Court Opinion

ID: 3883068
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:13:57.738559+00
Date Added: 2024-06-11T07:41:59.205860
License: Public Domain

This is an appeal from an order sustaining a demurrer to the complaint on the following ground: *Page 39 
"Because it appears on the face of the complaint, that the complaint does not state facts sufficient to constitute a cause of action, in that the cause of action, if any exists, is a cause of action in favor of South Atlantic Pecan Company, a corporation, and not in favor of the plaintiffs herein, and any action upon said cause of action should be brought in the name of the South Atlantic Pecan Company."
Error on the part of his Honor, the Circuit Judge, in sustaining the demurrer is thus assigned by the appellants:
"Because his Honor erred in holding that the facts alleged in the complaint showed that a cause of action existed in favor of the corporation, South Atlantic Pecan Company, when he should have held that the facts alleged showed a cause of action existing in favor of the plaintiffs, as individuals, based upon false and fraudulent representations made to them as individuals, and intended to influence their action as individuals, and should have held that the subsequent transfer of the contract for purchase, induced by such false representations to the corporation, was not a transfer of their rights of action for the injury resulting to them as individuals from the conspiracy and false representations of the defendants."
The complaint unquestionably alleges that the plaintiffs, in their individual capacity, entered into a contract with John S. Horlbeck (now deceased) for the purchase of the lands in dispute, and paid part of the purchase money, prior to the incorporation of the South Atlantic Pecan Company; that they were induced to enter into the contract by false representations of Horlbeck as to the condition of the lands, whereby they were damaged. If these allegations are true, then the plaintiffs became the equitable owners of the lands, together with a right of action for a breach of contract on the part of Horlbeck. Their right of equitable ownership had become vested, and their cause of action for breach of the contract had accrued, before the lands were conveyed to the company by Horlbeck. After Horlbeck had entered *Page 40 
into the contract with the plaintiffs, he did not have the power to destroy their vested interests in the property, or to defeat their cause of action against him for breach of the contract.
The allegations of the complaint show that Horlbeck conveyed the lands to the company by consent of the plaintiffs, and as they had the right, under the terms of the agreement, to require him to convey the lands to them, or to whomsoever they might direct, the conveyance to the company was, in effect, the same as if it had been made by them. The plaintiffs consented for the payments they had made to Horlbeck to be credited upon the agreed amount of the purchase money, to wit, $210,000, in consideration of stock which was issued to them by the company. It was for this reason that the mortgage was not executed in favor of Horlbeck for the full amount of the purchase money, but for only $174,000. The lands were sold under foreclosure of the mortgage for $50,000 and purchased by Horlbeck. But the complaint does not allege any facts showing an intention on the part of the plaintiffs to transfer or assign their cause of action for breach of the contract, or in any other manner to give the company the benefit of it.
When Horlbeck conveyed the lands to the company with the consent of the plaintiffs, they, as individuals, no longer had a vested interest in the land itself. But the cause of action for breach of the contract, arising from the false representations as to the condition of the property, was entirely separate and distinct from the other cause of action by which they could have compelled specific performance of the contract. As there are no allegations in the complaint, showing that the plaintiffs have disposed of their cause of action for breach of the contract, the demurrer was erroneously sustained.
This is the only question now properly before the Court for consideration. The judgment of the Circuit Court should be reversed. *Page 41