Opinion
18606.
ARGUED JUNE 14, 1954.
DECIDED JULY 13, 1954. REHEARING DENIED JULY 27, 1954.
Equitable petition. Before Judge Fort. Muscogee Superior Court. March 13, 1954.
Powell, Goldstein, Frazer Murphy, for plaintiff in error.
John G. Cozart, contra.
The allegations of the petition and the amendment, to the effect that property was purchased by the defendant while acting as agent for the petitioner under an agreement whereby the petitioner arranged to finance the purchase through the bank, were sufficient to show an implied trust in the land in favor of the petitioner; and the trial court erred in disallowing the amendment and in dismissing the action on general demurrer.
ARGUED JUNE 14, 1954 — DECIDED JULY 13, 1954 — REHEARING DENIED JULY 27, 1954.
J. W. Woodruff, Sr., filed in Muscogee Superior Court, against Ed. J. Hennessy, a petition, which alleged substantially the following: Defendant was engaged in the real-estate business from June, 1952, through March, 1953. Petitioner requested defendant to purchase for him a piece of property on the west side of Twelfth Avenue, in Columbus, Georgia. Early in November, 1952, defendant informed petitioner he had located a party who owned and was desirous of selling described property on the west side of Twelfth Avenue for $2,500. Petitioner instructed defendant to purchase the property for him at the above price. Defendant was to take title in his name, and after closing the purchase was to execute a warranty deed conveying the property to petitioner. On or about November 20, 1952, petitioner purchased the property through defendant as his agent. Petitioner arranged for the financing of the purchase through arrangements made with The First National Bank of Columbus. The bank advanced the $2,500, taking a note dated November 20, 1952, which was signed by defendant and endorsed by petitioner, payable on demand, and bearing 4% interest. At the time of the closing of the purchase, the seller conveyed the property to petitioner, by conveying same to defendant, who was acting as agent for petitioner. The title was taken in defendant's name, as per agreement between petitioner and defendant, but defendant did not then execute the warranty deed, as he had agreed to do, and has failed and refused to do so, although he has been requested to execute the deed. On or about April 1, 1953, petitioner and defendant had a disagreement over other matters, and at that time severed all connections between themselves. Petitioner again requested defendant to clear up petitioner's title to the property by executing a warranty deed conveying the property to him, which defendant refused to do and still refuses to do. On May 1, 1953, defendant unlawfully, fraudulently, and as a breach of trust with petitioner, without petitioner's knowledge or consent, conveyed the property to Columbus Mutual Loan Association as security for a loan of $1,500, made by the above lending institution to defendant individually. This conveyance gave the loan company a lien on the property, and the security deed is still outstanding and constitutes a lien upon the property. As a result of defendant's conveying the property to the loan company, petitioner has been damaged and the defendant has been unjustly enriched to the extent of the outstanding balance due on the loan. Defendant collected $25 as rent on the property for the month of December, 1952, and tendered same to petitioner. As defendant was new in his realty business, petitioner told him to collect the rent each month and account later. Defendant has never accounted to petitioner for any of the rent so collected from the property. Petitioner has no adequate remedy at law. The prayers were: that process issue; that the court decree that an implied trust exists, with defendant holding the record title to the property as trustee, for the use and benefit of petitioner; that the court decree the title to the property to be in petitioner; that defendant be required to execute a warranty deed conveying the property to petitioner free and clear of all liens, or in lieu thereof, if defendant be unable to so convey the property, that he convey it subject to the outstanding loan deed, and that petitioner be granted a judgment against the defendant in the amount presently outstanding on the loan deed; and that petitioner be granted a judgment against the defendant for $300 plus interest, for the rent collected but improperly held by defendant.
The defendant demurred to the petition upon the grounds: "No cause of action in law or in equity is set out; there is no right in the petitioner to maintain the action; it affirmatively appears from the allegations of the petition that the defendant paid the entire purchase money for the real estate described in the petition and it does not appear from any allegations thereof that the petitioner before, at the time of, or subsequent to the purchase of the property by defendant paid, tendered to or offered to pay to defendant the purchase price or any part thereof, or to reimburse him for any amounts he incurred as necessary expenses in connection with the purchase of the real estate."
Petitioner offered the following amendment: Prior to the execution of the note referred to in the original petition, he and defendant had agreed that the payment of the purchase price of the property would be accomplished by defendant executing a note to the First National Bank, which "defendant" would endorse and for which "defendant" would be solely responsible. Defendant paid the purchase price of the property with the proceeds of the note, and petitioner paid off the note to the bank. The property was purchased by defendant for petitioner with funds supplied by petitioner, and petitioner is entitled in equity to the relief prayed for in the original petition.
The defendant objected to the proffered amendment upon the ground that the petitioner sought by the amendment to change the cause of action set forth in the original petition and to set forth a new and distinct cause of action.
The trial court sustained the objections of the defendant and refused to allow the amendment. Thereafter, the trial court sustained the demurrer of the defendant and dismissed the action. To each of the above judgments the petitioner excepted.
The original petition alleged, among other things, that the petitioner arranged to finance the purchase of the land through the bank and the bank advanced the money therefor, taking a note which was signed by the defendant and endorsed by the petitioner. Irrespective of whether the original petition standing alone stated a complete cause of action, in that it failed to allege any consideration or money paid by the petitioner, such failure would not necessarily be sufficient reason for refusing to allow an amendment adding matter of form or substance. Code §§ 37-903, 81-1301; Calhoun v. Edwards, 202 Ga. 95 ( 42 S.E.2d 426).
The amendment which was disallowed in the present case contained allegations to the effect that the defendant paid the purchase price of the property with the proceeds of the note, and that petitioner paid off the note to the bank. The proffered amendment is merely an amplification of the details and circumstances of the same transaction which was set forth in the original petition, and was not subject to the objection that it sought to set forth a new and distinct cause of action. Ellison v. Georgia Railroad Co., 87 Ga. 691 ( 13 S.E. 809); Williams v. Porter, 202 Ga. 113 (4) ( 42 S.E.2d 475); Cooper v. Mims, 204 Ga. 357 ( 49 S.E.2d 824); Reed v. White, 207 Ga. 623 (3) ( 63 S.E.2d 597). The trial court erred in disallowing the amendment.
The next question for determination is whether the petition and amendment thereto set forth a cause of action. "A general demurrer to a petition will not be sustained if the facts entitle the plaintiff to any of the substantial relief prayed." Arteaga v. Arteaga, 169 Ga. 595 (4) ( 151 S.E. 5).
The amendment contains the following language: Prior to the execution of the note, petitioner and defendant had agreed that the payment of the purchase price would be accomplished by the defendant executing a note to the bank, which "defendant" would endorse and for which "defendant" would be solely responsible. Counsel for defendant insist that the amendment shows defendant signed the note to the bank to procure the funds to be used for purchasing the property and was to be solely responsible therefor in the first instance, and therefore there was no implied or resulting trust in the land in favor of petitioner. To construe the above language as meaning that the defendant was to endorse his own note in order to obtain the money from the bank, would render this portion of the amendment utterly meaningless. However, if this portion of the amendment should be disregarded, the original petition and the amendment allege in substance that the property was purchased by the defendant while acting as agent for the petitioner under an agreement whereby the petitioner arranged to finance the purchase through the bank and the bank advanced the money therefor, taking a note which was signed by the defendant and endorsed by the petitioner, and that the petitioner paid the note.
Taking the above-stated allegations to be true — as must be done on general demurrer — sufficient facts were alleged to show an implied trust in the land in favor of the petitioner. Code § 108-106 (1); Chastain v. Smith, 30 Ga. 96 (1); McDonald v. Dabney, 161 Ga. 711 (10) ( 132 S.E. 547); Hudson v. Evans, 198 Ga. 775 (2) ( 32 S.E.2d 793); Stevens v. Stevens, 204 Ga. 340 (1) ( 49 S.E.2d 895).
Applying the above-stated principles of law to the pleadings in the present case, the trial court erred in disallowing the amendment to the petition, and in dismissing the action on general demurrer.
Judgment reversed. All the Justices concur.