Mobley v. Quattlebaum

April 10, 1915. The opinion of the Court was delivered by This was an action by plaintiff against the defendant for the purpose of enforcing specific performance of a contract to purchase a piece of real estate in the city of Columbia. After issue joined the cause was referred to A.D. McFadden, Esq., master, to take the testimony and report the same to the Court without any finding or recommendation on his part. Upon coming in of this report the case was heard at the Spring term of the Court for Richland county, 1914, by his Honor, Judge Prince, who filed his decree on July 17, 1914, by which he denied the plaintiff the relief prayed for, and dismissed the complaint. By Judge Prince's decree the facts are fully set forth and his decree should be reported in the case. From this decree the plaintiff appealed after entry of judgment and seeks reversal by fourteen exceptions. He complains of error on the part of his Honor in his findings of facts and conclusions of law, and in not granting the relief asked for by the plaintiff in the case.

We will not attempt to take up each exception separately. The contract was entered into by the parties. The defendant refused to comply and accept the deed which was tendered him by the plaintiff, upon the ground that the plaintiff had induced the defendant to enter into the contract by material misrepresentations contained in the paper in the evidence, marked exhibit "Y," as to the rental value of the property, as to an ordinance having been passed for the paving of the street in front of the property sought to be sold and as to the removal of the Southern Railway shops in front of the property.

Defendant also took the position that he had contracted for a title in fee "free from encumbrances" and that the property was encumbered at the time the plaintiff undertook to convey it by three separate mortgages, all past due, and plaintiff did not tender any title free from encumbrances or any indemnity against them. It appears from the evidence in the case that the plaintiff some time previous to the execution of the contract in question had been endeavoring to sell the property, that he lived in Fairfield county, that the property is one acre of land, situate in the city of Columbia, on Blanding street, and has on it one fourteen-room house, one store, one set of rooms back of the store, and two small negro dwellings, and part of the lot unoccupied by any of the buildings and being used by one of the tenants for garden purposes. J.T. Reese, a real estate agent of Columbia, offered to sell the property to the defendant, but defendant declined to buy it. Later on Kelly, another real estate agent, had the property for sale and had a plat made of the same, and about that time submitted to the defendant a statement that the plaintiff had prepared, but had not signed, setting out the different features and advantages of the property; this statement was typewritten and contained thirteen statements and was long prior to the time that it was put in the hands of the Keenan Agency for sale. Later on the plaintiff, who had been asking $25,000, placed the property with the Keenan Agency to sell for $22,000, and gave them the plat and list of statements with regard to the property, with the explanation to them that the statement in regard to paving the street and removal of the railway shops were mere rumors. The evidence shows that the property was reasonably worth the price it was listed for sale. A member of the Keenan Agency went to the defendant and showed him the statement of plaintiff, but told defendant that Mobley did not in any manner guarantee the same. It does not appear by any evidence in the case that the defendant made any inquiries or attached any importance to the statements of plaintiff prior to the bringing of this suit.

The defendant signed the contract in question, and after defendant had signed it, it was carried to plaintiff by the Keenan Agency and signed by plaintiff, and the defendant immediately listed it with W.A. Keenan, another member of the Keenan Agency, for sale at a profit of $5,000, Keenan telling the defendant that he believed he could sell it at that advance price before the time expired between making the contract and the time to comply, which statements were made before defendant signed the contract with plaintiff, and actuated the defendant in buying. Keenan, as agent for defendant, used the same statement (exhibit "Y" in evidence) in endeavoring to sell the property for the defendant up to the time defendant refused to comply with his contract with plaintiff, more than thirty days. There was convincing evidence that the defendant wanted the property not for the buildings on it, but bought it for the number of front feet it contained. That the defendant lived in the city of Columbia, and according to all the evidence in the case of real estate agents and business men that he was an extensive operator in real estate, and had bought and sold numerous pieces of real estate property and was a wide-awake, shrewd real estate operator, making careful investigations and keeping well informed as to prices and changes in value as to real estate in Columbia, and that he owned a house and lot on Blanding street, and had lived in it for years, and, along with other citizens, a year or more before this transaction, and before he moved off of this street, signed a petition, which petition had a sufficient number of signers to warrant the city in having this street paved. It is in evidence that the firm of Messrs. Melton Belser were attorneys of both plaintiff and defendant in arranging the details of the transaction, both in the examination of the titles and financing the matter for the plaintiff, and when the time arrived to close the transaction defendant refused to comply on the grounds that the property did not rent for as much as $95 per month. At that time no question was raised as to the paving or removal of the railroad shops; plaintiff thereupon made his offer in writing to defendant's attorney, who was also his attorney, to guarantee the rents set out in statement, which proposition was submitted to, and refused by, the defendant. On the date provided for in the contract plaintiff tendered the defendant a deed of the property in question and demanded a compliance of contract on part of defendant. Defendant refused to comply and notified plaintiff that at no time did he intend to comply; and gave as his only reason at that time as his refusal for complying that he found the plaintiff was paying the water rate, which reduced the rent. No complaint was made until the bringing of this suit that the rents were not as represented. It was in evidence that in the spring of 1913, about the time of the transaction, that there was a considerable change in the money markets of the city of Columbia, owing to Federal legislation in reference to currency, and by reason thereof, property was not at that time as salable and in as much demand as it had been previous to that time. It also appears in evidence that after the contract between plaintiff and defendant was signed, and after defendant had placed it with Keenan for sale, the defendant made a proposition to take it up before the sixty days were out, if plaintiff would make a cash discount, and wanted plaintiff to fix it up before the sixty days expired, and offered plaintiff a consideration therefor.

We think his Honor was in error in finding as he did in his decree that the unsigned paper writing was a positive statement of an existing fact; it was no more than an advertisement, and the defendant could have by proper care and inquiry got the truth upon investigating as to the paving of streets and removal of shops. Upon investigating what ordinances had been passed by the city council he could have found out about the paving of the streets, and throughout the whole case there is nothing to show that Mobley made any representations that were calculated to mislead or deceive the defendant to his injury. The defendant made no effort to verify any of the rumors or statements that he claimed were made, there was no fraudulent representation made by Mobley or nothing that could be strained or distorted into such, but on the contrary, the overwhelming testimony is that in his dealings and statements he was frank and fair and that the defendant was an extensive real estate operator who had bought and sold extensively, a shrewd, bright trader and perfectly competent to take care of himself. Plaintiff made no statements, either by mistake on his part or by concealment of things within his knowledge or false statements, that defendant could rely on to avoid the contract solemnly made.

In Anderson v. Rainey, 100 N.C. 338, 5 S.E. 182, it is held: "If in a contract for the purchase of land a party fails to avail himself of those sources of information readily within his reach, and chooses to rely upon representations, which, though not true, were not made with any false and fraudulent intent, the maxim of caveat emptor applies, as it does to personal property, and Courts will not aid the purchaser. Walsh v. Hall, 66 N.C. 233."

The case of Cape Fear Lumber Company v. Matheson,69 S.C. 87, 48 S.E. 111, discusses this question quite fully, and lays down the following principles as governing on questions of this kind: "That parties occupied no fiduciary relation to each other, they were dealing at arm's length, and were fully competent to contract. They had every opportunity of knowing the contents of the option signed by the defendant, and of understanding what it should have contained and did not contain. There is no evidence of any concealment on the part of Mitchell, the agent of the plaintiff. The burden of proof to show mistake is upon the appellant, and we think that he has not shown, by the preponderance of the evidence, such a state of facts as would entitle him to the equity that he seeks to invoke in this cause."

In Murrell v. Murrell, 21 S.C. Eq. (2 Strob. Equity) 153, the Court uses the following language: "If parties come to a settlement, and will not see their rights in their true character, or use proper diligence in ascertaining them, or, perceiving their rights, think proper by their silence to waive them, there is no reason why this Court or any other should be called upon to protect them from the consequences of their own default or folly. There are but few settlements or accountings in which, by a searching scrutiny, some errors or omissions might not be detected, and this Court will not open them, when by proper vigilance they might have been guarded against, and unless some of the circumstances above adverted to as affording grounds for relief are alleged and proved. A party fully competent to protect himself under no disability, advised as to all circumstances by which he might by due diligence be so advised, not overreached by fraud, concealment or misrepresentation, nor the victim of a mistake against which prudence might have guarded, has no right to call upon the Courts of justice to protect him against the consequences of his own carelessness, and to disturb the peace of the society by his clamors for that justice which he voluntarily or negligently surrendered."

In the case of Montgomery v. Scott, 9 S.C. 35, Chief Justice McIver, in writing the opinion of the Court, cites with approval Story's Equity, section 200: "If he does not avail himself of the knowledge or means of knowledge open to himself or his agents, he cannot be heard to say that he was deceived by the vendor's misrepresentations. * * * It is his own folly and laches not to use the means of knowledge within his reach, and he may properly impute any loss or injury in such a case to his own knowledge or indiscretion. Courts of equity do not sit for the purpose of relieving parties, under ordinary circumstances, who refuse to exercise a reasonable diligence or discretion." The learned Chief Justice says with regard thereto: "This rule, which has received the sanction of this eminent text writer, as well as Courts of the highest authority, is but the expression of a natural feeling of equity which would prompt any just man to say that where one comes into a Court of equity and asks, against an innocent party, the interposition of its extraordinary powers, to protect him from danger or loss occasioned by the fraud of a third party, he ought to be required to show that he has in no way, either by his misconduct or negligence, contributed to the perpetration of the fraud, from the consequences of which he seeks to be relieved at the expense of such innocent party."

The evidence satisfies us that the plaintiff stated positively and fully to the agents, that the statements in the papers were only rumors, and the defendant should have investigated, and he had no right to rely on them, as he claims that he did.

As to the finding of the Judge that the plaintiff could not comply and give title by reason of the fact there were encumbrances on the property for over $9,000, and for this reason specific performance would not be decreed, the evidence abundantly shows that the plaintiff had arranged, and at the time was prepared to remove these encumbrances, and give to the defendant a clear, free, and unencumbered title in fee simple.

We are of the opinion that the defendant attempted to get out of what he considered a poor trade, and that under all of the evidence in the case he should not be allowed to do so, and that the Circuit Judge was in error in his findings and decree, and that the exceptions should be sustained and judgment reversed, and that under the facts proven that the plaintiff is entitled to a decree for specific performance, and that the case be remanded to the Circuit Court for the purpose of carrying out this judgment.

Reversed and remanded.