The petition set forth a cause of action for cancellation and for damages alleged to have resulted because of the failure of the seller to have a policy of insurance transferred to the purchaser; and the trial court erred in sustaining the defendant's general grounds of demurrer and in dismissing the action.
C. C. Norris and his wife, Mrs. Hazel Norris, filed in Fulton Superior Court, against Mrs. Nettie Johnson, a petition, which as amended alleged substantially the following: On June 3, 1949, petitioner C. C. Norris leased from the defendant and G. W. Johnson certain property known as "Johnson's Drive-In" (The Acorn), located at 3105 Bankhead Highway for a term of two years, at the sum of $75 per month, in advance, with an option to buy the equipment for a stated sum, and thus reduce the rental. Petitioners went into possession, and on May 21, 1950, paid in advance $75 to the defendant for rent up to and through June 21, 1950. On May 22, 1950, the defendant offered to sell and petitioners agreed to buy the property for $5750, payable $2000 cash and $75 per month, petitioners giving a series of 50 notes and a deed to secure the unpaid balance. Petitioners requested that their advance payment for the month of May, 1950, be applied on the purchase price, and the defendant stated that she had a $4500 fire-insurance policy on the business with the Philadelphia Fire Marine Insurance Company, and that she would transfer this insurance policy to petitioners for the $75 which had been paid the day before the closing of the agreement to purchase. Petitioners made repeated demands on the defendant to have the $4500 policy transferred to them, and the defendant made no effort to transfer the policy, although she promised to do so on numerous occasions. The $75 which the defendant retained was an ample amount to pay the premiums on the policy, and the defendant agreed to and had the right to request her insurance carrier to transfer the policy, the number and type of which are unknown to petitioners, and which was in the possession of the defendant. On November 7, 1950, the premises caught fire and petitioners sustained a total loss on the premises. Thereafter the defendant reassured petitioners that she would collect the $4500 from the insurance company and reimburse petitioners for their loss, and, based upon the reassurance, petitioners continued their monthly payments of $75 per month up and until February 22, 1951, at which time they discontinued payments on the notes, having paid in all eight monthly payments, or $600, together with the $2000 cash payment, aggregating $2600, leaving a balance on the purchase price of $3150. Petitioners sustained a loss of $4500 by reason of the defendant failing to have the insurance policy transferred to them, the same being valid and enforceable against the insurance company, and there being no valid reason why the company would not substitute petitioners as the insured on the property. On July 12, 1951, petitioners were served with a written notice of defendant's intentions to sue on the notes to the August term of the Civil Court of Fulton County, and to foreclose upon the property. Defendant is insolvent and if she recovers on the notes petitioners will suffer irreparable injury. Petitioners entered into the purchase of the property in good faith and were diligent and guilty of no laches in the premises, and are now operating the premises and have retained full possession of them since their purchase, but the defendant failed and refused to file the necessary proofs of loss or make any effort to prosecute the claim for insurance. Petitioners have no adequate remedy at law.
The prayers, besides for process and a rule nisi, were: that defendant be enjoined from instituting a suit on the notes in the Civil Court of Fulton County; that the notes be declared paid and delivered to petitioners; that the security deed be canceled, and the title be decreed to be in petitioners; that petitioners be given a judgment for $1350 as the difference between the $4500 insurance policy and the balance claimed to be due by the defendant; and that petitioners have general equitable relief.
A demurrer on general and special grounds was interposed to the petition as amended. The trial court sustained the general grounds of demurrer, and dismissed the action. The petitioners excepted.
ALMAND, Justice.
Since the passage of the Uniform Procedure Act, where a suit is filed in a superior court, which has general jurisdiction both in law and in equity, the petition should not be dismissed on general demurrer if it states a cause of action for either legal or equitable relief. Pardue Medicine Co. v. Pardue, 194 Ga. 516 (1) ( 22 S.E.2d 143).
"Equity will not enjoin the proceedings and processes of a court of law, unless there shall be some intervening equity or other proper defense of which the party, without fault on his part, can not avail himself at law." Code, § 55-103. The defendant in a threatened foreclosure suit does not need the aid of a court of equity for the assertion of such defense as that the purchaser has been damaged by the failure of the seller to have an insurance policy on the business transferred to the purchaser. Kanes v. Koutras, 203 Ga. 570 ( 47 S.E.2d 558), and cases cited.
In the present case, the petitioners, in addition to seeking to enjoin the threatened foreclosure proceeding, sought also cancellation of the notes and the security deed, and a decree declaring title to be in them. A common-law court, such as the Civil Court of Fulton County, may take cognizance of equitable defenses, but these courts can not grant affirmative equitable relief. Obviously, the relief which petitioners seek, such as cancellation and that the title to the property be decreed to be in them, can not be granted in the Civil Court of Fulton County. Hanson v. Williams, 170 Ga. 779, 781 (1) ( 154 S.E. 240).
Any right of the petitioners to set off the amount of the insurance policy against the balance due on the property would depend upon the validity of the agreement to transfer the policy; and under a fair construction this agreement amounted to an undertaking to have the insurance company transfer the policy. While, so far as appears from the allegations of the petition, the insurance company was under no obligation to transfer the policy, yet, if after a request so to do the company had refused to transfer it, this would be a matter of defense which might be asserted by the defendant.
Although Code § 20-309 provides that an impossible consideration is insufficient to sustain any promise, still it also provides that, if the expressed consideration be possible, though improbable, it is nevertheless valid. Accordingly, since the consideration to have the insurance company transfer the policy was possible of fulfillment, it was sufficient consideration for the retention of the $75 advance payment.
Counsel for the defendant in error insist that the petition, which alleged that the defendant failed after repeated requests to transfer the policy, affirmatively showed that the petitioners could not rely upon the defendant to furnish such insurance coverage, and that the petitioners' failure to obtain other insurance was the result of their own laches.
"Where by a breach of contract one is injured, he is bound to lessen the damages as far as is practicable by the use of ordinary care and diligence." Code, § 20-1410. But the provisions of this Code section can be invoked only by way of defense, and it is not necessary that a petition negative failure of the plaintiff to mitigate damages caused by the defendant. Southern Upholstering Co. v. Lieberman, 27 Ga. App. 703 (5) ( 109 S.E. 509); Mendel v. Converse Co., 30 Ga. App. 549 (4) ( 118 S.E. 586). Where, as here, a petition alleges injury caused by the defendant's breach of contract, and the exception is to an order sustaining a general demurrer, it can not be held as a matter of law that the plaintiff has not used ordinary care and diligence to lessen the damages.
It follows that the petition set forth a cause of action for damages by reason of the failure of the defendant to have the insurance policy on the business transferred to the petitioners, and the trial court erred in sustaining the defendant's general grounds of demurrer, and in dismissing the action.
Judgment reversed. All the Justices concur, except Duckworth, C. J., and Candler, J., who dissent.