First State Sav. and Loan v. Phelps
| Decision Date | 07 March 1989 |
| Docket Number | No. 23078,23078 |
| Citation | 385 S.E.2d 821,299 S.C. 441 |
| Court | South Carolina Supreme Court |
| Parties | FIRST STATE SAVINGS AND LOAN, Div. Poughkeepsie Savings Banks, FSB, Respondent, v. Robert PHELPS, Appellant. FIRST STATE SAVINGS AND LOAN, Div. Poughkeepsie Savings Banks, FSB, Respondent, v. Margo PHELPS, Appellant. . Heard |
Robert and Margo Phelps, Campobello, pro se.
Judson K. Chapin, III, of Perrin, Perrin, Mann & Patterson, Spartanburg, for respondent.
First State Savings & Loan, Div. Poughkeepsie Savings Banks, FSB, (the Bank) brought separate actions against Robert and Margo Phelps (the Phelps) to recover monies due upon two promissory notes previously executed in favor of the Bank. These two actions were subsequently consolidated. The Phelps answered, denying liability on the notes and counterclaimed against the Bank in causes of action sounding in warranty and fraud. At the close of the evidence, the trial court directed a verdict in favor of the Bank in its action upon the promissory notes and in the two counterclaims made by the Phelps.
The Phelps appealed, arguing that the trial court erred in directing a verdict against them on their counterclaims and in failing to permit Ms. Phelps to testify regarding certain elements of the Phelps' alleged damages. We affirm.
(1) Viewing the evidence and all inferences reasonably deduced therefrom in the light most favorable to the Phelps, was there sufficient evidence to warrant submission of the fraud and warranty claims to the jury?
(2) Did the trial court err in excluding Ms. Phelps' testimony relating to the Phelps' alleged damages?
In 1985, the Bank took possession of a number of horses which had been collateral for a loan, defaulted upon by a third party who is not connected with this action.
The Phelps were customers of the Bank and known to the Bank's local branch manager as individuals who were involved with and knowledgeable about horses. The branch manager approached the Phelps and asked them if they knew anyone who might wish to purchase the horses from the Bank. Initially, the Phelps assisted the branch manager in attempting to find someone to purchase the horses. When these efforts proved fruitless, the branch manager asked the Phelps to buy some of the horses, promising to loan them the money they would need to complete the purchase.
During these negotiations, the branch manager told the Phelps the horses were "registered." The Phelps testified that registration papers, which vouch for the blood line of the animal, are critical to the sale of horses, as horses which are registered are worth substantially more than those which are not registered.
In July 1985, the Phelps borrowed $7,500.00 from the Bank, $5,850.00 of which they paid to the Bank for fifteen of the horses, and the remainder of which they used to care for the newly purchased horses. The Bank held various pieces of the Phelps' farm equipment as security for the loan. The Phelps took possession of the horses within a few days.
The Bank delivered the registration papers on two of the horses to the Phelps at the sale, however, the Bank did not deliver the last of the papers for the other eleven adult horses until November of 1985. The remaining two horses were foals and had not yet been registered. The Bank eventually provided the Phelps with the certificates necessary to apply for the registration of the foals. These latter two certificates had typographical errors corrected with "White Out." It was uncontroverted that the delay in the delivery of the papers prevented the Phelps from immediately selling the horses.
The Phelps defaulted on the notes, and the Bank brought this action. The Phelps counterclaimed alleging fraud in the negotiation and consummation of the sale of the horses, and breach of warranty, in that the horses were represented as high quality registered horses.
The trial court directed a verdict in favor of the Bank on the promissory notes and directed a verdict against the Phelps on their counterclaims. This appeal by the Phelps, as to the counterclaims, followed.
The Phelps were represented by counsel during the trial proceedings. Trial counsel prepared and submitted the Transcript of Record for the appeal to this Court, however, the Phelps appeared pro se before this Court in brief and at argument.
Initially, the Phelps at oral argument alleged that the trial court erred in directing a verdict in favor of the Bank on its claim against them on the promissory notes. This issue is not properly before the Court, as: (1) no exception was taken to this portion of the trial court's Order Odom v. County of Florence, 258 S.C. 480, 189 S.E.2d 293 (1972) (); (2) the Statement of the Case recites "[n]o appeal is taken as to [this] ruling," United Fabrics Corp. v. Delaney, 241 S.C. 268, 128 S.E.2d 111 (1962) (); and (3) the Phelps did not argue the issue in their brief, Nienow v. Nienow, 268 S.C. 161, 232 S.E.2d 504 (1977); McGann v. Mungo, 287 S.C. 561, 340 S.E.2d 154 (Ct.App.1986).
In support of their contention that they were not liable on the notes, the Phelps argued facts which are not a part of the record in violation of the Rules of Practice in the Supreme Court of South Carolina, Rule 8, § 7. Such facts may not be considered by this Court. Supreme Court Rule 8, § 7; Becker v. Uhe, 221 S.C. 334, 70 S.E.2d 346 (1952).
The Phelps argue in brief and at oral argument that the record before this Court is incomplete. 1 In order to assure ourselves that an injustice was not being done, this Court obtained a complete transcript of the proceedings below pursuant to Supreme Court Rule 2. Our review of the full transcript discloses that the Phelps, through counsel, consented to a directed verdict in favor of the Bank in its claim on the promissory notes. As the Phelps consented to the directed verdict on the Bank's claim, this Court could not offer relief on appeal even if the issue was properly preserved for review. See Floyd v. Thornton, 220 S.C. 414, 68 S.E.2d 334 (1951); Thigpen v. Thigpen, 217 S.C. 322, 60 S.E.2d 621 (1950).
The two issues raised by the exceptions, and properly before the Court, allege the trial court erred in directing a verdict against the Phelps on their fraud and warranty counterclaims and in refusing to permit Ms. Phelps to offer certain damages testimony.
In reviewing a directed verdict, this Court must view the evidence and all reasonable inferences therefrom in the light most favorable to the party opposing the granted motion. In essence, this Court must determine whether a verdict for a party opposing the motion would be reasonably possible under the facts as liberally construed in his favor. Bultman v. Barber, 277 S.C. 5, 281 S.E.2d 791, 792 (1981). In order to make such a review, this Court must determine the elements of the action alleged and whether any evidence existed on each element. Todd v. South Carolina Farm Bureau Mut. Ins. Co., 283 S.C. 155, 321 S.E.2d 602 (Ct.App.1984) writ granted in part 285 S.C. 84, 328 S.E.2d 479 (1985) quashed 287 S.C. 190, 336 S.E.2d 472 (1985).
The elements of fraud are: a representation; its falsity; its materiality; knowledge of its falsity or a reckless disregard of its truth or falsity; intent that the representation be acted upon; hearer's ignorance of its falsity; hearer's reliance on its truth; hearer's right to rely; and hearer's consequent and proximate injury. Florentine Corp., Inc. v. PEDA I, Inc., 287 S.C. 382, 339 S.E.2d 112 (1985). Fraud must be proven by clear, cogent and convincing evidence. Anderson v. Citizens Bank, 294 S.C. 387, 365 S.E.2d 26 (Ct.App.1987).
The first representation upon which the Phelps base their fraud claim is that the bank manager told them the horses were registered. It is uncontroverted that thirteen of the horses were registered, and the Phelps received the registration papers. The two foals, due to their young age, had not yet been registered, but the Phelps were given papers which would enable them to register the foals. Thus, evidence of the most basic requirement of fraud, the falsity of the representation, is absent from the Phelps' case.
The second representation upon which the Phelps base their fraud claim is that the branch manager told them he would get the remaining registration papers to them within a few days. The papers were actually delivered to them some four months later. This representation is a representation as to a future event and, as such, is not actionable in fraud as...
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