Parker v. White , 235 N.C. 680 ( 1952 )

71 S.E.2d 122 (1952) 235 N.C. 680

PARKER
v.
WHITE et al.

No. 450.

Supreme Court of North Carolina.

June 11, 1952.

Simms & Simms, John M. Simms, Raleigh, for plaintiff appellant.

Smith, Leach & Anderson, Raleigh, for defendants appellees.

WINBORNE, Justice.

Does this action affect the title to real property? If it does, the judgment from which this appeal is taken would be in error. But if it does not, then the judgment is correct and should be affirmed. For the filing of the notice of the action, that is, lis pendens, is authorized only in actions affecting the title to real property. G.S. § 1-116. From a careful consideration and analysis of the various phases of the complaint, in the light of applicable principles of law, it seems apparent that the purpose of this action is to recover damages caused by fraud. Hence, error in the judgment is not made to appear.

"The essential elements of actionable fraud or deceit are the representation, its falsity, scienter, deception, and injury. The representation must be definite and specific; it must be materially false; it must be made with knowledge of its falsity or in culpable ignorance of its truth; it must be made with fraudulent intent; it must be reasonably relied on by the other party; and he must be deceived and caused to suffer loss," Adams, J., in Leggett Electric Co. v. Morrison, 194 N.C. 316, 139 S.E. 455; see also Berwer v. Union Central Life Ins. Co., 214 N.C. 554, 200 S.E. 1, and cases there cited, and also Hill v. Snider, 217 N.C. 437, 8 S.E.2d 202.

This principle applies to contracts and sales of both real and personal property. May v. Loomis, 140 N.C. 350, 52 S.E. 728; Tarault v. Seip, 158 N.C. 363, 74 S.E. 3; Evans v. Davis, 186 N.C. 41, 118 S.E. 845; Berwer v. Union Central Life Ins. Co., supra.

And a party who has been fraudulently induced to enter into a contract or sale has a choice of remedies. He may repudiate the contract, and, tendering back what he has received under it, may recovel what he has parted with or its value; or he may affirm the contract, keeping whatever property or advantage he has derived under it, and may recover in an action for deceit the damages caused by the fraud. And, in a proper case, the defrauded party may be entitled to the equitable remedies of rescission and cancellation or reformation. But, as a general rule, the defrauded party cannot both rescind and maintain an action for deceit. If he elects to rescind the contract, he may recover back what he has parted with under it, but cannot recover damages for the fraud. On the other hand, if he elects to maintain an action for deceit, he cannot sue for rescission or reformation. Fields v. Brown, 160 N.C. 295, 76 S.E. 8; F. E. Lykes & Co. v. Grove, 201 N.C. 254, 159 S.E. 360; Smith v. Greensboro Joint Stock Land Bank, 213 N.C. 343, 196 S.E. 481.

But the defrauded party is not allowed to rescind in part and affirm in part,— he must do one or the other. May v. Loomis, supra; McNair v. Southern States Finance Co., 191 N.C. 710, 133 S.E. 85; Willis v. Willis, 203 N.C. 517, 166 S.E. 398; Bolich v. Prudential Ins. Co., 206 N.C. 144, 173 S.E. 320; F. E. Lykes & Co. v. Grove, supra; Smith v. Greensboro Joint Stock Land Bank, supra.

In the light of these principles, while the prayer for relief contained in plaintiff's complaint is framed in general terms, it is clear from a reading of the complaint, and the amendments thereto, that this is an action to recover monetary damages. Whether the allegations, or the proof in support thereof, make out a case for the jury, is of no concern on this appeal. But having elected to affirm the transaction in question, and sue to recover damages, plaintiff may not, at the same time, sue to rescind or reform in whole or in part. Hence, the action is not one affecting the title to real property within the purview of G.S. § 1-116. See Horney v. Price, 189 N.C. 820, 128 S.E. 321; Threlkeld v. Malcragson Land Co., 198 N.C. 186, 151 S.E. 99; Jarrett v. Holland, 213 N.C. 428, 196 S.E. 314.

Therefore, the judgment below is affirmed.