Court Opinion

ID: 9592391
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:13:45.547897+00
Date Added: 2024-06-11T18:01:16.824795
License: Public Domain

Carley, Justice,
concurring in part and dissenting in part.
I agree with Division 1 of the majority opinion that this Court should consider the issue of waiver of the claim of Wayne and Jean Akins (Purchasers) for rescission, and with the conclusion of Division 3 that the issue of reasonable diligence is a question for the jury. However, I cannot agree with the holding in Division 2 that the Purchasers’ intent to affirm the sales contract is also an issue for the jury
“Forfeitures of rights under valid legal contracts are not favored under the law. Our courts generally are quick to seize upon any waiver of a forfeiture. . . . [Cits.]” Pearson v. George, 209 Ga. 938, 945-946 (77 SE2d 1) (1953).
“It is a well-settled rule that a party who is entitled to rescind a contract on account of fraud or false representation, when he has full knowledge of all the material circumstances of the case, if he freely and advisedly does anything which amounts to the recognition of the transaction, or acts in a manner inconsistent with its repudiation, it amounts to acquiescence, and, though originally impeachable, the contract becomes unimpeachable even in equity [.] ... If a party to a contract seeks to avoid it on the ground of fraud or mistake, he must, upon the discovery of the facts, at once announce his purpose and adhere to it.” [Cits.]
State Highway Dept. v. Hewitt Contracting Co., 221 Ga. 621, 624 (2) (146 SE2d 632) (1966). When a purchaser is induced to buy property by fraud and later gains knowledge of the fraud, his subsequent sale of the property is the most convincing evidence possible of his inten*280tion to affirm the transaction and, thus, he loses the right to rescind. Housley v. Linnton Plywood Assn., 311 P2d 432, 437 (Or. 1957). Similarly, if the purchaser with knowledge of pre-existing fraud executes a mortgage or deed of trust subsequent to the sale, such act constitutes a ratification, regardless of whether he knows that the execution of the mortgage will result in ratification. Koppe v. Koppe, 122 SW 68, 72 (Tex. Civ. App. 1909). See also Mims v. Wight, 78 Ga. 12 (3 SE 447) (2) (1887) (one who executed a mortgage was estopped from denying that she had the title to the land). In this case, the Purchasers undisputedly executed a second deed to secure debt after learning of the alleged fraud. The execution of that security deed, being an outright conveyance of title, is clearly inconsistent with repudiation of the previous purchase of the property. Thus, by their execution of a deed to secure debt after gaining knowledge of the alleged fraud, the Purchasers have, in my opinion, affirmed the contract and lost their right to rescind. I further believe that the Purchasers can no longer obtain a rescission even if they have now paid the debt secured by the deed and had it cancelled. “[A] waiver of a breach or forfeiture can not be recalled. [Cits.]” Pearson v. George, supra at 946 (2).
The Purchasers do not contend that, if the trial court had followed proper procedure, there would have been any addition to the record which could demonstrate an absence of waiver of the alleged fraud, nor can I conceive of any evidence which would show that the execution of the security deed after obtaining knowledge of the alleged fraud was not an affirmance of the contract. Premium Distributing Co. v. National Distributing Co., 157 Ga. App. 666, 670 (2) (278 SE2d 468) (1981). Therefore, it is my opinion that this Court should affirm the trial court’s judgment against the Purchasers on the rescission claim. However, the pre-trial order shows that the Purchasers also sought the inconsistent, alternative remedy of damages, which is available only in the event that they affirm the alleged fraudulent contract. See Price v. Mitchell, 154 Ga. App. 523, 524 (1) (268 SE2d 743) (1980). Construing the evidence most favorably for the Purchasers, genuine issues of material fact remain as to that alternative claim. Thus, I believe that the trial court did err to the extent that it entered judgment against the Purchasers as to their claim for damages against the Sellers. I also agree with the majority that the trial court had earlier properly denied the Sellers’ motion for summary judgment, but erred in granting summary judgment in favor of Gedda and Bullard, on the issue of reasonable diligence. Accordingly, I concur in part and dissent in part to this Court’s judgment of reversal in the main appeal, and I concur in the judgment of affirmance in the cross-appeal.
*281Decided June 14, 1999
Reconsideration denied July 6, 1999.
Philip S. Coe, for appellants.
Holland & Knight, Frank O. Brown, Jr., Weissman, Nowack, Curry & Wilco, Leigh M. Wilco, Vicki V. Mott, for appellees.