After S. Allan Stocks and Gloria J. Stocks took possession of a house they bought from Dillard O. Browning, they discovered termite damage in the house. The Stocks sued Browning alleging he fraudulently induced them to buy the house by making false representations about the condition of the house and by actively and passively concealing the damage. A jury returned a verdict in favor of the Stocks for damages on the fraud claim and Browning appeals. Because there was evidence at trial that Browning defrauded the Stocks by concealing the damage, we affirm. 1. We find no merit in Browning’s argument that there was a lack of evidence to support the fraud verdict. In claiming that Browning fraudulently induced them to enter into the sales contract to purchase the house, the Stocks elected to affirm the contract and to sue in tort for the fraud to recover damages for the difference between the value of the house sold to them with the unrevealed termite damage and the value the house would have had absent the damage. Ben Farmer Realty Co. v. Woodard , 212 Ga. App. 74-75 441 SE2d 421 1994.1 Because the Stocks elected to affirm the sales contract and pursue the coexisting right to sue in tort for the fraud, they were bound by the terms of the contract and subject to contractual defenses asserted by Browning in the fraud claim. Id.; Tuttle v. Stovall , 134 Ga. 325, 328-329 67 SE 806 1910. The sales contract contained an “entire agreement” clause which provided that the contract “constitutes the sole and entire agreement between the parties” and “no representation, promise, or inducement not included in this Agreement shall be binding upon any party hereto.” Accordingly, Browning correctly asserted that the Stocks were estopped from claiming he fraudulently induced them to enter into the contract by misrepresentations about the house made outside the contract. Ainsworth v. Perreault , 254 Ga. App. 470, 472, 474 563 SE2d 135 2002; Conway v. Romarion , 252 Ga. App. 528, 532 557 SE2d 54 2001. In the absence of any claim that the fraud arose from representations which were part of the sales contract Id., the Stocks’ suit for damages was necessarily based on their claim that Browning fraudulently induced them to enter into the sales contract by actively or passively concealing the termite damage.
In addition to alleging misrepresentations, fraud in the sale of real estate may be predicated on claims of fraudulent concealment. Wilhite v. Mays , 140 Ga. App. 816, 817 232 SE2d 141 1976. Fraudulent concealment of a defect to induce a sale may consist of active concealment, where the seller who knows of the defect takes active steps to conceal it and prevent the buyer from discovering it, or passive concealment, where the seller who knows of the defect does nothing to prevent the buyer from discovering it but simply keeps quiet about it.2 Mulkey v. Waggoner , 177 Ga. App. 165, 166 338 SE2d 755 1985; Ben Farmer , 212 Ga. App. at 75-76. In support of these claims, the Stocks presented evidence that Browning bought the house after it had been 90 percent gutted by fire, and that acting as his own general contractor, he rebuilt the house and occupied it as his residence from March 1992 until the September 1995 sale at issue. In addition to the house at issue, Browning owned over 50 rental properties and had bought and restored dozens of houses. During the three and a half years he lived in the house prior to the sale, Browning or his employees performed yearly maintenance work on the house. According to Browning, “Every spring, around February, we would go in and do, like you say, spring cleaning, painting, fixing up. I have people, you know, that work for me full time, and we’d always send people around to do this or do that. Anything that needed to be done to make it real nice.”
