Modlin v. Roanoke Railroad & Navigation Co.

Lead Opinion

IIoke, J.,

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 twelve 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 Ilarmon-Modlin tract, containing forty-two 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.

Defendant objected to tbe validity of this recovery, for tbe reason, chiefly, that by correct interpretation tbe deed only conveys to tbe defendant tbe timber specified in tbe contract, and on tbe principle that tbe latter part of the description, “all tbe pine, poplar and cypress timber on said land, on tbe southern side of Cooper Swamp,” being more specific, will control tbe former and more general description, “all tbe 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 tbe defendant is well recognized, but we do not think its correct application to tbe terms of the deed will sustain the position of defendant. Conceding that tbe latter part of tbe description is more specific, it would only control tbe former to tbe extent required to reconcile tbe 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. Casually Co., 140 N. C., 265. To apply, therefore, both of these rules of construction, we think it clear that in tbe instrument now before us the former and more general clause conveyed to tbe grantee all tbe pine, oak, ash, cypress and poplar, of tbe dimensions specified, within tbe boundaries of tbe entire ITarmon-Modlin 42-aere 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 tbe portion of the tract south of tbe swamp, leaving out tbe oak and ash. This being tbe true significance of the deed, the plaintiff has been wrongfully deprived of all of bis timber in excess of that described in tbe original contract, which was only tbe “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 tbe issue as to defendant’s responsibility, tbat the verdict be sustained, for it is well established that one who has been induced .to convey 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. Manufacturing 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. Oye., Vol. XX, p. 91; Andrews v. Jackson, 168 Mass., 266; Shimabarger v. Shelton el al., 41 Mo. App., 147. As said in Oyc., supra, “As indicated above, a return, of 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 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 seven 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 representation of the defendant’s agent plaintiff was induced to sign and deliver a deed conveying to the defendant all the june, oak, 'ash, cypress and poplar timber upon the entire tract of land known as the Harmon-Modlin tract, containing forty-two 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 twelve 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 tbe suit was 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. lie 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 seven 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 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 o'f importance. It has conveyed the timber bought by it to the Eennis-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 o'f $350, when the plaintiff had only agreed to sell $60 worth of timber on seven 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 remqval of 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 (Eevisal, sec. 395, sub-sec. 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, coüstruing 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.

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Dissenting Opinion

CoNNOR, J.,

dissenting: I am unable to concur in the conclusion reached by the Court in this case. If nothing more was involved than a small sum of money I would be content •to note my dissent and say no more; but, as I interpret the record, a gross moral fraud is by the verdict of the jury fixed upon the defendant — a corporation, it is true, but corporations commit frauds only by their agents and servants. It is impossible to disassociate them. I, of course, accept as true the allegation in the complaint, and every statement made by plaintiff and his witness, in regard to the terms of the option, and the contract upon which it is founded. I also accept as true his testimony in regard to the declarations and conduct of defendant’s agent when he presented the deed for plaintiff’s signature. I am, however, of the opinion that, instead of speaking a willful, deliberate falsehood in regard to the timber conveyed in the deed, he spoke the exact truth — that the deed, properly construed in the light of the option, conveys no other and no more timber than is included in the option. . I freely concede that, if I am in error in this, and if the agent, who, it seems, did not take the' option or draw the deed, knew that it included more and other -timber than the option called for, he was guilty of a gross fraud upon the plaintiff. It is so easy to charge men with fraud, and, unfortunately, we are so prone to take the accusation for the proof, that courts should be cautious to see that conduct capable of more than one construction should not be hastily or upon insufficient evidence branded as fraudulent when it may be consistent with an honest mistake. The complaint sets out the terms of the option, and in that respect it is fully sustained by the testimony. The option was for “the pine, cypress and poplar timber in the swamp and ravines, up as far as muck and mire comes, consisting of about seven acres, on the land known as the Iiarmon-Modlin land, on the eastern side of the Washington and Jamesville Noad and the south side of Oooper Swamp.” The charge is that defendant “willfully and wickedly contrived to defraud plaintiff,” and “fraudulently and purposely” inserted in the deed other timber, to-wit, “oak and ash,” on the swamp and ravine, and “pine, oak, ash, cypress and poplar” on the highland, etc.

Plaintiff introduces Mr. Hardison, who says: “I took an option on the swamp and ravine timber. * * * The plaintiff had other timber than swamp and ravine: I did not buy the timber on the highland.” Plaintiff testifies: “I gave him (Mr. Hardison) an option on the SAvamp timber, as far up as the muck and mire goes. I did not sell him any highland timber. He was to cut timber down to twelve inches in diameter at the stump on the swamp and ravine.” The deed contains the following description: “All the pine, oak, ash, cypress and poplar timber, of and above the size of twelve 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, Id. M. Modlin and others, and known as the Ilarmon-Modlin tract, containing forty-two acres, more or less; all the pine, poplar, cypress timber on said land, on the southern side of Cooper Swamp and in said swamp and ravines; being the land conveyed to said Modlin, as per record of Martin County, by deed dated 18 February, 1898.” It bears date 18 November, 1899, and is recorded 19 December, 1899. No timber has been cut, and defendant has never claimed, but expressly disclaims, any other timber than that included in the option. Its contention is thus stated in the record: “The defendant contends that the deed to it did not convey any timber except that in the swamp and ravines.” Thus the issue is sharply presented. ' Plaintiff charges that defendant fraudulently included all of his timber in the deed, whereas defendant disclaims ever taking, owning or acquiring the timber on the highland. The controversy, so far as the quantity of timber is concerned, depends upon the construction of the deed. It will be noted that, although the plaintiff alleges that defendant fraudulently inserted in, the deed “oak and ash” in “the swamp and ravine,” the deed conveys only “pine, poplar and cypress,” the exact language of the option. The controversy is, therefore, narrowed to the question whether, reading the deed in the light of the option, any other timber is conveyed than that on the “southern side of Cooper Swamp and in said swamp and ravines.” His Honor construed the deed to convey all of the timber on the Harmon-Modlin land, thus giving no effect to the last restrictive words in the description. ' I take it as settled that courts, in such cases, will, for the purpose of ascertaining the intention of the parties, “endeavor to place themselves in the position of the parties at the time of the conveyance.” Cox v. McGowan, 116 N. C., 131. We should read this deed as if thfe description referred to the option. The question which the Court is to ask in such cases is thus, clearly stated by Judge Walker, in Gudger v. White, 141 N. C., 507: “After all, the simple question is, what does the whole description show was actually intended to be conveyed ? When reading the deed and looking at the facts and circumstances as they appear, what impression is left on the mind as to the purpose of the parties ?” “When a general description is joined with a particular one, it is a rule of construction that the latter prevails over the former. A general description may be limited, restrained or controlled by a particular description, but, as a rule, a particular description is' not limited, restrained or controlled by a general description. The real intent of the parties should, when possible, be gathered from the whole description.” Jones on Conv., sec. 410. It is sometimes said that the first description will control a later one. This rule is, however, applied only when the question as to which conveys the intention is so exactly balanced that it is necessary to invoke it “to .tip the nodding beam.” “But, whether a specific description comes before or after a general description, ' it must prevail, upon the underlying principle that the law will always demand the production of the highest evidence, and, as between two descriptions, will prefer that which is most certain.” Cox v. McGowan, supra. In Carter v. White, 101 N. C., 30, the grant described the land as “a tract containing sixty-seven and a half acres, lying and being in the county of Currituck, known by the name of Walker’s Island, beginning,” etc. These words were followed by a specific description, which did not include the whole of Walker’s Island. Smith, G. J., said: “While the words recited, unconnected with others, will embrace a water-bound tract as an island, yet, upon every well-settled rule of interpretation, subsequent restrictive words giving and defining its boundaries must have the effect of qualifying the preceding general designation. Tbe island determines, as does tbe mention of tbe county, tbe locality of tbe land granted; tbe particular description, wbat portion is intended; and tbus tbe general and true intent is reached and an apparent repug-nancy avoided and tbe deed rendered self-consistent.” Tbe learned Chief Justice says tbat tbe proposition is so manifest that be refrains from citing authority for its support. In Peebles v. Graham, 128 N. C., 218, tbe testator, under whom both parties claimed, gave plaintiff “all tbe lands included under tbe name of tbe Arnold, tbe Geer and tbe Jones lands— all east of tbe Ealeigb and Eoxboro Eoad.” Furches, G. J said: “If tbe description bad closed with all tbe lands included, * * * and tbe dispute bad been whether tbe 64y2 acres were a part of tbe ‘Arnold’ land, it would have been proper for tbe Court to submit tbat question to tbe jury. But tbe description did not stop here; it added ‘all east of tbe Ealeigb and Eoxboro Eoad.’ This qualification must mean something. It would not have been added if it did not. Tbe description, without this qualifying clause, would undoubtedly have given the plaintiff all tbe Arnold tract. * * * As (to) this language, according to all rules of interpretation, tbe only meaning it can have is to restrict tbe gift to tbe east side of tbe road.” Proctor v. Pool, 15 N. C., 371. In these cases tbe Court bad no facts and circumstances aliunde tbe deed to aid it; whereas we have tbe option pursuant to which tbe deed was drawn. Tbe option includes “pine, cypress and poplar timber”; tbe specific description in tbe deed is confined to “pine, cypress and poplar timber.” Tbe option calls for the timber “in tbe swamp and ravines” — the exact words of tbe deed. Tbe option confines tbe timber sold to tbe “Harmon-Modlin land on the eastern side of tbe Washington and Jamesville Eoad, on tbe south side of Cooper Swamp.” Tbe deed confines tbe grant 'to tbe timber on tbe “south side of. Cooper Swamp.” No point is made of tbe omission to insert tbe road. But it is said tbat tbe words “up as far as the muck and mire comes” are omitted. No reference is made in the complaint to this omission. The only complaint made of the description as to the land on the “south side of Cooper Swamp, in the swamp and ravines,” is that the deed includes “oak and ash,” whereas the option includes only “pine, cypress and poplar”; and when tire deed is read it appears that “oak and ash” are not in it. I fail, after careful inspection, to find any evidence suggesting that plaintiff was claiming any damage for fraud as to the swamp and ravine timber. Ilis action is for the value of the timber on the highland. It is conceded that no timber has been cut. There is no suggestion that defendant, or its grantee, has ever claimed to own the highland timber; on the contrary, defendant expressly disclaims such ownership. I think that his Honor was in error when he held, as a matter of law, that the deed conveyed all of the timber on the Modlin land. There is not the slightest evidence that Jordan, or any one else, ever made any such claim. While it is conceded that defendant did not request his Honor to submit the question of the intention of the jDarties to the jury, it did except to his instruction that, as a matter of law, the language of the deed included all of the timber. If the question was for the jury, I think the exception extends to all errors in the charge in that respect. If the description was ambiguous and obscure, it would seem clear that the question as to what was included in the deed, in the light of the “facts and circumstances,” should have been submitted to the jury. Ward v. Gay, 131 N. C., 397. It is said that defendant conveyed the timber to the Dennis-Sim-rnons Lumber Company by deed, containing the same description as is found in the deed from plaintiff. There is no' suggestion that the lumber company has ever claimed that the highland timber passed, although eight years have elapsed since plaintiff’s deed was made. I confess to some difficulty in comprehending how a person, either natural or corporate, can be fixed with actual intentional fraud in respect to property wbicb it does not claim to own, bas never asserted any right to, and when, after eight years from the date of the 'alleged fraud, it is first notified that any such construction is put upon the deed, promptly disclaims title to the property. The defendant is made to buy property, at plaintiff’s price, which it does not want, has never purchased or claimed to own, and, for the purpose of compelling the purchase, is fixed with a gross, wicked fraud. It is made to pay interest for eight years. The deed was recorded immediately. It will' be further observed that, although the defendant’s grantee, by the judgment, is compelled to take the timber, it is given only two years within which to remove it. If it be not removed within that time, the plaintiff receives $290, with interest for eight years, and retains his timber. Bunch v. Lumber Co., 134 N. C., 116, and other cases in which we have held that, at the expiration of the time fixed for removal, the estate of the purchaser revests in the vendor. Assuming that ten years was inserted instead of five for removal, the difference in the price is fixed by the testimony. This amount, easy of calculation, plaintiff would recover. It may not be improper to say that, upon the argument, the attorney who wrote the deed — a man utterly incapable of committing a fraud — had the original deed, showing that a portion of the description was printed, thus explaining how the ambiguity occurred— the written words constitute the specific description. I think that, in any aspect of the case, there should be a new trial, to the end that the rights of all parties may be adjudged and protected.

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Lead Opinion

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. CasualtyCo., 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.

Case Details

Case Name: Modlin v. Roanoke Railroad & Navigation Co.

Court Name: Supreme Court of North Carolina

Date Published: Oct 16, 1907

Citation: 145 N.C. 218

Court Abbreviation: N.C.