Tarlton v. Keith

108 S.E.2d 621 (1959) 250 N.C. 298

Roy TARLTON and Dewey Smith
v.
H. M. KEITH and Grady Earp.

No. 465.

Supreme Court of North Carolina.

May 20, 1959.

Coble Funderburk, Monroe, for plaintiffs, appellees.

Taylor & Morgan, Lillington, for defendants, appellants.

PARKER, Justice.

Defendants assign as error the overruling of their motion for judgment of nonsuit renewed at the close of all the evidence. G.S. § 1-183.

The timber deed from Luby Denning and wife to plaintiffs is not in the Record. There is no suggestion that the description of the tract of timber in this deed was defective, or did not disclose the correct boundaries of the tract of timber, or did not convey to plaintiffs all the timber owned by Luby Denning and wife on this tract of land. L. T. Bryant, a surveyor and witness for the plaintiffs, illustrated his testimony by a sketch of the land drawn on a blackboard. We do not have the benefit of such sketch. No copy of it was made, and inserted in the Record.

Defendants admitted in their answer that a survey made by L. T. Bryant after the timber deed was executed and delivered to plaintiffs showed that 45 acres of timber pointed out by them to plaintiffs on 7 June 1957 as being part of the timber plaintiffs were buying was not included in the timber deed, but said 45 acres of timber belonged to the Denning estate. Plaintiffs' evidence is that, when Grady Earp, one of the defendants, was pointing out the boundaries of the tract of timber to them before they purchased it, he said the lines he was pointing out were the lines the owner had pointed out to him.

Luby Denning on 16 May 1957 had his land surveyed, and his lines clearly cut all around it. When this survey was made, two of the surveying party went 25 or 30 yards beyond his corner, and chopped a line, apparently in the tract of timber of the Denning estate. It would seem that this is what caused Grady Earp to point out to plaintiffs on 7 June 1957 that the tract of 45 acres of timber of the Denning estate was part of the Luby Denning timber.

However, there is no evidence that when Grady Earp pointed out the 45 acres of timber belonging to the Denning estate as being part of the Luby Denning timber, he, or his codefendant H. M. Keith, knew the representation was false, or that he made it recklessly, without any knowledge of its truth, and as a positive assertion. Hence, it would seem as a necessary consequence there was no intent on the part of the defendants to deceive. There is no evidence that defendants resorted to any artifice to induce plaintiffs to forego making inquiry as to the lines of the tract of timber. Scienter and intent to deceive are essential elements of actionable fraud. Cofield v. Griffin, 238 N.C. 377, 78 S.E.2d 131, 40 A.L.R. 2d 966; Ebbs v. St. Louis Trust Co., 199 N.C. 242, 153 S.E. 858. Plaintiffs' counsel acted properly in stating to the trial court that he was not proceeding on the ground of fraud, for the reason that plaintiffs' evidence, and so much of defendants' evidence as is favorable to plaintiffs, considered in the light most favorable to plaintiffs, are not sufficient to make out a case of actionable fraud.

The case was tried on the theory that if at the time the purchase price of the timber was paid, plaintiffs reasonably understood that the 45 acres of timber on the Denning estate was included in the acreage of timber bought, they were entitled to recover from defendants. And on the second issue the court instructed the jury: "The measure of damages would be the value of that timber on the Denning Estate tract of the approximately 45-acre tract, at the time that the purchase price was paid."

The trial judge instructed the jury on the first issue, in part, substantially as follows: The plaintiffs contend that you should be satisfied by the greater weight of the evidence that the defendant Earp on 7 June 1957 pointed out the timber to them, including the timber on the 45 acres on the Denning estate, which the defendants did not have any option upon, that they paid the purchase price honestly believing that the timber they were buying included the timber on the 45-acre tract, "that there was a mistake, and that they never did come to any meeting of the minds," and that the jury should answer the first issue, Yes.

Defendants had an option to buy the timber for $17,500, and were to have a 5% commission for selling it. When plaintiffs agreed to buy the timber, they delivered the cheque in payment for it to Taylor & Morgan, attorneys at law, with instructions to hold it, until title to the timber could be checked, and a timber deed made to them. The owners of the timber deeded it to plaintiffs. Plaintiffs do not assail the timber deed or any of its provisions. The owners of the timber conveyed by them to plaintiffs are not parties, and plaintiffs seek no relief against them. The contract was the purchase and sale of timber, consummated by deed. Certainly the makers of the timber deed are essentially involved in determining as to whether or not there was any meeting of the minds in the purchase and sale of the timber.

The theory of the trial was that if the purchase price of the timber was paid under a mistake of fact on the part of plaintiffs and defendants alone—there is no evidence and no contention that there was any mistake or any false or fraudulent representation on the part of the makers of the timber deed—, there was no meeting of the minds of the parties, and the jury should answer the first issue, Yes, and then proceed to answer the second issue.

This Court has not adopted the doctrine that unilateral mistake, unaccompanied by fraud, imposition, undue influence or like circumstances of oppression is sufficient to avoid a contract. Cheek v. Southern R. R. Co., 214 N.C. 152, 198 S.E. 626. In that case it is said: "The mere mistake of one party alone is not sufficient to avoid the contract. (Citing authority). To have that effect, the mistake must be mutual."

In Ebbs v. St. Louis Trust Co., supra, [199 N.C. 242, 153 S.E. 860], it is said: "Ordinarily the right to rescind a contract is built upon fraud, mutual mistake, or mistake of one party induced by the fraudulent or false representations of the other."

In September 1957, or before, plaintiffs sold for $19,000 the timber purchased by them in June 1957 for $18,375. The remedy of rescission is not available to plaintiffs, because the parties cannot be placed in statu quo. Dean v. Mattox, 250 N.C. 246, 108 S.E.2d 541.

Accepting as true for the purpose of considering the motion for judgment of nonsuit, the evidence of plaintiffs that they paid the purchase price for the timber under a mistake of fact on the part of plaintiffs and defendants, but not on the part of the makers of the timber deed, and in the honest belief that the 45 acres of timber belonging to the Denning estate was included in the timber they purchased, and that shortly after the purchase of the timber plaintiffs sold it for more than they paid for it, does not entitle them to avoid the contract, and to recover money from the defendants.

Generally, when money is paid to another under the influence of a mistake of fact, and it would not have been paid had the person making the payment known that the fact was otherwise, the money may be recovered. The basis of such recovery is that money paid through misapprehension of facts belongs, in equity and good conscience, to the person who paid it. 4 Am.Jur., Assumpsit, Sec. 24. In such a case the proper remedy is an action for money had and received. 4 Am.Jur., Assumpsit, p. 514. This rule is subject to certain well-defined exceptions, among them, that a payment induced by mistake cannot be recovered if the payee, in equity and good conscience, is entitled to retain the money received. 40 Am.Jur., Payment, Sec. 188.

In the case sub judice, plaintiffs paid in June 1957 for the timber $18,375—of which amount $17,500 was received by Luby Denning and wife, the owners of the timber, and a 5% commission amounting to $875 by defendants. In September 1957, or before, plaintiffs sold this timber for $19,000. Plaintiffs seek no recovery of the $17,500. The defendants by their activities consummated the sale of the timber to plaintiffs. Defendants, in equity and good conscience, are entitled to retain the 5% commission for their services. The evidence is insufficient to support a recovery from defendants for money had and received.

McBryde v. Coggins-McIntosh Lumber Co., 246 N.C. 415, 98 S.E.2d 663, relied upon by plaintiffs as stating the law of this case, is clearly distinguishable. That case holds that where the grantors in a timber deed go upon the land, point out the boundaries, and mark trees as being within their boundaries, both the grantors and the grantee, who cut the timber within the boundaries designated, are liable to the owner of the adjacent land for trespass as joint tort-feasors, if any of the trees so cut stood on land belonging to the adjacent owner.

To establish a cause of action there must be allegata and probata, and the two must correspond with each other. Southern Box & Lumber Co. v. Home Chair Co., 250 N.C. 71, 108 S.E.2d 70; Whichard v. Lipe, 221 N.C. 53, 19 S.E.2d 14, 139 A.L.R. 1147. Plaintiffs' evidence, and defendants' evidence favorable to them, considered in the light most favorable to plaintiffs, do not make out a case against defendants, and the trial judge committed error in overruling defendants' motion for judgment of nonsuit made at the close of all the evidence.

Reversed.