Opinion
6 Div. 637.
January 17, 1935. Rehearing Denied February 21, 1935.
Appeal from Circuit Court, Jefferson County; John Denson, Judge.
Martin, Turner McWhorter, Walter Bouldin, and J. C. Blakey, all of Birmingham, for appellant.
A vendee cannot rescind a contract for the purchase of land on account of a misrepresentation of the vendor unless such representation was of a material fact, unless it constituted an inducement to the purchase upon which the vendee relied, and unless he was actually deceived and damaged as a result thereof. Juzan v. Toulmin, 9 Ala. 662, 44 Am. Dec. 448; Foster v. Gressett's Heirs, 29 Ala. 393; Crown v. Carriger, 66 Ala. 590; Griel v. Lomax, 89 Ala. 420, 6 So. 741; Lockwood v. Fitts, 90 Ala. 150, 7 So. 467; Meeks v. Garner, 93 Ala. 17, 8 So. 378, 11 L.R.A. 196; Hughes v. So. Warehouse Co., 94 Ala. 613, 10 So. 133; Baker v. Maxwell, 99 Ala. 558, 14 So. 468. A statement that the property is within city limits is not a material representation where the purchaser has seen and is acquainted with its actual location and where there is no showing that the property would be more valuable if included within the city limits. Porter v. Collins, 90 Ala. 510, 8 So. 80; New Orleans Co. v. Musgrove, 90 Ala. 428, 7 So. 747; Landfried v. Milam (Tex.Civ.App.) 214 S.W. 847; McCallum v. Hart, 1 Sask. L. 482. In order for a vendee to rescind a contract for the sale of lands and recover the consideration paid, he must place the vendor in statu quo by returning or offering to return the property conveyed. Fitzpatrick v. Featherstone, 3 Ala. 40; Duncan v. Jeter, 5 Ala. 604, 39 Am. Dec. 342; Allgood v. Bank of Piedmont, 115 Ala. 418, 22 So. 35; Maxwell v. Sherman, 172 Ala. 626, 55 So. 520. The delivery to the grantee of a deed complete on its face is an absolute delivery and vests title to the property in the grantee. Hargrave v. Melbourne, 86 Ala. 270, 5 So. 285; Powell v. Powell, 217 Ala. 287, 116 So. 139. Return of a deed and abstract delivered by grantor to grantee does not revest title in the grantor, and is not sufficient to rescind the contract. Homer v. Purser, 20 Ala. 573; Hollingsworth v. Walker, 98 Ala. 543, 13 So. 6; Davidson v. Brown, 215 Ala. 205, 110 So. 384; Ahrens v. Adler, 33 Cal. 608; Jeffers v. Forbes, 28 Kan. 174; Howe v. Martin, 23 Okl. 561, 102 P. 128, 138 Am. St. Rep. 840; Johnson v. Burnside, 3 S.D. 230, 52 N.W. 1057. Where a deed has been delivered to the grantee, he must resort to a court of equity in order to recover the consideration paid even if fraud be alleged, since a court of law cannot place the parties in statu quo. Cullum v. Mobile Branch Bank, 4 Ala. 21, 37 Am. Dec. 725; Patton v. England, 15 Ala. 69; Homer v. Purser, 20 Ala. 573. Where there is a written contract, an action on the common counts cannot be maintained except in cases where nothing remains to be done but the payment of money. Morgan v. Patrick, 7 Ala. 185; Darden v. James, 48 Ala. 33; Smith v. Sharpe, 162 Ala. 433, 50 So. 381, 136 Am. St. Rep. 52; Jonas v. King, 81 Ala. 285, 1 So. 591; Elrod Lumber Co. v. Moore, 186 Ala. 430, 65 So. 175; Abercrombie v. Vandiver, 126 Ala. 513, 28 So. 491.
Thos. Seay, of Birmingham, for appellee.
Any material misrepresentation as to the location of land or the like, whether made innocently or with fraudulent intent, will in general entitle the person acquiring the land and relying on such statement to rescind the transaction and recover the amount paid by him on the purchase price. 5 Thompson on Real Prop. 427, § 4313. Suppression of truth may amount to a suggestion of falsehood, and, if with intent to deceive, either party to a contract conceals or suppresses a material fact which good faith requires him to disclose, this is equivalent to false misrepresentation. American-Traders' Nat. Bank v. Henderson, 222 Ala. 426, 133 So. 36; Griel v. Lomax, 89 Ala. 420, 6 So. 741. One induced by fraud to enter into a contract may rescind and sue for money had and received or may affirm the contract and sue in deceit for damages. Bankers' Mortg. Bond Co. v. Rosenthal, 226 Ala. 135, 145 So. 456. An action for money had and received is one in assumpsit based upon a promise to repay implied by law, and is a proper action to recover money paid on a contract that has been rescinded because induced by fraud. Mutual B. L. Ass'n v. Watson, 226 Ala. 526, 147 So. 817; Bankers' Mortg. Bond Co. v. Rosenthal, supra; Southern B. L. Ass'n v. Argo, 224 Ala. 611, 141 So. 545. A deed does not convey title until delivery. Powell v. Powell, 217 Ala. 287, 116 So. 139; Arrington v. Arrington, 122 Ala. 510, 26 So. 152; Fitzpatrick v. Brigman, 130 Ala. 450, 30 So. 500; Crosby v. Baldwin County, 227 Ala. 122, 148 So. 814. Acceptance by grantee is an essential element of good delivery. Buszozak v. Wolo, 125 Misc. 546, 211 N.Y. S. 557; Redmond v. Gillis, 346 Ill. 223, 178 N.E. 504; Hardin v. Kazee, 238 Ky. 526, 38 S.W.(2d) 438; Ratcliff's Guardian v. Ratcliff, 242 Ky. 419, 46 S.W.(2d) 504; Birchard v. Simons, 59 S.D. 422, 240 N.W. 490; City Nat. Bank v. Morrisey, 97 Conn. 480, 117 A. 493; Arrington v. Arrington, supra. The question of the delivery of a deed is one of fact for the jury. Elsberry v. Boykin, 65 Ala. 336, 340; Culver v. Carroll, 175 Ala. 469, 57 So. 767, Ann. Cas. 1914D, 103; Napier v. Elliott, 146 Ala. 213, 40 So. 752, 119 Am. St. Rep. 17; Gulf R. C. Co. v. Crenshaw, 169 Ala. 606, 53 So. 812; Powell v. Powell, supra; Seeley v. Curts, 180 Ala. 445, 61 So. 807, Ann. Cas. 1915C, 381. Parol evidence is admissible, and all surrounding circumstances should be considered in determining delivery vel non. Alabama C. C. Co. v. Gulf C. C. Co., 165 Ala. 304, 51 So. 570; Gargis v. Fore, 218 Ala. 102, 117 So. 679; Jones v. First Nat. Bank, 206 Ala. 203, 89 So. 437; 1 Devlin on Deeds, § 205. A deed may be placed with the grantee for inspection in order that the grantee may determine whether it is acceptable. Cherry, Smith Co. v. Herring, 83 Ala. 458, 3 So. 667; 1 Devlin on Deeds, § 271. If there was no delivery of the deed, then the deed was a nullity, and there was no occasion for resort to equity. Davidson v. Brown, 215 Ala. 205, 110 So. 384.
The action was for money had and received on rescission of a contract of purchase of real property, induced thereto by a material misrepresentation of its location.
Several propositions of law are established, as that such an action is in assumpsit, based upon a promise to repay that is implied by law (National Finance Corporation v. Atkins, 227 Ala. 393, 150 So. 351; Mutual Building Loan Ass'n v. Watson, 226 Ala. 526, 147 So. 817; Bankers' Mortg. Bond Co. v. Rosenthal, 226 Ala. 135, 140, 145 So. 456; National Life Accident Ins. Co. v. Baker, 226 Ala. 501, 147 So. 427; Southern Building Loan Ass'n v. Argo, 224 Ala. 611, 141 So. 545); that one induced by fraud or a vitiating misrepresentation to enter into a contract may duly rescind and sue for the money had and received thereon, or may affirm the contract and sue in deceit for damages (Bankers' Mortg. Bond Co. v. Rosenthal, supra); and that the suppression of the truth as to the material fact may amount to an actionable falsehood, as when, with the intent to deceive, a party to the contract conceals or suppresses a material fact which good faith requires to be declared or disclosed, it is the equivalent of false misrepresentation and fraudulent concealment (American-Traders' Nat. Bank et al. v. Henderson, 222 Ala. 426, 133 So. 36; Griel v. Lomax, 89 Ala. 420, 6 So. 741).
In Thompson on Real Property, vol. 5, § 4313, p. 427, the text — "Nothing but what is plainly injurious to good faith can constitute such a fraud as will form the basis of a rescission. A statement as to the value or area of land may be such a statement of fact as will entitle the other party to rescission. Any material misrepresentation as to the location of land, or the like, whether made innocently or with a fraudulent intent, will in general, entitle a person acquiring the land and relying on such statements to rescind the transaction and recover the amount paid by him on the purchase-price (Lockwood v. Fitts, 90 Ala. 150, 7 So. 467). False representations made by a vendor as to his title, though innocently made, upon which his vendee relies to his injury, may constitute such constructive fraud as will entitle the purchaser to a rescission (Baker v. Maxwell, 99 Ala. 558, 14 So. 468)" — is founded on our decisions. Davidson v. Brown et al., 215 Ala. 205, 110 So. 384; Williams et al. v. Bedenbaugh, 215 Ala. 200, 110 So. 286; Letson v. Mutual Loan Soc., 208 Ala. 285, 94 So. 288; Preston Motors Corporation v. Wood, 208 Ala. 172, 94 So. 70; Stone v. Walker et al., 201 Ala. 130, 77 So. 554, L.R.A. 1918C, 839.
The facts generally stated are that in July, 1925, appellant negotiated with appellee for the purchase of lots 1 and 2 in block 4 of a survey of West End Manor, described in the contract and represented to be "in the City of Birmingham"; that she was shown the lots by a selling agent, though she did not know their location with respect to the corporate limits of that city; that, after paying some of the installments on these lots, she advised appellant's selling agent that she wished to purchase the two adjacent lots, numbered 3 and 4 of that subdivision, and entered into a like written contract therefor. She made default in her payments on lots 1 and 2, and all sums paid on that contract were by consent transferred to and credited on her purchase of lots 3 and 4. In both contracts the lots were described as being in West End Manor in the city of Birmingham, Jefferson county, Ala.
Interrogatories propounded under the statute by plaintiff to defendant, in evidence, show defendant's explanation of this misdescription of location to have been: "Defendant did enter into a contract with the plaintiff on July 9, 1925, wherein defendant agreed to sell to the plaintiff for $900, plus certain interest payments and taxes, two lots owned by the defendant. The lots were described in such contract as Lots 3 and 4 in Block 4, according to the survey of West End Manor in the City of Birmingham, Jefferson County, Alabama. This description was correct except for the words 'in the City of Birmingham.' Said misdescription was caused by the fact that the lots were sold under a contract form prepared for the sale of lots throughout the subdivision owned by the defendant and some of the lots in the subdivision were within the City of Birmingham."
It is admitted that the property described in the deed and abstract was 1,250 feet outside the limits of the city of Birmingham.
Appellee completed payment of the purchase price under her contract for lots 3 and 4; there was tender or delivery of a deed conveying lots 3 and 4 by the defendant to the purchaser about June 26, 1933; delivery of the deed and abstract tendered in execution of the contract to appellee's attorney, who thereafter, on July 20, 1933, notified appellant of the discovery that lots 3 and 4, according to the survey of West End Manor, were without the city limits, and that for this reason the delivery was not accepted as such, the possession of the lots had not been assumed, and demanded repayment of the purchase price paid to the defendant by plaintiff.
If the misrepresentation of the vendor as to the true location had been equally open and visible by inspection, and plaintiff had not relied upon the representation of the location as employed in the contract, but relied upon her inspection made, the representation in question would not be material and within the rule of Porter v. Collins, 90 Ala. 510, 8 So. 80; New Orleans Ala. Coal Mining Co. v. Musgrove, 90 Ala. 428, 7 So. 747. She testifies she was uninformed otherwise than as her contract disclosed, and the selling agent misinformed her. The court could not say, under the evidence, as a matter of law, that the purchaser had information of the true location of the lots and that they were different from the description employed.
It is without dispute in the evidence that as soon as the deed, under contract and abstract of title, was delivered to her by defendant's agent, she referred it to her attorney for examination and report to her, that he duly reported that the court records disclosed the property to be without the city, and immediately authorized her attorney to return the deed and abstract as not a delivery under the contract, to exercise for her the right of rescission, and to demand a return of the purchase price.
The question of delivery and acceptance under the circumstances of the parties, the nature and duration of the contract in executory stages, and that of tender and acceptance of the deed and abstract, were for the jury. The contract was extended through the years, with its installment payments, requiring a week or ten days after completion of payments for defendant to tender or deliver the deed; it contained the express provision that, "When the purchase price of said lots has been paid, the seller will furnish the purchaser with an abstract of title assuming title in Southern Land Development Company and will execute to the purchaser a warranty deed conveying said property to the purchaser, warranting the title as of the date of this contract." This implied a reasonable time within which the purchaser should have to note compliance and examination of the title so tendered or with which she was sought to be invested. This is the course of a commercial abstract of title to real property. Baker v. Howison, 213 Ala. 41, 104 So. 239, 52 A.L.R. 1452. The court could not say, as a matter of law, that twenty days for such purpose was not a reasonable time within which to have the deed and abstract examined by plaintiff. This was a question for the jury — that is, to say whether the delivery was absolute or unconditional, and whether the title passed eo instante to the grantee under all the circumstances that entered into the execution of this contract. Arrington v. Arrington, 122 Ala. 510, 26 So. 152; Rhode Island Ins. Co. v. Walden, 217 Ala. 510, 116 So. 693; Gargis et al. v. Fore et al., 218 Ala. 102, 117 So. 679; 18 C. J. 213. If there was not a due delivery of the deed as per the completed contract, the title did not pass, and it was not necessary to execute or offer to reinvest by solemn conveyance the title in defendant before there may be a suit at law to compel the return of the purchase price. There was no error in refusing defendant's requested written charges A, B, C, D, and E.
When the parts of the oral charge to which exceptions were taken are considered in their context, and the whole of the oral charge illustrating such portions and the evidence on the point, no reversible error is shown. It was a clear statement of the respective contentions of fact, and the issues of notice and of a due rescission were properly submitted to the jury.
There was no error in overruling the motion for a new trial. The judgment of the circuit court is affirmed.
Affirmed.
ANDERSON, C. J., and BROWN and KNIGHT, JJ., concur.