Opinion
35951.
DECIDED JANUARY 25, 1956.
Action for damages. Before Judge Heery. Savannah City Court. September 2, 1955.
Oliver, Davis Maner, for plaintiff in error.
W. J. Richardson, Jr., contra.
Where, as here, a vendor and a purchaser of real estate enter into a valid, specific contract, and where within the time specified in the contract of sale and before consummation of the sale the vendor executes an instrument guaranteeing that the premises involved are free of termite damage, such latter instrument is nudum pactum and unenforceable.
DECIDED JANUARY 25, 1956.
Elmer L. Jacobsen filed a petition against Margaret M. James, alleging a contract between the parties whereby the defendant agreed to sell, and the plaintiff agreed to purchase certain real estate in Savannah, Georgia. The petition alleges that the contract was made on January 14, 1955. It is alleged that subsequently to the date of the contract, to wit, on February 10, 1955, the defendant made to the plaintiff a written warranty that as of that date the premises were free from any termite infestation and free from any damage due to any previous termite infestation. A copy of the said alleged warranty was attached to the petition. The petition further alleges that by reason of the above warranty the plaintiff "thereby agreed to purchase the above described property for a purchase price of $15,000, which amount was paid to the defendant and the plaintiff took possession of the property." It is alleged that the defendant knowingly and wilfully kept from the purchaser the knowledge that the property had, in the past, suffered termite damage and "that the defendant executed the above described warranty as an inducement for the plaintiff to purchase the above described property, on which warranty your petitioner acted, the defendant knowing the same to be false and untrue." It is not alleged in the petition that the written warranty was based upon any consideration of any kind either good or valuable. By amendment to the petition, the plaintiff supplied a copy of the original contract between the parties, bearing date of January 14, 1955, which contract shows that the same parties agreed to buy and to sell the same real estate at and for the price of $15,000, which was the price paid. The contract of sale is in writing, and is executed under seal by both parties. $1,000 was paid down as earnest money. The contract contains the following language: "This contract constitutes the entire agreement between the parties, and shall be binding upon and inure to the benefit of the heirs, executors, administrators and assigns of the respective parties hereto. The contract provides for the closing out and the consummation of the sale within 30 days from January 14, 1955." Thereafter, before the expiration of that 30-day period, on February 10, 1955, the owner of the real estate allegedly made a written warranty as to the lack of termites or termite damage, past or present, and the purchaser concluded and consummated his sale on February 10, 1955. The petition alleges $1,500 damages by reason of the termite infestation, past or present.
In the original contract of sale dated January 14, 1955, executed under seal, valuable consideration was stated, and there was no mention of damage to property from termites. The contract provides for the closing out of the sale within 30 days from the date of the contract, i.e., February 14, 1955. The sale was consummated on February 10, 1955. The sales contract was the usual form. The instrument regarding the termite situation reads as follows: "For the purpose of inducing Elmer L. Jacobsen to purchase from me Lots 213, 214, 215 and 216, Southville Ward, Savannah, Chatham County, Georgia, I hereby covenant and warrant that the premises on said lots known in the present house numbering in the City of Savannah as No. 517 Maupas Avenue, are as of this date, free of any termite infestation and free of damage due to any previous termite infestation. Witness my hand and seal this February 10th, 1955. (S) Margaret May James." The signing of the instrument was properly notarized. General and special demurrers were filed to the petition as amended all of which were overruled by the trial judge. The case is before the Court of Appeals on this ruling.
The record reveals that this is an action ex contractu and not ex delicto. This leads us to consider first whether or not the instrument regarding termite infestation was a legal and binding contract with sufficient consideration to vary the terms of the original contract of sale and contract of purchase. It is our understanding of the law that where the vendor of realty stipulates the terms upon which the property is offered for sale and such offer is accepted by a proposed purchaser, such contract between them is executed within the terms of the agreement. The contract of sale set up certain specifications, all of which were fulfilled by the vendor and the purchaser within the specified time. Before the consummation of the sale there was executed an instrument in which the seller guaranteed to the purchaser, in writing, that the premises in question were free of termite infestation and free of damage due to any previous termite infestation. It is further contended by the purchaser that even before the original contract was signed the vendor orally stated that the premises were free from termite damage. It must be kept in mind that the action here involved is not based on fraud in the procurement of the contract. Fraud in the procurement of a contract will authorize a rescission of a contract. See Evans v. Mitchell, 44 Ga. App. 695 (1) ( 162 S.E. 660). Whether or not a warranty is express or implied by law, after delivery and acceptance of the contract, the contract becomes executed and, in the absence of fraud, it cannot be rescinded and/or canceled because the property does not come up to specifications of the sales agreement. In such event the purchaser's action is for breach of warranty. See Battle v. Livingston, 21 Ga. App. 809 ( 95 S.E. 314); John M. Clark Co. v. Neufville, 46 Ga. 261 (1); and Cook Co. v. Finch, 117 Ga. 541 ( 44 S.E. 95). See also Code § 96-306 which reads: "A breach of warranty, express or implied, shall not annual the sale is executed, but shall give the purchaser a right to damages. It may be pleaded in abatement of the purchase money. If the sale is executory, such breach is a good reason for the purchaser to refuse to accept possession of the goods." The plaintiff has elected to have his action on the contract for breach of warranty. A breach of warranty express or implied gives the purchaser the right to damages even though the vendor by his actions may have been liable for fraud as well as breach of warranty. The purchaser may waive fraud and sue upon breach of warranty. A warranty itself rests upon contract. Thompson v. Scott, 21 Ga. App. 440 ( 94 S.E. 628). The original contract was based on legal consideration and was valid and enforceable. The original contract of sale here, as the record reveals, was executed on January 14, 1955, and the express warranty with regard to termites was given by the defendant on February 10, 1955. The sale had not taken place and no delivery of the property had been made and the parties had not yet done what the original contract obligated them to do. See Woodruff v. Graddy Sons, 91 Ga. 333 ( 17 S.E. 264). Where, as here, the termite instrument is relied upon as a part of the original contract of sale, there are decisions to the effect that such a reliance is not tenable but is nudum pactum. See Willingham Sash Door Co. v. Drew, 117 Ga. 850 ( 45 S.E. 237); Dutton v. Faulk, 159 Ga. 736 ( 126 S.E. 718); Bush Bros. v. Rawlings, 89 Ga. 117 ( 14 S.E. 886); and Phinizy v. Bush, 129 Ga. 479 ( 59 S.E. 259).
The court overruled the general and special demurrers. However, the argument here is based solely on the overruling of the general demurrers. In view of the whole record and the law the court erred in overruling the general demurrers.
Judgment reversed. Townsend and Carlisle, JJ., concur.