Marshall v. Keaveny

248 S.E.2d 750 (1978) 38 N.C. App. 644

William E. MARSHALL, Jr., Plaintiff,
v.
Michael J. KEAVENY and wife, Marion T. Keaveny, Defendants and Third-Party Plaintiffs,
v.
HANNON REAL ESTATE, INSURANCE AND DEVELOPMENT COMPANY, Third-Party Defendant.

No. 7810DC120.

Court of Appeals of North Carolina.

November 21, 1978.

Donald H. Solomon, Raleigh, for plaintiff-appellant.

Ragsdale, Liggett & Cheshire, by William J. Bruckel, Jr., and Michael A. Swann, Raleigh, for defendants-third party plaintiffs-appellees.

MITCHELL, Judge.

The plaintiff first assigns as error the action of the trial court in granting the defendants' motion for summary judgment. He contends in support of this assignment that his pleadings and the documents filed in support thereof were sufficient to support an action against the defendants for fraudulent misrepresentation of the heated square footage contained in the house which they sold to him. We do not agree.

Our courts have joined the preponderance of American jurisdictions in holding that, in proper cases, a seller's fraudulent misrepresentation concerning the acreage or quantity of real property which he sells to a buyer is actionable. Swinton v. Realty Co., 236 N.C. 723, 73 S.E.2d 785 (1953); Shell v. Roseman, 155 N.C. 90, 71 S.E. 86 (1911); Hill v. Brower, 76 N.C. 124 (1877); Walsh v. Hall, 66 N.C. 233 (1872) (disapproving prior cases contra); 37 Am. Jur.2d Fraud and Deceit § 233, pp. 312-13; Annot., 54 A.L.R. 2d 660 (1957). In such cases the buyer has the right at his election to rescind or to keep the property and recover the difference between its actual value and its value as represented. Horne v. Cloninger, 256 N.C. 102, 104, 123 S.E.2d 112, 113 (1961). There is also considerable authority for the proposition that a seller is responsible to third parties for the misrepresentations of his agent or real estate broker as to acreage. Norburn v. Mackie, 262 N.C. 16, 136 S.E.2d 279 (1964); Annot., 58 A.L.R. 2d 10 (1958). Courts have not normally distinguished between fraud as to real or personal property in choosing such rules. Johnson v. Owens, 263 N.C. 754, 140 S.E.2d 311 (1965); Annot., 13 A.L.R. 3d 875, 936 (1967).

The defendants contend nonetheless that any misrepresentations by them or their agents as to the heated square footage contained in the house they sold the plaintiff could not be the basis of an action against them by the plaintiff. In support of this contention, the defendants point out that the contract for the purchase and sale of the house made no reference to heated square footage and specifically provided that, "It is understood that no representations other than those expressed herein, either oral or written, are a part of this agreement." The defendants assert that to allow the plaintiff to present evidence concerning the representations made by Hannon as to the heated square footage of the house would be to allow parol testimony of prior or contemporaneous negotiations or conversations inconsistent with the written contract and would violate the parol evidence rule. This argument overlooks the fact that an action for fraudulent misrepresentations inducing the plaintiff to enter a contract is an action in tort and not an action in contract, and the rule that prior conversations and negotiations are merged into the writing does not apply. See Fox v. Southern Appliances, Inc., 264 N.C. 267, 141 S.E.2d 522 (1965).

Fraud alleged as a defense to the enforcement of a written contract is not an attempt to vary or contradict the terms of the contract, for if the fraud is proven it nullifies the contract. White v. Products Co., 185 N.C. 68, 116 S.E. 169 (1923). We do not find that the clause of the contract relied upon by the defendants so closely relates to the precise subject matter of the defendants' alleged misrepresentations of heated square footage as to preclude the plaintiff's action based upon these alleged misrepresentations. See Fox v. Southern Appliances, Inc., 264 N.C. 267, 141 S.E.2d 522 (1965). Parol evidence was, therefore, admissible to show that the written contract was procured by the prior alleged misrepresentations of Hannon as to the heated square footage contained in the house.

Having so decided, we are confronted with the issue of whether as a matter of law the plaintiff could reasonably rely on the alleged prior representations, or, on the other hand, this was an issue for the jury. We hold that the trial court correctly determined as a matter of law that the plaintiff could not reasonably rely on the alleged prior misrepresentations as to heated square footage, and that the granting of summary judgment for the defendants was not error.

We note that in cases involving misrepresentations as to quantity or acreage, our courts appear to have taken a somewhat more tolerant attitude toward those contending they have been defrauded than is apparent in cases involving misrepresentations as to patent or latent defects or the quality or character of property purchased. Compare Shell v. Roseman, 155 N.C. 90, 71 S.E. 86 (1911); Hill v. Brower, 76 N.C. 124 (1877); and Parker v. Bennett, 32 N.C.App. 46, 231 S.E.2d 10 (1977); with Calloway v. Wyatt, 246 N.C. 129, 97 S.E.2d 881 (1957); and, Goff v. Realty and Insurance Co., 21 N.C.App. 25, 203 S.E.2d 65 (1974). But see Johnson v. Owens, 263 N.C. 754, 140 S.E.2d 311 (1965). Perhaps a reason for any such distinction arises from the fact that the acreage of property within given boundaries is not apt to be as obvious to or as readily ascertainable by the buyer as are the true facts in many cases involving patent or latent defects or the quality or character of property. The science of surveying land and determining the acreage contained within boundaries, which frequently create forms unknown to students of geometry, remains beyond the abilities of the ordinary buyer in sales of real property. The precise acreage of a given tract of land is often so difficult to determine that a general custom of drafting deeds and other legal documents to convey a stated amount of acreage "more or less" has developed in this and other jurisdictions. When these facts are combined with the former custom still frequently followed of conveying land according to old deeds and without a survey, it would appear that our courts have properly imposed upon sellers of real property a requirement that any representations they make, as to the acreage of a tract of land with which they are more familiar than the buyer either is or may reasonably become, be correct and that they be bound by such representations. See Walsh v. Hall, 66 N.C. 233 (1872) (location of real property).

We do not think the same reasoning should be applied to alleged misrepresentations as to the square footage contained in a house. This is particularly true where, as here, the person seeking to bring an action for the alleged misrepresentations of square footage had full opportunity to and in fact did inspect the house and could have determined the square footage therein for himself by simple measurements and mathematical computations. Absent facts to the contrary made known to a seller at the time of his representations as to the square footage of a house to be sold, the seller is entitled at this point in the history of public education to assume that his prospective buyer possesses the mathematical skills required for determining the square footage contained in the house. The seller is also entitled to assume that his buyer will make such determination during his actual inspection of the house if he believes it material. The same is not true, however, where the much more difficult and precise science of surveying a tract of land and determining its acreage is involved.

We are well aware that the point at which reliance ceases to be reasonable and becomes such negligence and inattention that it will, as a matter of law, bar recovery is difficult to determine and, in close cases, should be resolved in favor of the party alleging reasonable reliance upon fraudulent misrepresentations. Johnson v. Owens, 263 N.C. 754, 140 S.E.2d 311 (1965). Nevertheless, "The right to rely on representations is inseparably connected with the correlative problem of the duty of a representee to use diligence in respect of representations made to him." Calloway v. Wyatt, 246 N.C. 129, 134, 97 S.E.2d 881, 886 (1957). If the party seeking to bring an action for fraud based upon misrepresentations of a seller has not reasonably relied upon those representations, he has no claim upon which relief can be granted. Cofield v. Griffin, 238 N.C. 377, 78 S.E.2d 131 (1953).

The plaintiff here did not rely upon the representations of Hannon or any other representations to such extent as to forego making his own investigation of the interior of the house which he proposed to purchase. It must be assumed that he possessed the necessary skills to make any measurements which he deemed material during the course of his investigation. There is no indication from the record on appeal that the plaintiff was any less able to make a determination as to square footage than Hannon or that any representation was made to him which caused him to reasonably forego measuring the house and computing its square footage if he felt it was a material matter. After walking through and viewing the interior of the house, the plaintiff engaged in further arms length bargaining with the defendants resulting in his offering and their accepting a purchase price below the listed price.

We do not think that a statement by a seller as to the square footage contained in a house he sells constitutes, under ordinary circumstances, that type of "artifice" which induces reasonable reliance causing a prospective buyer to forego further investigation. See Calloway v. Wyatt, 246 N.C. 129, 97 S.E.2d 881 (1957), and Goff v. Realty and Insurance Co., 21 N.C.App. 25, 203 S.E.2d 65 (1974).

The plaintiff also contends the trial court erred in denying his motion and request for findings of fact and conclusions of law made pursuant to G.S. 1A-1, Rule 52. This contention is without merit. Trial courts are not required to make findings of fact when granting motions for summary judgment. It is not a part of the function of the court on a motion for summary judgment to make findings of fact and conclusions of law. Capps v. City of Raleigh, 35 N.C.App. 290, 241 S.E.2d 527 (1978).

The action of the trial court in granting summary judgment in favor of the defendants was without error and is

Affirmed.

VAUGHN and ROBERT M. MARTIN, JJ., concur.