Swinton v. Savoy Realty Co.

73 S.E.2d 785 (1953) 236 N.C. 723

SWINTON et ux.
v.
SAVOY REALTY CO. et al.

No. 676.

Supreme Court of North Carolina.

January 6, 1953.

Jones & Jones, Rockingham, for plaintiffs, appellees.

Robert H. Dye, Fayetteville, for defendants, appellants.

DEVIN, Chief Justice.

The defendants noted numerous exceptions during the trial, but base their appeal chiefly on three grounds: (1) the denial of their motion for judgment of nonsuit, (2) submission of issue of punitive damages, and (3) errors in the court's instructions to the jury.

1. It is apparent from an examination of the record that the plaintiffs' evidence considered in the light most favorable for them was sufficient to make out a case for the jury. The plaintiffs are aged Negroes without education, and their testimony, if believed, was adequate to establish actionable fraud. Garland v. Penegar, 235 N.C. 517, 70 S.E.2d 486; Gray v. Edmonds, 232 N.C. 681, 62 S.E.2d 77; Kennedy v. High Point Savings & Trust Co., 213 N.C. 620, 197 S.E. 130.

The plaintiffs' evidence was sufficient to show that the action was begun within three years of the time when the facts constituting the alleged fraud were discovered, or should have been discovered in the exercise of reasonable diligence. G. S. § 1-52(9); Lee v. Rhodes, 231 N.C. 602, 58 S.E.2d 363; Wimberly v. Washington Furniture Stores, 216 N.C. 732, 6 S.E.2d 512; Hargett v. Lee, 206 N.C. 536, 174 S.E. 498. The facts stated in Harding v. Southern Loan & Ins. Co., 218 N.C. 129, 10 S.E. 2d 599, and Hargett v. Lee, 206 N.C. 536, 174 S.E. 498, cited by defendants, are materially different from those in the case at bar.

2. Defendants assign error in the action of the court in submitting an issue as to punitive damages.

The power of the court to assess punitive or exemplary damages, and thereby authorize the taking of money from the defendant and awarding it to the plaintiff in addition to that sufficient to compensate him for the injury done him, is questioned in some jurisdictions, 25 C.J.S. Damages, § 117, p. 708, but it has been uniformly held with us that punitive damages may be awarded in the sound discretion of the jury and within reasonable limits, though the right to such an award does not follow as a conclusion of law because the jury has found an issue of fraud against the defendant. There must be an element of aggravation accompanying the tortious conduct which causes the injury. Smart money may not be included in the assessment of damages as a matter of course simply because of an actionable wrong, "but only when there are some features of aggravation, as when the wrong is done willfully or under circumstances of rudeness or oppression, or in a manner which evinces a reckless and wanton disregard of the plaintiff's rights." Baker v. Winslow, 184 N.C. 1, 113 S.E. 570, 572. "But these damages are awarded on the grounds of public policy, for example's sake, and not because the plaintiff has a right to the money, but it goes to him merely because it is assessed in his suit." Cotton v. Fisheries Products Co., 181 N.C. 151, 106 S.E. 487, 488.

In the American Law Institute Restatement Law of Torts, sec. 908, it is said: "``Punitive damages' are damages, other than compensatory or nominal damages, awarded against a person to punish him for his outrageous conduct." In actions to recover damages for a tort which involves the ingredient of fraud, malice, insult or is characterized by reckless and wanton disregard of the rights of the plaintiff exemplary or punitive damages may be awarded for the purpose of punishing or making an example of the defendant. 15 A.J. 713. As a general rule exemplary damages are not recoverable in actions for breach of contract. 25 C.J.S. Damages, § 120, p. 716; Saberton v. Greenwald, 146 Ohio St. 414, 66 N.E.2d 224, 165 A.L.R. 599.

In Saberton v. Greenwald, supra, the action was to recover damages for fraudulent representation in the sale of a watch. It was held by a divided court that punitive damages might be recovered under the facts of that case. Three justices dissented, arguendo, on the ground that the tort sued on was not of such a character as to warrant the assessment of punitive damages, questioning also the power of the court to make the defendant pay twice for the same wrong.

In some cases, in actions to recover damages for fraud, where punitive damages are asked, it is suggested that a line of demarcation be drawn between aggravated fraud and simple fraud, with punitive damages allowable in the one case and refused in the other. In a note in 165 A.L.R. 616, it is said: "All that can be said is that to constitute aggravated fraud there must be some additional element of asocial behavior which goes beyond the facts necessary to create a case of simple fraud."

Without undertaking to pursue this further, we think the rule is that the facts in each case must determine whether the fraudulent representations alleged were accompanied by such acts and conduct as to subject the wrongdoer to an assessment of additional damages, for the purpose of punishing him for what has been called his "outrageous conduct."

In the case at bar the plaintiffs' original complaint alleged that defendants entered into a written contract to convey lot No. 310, and pointed out certain lines as the boundaries of this lot, and plaintiffs in their complaint demanded specific performance of the contract according to the boundaries thus indicated. Subsequently in an amended and substituted complaint, plaintiffs having accepted the deed to lot 310, sued to recover damages for the loss occasioned by defendants' fraud in the sum of $1500. This the jury awarded them. Thus the plaintiffs seem to have been made whole for the $2000 paid out, as they have received a lot with $500 and $1500 as damages on the ground of fraud. This is all the plaintiffs asked for, except an additional amount as punitive damages.

We are inclined to the view that the facts in evidence here are not sufficient to warrant the allowance of punitive damages. There was no evidence of insult, indignity, malice, oppression or bad motive other than the same false representations for which they have received the amount demanded. Here fraud is not an accompanying element of an independent tort but the particular tort alleged.

Though the conduct of the defendants was reprehensible, they have now been required to compensate the plaintiffs fully for the loss and injury caused by their false representations. We do not think the law requires that an additional amount for punishment should be meted out in this action.

3. The defendants have noted exception to several portions of the court's charge to the jury, and to the failure of the court to explain the law relating to certain phases of the testimony.

We have examined these in connection with the charge as a whole in the light of the evidence offered, and do not perceive any substantial ground upon which to predicate harmful error.

Other exceptions to which no reason or argument is submitted are deemed abandoned. Rule 28; Bank of Pilot Mountain v. Snow, 221 N.C. 14, 18 S.E.2d 711.

For the reasons herein set forth the allowance of punitive damages should be eliminated from the judgment, and except as modified in this respect the judgment is affirmed.

Modified and affirmed.

PARKER, J., took no part in the consideration or decision of this case.