Summary
In State Hwy. Dept. v. Hewitt Contracting Co., 221 Ga. 621 (146 S.E.2d 632), the Supreme Court held that this case did not come within the equity jurisdiction of that court and remanded the case to this court.
Summary of this case from State Hwy. Dept. v. Hewitt Contr. Co.Opinion
23225.
ARGUED DECEMBER 14, 1965.
DECIDED JANUARY 6, 1966.
Action on contract. DeKalb Superior Court. Before Judge Guess.
Arthur K. Bolton, Attorney General, Richard L. Chambers, E. J. Summerour, Assistant Attorneys General, for plaintiff in error.
Greene, Neely, Buckley DeRieux, Ferdinand Buckley, John D. Jones, C. Richard McQueen, B. Hugh Burgess, contra.
For reasons stated in the opinion this case is remanded to the Court of Appeals.
ARGUED DECEMBER 14, 1965 — DECIDED JANUARY 6, 1966.
This is a case arising out of a highway construction contract between Hewitt Contracting Company, a corporation, and the State Highway Department. The contractor contended the State Highway Department did not pay it the full compensation due for work done and materials furnished in completing a certain highway project. In all five counts of the petition the only prayers were for money verdicts. However, in the fifth count there appears an allegation reading: "By virtue of the errors and omissions of said plans and specifications, as hereinabove set forth, and in the light of the fact that neither plaintiff nor defendant knew thereof at the time said contract was executed and thus were unaware that the construction of said project would be materially different than as reflected on said plans and specifications, plaintiff avers that, in legal contemplation, a mutual mistake of fact existed with reference to said contract and accordingly prays that said contract be rescinded and that, in computing the compensation due it on said project, the basis therefor, should be the reasonable value of the work done." The only basis upon which rescission of the contract was sought was that there was a mutual mistake of the parties in drafting the specifications also made a part of the petition. These mistakes were alleged to consist of failure in estimating the quantity of rock to be moved, errors as to contours upon the surface of the proposed highway and miscalculations as to the amount of waste dirt and rock that could be used in completing the work.
The contract was attached as an exhibit to count 5. It plainly appears from the terms of the contract that, while the specifications which constituted a part of the contract were relied upon as the basis of the same, there might be errors and omissions in the specifications which would cause extra or additional operations not set out in the specifications. The contract made ample provision for compensation to be paid the contractor for such additional work. It furnished two formulas to be used in determining the value of the work: one that the parties agree upon the price to be paid; the other that they submit the matter to arbitration. From count 5 or elsewhere in the petition it did not appear that the mistakes referred to in the count were not of the nature contemplated by the contract or that the extra work caused by the alleged mistakes was not within the provisions of the contract, stipulating compensation for such work would be paid the contractor.
The petition does not disclose exactly when the plaintiff became aware of the mistakes which necessitated additional work and expense on its part in the construction of the project. But it is alleged the contract was entered into on August 8, 1958, and was not completed until November 6, 1963. So it is apparent that for at least a year or two the plaintiff proceeded with the construction of the project covered by the contract and finally, without repudiating the contract, completed the project.
The Court of Appeals transferred the case to this court for review.
1. All formal prayers contained in the petition are for the recovery of money judgments and no allusion is made in any of these prayers to any form of equitable relief. However, as recited in the foregoing statement of facts in the fifth count of the petition there is an allegation: "a mutual mistake of fact existed with reference to said contract and accordingly prays that said contract be rescinded. . ." Treating this allegation as a prayer for rescission of the contract between the parties, we consider the averments of the petition to decide whether the case made by the petition is an equitable action and whether review of the same is within this court's jurisdiction.
At this point it is observed that the Constitution vests in this court the power to review equity cases and this jurisdictional power extends to "bad equity cases." By "bad equity cases" is meant those cases where the pleadings of the party who invokes the aid of equity, while for some reason not sufficient to set forth a cause in equity, allege facts and contain prayers raising a substantial question as to whether the pleader is entitled to relief in equity. The phrase "bad equity cases" obviously does not extend to cases where the pleadings show no semblance of an equitable action and affirmatively reveal the only relief is such as can be obtained in a court of law. "To make a case one for equity jurisdiction it must contain allegations and prayers for equitable relief. Decatur County v. Praytor, Howton Wood Contr. Co., 36 Ga. App. 611 ( 137 S.E. 918); City of Summerville v. Georgia Power Co., 204 Ga. 276, 277 (3) ( 49 S.E.2d 661); Odom v. Atlanta West Point R. Co., 204 Ga. 328 (1) ( 49 S.E.2d 821); U.S. Cas. Co. v. Georgia Sou. R. Co., 212 Ga. 569 ( 94 S.E.2d 422); Hollinshed v. Shadrick, 212 Ga. 624 ( 94 S.E.2d 705)." Hudon v. North Atlanta, 219 Ga. 179 ( 132 S.E.2d 74).
2. Count 5 of the petition discloses that after discovering the existence of the mistakes in the specifications of the project and with full knowledge of their consequences, the plaintiff did not renounce the contract, but on the contrary continued for a year or two to perform the contract, until completion. This court held in Gibson v. Alford, 161 Ga. 672, 685 ( 132 S.E. 442): "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." Hunt v. Hardwick, 68 Ga. 100; Smith v. Estey Organ Co., 100 Ga. 628 ( 28 S.E. 392).
3. Rescission is granted in equity solely to prevent the contract, when executed, from containing terms and provisions materially different from those actually agreed upon by the contracting parties, in consequence of which one party would gain an unconscionable advantage. "A court of equity will not decree the cancellation of a paper when so doing is in no way essential to the protection of the party seeking such relief." Hairalson v. Carson, 111 Ga. 57 (1) ( 36 S.E. 319).
In the present case no need to rescind the contract exists in order for the plaintiff to recover, if entitled to recover, the value of the additional work allegedly caused by the mistake found in the specifications of the project. This is true because the recovery could be had on quantum meruit for the value of the work which was not included in the contract price to be paid for construction of the project and which was nevertheless when completed accepted by the Highway Department. In the case of State Hwy. Dept. v. Wright Contracting Co., 107 Ga. App. 758 ( 131 S.E.2d 808), the Court of Appeals construed the same contract under identical circumstances as in the present case. It was there held the work was not within the contract and since the parties had failed to agree upon the price to be paid for the work, recovery could be had independently of the contract on quantum meruit.
Remanded to the Court of Appeals. All the Justices concur, except Cook, J., disqualified.