Ebbs v. St. Louis Union Trust Co.

• Decision Date: 02 July 1930
• Docket Number: 587.
• Parties: EBBS v. ST. LOUIS UNION TRUST CO. et al.
• Court: North Carolina Supreme Court

153 S.E. 858

199 N.C. 242

EBBS v. ST. LOUIS UNION TRUST CO. et al.

No. 587.

Supreme Court of North Carolina

July 2, 1930

Appeal from Superior Court, Buncombe County; Johnson, Special Judge.

Action by P. D. Ebbs against the St. Louis Union Trust Company and others, executors and trustees of the last will and testament of the estate of Edwin W. Grove and others. Judgment for plaintiff, and defendants appeal.

New trial.

Scienter and intent to deceive are essential elements of actionable fraud.

On or about the 26th day of March, 1927, the plaintiff made an offer in writing to the Grove estate to purchase a certain house for the sum of $25,000. The real estate broker securing the contract was the defendant Arthur Sabin. It was understood at the time that a special proceeding to perfect the title would be necessary. The defendant Sabin approached the plaintiff about March 20, 1927, stating that he had a couple of stone houses belonging to the Grove estate, which he desired to sell to the plaintiff. The plaintiff accompanied the defendant Sabin and examined a stone house on Kimberly avenue. Thereafter the plaintiff made two or three trips to examine the house, both inside and out. The house was apparently built of stone taken in its natural state and laid in a unique way, which made the appearance of the house very attractive to the plaintiff. The agent, the defendant Sabin represented to the plaintiff "that it was a perfectly constructed house in every way." Furthermore that it was "a stone house." There were certain minor repairs to be made, which the agent agreed to have made in order to satisfy the plaintiff. Thereupon the plaintiff stated to the defendant Sabin: "Well, Mr. Sabin, if this house is what you recommend it to be, a perfect house, perfectly constructed, perfect house, and you will put these other things in that I have found here I will let you offer them $25,000.00 and arrange the terms, name the terms myself." Thereupon the plaintiff signed the offer of purchase to be submitted to the Grove estate. The offer was accepted by the defendant representing the Grove estate. Thereafter, realizing that it would require some time to perfect the special proceeding to pass title, the plaintiff moved into the house the first of May. On the 12th of September the wife of plaintiff died and the plaintiff vacated the house on the 14th of September, leaving the furniture therein and listing the property for sale with certain real estate agents in Asheville for the sum of $32,500. The evidence tended to show that from May until December there was very little rain. About the first of December heavy snow and rain began falling, and the plaintiff went to the house and found that the walls were wet and dripping, and that there was a leak in the sunparlor. Thereafter, on December 23, 1927, the plaintiff wrote a letter to the Grove estate stating that he would not take the house, and that it would be useless to complete the proceeding to make title, and demanded the return of an initial payment of $2,500. The Grove estate declined to return the money paid at the time of signing the agreement and offered to tender deed subject to the payment of the balance of cash payment and the execution and delivery of notes for the deferred payments. Shortly thereafter the plaintiff brought a suit against the defendants alleging that Sabin was the agent of defendants and that he had represented that the house was "a perfectly constructed house in every respect, of permanent and fire proof nature, and that upkeep of same would never amount to anything," when, as a matter of fact, the house was of defective construction in that the mortar or masonry had not been water-proofed, and that as a result thereof the exterior walls of the house absorbed water, causing the floors to swell out of alignment and the basement to be flooded with water.

Plaintiff further alleged that the defendant knew or by the exercise of reasonable and ordinary diligence should have known that the house at the time of sale was not a perfectly constructed house in every particular.

Upon such allegations the plaintiff asked for a rescission of the contract and for the recovery of $2,500 paid upon the purchase price, and for damages in the sum of $2,500.

The defendants filed answer denying the allegations of the complaint and asking that the plaintiff be required to specifically perform the contract of purchase. In June, 1929 the plaintiff filed an amendment to the complaint setting out the fact that the house in controversy, "instead of being a stone and masonry house," was in fact a "stone veneer house"; that is to say, a house of wooden frame enclosed by a veneering of stone laid on concrete," etc. The evidence tended to show that the plaintiff had made this discovery a day or two before the trial.

The following issues were submitted to the jury:

1. "Was the plaintiff induced to execute the contract set out in the pleadings by the...