Summary
holding that the statute of limitations did not begin running upon recording of a deed where, despite contrary assurances from the defendant, the deed included more land than agreed upon, and there were no other facts putting the plaintiff on notice of the fraud
Summary of this case from Gilchrist v. Wells Fargo Bank, Nat'l Ass'nOpinion
(Filed 16 October, 1907.)
1. Deeds and Conveyances — Timber, Standing — Description, Specific, General — Construction.
When a deed conveying standing timber contains a general description, followed by a specific one, the latter will control the former only to the extent required to reconcile the two, and in subordination to the principle that all clauses of the deed should be given effect so far as they can be harmonized by a fair and reasonable interpretation.
2. Same.
When the general description in a deed of standing timber conveys "all the pine, oak, ash, cypress, and poplar of specified dimensions within the boundaries of the entire Harmon-Modlin 42-acre tract," specifically excepting "as to that portion lying on the south of Cooper Swamp," whereon only the pine, poplar, and cypress were passed, the specific description relates only to the locality named, and controls the general description to that extent only.
3. Deeds and Conveyances — Description — Fraud — Options.
When it is properly established by the verdict of the jury, in an action to set aside a deed of standing timber, that fraud or deceit was practiced upon plaintiff, an ignorant man, unable to read or write, induced by false and fraudulent representations of defendant as to its contents, making plaintiff believe that it was in accordance with an option thereof theretofore obtained from him, but was, in fact, a conveyance to defendant of a much larger amount of timber, the evidence of fraud and deceit is sufficient, and the judgment will not be disturbed.
4. Same — Remedies.
One who has been induced to convey his property by fraud or deceit has an election of remedies, either to bring an action to set aside the conveyance, unless the property has passed into ownership of a purchaser for value without notice, or, allowing the conveyance to stand, he may sue to recover damages for the pecuniary injury inflicted upon him by the fraud. Retaining the purchase price is not, in the latter case, a ratification of the deed.
5. Same — Evidence, Extrinsic.
When the deed, which is alleged to have been fraudulently obtained as not being in accordance with an option theretofore given, stands alone as embodying the contract of conveyance between the parties, without referring to the option, the last-named paper is competent evidence in proper instances upon the question of fraud, and to show whether the deed complied with the option, but is incompetent in aid of the description in the deed.
6. Same — Knowledge, False Representations as to.
When the agent of defendant, charged with the duty of obtaining a deed from plaintiff in accordance with an option theretofore obtained, positively asserted that he knew the contents of the option, and that the deed was in conformity therewith, and when he does not know whether his assertion is true or false, he is as culpable, in case another is thereby misled or injured, as if he made an assertion knowing it to be untrue.
7. Same — Timber, Standing — Removal.
When it is established that the defendant obtained from the plaintiff a deed of timber by fraud or deceit, and conveyed the timber to a third person, the cause of action is not dependent upon the question of the removal of the timber in an action for damages.
8. Same — Registration — Limitation of Actions — Discovery of Fraud.
In an action for damages for obtaining by fraud or deceit a deed from plaintiff conveying a larger amount of timber than was intended to be conveyed, the statute of limitations applicable is Revisal, sec. 395, subsec. 9, and begins to run only when the injured party first discovered the facts, or could have discovered them by the exercise of proper effort and reasonable care. Registration of the deed is not in itself sufficient notice of such facts.
ACTION to recover damages for fraud and deceit, tried before (220) Biggs, J., and a jury, at March Term, 1907, of MARTIN.
Winston Everett and B. A. Critcher for plaintiff.
A. O. Gaylord for defendant.
CONNOR, J., dissenting.
There was evidence tending to show that, on 15 November, 1899, plaintiff contracted to sell to defendant company that portion of the pine, cypress, and poplar timber on a tract of land belonging to plaintiff and known as the Harmon-Modlin land, which was situated on the south side of Cooper Swamp, "as far back as the muck and mire comes," for the sum of $60; that plaintiff was an ignorant man, being unable to read or write, and that, on 18 November following, the defendant company, by false and fraudulent representations as to its contents, and making plaintiff believe that it was in compliance with the contract, induced plaintiff to execute a deed conveying to defendant company a much larger amount of the timber on the said tract than was included in the terms of the contract; that defendant afterwards sold the timber to the Dennis Simmons Lumber Company, and conveyed same to that company by deed, in the exact terms of the said deed to defendant, and, by reason of the fraud and deceit so practiced on plaintiff, he was damaged to the amount of $1,000.
The action to recover damages for said wrong was commenced on 3 April, 1906, and the fraud practiced on plaintiff by defendant and the sale to the Dennis Simmons Lumber Company were not discovered until December, 1905. The deed to defendant company was registered 9 January, 1900, and that to the Dennis Simmons Company was registered 24 February, 1902, and no timber has yet been cut by either company. Defendant company denied the fraud, claimed that the deed, in effect, only conveyed the timber embraced under the terms of the contract, and (221) that no injury had been wrought to plaintiff, and pleaded the statute of limitations. The jury rendered a verdict as follows:
"1. Did defendant procure the execution of the deed of date 18 November, 1899, by false and fraudulent representation, as alleged in the complaint?" Ans. "Yes."
"2. What damage, if any, has the plaintiff sustained in respect to the highland timber?" Ans. "Two hundred and fifty dollars, with interest from 18 November, 1899."
"3. What damages, if any, has the plaintiff sustained in respect to the swamp and ravine timber?" Ans. "Forty dollars, with interest from 18 November, 1899."
"4. Is the plaintiff's cause of action barred by the statute of limitations?" Ans. "No."
There was judgment for plaintiff, and defendant excepted and appealed.
After stating the case: The verdict, when considered in connection with the allegations and the admissions and testimony, establishes the proposition that, under a contract to convey the pine, poplar, and cypress timber on the tract which was situated on the south side of Cooper Swamp, as far as the muck and mire comes, the plaintiff has been induced by fraud and deceit to convey to defendant company the timber described in the deed, as follows: "All the pine, oak, ash, cypress, and poplar timber, of and above the size of 12 inches in diameter on the stump when cut, in and upon the following described tracts of land, situated in Jamesville Township, in the aforesaid county of Martin, adjoining the lands of S. L. Wallace, H. M. Modlin, and others, and known as the Harmon-Modlin tract, containing 42 acres, more or less; all the pine, poplar, and cypress timber on said land on the southern side of Cooper Swamp and in said swamp and ravines," and the damage fixed at $290.
(222) Defendant objected to the validity of this recovery, for the reason, chiefly, that by correct interpretation the deed only conveys to the defendant the timber specified in the contract, and on the principle that the latter part of the description, "all the pine, poplar, and cypress timber on said land, on the southern side of Cooper Swamp," being more specific, will control the former and more general description, "all the pine, oak, ash, cypress, and poplar timber on said tract," and so restrict the timber conveyed to that which was actually embraced within the terms of the contract, citing Peebles v. Graham, 128 N.C. 220. The principle contended for by the defendant is well recognized, but we do not think its correct application to the terms of the deed will sustain the position of defendant. Conceding that the latter part of the description is more specific, it would only control the former to the extent required to reconcile the two, and in subordination to the principle that all the clauses of the deed should be given effect as far as they can be harmonized by fair and reasonable interpretation. Jones v. Casualty Co., 140 N.C. 265. To apply, therefore, both of these rules of construction, we think it clear that in the instrument now before us the former and more general clause conveyed the grantee all the pine, oak, ash, cypress, and poplar, of the dimensions specified, within the boundaries of the entire Harmon-Modlin 32-acre tract, except as to that portion of said timber lying on the south side of Cooper Swamp, and as to that, only the pine, poplar, and cypress timber was passed, allowing the latter and more specific description to limit the kind of timber conveyed on the portion of the tract south of the swamp, leaving out the oak and ash. This being the true significance of the deed, the plaintiff has been wrongfully deprived of all his timber in excess of that described in the original contract, which was only the "pine, cypress, and poplar within that portion of the tract on the south side of Cooper Swamp, as far as the muck and mire ran." It is right, therefore, on the issue as to defendant's responsibility, that the verdict be sustained, for it is well established that one who has been induced to convey (223) his property by fraud and deceit has an election of remedies, and may either bring an action to set aside the conveyance, unless the property has passed into ownership of a purchaser for value and without notice ( Summers v. Mfg. Co., 143 N.C. 102), or he may allow the conveyance to stand, and sue to recover damages for the pecuniary injury inflicted upon him by the fraud. May v. Loomis, 140 N.C. 350. And it is further held that retaining the purchase price is not such a ratification of the contract as prevents the injured party from maintaining his action for damages to recover for the injury over and above the amount already received under the contract. 20 Cyc., 91; Andrews v. Jackson, 168 Mass. 266; Shimabarger v. Shelton, 41 Mo. App. 147. As said in Cyc., supra, "As indicated above, a return, or an offer to return, what plaintiff has received under the contract, induced by the fraud, is not a condition precedent to his maintaining an action for deceit, since he is entitled to the benefit of his contract, plus the damage caused by the fraud," and the general principles sustaining plaintiff's right to recover are well stated in the cases of Sprinkle v. Wellborn, 140 N.C. 163; Griffin v. Lumber Co., 140 N.C. 514.
An effort is made to support the interpretation of the deed insisted on by defendant by construing the deed and option together, using the option in aid of the description contained in the deed. It is familiar learning, however, that user of the option for such purpose is not permissible. The deed now stands alone as embodying the contract between the parties. It makes no reference to the option for description, or for any other purpose, and, while this last paper is competent evidence on the question of fraud, and to show whether or not the deed complies with the option, the authorities are clear that the paper is not relevant in aid of the description in the deed, and any attempt to use (224) it for such purpose would, therefore, be improper. Farthing v. Rochelle, 131 N.C. 563. Again, it is contended that a great wrong has been done defendant in this trial, and a verdict has been rendered fixing it with a gross fraud, without any sufficient evidence to support it; but we find nothing either in the record or the testimony to justify this position. It appears that plaintiff gave an option at the price of $60 to sell to the defendant company the pine, cypress, and poplar timber in the swamp and ravine, "as far as the muck and mire comes," on a tract of land consisting of about 7 acres of the land known as the Harmon-Modlin tract, on the eastern side of the Washington and Jamesville Road and the southern side of Cooper Swamp, and agreed that the company should have five years in which to cut and remove the same. By the representations of the defendant's agent, plaintiff was induced to sign and deliver a deed conveying to the defendant all the pine, oak, ash, cypress, and poplar timber upon the entire tract of land known as the Harmon-Modlin tract, containing 42 acres, more or less; all the pine, poplar, and cypress timber on such land on the southern side of Cooper Swamp and in said swamp and ravines, being the land conveyed to said Modlin, as per record in Martin County, by deed dated 18 February, 1898, giving ten years in which to remove it.
Speaking of the transaction by which this result was effected, the plaintiff testified as follows:
"The highland part of the Harmon-Modlin tract is covered with pine, oak, and poplar timber. It is good timber. There is pine, ash, poplar, and cypress timber in the swamp. None of the timber has ever been cut. Mr. Arthur Hardison came to my house to buy my timber for the company. I gave him an option on the swamp timber as far up as the muck and mire goes. I did not sell him any of the highland timber. He was to cut timber down to 12 inches in diameter at the stump in the swamp and ravines. I signed the option — my wife and I. Hardison gave it to Mr. Jordan. I have seen it since. Mr. Jordan read it to me, at his home in Beaufort County, some weeks before the suit was (225) brought. In 1905 was the last time I saw the option, just before I brought this suit. It was a thirty-day option. Mr. Jordan came with a deed at the end of the thirty days. Mr. Jordan said the deed was exactly like the option — that it was written, word for word, like the option. I asked him to read the deed over to me. He said: `It is no use reading the deed; it is exactly like the option, and is all right.' I cannot read, and Mr. Jordan knew that I could not read or write. I sold the timber for five years in the option, and Mr. Jordan said the deed was exactly like the option in every respect. On this statement, and relying on it, I signed the deed — my wife and I signed it — and Mr. Jordan took private examination and paid me $59 in check on the company. One dollar had been paid by Hardison when the option was taken." It is admitted that the defendant paid $60. Mr. Jordan acted for the defendant.
Thus it will be seen that plaintiff, as we interpret the deed, who had given an option at the price of $60 to convey the pine, cypress, and poplar timber on 7 acres of the Judson Harmon land, lying south of the Cooper Swamp, and "as far as the muck and mire runs," has, by the false representations of the defendant's agent, been induced to convey all the pine, cypress, poplar, oak, and ash on the entire tract, except that part lying south of Cooper Swamp, and all the pine, cypress, and poplar south of Cooper Swamp, without limiting this amount by the restriction "as far as the muck and mire runs," the timber so conveyed amounting in value to $350, being $290, the amount of damage found by the verdict, plus $60, amount paid under the contract. On the moral aspects of the question there is here, in our opinion, ample evidence to establish willful misrepresentation on the part of defendant's agent, and to justify the verdict as rendered. If it be suggested that there is no evidence that the agent, Jordan, was aware of the contents of the option, the answer is, that he positively asserted that he knew the contents, and that the deed was in exact compliance with the same; and it is well (226) established that one who intentionally and positively asserts a fact to be true of his own knowledge, when he does not know whether it be true or false, is as culpable, in case another is thereby misled or injured, as one who makes an assertion which he knows to be untrue.
It is further urged, in objection to this recovery, that no timber has yet been cut, and may never be, but the law must deal with facts, and not with possibilities, which rest only in suggestion; and, unfortunately for the defendant, it has so dealt with this contract that its mental attitude toward it has ceased to be of importance. It has conveyed the timber bought by it to the Dennis Simmons Lumber Company by deed containing a description exactly similar to its own. This last company is not a party to this record, and we are not informed of its purpose. Certain it is, however, that, if our interpretation of this deed be correct, it has a right to enter upon the plaintiff's land and cut and appropriate all the timber of the kind and dimensions specified on the entire Judson Harmon tract, to the value of $350, when the plaintiff had only agreed to sell $60 worth of timber on 7 acres of the property.
This being true, and the result indicated having been brought about by the fraudulent misrepresentations on the part of defendant's. agent, the plaintiff's right to recover on the main issue comes clearly within the principle so well stated in Griffin v. Lumber Co., 140 N.C. 514: "Where the parties made a contract for the sale of certain timber, reserving a well-defined class of trees, and defendant undertook to reduce the contract to writing, in accordance with its terms, but knowingly included the reserved timber, and falsely represented to plaintiff that said timber was reserved in the deed, and, by means of this false representation, procured the execution of the deed, the plaintiff has a cause of action for deceit; and this is not dependent upon the removal of (227) the timber."
Defendant assigns for error, further, that on the issue as to the statute of limitations the judge below declined to charge, as requested, that the registration of defendant's deed was in itself such a notice of the alleged fraud as would put the statute in motion for the defendant's protection and in bar of plaintiff's claim; but the point has been resolved against the defendant. The statute applicable (Revisal, sec. 395, subsec. 9) provides that actions of the present kind are barred in three years after the discovery by the aggrieved party of the facts constituting the fraud, and, construing this subsection, the Court has decided that the statute commenced to run when the aggrieved party first discovered the facts, or could have discovered them by the exercise of proper effort and reasonable care, and that the registration of the deed, or knowledge of its existence, by which the fraud was accomplished was not of itself sufficient notice of such facts. Peacock v. Barnes, 142 N.C. 215; Stubbs v. Motz, 113 N.C. 458.
There is no error, and the judgment of the lower court is
Affirmed.