(Civil Code 1895, § 3974; Civil Code 1910, § 4571; Code 1933, § 37-212.)
Law reviews.- For article, "Limitations on the Meaning and Impact of DeGarmo v. DeGarmo," see 4 Ga. St. B.J. 20 (1998).
JUDICIAL DECISIONS
This section is a codification from the decision of Werner v. Rawson, 89 Ga. 619, 15 S.E. 813 (1892). McCollum v. Loveless, 187 Ga. 262, 200 S.E. 115 (1938); Livingston v. Barnett, 193 Ga. 640, 19 S.E.2d 385 (1942); Hargrove v. Bledsoe, 78 Ga. App. 107, 50 S.E.2d 223 (1948).
This section does not entitle a party to relief against the consequences of gross and inexcusable negligence in signing his name to a plain and unambiguous written instrument, when no fraud, artifice, or misrepresentation was employed to induce him to sign it, and when there is nothing to show that it did not embody the identical agreement which the other party actually intended to make. Holton Dodge, Inc. v. Baird, 118 Ga. App. 316, 163 S.E.2d 346 (1968).
Equity will not reform a written contract because of mistake as to the contents of the writing on the part of the complaining party (who was able to read), and fraud of the other which consists only in making false representations as to such contents, on which the complaining party relied as true because of confidence in the party making them; no fiduciary or confidential relation existed between the parties, and no sufficient excuse appears why the complaining party did not read the contract. This doctrine does not apply if the party seeking relief shows some good excuse for not reading the instrument. Livingston v. Barnett, 193 Ga. 640, 19 S.E.2d 385 (1942).
When no confidential relationship between the parties is alleged, a court of equity will not relieve a vendor of land from his own negligence in not ascertaining facts which he could have ascertained by diligence, the vendee using no artifice or fraudulent scheme in order to prevent the vendor from ascertaining facts which might have prevented him from executing the deed sought to be canceled. Jackson v. Brown, 209 Ga. 78, 70 S.E.2d 756 (1952).
Petition of negligent complainant subject to motion to dismiss.
- This section does not save a petition from a demurrer (now motion to dismiss) where the allegations, construed on demurrer (now motion to dismiss) most strongly against the petitioner, show affirmatively that the petitioner was guilty of negligence amounting to a violation of legal duty, and it does not appear that the other party was not prejudiced thereby. Glens Falls Indem. Co. v. Liberty Mut. Ins. Co., 202 Ga. App. 752, 44 S.E.2d 543 (1947).
It is not essential that complainants should be clear of all vestige of fault or negligence on their part. Dollar v. Fred W. Amend Co., 184 Ga. 432, 191 S.E. 696 (1937).
Negligence of the party complaining will not defeat the party's right to reformation, if the other party has not been prejudiced thereby. Sheldon v. Hargrose, 213 Ga. 672, 100 S.E.2d 898 (1957).
Negligence of elderly, illiterate individual.
- A petition which alleges that an instrument in the form of a deed, which was signed by an elderly, illiterate man who thought he was executing a will, and prays for cancellation on the ground of mistake does not show, on its face, negligence amounting to a violation of a legal duty so as to render the petition demurrable (now subject to motion to dismiss). Jackson v. Jackson, 202 Ga. 634, 44 S.E.2d 250 (1947).
Reformation of a deed.
- Trial court properly ordered reformation of a deed of assent to include an entire eight acre tract of land as opposed to only a partial strip because reformation was not barred by the seven-year statute of limitations since the seller was not prejudiced as the deed should have been corrected previously, thus, equitable relief under O.C.G.A. § 23-2-32(b) was appropriate. Ehlers v. Upper West Side, LLC, 292 Ga. 151, 733 S.E.2d 723 (2012).
Rescission notwithstanding prohibition of bid withdrawal for negligence.
- Contractor was entitled to rescind its construction bid for a church building, where a clerical error had resulted in a seven percent discrepancy in the amount of the bid, notwithstanding bidding instructions which prohibited the contractor from withdrawing the bid on the ground of "negligence." First Baptist Church v. Barber Contracting Co., 189 Ga. App. 804, 377 S.E.2d 717 (1989).
Lack of diligence constitutes negligence.
- When both the appellant and counsel for the appellant could have with reasonable diligence discovered that the note in question bore interest from the date of its execution, the failure to exercise such diligence was negligence, which precluded reformation on ground of mutual mistake, since the appellee has been prejudiced by that negligence. Cox v. Smith, 244 Ga. 280, 260 S.E.2d 310 (1979).
Questions of fact as to diligence prevented judgment of reformation.
- In a suit by a shopping center mortgagee against an insurer and banks seeking damages after the insurer paid the mortgagor insurance proceeds for hail damage to the premises (and the mortgagor's agent fraudulently endorsed the check), the mortgagee was not entitled to summary judgment on the mortgagee's reformation claim based on its listing as a mortgagee/payee on the application and proof of loss form, but not in the policy, because there were issues as to its diligence in reviewing the policy. Auto-Owners Ins. Co. v. Hale Haven Props., 346 Ga. App. 39, 815 S.E.2d 574 (2018), cert. denied, No. S18C1423, 2019 Ga. LEXIS 75, cert. denied, No. S18C1418, 2019 Ga. LEXIS 88, cert. denied, No. S18C1421, 2019 Ga. LEXIS 92 (Ga. 2019), cert. denied, No. S18C1417, 2019 Ga. LEXIS 93 (Ga. 2019).
Courts of equity grant relief only in favor of the diligent, and equity does not relieve from a judgment which could have been prevented except for negligence on the part of the complaining party. West v. Downer, 218 Ga. 235, 127 S.E.2d 359 (1962).
Failure to make inquiry.
- The failure of a petitioner to know the content defining the coverage of its insurance contract or to compare the facts and circumstances surrounding the injury to ascertain if it was covered thereby, and its failure to inquire of the employer or the Industrial Board (now Board of Workers' Compensation) as to the existence of an insurance contract with another insurance carrier that covered the injury, amounted to negligence on the part of the petitioner, and would not constitute such a mistake of fact as would render the agreement and the payments thereunder involuntary and, therefore, a basis for subrogation. Glens Falls Indem. Co. v. Liberty Mut. Ins. Co., 202 Ga. 752, 44 S.E.2d 543 (1947).
An insurer was entitled to reformation of a policy where coverage of a vehicle was extended at the insured's request, after the vehicle was involved in an accident; even though the insurer could have inquired before extending the coverage, the insured was not prejudiced by the insurer's action and would obtain a windfall absent reformation of the contract. Cotton States Mut. Ins. Co. v. Woodruff, 215 Ga. App. 511, 451 S.E.2d 106 (1994).
Recovery of payment mistakenly paid.
- In an action for money had and received, the plaintiff generally can recover a payment mistakenly made when that mistake was caused by his lack of diligence or his negligence in ascertaining the true facts and the other party would not be prejudiced by refunding the payment, subject to a weighing of the equities between the parties by the trier of fact. Gulf Life Ins. Co. v. Folsom, 256 Ga. 400, 349 S.E.2d 368 (1986) (relying solely on computer records); Graham v. Hogan, 185 Ga. App. 842, 366 S.E.2d 219 (1988).
Summary judgment for a retirement system was reversed because there were fact issues as to voluntary payment under O.C.G.A. § 13-1-13, and as to equitable estoppel under O.C.G.A. § 23-2-32, after the son claimed that the mother told the son that the benefits would continue to be paid after the mother's death; details of how the retirement system discovered the mother's death were needed to resolve the possibility that the son retained and spent the money in good faith. Applebury v. Teachers' Ret. Sys., 275 Ga. App. 194, 620 S.E.2d 452 (2005).
The voluntary payment doctrine did not bar a city's unjust enrichment and conversion claims filed against a construction contractor, as the contractor failed to show that: (1) a genuine issue of material fact remained over whether the city was negligent in ascertaining the true facts; and (2) any prejudice would result if the mistaken duplicate payment the city made to the contractor were returned to the city. D & H Constr. Co. v. City of Woodstock, 284 Ga. App. 314, 643 S.E.2d 826 (2007).
Defendants not prejudiced, plaintiff's alleged negligence no defense to claim for money had and received.
- Lawyer falsely told clients that the clients' lawsuit was settled, paid the clients money the lawyer obtained by kiting checks from the law firm's bank accounts, and defrauded a relative into lending the lawyer money to cover the shortage in the accounts. As the relative's failure to fully investigate the facts before making the loan did not prejudice the clients, any negligence on the relative's part was not a defense under O.C.G.A. § 23-2-32 to the relative's claim against the clients for money had and received. Haugabook v. Crisler, 297 Ga. App. 428, 677 S.E.2d 355 (2009).
Considerations by jury in claim for money had and received.- The equities to be considered by the jury in the case of a claim for money had and received are: (1) the degree of negligence on the plaintiff's part in erroneously paying over the money, (2) the level of good faith with which the defendant acted in receiving and retaining the money, and (3) prejudice, i.e., whether the defendant's position has so changed that it would be unfair to require him to pay the money back. Gulf Life Ins. Co. v. Folsom, 907 F.2d 1115 (11th Cir. 1990).
In an action for money had and received, where the plaintiff was negligent, the plaintiff is entitled to get the plaintiff's money back - unless the jury decides that the plaintiff doesn't deserve it back or that the defendant deserves to keep it. Gulf Life Ins. Co. v. Folsom, 907 F.2d 1115 (11th Cir. 1990).
Effect of material change of position by payee of funds sought to be recovered.
- The superior court did not err in ruling that a recipient of Medicaid reimbursement funds had so changed its position in reliance on its hospital-based classification during the period in question that it would be unjust to require it to refund the monies in question. Department of Medical Assistance v. Presbyterian Home, Inc., 200 Ga. App. 885, 409 S.E.2d 881 (1991), cert. denied, No. S91C1697, 1992 Ga. LEXIS 357 (1992).
Payment of late charges.
- The voluntary payment doctrine barred claims for recovery of late fees paid by cable television subscribers under a service agreement with the cable company which stated that a late fee would be charged to a customer's account if payment was not received by the due date. Telescripps Cable Co. v. Welsh, 247 Ga. App. 282, 542 S.E.2d 640 (2000).
Wrong property foreclosed upon.
- Trial court properly reformed security deed and declared that suing lender had first priority over certain tract of land since there was no doubt that parties intended for the tract to have been subject to the security deed alone; trial court also properly directed verdict in favor of suing lender as to its claim for rescission and cancellation of the deed it obtained when it mistakenly foreclosed on the wrong tract, as such relief was the proper remedy. DeGolyer v. Green Tree Servicing, LLC, 291 Ga. App. 444, 662 S.E.2d 141 (2008).
Company required to honor bid price on foreclosed property.
- Superior court did not err in granting a purchaser summary judgment in its action seeking specific performance pursuant to O.C.G.A. § 23-2-131 requiring a mortgage company to deliver a deed conveying certain property because the company failed to demonstrate any merit in the company's contention that the superior court improperly refused to invoke the court's equitable power to relieve the company from performing under the foreclosure sale contract on the ground that the opening bid it set forth was a mistake. O.C.G.A. § 23-2-32(b) did not provide relief from the foreclosure sale contract because the company failed to show how the purchaser would not be prejudiced if the company were granted relief and the record was void of any evidence that there was no difference between the contract price and the fair market value of the real property. Decision One Mortg. Co., LLC v. Victor Warren Props., Inc., 304 Ga. App. 423, 696 S.E.2d 145 (2010).
O.C.G.A. § 23-2-32(b) did not apply to a son's action to quiet title to a parcel of land because the original grantor, the son's father, no longer owned the land, and buyers of the land were bona fide purchasers who had no notice of the mistake in the deed until two years after the purchasers' purchased the property from the bank. Haffner v. Davis, 290 Ga. 753, 725 S.E.2d 286 (2012).
Denial of request for reformation of contract held proper.
- Trial court properly entered judgment in favor of a purchaser in a bank's action seeking reformation of a security deed and cancellation of the levy and sale of two lots; while O.C.G.A. § 23-2-32(b) stated that relief could be granted even in cases of negligence by the complainant if it appears that the other party has not been prejudiced thereby, the purchaser had begun making repairs and improving the property, and had spent $12,410 and continued to incur expenses, and thus, the trial court's finding that the purchaser would be prejudiced by the reformation sought by the bank was not clearly erroneous. First Nat'l Bank v. Carr, 260 Ga. App. 439, 579 S.E.2d 863 (2003).
Constructive trust denied due to laches.
- Former wife was not entitled to impose a constructive trust on her former husband's military pension pursuant to O.C.G.A. § 53-12-132 because she failed to object to the absence of any provision for the pension in their divorce decree for 12 years and failed to bring suit until five years after payments allegedly became due. Davis v. Davis, 310 Ga. App. 512, 713 S.E.2d 694 (2011).
Cited in Harrison v. Hester, 160 Ga. 865, 129 S.E. 528 (1925); Crim v. Alston, 169 Ga. 852, 151 S.E. 807 (1930); Chapman v. Cassels Co., 180 Ga. 349, 179 S.E. 91 (1935); Young v. Hirsch, 187 Ga. 1, 199 S.E. 179 (1938); J. Kuniansky, Inc. v. Ware, 192 Ga. 488, 15 S.E.2d 783 (1941); Scott v. Gillis, 202 Ga. 220, 43 S.E.2d 95 (1947); Mulkey v. Spicer, 202 Ga. 592, 43 S.E.2d 661 (1947); Tillman v. Byrd, 211 Ga. 918, 89 S.E.2d 479 (1955); Flagg v. Hedrick, 215 Ga. 16, 108 S.E.2d 703 (1959); Cline v. Schuster, 221 Ga. 653, 146 S.E.2d 732 (1966); Finch v. McAloney, 222 Ga. 174, 149 S.E.2d 100 (1966); Vinson v. Citizens & S. Nat'l Bank, 223 Ga. 54, 153 S.E.2d 436 (1967); Long v. Walls, 226 Ga. 737, 177 S.E.2d 373 (1970); Eaton Yale & Towne, Inc. v. Strickland, 228 Ga. 430, 185 S.E.2d 923 (1971); J.C. Penney Co. v. West, 140 Ga. App. 110, 230 S.E.2d 66 (1976); Funding Sys. Leasing Corp. v. Pugh, 530 F.2d 91 (5th Cir. 1976); Garden of Eden, Inc. v. Eastern Sav. Bank, 244 Ga. 63, 257 S.E.2d 897 (1979); FDIC v. Lattimore Land Corp., 656 F.2d 139 (5th Cir. 1981); Atkinson v. Atkinson, 254 Ga. 70, 326 S.E.2d 206 (1985); Crane v. Adams-Cates Co., 256 Ga. 407, 350 S.E.2d 767 (1986); Brannen v. Gulf Life Ins. Co., 201 Ga. App. 241, 410 S.E.2d 763 (1991); Baghdady v. Central Life Ins. Co., 224 Ga. App. 170, 480 S.E.2d 221 (1996); Beasley v. Wachovia Bank, 277 Ga. App. 698, 627 S.E.2d 417 (2006); Levenson v. Word, 294 Ga. App. 104, 668 S.E.2d 763 (2008).
RESEARCH REFERENCES
Am. Jur. 2d.
- 27 Am. Jur. 2d, Equity, §§ 22, 34, 43, 45, 82.
C.J.S.- 30 C.J.S., Equity, § 47. 37 C.J.S., Fraud, § 28 et seq.
ALR.- Liability of publisher for mistake in advertisement, 10 A.L.R.2d 686.
Negligence in executing contract as affecting right to have it reformed, 81 A.L.R.2d 7.