Isler v. Brown, 196 N.C. 685 (1929)

Feb. 27, 1929 · Supreme Court of North Carolina

196 N.C. 685

S. H. ISLER v. H. H. BROWN, Trading as BROWN AUTO AND SUPPLY COMPANY.

(Filed 27 February, 1929.)

Chattel Mortgages — Removal or Transfer of Property by Mortgagor— Rights and Liabilities of Parties — Fraud.

Where the seller of an automobile since discharged in bankruptcy obtains from the State a certificate of clear title for the purchaser, and suppresses the fact that there was an existing registered chattel mortgage on the car, which the latter was later forced to pay: Held, the seller is liable in damages to the purchaser for the fraud practiced upon him.

Appeal by defendant from Daniels, J., and a jury, at October Term, 1928, of Wayne.

No error.

The plaintiff’s evidence was to the effect that about 12 May, 1925, he purchased from the defendant a new Studebaker automobile, paying $1,450 for same, some $1,100 casb and a Hudson ear. At tbe time of tbe sale defendant met plaintiff at tbe Borden Building, in G-oldsboro, N. C., where tbe State issues certificates and defendant got tbe certificate for plaintiff. In tbe certificate there was no statement of a lien on tbe car that be purchased from defendant. Plaintiff sent tbe certificate to tbe State Department and it sent him a title to tbe car. Defendant gave plaintiff tbe information on which tbe certificate of title was issued to him, but concealed tbe fact that there was a chattel mortgage on tbe car. Plaintiff paid for tbe ear and relied on tbe representation and conduct of defendant that it was free and clear of encumbrances. In fact, there was a recorded chattel mortgage against tbe automobile at tbe time in tbe sum of $900, which tbe defendant himself bad on 16 February, 1925, given to tbe First National Bank of Mount Olive, N. O., which was duly recorded. Tbe plaintiff bad no actual knowledge of this mortgage until tbe fall of 1927, when tbe bank instituted claim and delivery proceedings for tbe automobile and forced tbe plaintiff to pay $400, being tbe balance then due on tbe chattel mortgage. At that time tbe defendant was totally insolvent and bad gone into bankruptcy.

Tbe issues submitted to tbe jury in tbe Superior Court and their answers thereto, were as follows:

“1. In what amount, if any, is tbe defendant, H. H. Brown, indebted to tbe plaintiff by reason of breach of warranty of title? Answer (by consent) : $400 with interest from 1 February, 1928.

2. Was tbe plaintiff induced to purchase said automobile by false and fraudulent representations as alleged in tbe complaint? Answer: Yes.”

Kenneth G. Boyall and J. Q. LeGrand for plaintiff.

J. Faison Thomson and E. A. Humphrey for defendant.

Per OumAM.

Fraud can be practiced by a suppressio veri or sug-gestio falsi. “It is a rule of equity, as well as of law, that a suppressio veri is equivalent to a suggestio falsi; and where either tbe suppression of tbe truth or tbe suggestion of what is false can be proved, in a fact material to tbe contract, tbe party injured may have relief against tbe contract.” 18 Johns., 405; Black’s Law Diet., p. 1040; McNair v. Finance Co., 191 N. C., at p. 715. This is good law as well as good morals.

Tbe court below charged clearly and fully tbe law of actionable fraud applicable to tbe facts in this case. We find

No error.