Court Opinion

ID: 5621387
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:37:14.139181+00
Date Added: 2024-06-11T08:37:26.122588
License: Public Domain

Bell, J.,
dissenting. I am constrained to dissent from the judgment of reversal, for two reasons: first, because I think the evidence shows as a matter of law that the plaintiff did not rely upon any representation which the defendant may have made to him regarding the value and collectibility of the notes. On the other hand, it affirmatively appears from the evidence that the plaintiff, before he signed any sort of contract, concluded to make an independent investigation with regard to the same subject. Upon this question *827lie testified as follows: “After I had my conversation with Mr. Cannon [the defendant] and Mr. Williams [the broker] in regard to these notes, the value of them and so forth, I made further investigation in regard to these notes. When Mr. Williams and I went to see Mr. Morrison [who had signed the notes as president of the Acme Investment Company, the maker] — prior to signing the contract Mr. Williams and I went to see Mr. Morrison and asked him about the notes. Mr. Morrison told us he believed the notes were good, that he had some notes in his possession from the man he had sold the Georgian Hotel to, payable to him, $2,000 a month, and out of that money he was going to pay these notes of $500 a month. . . When I got these notes in hand and examined them I went to see Mr. Morrison. I did see Mrs. Morrison in there. She was in the office. I talked to her about the Acme Investment Company. I asked her about the Acme Investment Company there, what it was, before I signed the contract. I was trying to get a line on the notes. I was malting an investigation into these notes for myself. I made that investigation. I can not say that was before I talked to Mr. Cannon. It was about the same time. Mrs. Morrison told me what these notes represented in substance. She told me about some notes given by Cunningham. She told me that the Acme Investment Company got over $200,000 of notes from Cunningham for the Georgian Hotel at Athens, payable $2,000 a month. Mr. Morrison came in on another visit and told me substantially the same thing. On two separate occasions Mrs. Morrison told me and Mr. Morrison that they had some notes from Cunningham, and that they represented the sale of the Georgian Hotel in Athens, and all about that. They told me their notes were good too. He told me their notes were good, or she did. He told me the Acme Investment Company notes would be paid. They said there was an agreement. I asked about that agreement after I got the notes, several days after. I went to the title company on the 12th of February to close this trade with Mr. .Cannon [italics ours].”
There is no evidence that the plaintiff was referred to the Morrisons by the defendant, but it appears that he went of his own volition, desiring to make an investigation “for himself.” One of the essentials of a cause of action for fraud is that the plaintiff shall have relied upon the representations in consummating the con*828tract, and it seems to me that the evidence failed as a matter of law to establish this necessary element. Compare King v. Holt, 31 Ga. App. 795 (122 S. E. 95); Sawyer v. Birrick, 33 Ga. App. 746 (127 S. E. 806); Davis v. State, 27 Ga. App. 195 (3) (107 S. E. 883); Currie v. Collins, 136 Ga. 473 (2) (71 S. E. 798). “If the purchaser investigates for himself and nothing is done to prevent his investigation from being as full as he chooses, he can not say that he relied on the vendor’s representations.” Farrar v. Churchill, 135 U. S. 609, 615 (10 Sup. Ct. 771, 34 L. ed. 246).
Secondly, I am of the opinion that the evidence established without dispute that the plaintiff waived the alleged fraud by proceeding to close the transaction after knowledge that the notes were of questionable value, or after the discovery of such facts as should have led an ordinarily prudent person to the acquisition of such knowledge. After the execution of the escrow agreement the plaintiff, according to his own testimony, concluded that the “notes were suspicious,” and began “to feel that they were not good.” He had employed an attorney to make an investigation, and this attorney had gone to Athens for the purpose, just as the plaintiff himself had done on two different occasions in order to interview the Morrisons. The attorney discovered that the notes were without security, and for this reason, so the plaintiff says, he began to doubt that the notes were good.
Notwithstanding this state of mind on his part, he proceeded to clear the title as demanded by the defendant’s attorney, by arranging to segregate the property from an omnibus mortgage so that the defendant might assume a particular amount in part satisfaction of the purchase-money. He also accepted from the depositary a remainder of the notes, which were held with the deed in escrow pending clearance of the title to the extent required.
In these circumstances, I think that the plaintiff should be held to have waived the fraud, since by further action on his part he made possible the delivery of the deed and the notes, in accordance with the escrow agreement, himself receiving the remaining and greater portion of the notes in part and final payment of the purchase-price. The plaintiff added materially to his entanglement after the discovery of facts which should have put him fully upon notice of the alleged falsity of the representations, and in such a case he is not entitled to redress at the hands of the court. Tuttle *829v. Stovall, 134 Ga. 325 (67 S. E. 806, 20 Ann. Cas. 168); Richardson v. DuPree, 32 Ga. App. 3 (5 b) (122 S. E. 707); Kingman v. Stoddard, 85 Fed. 745; Simon v. Goodyear Metallic Rubber Shoe Co., 105 Fed. 579.
For the above reasons, regardless of others that may appear in the record, including a possible failure to show that the representations were known by the defendant to be false, it is my opinion that the judgment of nonsuit was right, and should be affirmed.