Court Opinion

ID: 9450987
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:02:17.121624+00
Date Added: 2024-06-11T17:31:28.740855
License: Public Domain

EDGERTON, Senior Circuit Judge
(dissenting):
The court says the bankrupt corporation’s deed was given “to secure loans previously advanced and to be advanced.” The statement that there were “loans previously advanced” rests only on defendant’s answer and contradicts plain*482tiff’s complaint. The complaint says neither the bankrupt nor the plaintiff trustee in bankruptcy received any part of the proposed loans for which the bankrupt gave promissory notes for $720,000, and to secure which it conveyed its land, buildings, and machinery to defendant. The defendant’s answer contradicts these statements of the complaint and says the defendant loaned the bankrupt $215,757.-35.
Since the pleadings of the plaintiff and the defendant are in conflict on the critical question whether the defendant did or did not loan money to the bankrupt, I think the District Court erred in granting the defendant’s motion for judgment on the pleadings. I think the court, in deciding the motion, should have taken as true the allegation of the complaint that the defendant made no part of the proposed loans, and should not have taken as true the contrary allegation of the answer, that the notes and security deed were made in consideration of past and future loans and that loans of $215,757.35 had been made. In Stanton v. Larsh, 239 F.2d 104, 106 (5th Cir. 1956), this court said: “On defendant’s motion for judgment on the pleadings, where no matters outside the pleadings are presented, the fact allegations of the complaint are to be taken as true, but those of the answer are taken as true only where and to the extent that they have not been denied or do not conflict with those of the complaint.” 1
The complaint asks judgment for $720,000, evidently on the assumption that the damages at law for breach of a contract to lend, like the damages at law for breach of a contract to buy land, see Harry v. Griffin, 210 Ga. 133, 78 S.E. 2d 37 (1953), are measured by the agreed consideration. The assumption is erroneous; damages at law for breach of a contract to lend must be specifically alleged and proved. See, e. g., Anderson v. Hilton & Dodge Lumber Co., 121 Ga. 688, 49 S.E. 725 (1905); cf. F.R.Civ.P. 9(g). The plaintiff did not make the necessary allegation and cannot recover damages at law. But he should not be denied all relief because he mistook the relief to which he was entitled. The prayer for relief in a complaint should be disregarded in determining whether the complaint states facts on which relief may be granted. Dotschay for Use and Benefit of Alfonso v. National Mutual Ins. Co., 246 F.2d 221 (5th Cir. 1957); 6 Moore, Federal Practice, § 54.60, at 1203-04 (2d ed. 1964). I think the court errs in holding that the facts alleged in the plaintiff’s complaint, “if proved, would not support his claim for relief on any theory of the law.” I think they would support equitable relief.
If the grantor of a security deed has repaid the loan he is entitled to a judgment that he owes nothing, an injunction against foreclosure, and cancellation of the deed.2 If no part of the proposed *483loan was ever made, the grantor of the security deed should be entitled to the same relief. A trust deed or mortgage unsupported by consideration may be cancelled in equity and the title of the grantor cleared. See Sanders v. Sanders, 210 Ga. 248, 78 S.E.2d 785 (1953); Johnson v. Neal, 170 Ga. 230, 152 S.E. 108 (1930). Even if it appears at trial that something is owed to the grantee, the court may order an accounting and cancel the deed on condition of full payment by the grantor.3

. Under Rule 8(d), F.R.Civ.P., “[a]verments in a pleading to which no responsive pleading is required or permitted are to be taken as denied * * After the defendant’s counter-claim was dismissed, no pleading in response to defendant’s answer was required or permitted. Rule 7(a), F.R.Civ.P. The answer put in issue the question whether loans had been made. “For the purposes of the motion [for judgment on the pleadings], all well-pleaded material allegations of the opposing party’s pleading are to be taken as true, and all allegations of the moving party which have been denied are taken as false. * * * Hence, a defendant may not obtain a judgment on the pleadings on the basis of the allegations in his answer where no reply is required, since under Rule 8(d) these allegations are deemed denied * * * ” 2 Moore Federal Practice, § 12.15, at 2269-70 (2d ed. 1964).

. See Bower v. Certain-teed Prods. Corp., 216 Ga. 646, 119 S.E.2d 5 (1961); First Federal Savings & Loan Ass’n of Atlanta v. Norwood Realty Co., 212 Ga. 524, 93 S.E.2d 763 (1956); Bank of LaFayette v. Giles, 208 Ga. 674, 69 S.E.2d 78 (1952); Hobbs v. Houston, 190 Ga. 505, 9 S.E.2d 749 (1940); Mitchell v. Mandeville Mills, 180 Ga. 791, 180 S.E. 828 (1935) ; Linder v. Wimberly, 158 Ga. 285, 123 S.E. 129 (1924); E. Tris Napier Co. v. Gloss, 150 Ga. 561, 104 S.E. 230 (1920).

. See Wagoner v. Bainbridge State Bank, 176 Ga. 82, 169 S.E. 32 (1933); Linder v. Wimberly, supra note 2; E. Tris Napier Co. v. Gloss, supra note 2.
In tbe circumstances of this ease, specific performance might perhaps be allowed as an alternative remedy. Ordinarily, damages at law are an adequate remedy for breach of a contract to lend money and therefore specific performance is not granted. But this case is exceptional in that, according to the complaint, the would-be borrower conveyed all his land and got nothing in return. It has been said that in such a case the “decree would far better let the security stand and order the payment of the sum promised. This would be specific performance and not merely damages.” 5A Corbin, Contracts, § 1152, at 168 (1964).