Murphy v. T. B. O'Toole, Inc.

• Decision Date: 29 February 1952
• Docket Number: No. 212,C,212
• Citation: 8 Terry 99,87 A.2d 637,47 Del. 99
• Parties: , 47 Del. 99 MURPHY et al. v. T. B. O'TOOLE, Inc., et al. ivil Action, 1950.
• Court: Delaware Superior Court

Page 637

87 A.2d 637

8 Terry 99, 47 Del. 99

MURPHY et al. v. T. B. O'TOOLE, Inc., et al.

No. 212, Civil Action, 1950.

Superior Court of Delaware, New Castle County.

Feb. 29, 1952.

David A. Eastburn and John M. Bader, both of Wilmington, for plaintiffs.

John VanBrunt, Jr., of Killoran & VanBrunt, Wilmington, for defendants.

CAREY, Judge.

The question for determination is whether the record discloses the existence of a genuine issue as to any material facts warranting submission of the case to a jury. As will be seen, defendants' affidavits, if true, fully refute any imputation of fraud. Plaintiffs, therefore, have the duty of disclosing the existence of evidence justifying a trial of the issue. 3 Barron and Holtzoff 88.

The parties agree that a statement of intent to perform an act, when in truth no such intent exists, constitutes a misrepresentation of fact and as such many furnish the basis for an action in deceit, provided the other necessary elements are present. The plaintiffs here contend that evidence of non-performance of the act is alone sufficient to justify a jury in inferring lack of truth in the prior statement of intent. They argue that, upon proof of non-performance, the matter must be left to the jury regardless of what explanation may be offered, for the jury may disbelieve the explanation, even though no rebuttal thereof be made. It would follow, presumably, that summary judgment in favor of a defendant could never be granted, whenever his non-performance of the promised act has been established.

I should be reluctant to hold that proof of non-compliance with a promise is never, under any circumstances, sufficient to justify an inference of fraud. Instances when non-performance could be explained by no other reasonable hypothesis may easily be visualized. Usually, however, something more is required. 24 Am.Jur. 133, Sec. 287; 37 C.J.S., Fraud, § 116, p. 440; see cases collected in 51 A.L.R. 163; 68 A.L.R. 648; 91 A.L.R. 1306; 125 A.L.R. 891. Ordinarily, in the absence of additional circumstances, it will be found that a mere failure to perform is as consistent with an honest intent as with a dishonest one. ¹ When that is true, a prima facie case is not made out. 'Where the circumstances relied upon as indicating fraud are of a doubtful nature, or are susceptible of an innocent interpretation, or are calculated to raise but a bare suspicion of fraud in regard to the person charged therewith, they will not amount to sufficient evidence to establish the fact.' Kent Co. R. Co. v. Wilson, 5 Houst. 49, (56). See also Griffin v. Star Pub. Co., 1 Boyce 169, 74 A. 1072; Mears v. Waples, 3 Houst. 581, 619; 24 Am.Jur. 133, Sec. 286; 37 C.J.S., Fraud, § 115, p. 438. These principles are not limited to causes arising out of commercial transactions, as plaintiffs suggest, for they rest not merely upon the needs of commerce, but rather upon two broader bases: (1) the usual rule that the burden of proof rests upon him who alleges; (2) the legal presumption of good faith and honesty. 2 Jones Civil Evidence (Horwitz ed.) Sec. 192. Obviously, mere proof of defendants' failure to demolish the dwelling promptly after it became vacant is not enough to sustain plaintiffs' burden, because the failure could have been caused by any one of a number of bona fide reasons. It would therefore be incorrect to allow a jury to infer fraud from this fact alone. Williams v. DeFabio, 3 N.J.Super. 182, 65 A.2d 858, cited by plaintiffs is not inconsistent with this holding. In that case, as the statement of facts points out, there was evidence to the effect that an agreement had been made by the owners to lease the property to a new tenant before the plaintiff moved out. The finding of fraud was not based merely upon non-compliance with a promise.

Plaintiffs contend, however, that there are additional circumstances in this case, aside from non-compliance, which justify submission to a jury. Accordingly, it becomes necessary to review briefly the material allegations of the affidavits and depositions.

The dwelling in question was located on a tract of land owned by George. It was decided to use the property for the erection of a large housing project consisting of 92 apartment buildings containing 920 apartments at a cost of several million dollars, the project to be known as Clifton Park Manor. Don A. Loftus and Associates, Inc., entered the picture as builder, and Permanesque Homes of Delaware, Inc., was employed as the construction contractor. The Federal Housing Administration agreed to make a mortgage loan of nearly six million dollars. The plans and specifications were drawn by Albert D. Lueders, a registered architect, and were subject to approval by F. H. A. They also had to be approved by the Regional Planning Commission of New Castle County. O'Toole closely cooperated in the handling of numerous details as agent of George.

Defendants' affidavits indicate that, at all times from the very beginning, the dwelling occupied by plaintiffs was regarded as expendable. They planned to demolish it for several reasons. It was in a bad state of repair. Its value was not great. It was so located with respect to the proposed apartments as to constitute an eyesore. A considerable amount of blasting and excavation work had to be done very close to it, thereby rendering occupancy hazardous. Under the first site plans...