Morrison v. Hartley, 178 N.C. 618 (1919)

Dec. 10, 1919 · Supreme Court of North Carolina

178 N.C. 618

C. F. MORRISON v. R. B. HARTLEY.

(Filed 10 December, 1919.)

1. Evidence — Writings—Telegrams—Parol Evidence.

Where a telegram, material to the inquiry, has been given to the defendant’s brother, and defendant has failed to produce it upon notice, and there is evidence that the original has been lost and the records in the-telegraph office destroyed, it is sufficient to admit of parol evidence of its contents.

2. Evidence — Writings—Letters—Parol Evidence.

Where the contents of a letter are not directly in issue and it is not the-purpose of the action to enforce any obligation created by it, its contents-may be shown by parol when relevant to the inquiry.

3. Evidence — Contracts—Lands—Fraud—Damages—Nonsuit—Trials.

In an action to recover damages for fraud in inducing a purchase of real estate at a fictitious price, a judgment as of nonsuit upon the evidence-will not be granted when it tends to show a false representation as to the-value of the land made with the knowledge that it was untrue, and with intent to deceive, and was relied on by the other party to his damage.

4. Evidence — Contracts—Lands—Fraud—Measure of Damages.

Where the defendant has induced the plaintiff by fraud to purchase-land at an excessive price, the measure of damages is the difference between the real value of the lands and its value as fraudulently represented to be.

5. Limitation of Actions — Contracts—Fraud—Discovery—Statutes.

Where an action for damages will lie for fraud in inducing the purchasing of land at an excessive price, the three-year statute of limitations-is applicable and will begin to run from the time the fraud was discovered, or should have been discovered, under the rule of the prudent man.

Appeal by defendant from Long, J., at tbe July Terna, 1919, of' Catawba.

Tbe plaintiff sues to recover damages for fraud in tbe sale of real estate (160 acres) in Oklahoma, basing tbe action on alleged false representations of defendant vendor, -that it was worth $200 per acre, their purpose being investment and speculation.

In tbe summer of 1909, tbe plaintiff, tbe defendant, and "W. L. Hart-ley, a brother of defendant, all residents of North Carolina, went to-Oklahoma and purchased 160 acres of land near the town of Britton,, for $16,000. In a few days after tbe purchase of this land, they declined an offer of $20,000 for it. They returned home, and in November, 1909, W. L. Hartley, who bad other holdings in Oklahoma, removed! from North Carolina, and became a resident of that State. In December, 1909, W. L. Hartley listed their said 160-aere tract with Charles Phelps, a real estate dealer, at the price of $25,000, and on 10 January* 1910, said broker secured a purchaser, in the person of H. C. Finley, at the price of $25,000. Morrison and E. B. Hartley, at the instance of' Morrison, declined to make a deed, and Phelps sued the three joint owners for commissions. The defendants in that action prevailed, not on the ground that a sale had not been effected, but on the ground that the contract with Phelps was conditioned upon the defendants being able, through the plaintiff, to secure certain other lands at a given price, and that said condition had not been, or could not be, complied with.

In March, 1910, the Hartleys sold their two-thirds undivided interest in the land to Morrison, on the basis of $25,000 for the entire property. Land values in that section declined very materially, and, seven years-after his purchase from the Hartleys, he claims to have discovered that in that transaction a fraud had been perpetrated upon him. He made-the discovery through W. L. Hartley, who, it appears, gave the information on account of a serious disagreement with his brother, the defendant.

The evidence of the plaintiff tends to prove that the fraud was perpetrated in March, 1910; that the defendant and his brother, W. L. Hart-ley, were in Oklahoma the first of the month and discovered that there' was a great shrinkage in land values, and that the land in which they were jointly interested with the plaintiff was not worth more than $20’ or $40 an acre; that they conceived the plan of selling to the plaintiff,, who was in North Carolina; that they telegraphed the plaintiff that W. L. Hartley was about to sell his interest to one Finley on the basis of $25,000 for the whole land, and that it was worth $200 per acre; that the defendant returned to North Carolina and repeated his representations, to the plaintiff; that relying on these representations, which were false, the plaintiff bought, and that he did not discover the fraud until 1917, when ~W. L. Hartley, upon disagreement with his brother, the defendant, told him of it. Also, that the defendant and his brother tried to prevent the plaintiff from discovering the fraud.

The evidence of the defendant was in direct contradiction of that for the plaintiff.

The jury returned the following verdict:

“1. Did the defendant falsely and deceitfully represent to the plaintiff' that the market value of the land mentioned in the complaint was worth greatly in excess of its actual market value, and that W. L. Hartley was-about to sell his interest therein to an outside party, as alleged in the-complaint? Answer: £Yes.’

“2. Did the plaintiff rely thereon, and was he thereby induced to purchase a further interest in said land to his injury? Answer: ‘Yes.’

“3. What damage is plaintiff entitled to recover of the defendant £ Answer: £$3,000.’

“4. Did plaintiff pay out moneys for interest and taxes for tbe use ■and benefit of tbe defendant, as alleged in tbe complaint? Answer: ■‘Yes.’

“5. If so, wbat is tbe amount of sueb interest and taxes? Answer: ■<$1,160.’

“6. Is tbe plaintiff’s action barred by tbe statute of limitations, as alleged in tbe answer ? Answer: ‘No.’ ”

Judgment on tbe verdict in favor of tbe plaintiff, and tbe defendant .appealed.

Qouncill & Yount and E. B. Oline for plaintiff.

W. G. Newland, Marie Squires, and W. A. Self for defendant.

AlleN, J.

There are twenty-tbree exceptions in tbe record, sixteen to tbe admission or exclusion of evidence, one to tbe refusal to nonsuit, two to instructions on tbe issue of damages, three to instructions on tbe issue of tbe statute of limitations, and one to tbe signing of tbe judgment.

None of these require extended discussion, because tbe real controversy was one of fact, and most of tbe exceptions were taken as matter •of precaution during tbe progress of tbe trial.

Those principally relied on are to permitting tbe contents of a telegram, purporting to have been sent by tbe defendant to tbe plaintiff in 1910, from Oklahoma to induce tbe plaintiff to buy, to be proven by parol, another to allowing tbe plaintiff to introduce a copy of a letter written by tbe defendant to bis brother in 1916, and to tbe refusal to •enter judgment of nonsuit.

Tbe telegram was material to tbe inquiry, and tbe loss of tbe original was shown. Tbe plaintiff testified be received tbe telegram, and after-wards gave it to tbe defendant, who said he wanted it “about dates” in a controversy with bis brother, and tbe defendant, upon notice, failed to produce it, and it was also shown that tbe record in tbe telegraph office bad been destroyed.

This was sufficient foundation for admitting parol evidence.

Tbe loss of tbe letter, a copy of which was introduced, was not established, but tbe letter was not directly in issue, and it was not tbe purpose of tbe action to enforce any obligation created by it, and, “Tbe rule ■excluding parol evidence as to tbe contents of a written instrument .applies only in actions between parties to tbe writing, when tbe enforcement of any obligation created by it is substantially tbe cause of action.” Holloman v. R. R., 172 N. C., 375. See, also, Faulcon v. Johnson, 102 N. C., 268; Carrington v. Allen, 87 N. C., 354; Ledford v. Emerson, 138 N. C., 502.

Tbe motion to nonsuit could not have been allowed, because evidence-was introduced tending to prove a false representation as to-the value of the land, made with the knowledge that it was untrue and with intent to-deceive, relied on by the plaintiff to his damage, and it was for the jury and not for us to say whether it was worthy of belief.

His Honor instructed the jury that the measure of damages was the difference between the real value of the land and its value as it was-represented to be, and that the action was barred if more than three years elapsed before the bringing of the action after the discovery of the-fraud by the plaintiff, acting as a prudent man, which is in accord with our precedents.

The verdict might well have been in favor of the defendant, as the plaintiff had to rely on the evidence of W. L. Hartley, who admitted that he conspired with the defendant, his brother, to defraud the plaintiff, and who made no disclosure until he and his brother disagreed, but these were matters for the consideration of the jury, and on the exceptions-there is no error which authorizes us to order a new trial.

No error.