Myrtle Apartments, Inc. v. Lumbermen's Mutual Casualty Co.

127 S.E.2d 759 (1962) 258 N.C. 49

MYRTLE APARTMENTS, INC.
v.
LUMBERMEN'S MUTUAL CASUALTY COMPANY.

No. 252.

Supreme Court of North Carolina.

October 31, 1962.

Dockery, Ruff, Perry, Bond & Cobb, by William H. McNair, Charlotte, for plaintiff, appellant.

Carpenter, Webb & Golding, by William B. Webb, Charlotte, for defendant, appellee.

HIGGINS, Justice.

In testing the sufficiency of a complaint, the court ignores the conclusions and looks to the facts. Here, the plaintiff alleged: "The boiler was in all respects sound and in proper working condition"; and that the defendant, through its engineer, represented that, "The general condition of the boiler is poor. It is, therefore, recommended that this boiler be replaced with a new or better one of standard construction as soon as this heating season is over."

With respect to the further representations in the letter, the plaintiff alleged: "And as to the remaining representations and contents of said letter, plaintiff does not have sufficient information to form a belief concerning the same and therefore, on information and belief, the plaintiff alleges that each and every statement contained in said letter was untrue and false." The allegation that every other statement in the letter is untrue and false is cancelled out by the prior statement that the plaintiff does not have sufficient information to form a belief with respect to them.

In stating his cause of action a plaintiff has the laboring oar. He may allege facts based on actual knowledge, or upon information and belief. A defendant's position is defensive. He may deny generally, i. e., upon actual knowledge, or upon information and belief, or that he has sufficient knowledge or information to form a belief. A denial in either form puts the plaintiff to his proof. But when a plaintiff alleges he does not have sufficient knowledge or information to form a belief as to particulars, he disqualifies himself to allege them as facts. McIntosh on Pleadings, 2d Ed., Vol. 1, § 983; Linker v. Linker, 167 N.C. 651, 83 S.E. 736; G.S. § 1-121; G.S. § 1-145.

The plaintiff owned and operated the boiler. The defendant insured it against accidental explosion. Both parties were interested in eliminating this danger. The right of the insurer to inspect is not challenged. The duty to report the results of the inspection and to recommend corrective measures, if needed, follows as a matter of course. Was the boiler 21 years old? Had a leak developed in the weld between the mudring and waterleg? Had it outlived its normal life expectancy? Had the poor condition of the tubes been reported? All of these findings by the engineer were, or should have been, known to the plaintiff, who voluntarily carried out the recommendation. What would have been the result otherwise, no one knows.

The defendant was not interested in the sale of a new boiler. Its only interest was to reduce the risk. This interest the plaintiff shared. The engineer's report shows it to be a recommendation for a new boiler upon the basis of what the examination revealed, all of which was set forth. "The general rule is that the mere expression of an opinion or belief, or more precisely, a representation which is nothing more than the statement of an opinion, cannot constitute fraud. 37 C.J.S., Fraud § 10, p. 226, citing cases from the Federal courts and from the appellate courts of 26 of the states, including the case of American Laundry Machinery Co. v. Skinner, supra [225 N.C. 285, 34 S.E.2d 190]." Lester v. McLean, 242 N.C. 390, 87 S.E.2d 886. To constitute fraud, there must be false representation, known to be false, or made with reckless indifference as to its truth, and it must be made with intent to deceive. Vail v. Vail, 233 N.C. 109, 63 S.E.2d 202; Ward v. Heath, 222 N.C. 470, 24 S.E.2d 5. The plaintiff's factual allegations do not raise an issue of fraud.

The plaintiff alleged the engineer inspected the boiler "in a negligent and careless manner." This is a conclusion and not an allegation of facts. The allegation is insufficient to raise an issue of negligence. Etheridge v. Power & Light Co., 249 N.C. 367, 106 S.E.2d 560; Shives v. Sample, 238 N.C. 724, 79 S.E.2d 193; Citizens Bank v. Gahagan, 210 N.C. 464, 187 S.E. 580.

The second amended complaint fails to state a cause of action. The demurrer was properly sustained. However, by filing a third amended complaint, the plaintiff may be able to state some cause of action. Davis v. Rhodes, 231 N.C. 71, 56 S.E.2d 43. At least the contrary does not appear as a matter of law. The judgment will be modified by striking that part which dismisses the action. The plaintiff will be permitted to amend.

Modified and affirmed.