there is not one case which precludes the conclusion we have reached in this case.