Mills v. Lynch

130 S.E.2d 541 (1963) 259 N.C. 359

John Lloyd MILLS and wife, Rosella Mills
v.
W. H. LYNCH.

No. 529.

Supreme Court of North Carolina.

May 1, 1963.

Coltrane & Gavin, Asheboro, Elreta Melton Alexander, Greensboro, for plaintiffs-appellants.

Norman & Reid, Pilot Mountain, for defendant-appellee.

SHARP, Justice.

This appeal presents only the question of whether the plaintiffs' evidence was sufficient to survive the motion for nonsuit. There are a number of discrepancies and omissions in plaintiffs' evidence. Defendant's evidence, of course, was not before the court. In his answer defendant categorically denies that he was guilty of any fraud. He alleges the transaction was handled by plaintiffs' own attorney who had been employed by the family to sell the land of their father in order to pay his debts, and the proceeds of the sale were used for that purpose; that the brothers and sisters had theretofore conveyed their interest in the land to the plaintiff in order to expedite the sale; that he had refused to make plaintiffs a loan and it was at all times understood by those concerned that defendant was buying the land outright.

Albeit the facts may be different, on motion to nonsuit, plaintiffs' evidence must be taken as true and considered in the light most favorable to them. 4 Strong's North Carolina Index, Trial, Section 21. Applying this well-established rule, plaintiffs' evidence, if believed, would establish that they were wilfully misled and misinformed by the defendant and the attorney acting for all parties; that the attorney of the defendant informed plaintiffs, an illiterate man and his wife, that the instrument they were signing was a deed of trust when it was actually a deed; that plaintiffs were prevented from reading the paper or having it read to them by the positive assertion that this was unnecessary because they knew what it was, a deed of trust.

"(T)he duty to read an instrument or to have it read before signing it is a positive one, and the failure to do so, in the absence of any mistake, fraud, or oppression, is a circumstance against which no relief may be had, either at law or in equity." Furst & Thomas v. Merritt, 190 N.C. 397, 130 S.E. 40. However, we cannot say, as a matter of law, that plaintiffs' evidence in this case shows an absence of fraud or oppression. Neither can we hold as a matter of law, under the circumstances and considering the relation of the plaintiffs to the attorney acting for all the parties, that plaintiffs might not reasonably have relied upon the positive misrepresentations which they say were made.

Fraud affecting the validity of deeds is of two kinds, fraud in the treaty and fraud in the factum. Medlin v. Buford, 115 N.C. 260, 20 S.E. 463; Cutler v. Roanoke R. & Lumber Co., 128 N.C. 477, 39 S.E. 30. Although it has been said "definitions are a bog for the unwary and a chart for the wicked," courts frequently find it necessary to attempt a demarcation. Where a party knowingly executes the very instrument he intended but is induced to do so by some false and fraudulent representation, we have an instance of fraud in the treaty. McArthur v. Johnson, 61 N.C. 317; Medlin v. Buford, supra; Cutler v. Roanoke R. & Lumber Co., supra.

"As a general rule, it may be said that fraud in the factum arises from a want of identity or disparity between the instrument executed and the one intended to be executed, or from circumstances which go to the question as to whether the instrument, in fact, ever had any legal existence, as, for example, where a grantor intends to execute a certain deed, and another is surreptitiously substituted in the place of it * * * or where a blind or illiterate person executes a deed when it has been read falsely to him on his request to have it read * * * or where some trick, artifice or imposition, other than false representation as to the meaning and content of the instrument itself, is practiced on the maker in effecting the execution of the instrument." Furst & Thomas v. Merritt, supra.

Plaintiffs contend that the evidence in the case makes out a case of fraud in the factum. However, the action is between the original parties to the deed. Therefore, the difference between fraud in the factum and fraud in the treaty is of no practical importance. In an action between original parties, if it appears that one induced the other to execute a paper by false and fraudulent misrepresentations as to its contents, the one who relied upon those misrepresentations to his injury—if he acted with reasonable prudence in the matter—is not obligated to the one who deceived him into executing the paper. Furst & Thomas v. Merritt, supra. See also Isley v. Brown, 253 N.C. 791, 117 S.E.2d 821.

It is for the jury to say what the facts are.

Reversed.