Pridgen v. Long

• Decision Date: 12 March 1919
• Docket Number: 221.
• Citation: 98 S.E. 451,177 N.C. 189
• Parties: PRIDGEN ET AL. v. LONG ET AL.
• Court: North Carolina Supreme Court

98 S.E. 451

177 N.C. 189

PRIDGEN ET AL. v. LONG ET AL.

No. 221.

Supreme Court of North Carolina

March 12, 1919

Appeal from Superior Court, Duplin County; Allen, Judge.

Suit by R. C. Pridgen and J. R. Barden against J. P. Long and N. P Jarman. From judgment for defendant Jarman, plaintiff Barden appeals. New trial.

The maxim of caveat emptor is applicable to contracts of purchase of both realty and personalty, and is adhered to, both by courts of law and of equity, in absence of fraud.

On the 12th day of February, 1911, John R. Barden, being the owner in fee simple of the tracts of land in controversy, conveyed the same to R. C. Pridgen, for the consideration of $2,000 his wife joining in the deed, which was duly recorded on September 6, 1911; and on the 12th day of February, 1911, R C. Pridgen reconveyed the same land, by way of mortgage, to John R. Barden, to secure ten notes of $200 each, due at stated times from 1911 to 1920. This mortgage was registered the 9th day of March, 1911.

On September 5, 1911, R. C. Pridgen conveyed the same land to J P. Long, in consideration of $3,000, and the deed was recorded on the 7th of September, 1911. On September 5, 1911 J. P. Long and wife, Willie Long, reconveyed the land to R. C. Pridgen by a mortgage to secure $2,500, evidenced by ten notes due on different dates between January, 1913 and 1922. R. C. Pridgen then, on the 15th day of September, assigned the ten notes and mortgage to J. R. Barden, who paid him for the same, but Pridgen did not transfer the legal title, which he held as mortgagee. Long took possession of the property, and remained there until about the 1st of November, 1911, and then surrendered the possession of the land to Barden under an agreement, as alleged by Barden, that Barden was to make improvements, and was to sell the land, Long to give him a deed for his equity of redemption, and under this agreement Barden went into the actual possession of the land, and remained in possession until the 11th day of November, 1915, when Barden and wife conveyed to the defendant Nelson P. Jarman and wife, Marie C. Jarman, and Barden put them in possession of the premises, and they have remained there ever since without being disturbed by any one.

On the 10th day of July, 1915, J. R. Barden and R. C. Pridgen instituted a suit, in the superior court of Duplin county, against J. P. Long and Willie Long, and duly filed their complaint on July 10, 1915, in the clerk of the superior court's office. Long and wife filed their answer on August 21, 1915, and at the March term, 1917, the case came on for trial between Pridgen and Barden, as plaintiffs, and Long and wife, as defendants, and at this term the court ordered a mistrial, and made Jarman and wife parties to the action. On April 4, 1917, the defendants Jarman and wife filed their answer, and therewith commenced proceedings for arrest and bail against John R. Barden, alleging that they paid Barden $3,500 for the land, and took his deed with full covenants of warranty and seizin, and, further, that Barden "specifically and emphatically" declared to them and to their attorney, Frank L. Potter, that he was the absolute owner of the lands in fee simple, and that there were no incumbrances or liens upon the same, which assurances and representations were relied upon by these defendants, and were false and fraudulent. The plaintiffs, Pridgen and Barden, filed replies thereto, denying that any false representations were made, and upon all these pleadings the case came on for trial at the August term, 1918, when the court submitted the three issues set out in the record, to which the plaintiff, John R. Barden, excepted.

This action, it is alleged, was brought by Pridgen and Barden for the purpose of foreclosing the mortgage made by Long and wife, and to acquire the equity of redemption of the mortgagors for the purpose of perfecting the title in Barden, and for the benefit of Jarman and wife. The defendants, Jarman and wife, filed an answer, setting up the fraudulent representations, and alleging that Barden was not seized and possessed of any interest whatever in the said lands, and also alleging that John R. Barden delivered to the defendant, Jarman and wife, the notes and mortgage given by J. P. Long to R. C. Pridgen, and assigned by the latter to him.

Among other instructions, the court charged the jury as follows:

"The deed from the plaintiff Barden to the defendant Jarman conveyed nothing, in so far as the land referred to therein is concerned, but only had the effect of transferring to the defendant Jarman his rights as owner of the notes in question, and no title to the land was conveyed thereby. So I charge you, upon the admitted facts in the pleadings, that in so far as Barden was not the owner of the said land at the time of the sale to Jarman, and inasmuch as he covenanted in the deed that he was seized of said lands, as set out in the answer of the defendant Jarman, there was a breach of said covenant immediately upon the execution of the said deed, that is, the said covenant of seizin, and that the defendant Jarman is therefore entitled to recover of the plaintiff, Barden, such damages as arose naturally from said breach of covenant just referred to. I charge you further that the defendant Jarman had a right to buy any outstanding title to said lands, in order to protect himself against incumbrances, and that the measure of damages in this case is the amount paid by Jarman in order to protect his title, so long as it does not exceed the total purchase price paid to plaintiff Barden."

The jury returned the following verdict:

"1. Did the plaintiff Barden, at the time of the sale of the lands in controversy to the defendant Jarman, falsely and fraudulently represent to the defendant Jarman that he was the absolute owner of the land in controversy, and that the same was free of all incumbrances? Answer: Yes.

2. Did the defendant Jarman rely upon said representations and purchase said land, believing that Barden was the owner thereof in fee simple? Answer: Yes.

3. What damage, if any, is the defendant Jarman entitled to recover of the plaintiff J. R. Barden? Answer: $800, with interest."

Judgment upon the verdict, and appeal by John R. Barden, one of the plaintiffs. The other facts are stated in the opinion of the court.

Stevens & Beasley, of Warsaw, and Murray Allen, of Raleigh, for appellant Barden.

Grady & Graham, of Clinton, for appellees Jarman and wife.

WALKER, J. (after stating the facts as above).

The court was trying an issue of fraud, whether the plaintiff John R. Barden had falsely and fraudulently represented that he had a good and indefeasible title to the land. The intent of Barden to deceive and cheat the defendant Jarman was an essential ingredient of the alleged fraud. This allegation of fraud was the only one submitted to the jury. The question, therefore, was whether there was a false assertion of title made, which was calculated to deceive, and with intent to deceive, the defendant, and upon the truth of which the latter relied, and was misled thereby to accept the title to his injury. The important element, as to the fraudulent purpose, required that all the relevant facts bearing on it should be submitted to the jury, and the court committed error when it excluded the evidence as to the dealings of the plaintiff with the defendant Long, in regard to the delivery of possession by him to Barden, for the purpose of selling the land and exercising a general control over it, as if he were the absolute owner. There was some evidence, too, of a settlement, or adjustment, between the parties; Jarman and his attorney agreeing to accept a transfer of the notes and mortgage by Barden to Jarman in full settlement, as appears in the statement of the case. Barden denied all fraud, and testified that he thought he had a good title, and had conveyed such a title to Jarman. It was not good in law, but he may have honestly believed that it was, being a layman and having no technical knowledge of the law, or of what was required to constitute a good title. It was not inexcusable ignorance of the law for him to suppose that a transfer of the notes, and the mortgage securing them, would vest the legal title in him. This would be so in some jurisdictions, where a mortgage is regarded only as a security, and some of the profession may have taken this view prior to the decision in Williams v. Teachey, 85 N.C. 402, where this court held that an assignment of a mortgage, in terms which do not profess to act upon the land, does not pass the mortgagee's estate in the land, but only the security it affords to the holder of the debt. The question was even hotly contested in that case. We, therefore, must grant a new trial because of this error.

But the appellant contends that the court stated the wrong rule, as to the measure of damages, when it charged that the jury would allow, as damages, what the defendant Jarman had paid to Long, who held the equity of redemption. This was not the correct rule. Where a covenantee buys in an outstanding paramount title, the measure of damages, in an action for breach of the covenant of seizin in his deed, is the reasonable price which he has fairly and necessarily paid for such title, not to exceed the original consideration paid by him. 11 Cyc. p. 1162; Price v. Deal, 90 N.C. 290; Wiggins v. Pender, 132 N.C. 640, 44 S.E. 362, 61 L R. A. 772; Bank v. Glenn, 68 N.C. 35. The usual recovery for breach of a covenant of seizin, or for one of right to convey, is the purchase money paid by the covenantor, and interest thereon; but, where the vendee is induced to purchase by the fraudulent representations of the vendor as to his title, he may, upon eviction by a better...