Walsh v. Hall

• Decision Date: 31 January 1872
• Court: North Carolina Supreme Court
• Parties: PHILLIPS WALSH v. RUFUS D. HALL.

66 N.C. 233

PHILLIPS WALSH

v.RUFUS D. HALL.

Supreme Court of North Carolina.

January Term, 1872.

Where a horse is exchanged for land, and having afterwards returned to the possession of the original owner, the latter is sued for it, the allegation in the answer, that the defendant had agreed to exchange the horse for a tract of land on a certain creek. adjoining his own, and that the plaintiff had falsely and fraudulently asserted title to said tract, and had exhibited a deed to himself, for a tract on the same creek, and that the plaintiff well knew, that the defendant was only desirous of obtaining title to the particular tract indicated by him, and such was a material inducement to the exchange, would not have been available, as a defence under the former system, and but for the wise and benneficent provisions of the C. C. P., the defendant would have been driven to a separate action; but such an statement under the C. C. P., does constitute a good counter-claim, within the meaning of the Code,

2. Ordinarily the maxim of caveat emptor, applies equally to sales of real and personal property, and is adhered to in all courts, where there is no fraud.

3. But if representations made by one party to a contract, which may be reasonably relied on by the other, constitute a material inducement to the coutract; are knowingly false; cause loss to the other party relying on them; and such other party has acted with ordinary prudence, he is entitled to relief in any Court of Justice.

4. If the parties have equal means of information, the rule of caveat emptor applies and an injured party cannot have redress, if he fail to avail himself of those sources of information which he may readily reach, unless prevented by the artifice or contrivance of the other party.

5. So, if the false representation is a mere expression??of commendation, or simply a matter of opinion, the parties are considered as standing on an equal footing, and the courts will not interfere.

6. In contracts of this character, fraud without damage, or damage without fraud, are usually not the subject of an action for deceit.

7. In a case like that set forth in the answer, the purchaser of land is not required, in order to guard against the fraudulent representations of a vendor, to cause a survey to be made; unless some third person is in possession claiming title; or there is some dispute about boundary or as to the true location; or he has received some information which would reasonably induce him to suspect fraud.

8. The general custom of conveying land, according to the calls of old deeds, and without a survey, is sufficiently established to be reasonably relied on by a purchaser, as to description of location and boundary.

The cases of Fagan v. Newson, I Dev. 20. Saunders v. Hatterman, 2 Ired. 32. Lytle v. Bira, 3 Jones, 222, aud Credle v. Swindell, 63 N. C. R., 305, cited, approved and distinguished from the principal case.

This was a civil action, heard on complaint, counter-claim and demurrer, before his Honor, Judge Mitchell, at Fall Term 1871, of Caldwell Superior Court. The plaintiff, in his complaint, alleged title to a horse in himself, and that the same had been taken out of his possession by the defendant, and was detained after demand, and demanding appropriate relief.

The defendant by his answer and counter claim, denied that the plaintiff was the owner of the horse, in equity; that the horse had been in possesion of the plaintiff, but had escaped, and having strayed back to his old home, had been ever since retained in his custody. That he was the owner of a tract of land in Wilkes county, lying on Elk Creek; and that the plaintiff pretended to be seized of a tract lying on the same creek, and adjacent to the land owned by the defendant, which he knew the defendant was desirous to purchase; that the plaintiff approached the defendant, and proposed to him to enchange the land for the said horse, which proposition, the defendant at first rejected, on the ground, that he heard that one Hendricks claimed the land; the plaintiff, thereupon, positively asserted that the true title was in himself; that said land once belonged to one Witherspoon, who had conveyed to him, and that Hendricks had no title; that the deed from Witherspoon was produced, and purported to convey a tract of land, lying on Elk Creek; that, thereupon, the defendant accepted the proposition of the plaintiff, took a deed from him, following the boundaries contained in the Witherspoon deed, and delivered to plaintiff the horse; that the plaintiff, during the negotiation, frequently asserted that the deed from Witherspoon, covered the land which he proposed to exchange for the horse; that he had been in possession for more than seven years, under the said deed, and that by virtue of said deed and possession, he had acquired a good title thereto; that the defendant, confiding in these representations, made the trade.

The counter-claim further set forth that the defendant sometime after the trade, ascertained that the deed from plaintiff did not cover the land he was seeking to purchase, or any part of it, but another tract adjoining the tract which defendant was desirous to obtain, and thought he had obtained, and the title to the tract which he wished to purchase, and which the plaintiff professed to sell, and which he said the boundaries of his deed covered, was, in one Ferguson, and that this was well known to the plaintiff, and that the defendant was ignorant thereof, and concludes by alleging the entire insolvency of the plaintiff, and by an appropriate demand for relief on his counter-claim.

To this counter-claim a demurrer was interposed, which was sustained by His Honor, who gave judgment for plaintiff, and thereupon the defendant appealed.

Armfield for the plaintiff .

Folk for the defendant .

The answer of the defendant may contain a statement of any new matter constituting a defense or counter claim. C. C. P., sec. 100.

The defendant may set forth by answer as many defences and counter claims, as he may have, whether they be such as have heretofore been denominated legal or equitable, or both. Sec. 102.

As a special plea had to confess and avoid the cause of action alleged in the declaration, so, new matter is that which admits and avoids the cause of action set forth in the complaint. Under the head of equitable defences are included, all matters which would have authorized an application to a Court of Equity for relief against a legal liability, but which, at law, could not be pleaded in bar. Harshaw v. Woodfin, 65 N. C., p., 688, Clark v. Clark, ibid p., 660. If this be so, the defendant is entitled to judgment for the demurer admits the facts set forth in the answer, and they are sufficient to induce a Court of Equity to rescind the contract. Blackwood v. Jones, 4 Jones' Eq., 54. Woods v. Hall, 1 Dev. Eq., 411. Courts of Equity rescind executed contracts on the ground of fraud. Sparks v. Messick, 65 N. C., p. 440., C. C. P., sec. 248.

The action is for the delivery of specific personal property, i. e., an action of detinue. This action is distinguishable from an action of trespass.

In detinue, the plaintiff must prove property, either general or special. In trespass, possession is sufficient against one who cannot show a better right than plaintiff. Armory v. Delamirie, Smith's leading cases, vol. 1. Had the detendant committed a trespass, by taking the horse, and been sued for the taking, it may be that he could not have interposed the equitable defence. But in this action, the plaintiff relies on property, which he acquired by contract tainted with fraud, and when the contract is rescinded, the plaintiff has no property.

It must be admitted, that defendant can file a bill to rescind the contract, but to require him to do so, would be to put us back to the place from which we started, and defeat the object of the Code, which was to settle all matters in one suit.

DICK, J.

This is a civil action, in the nature of an action of detinue, to recover a horse from the defendant.

The defendant filed an answer, controverting some of the allegations of the complaint, and made a statement of new matter, which he insisted, constituted a counter-claim to the plaintiff's cause of action. The plaintiff demurred, and thereby admitted the truth of the defendant's statement of new matter, and we must consider whether the admitted facts constitute a good counter-claim in this action.

The defendant alleges that he was the owner of the horse in controversy, and exchanged it with the plaintiff for a certain tract of land, which the plaintiff wilfully and falsely represented as being contiguous to the land of the defendant--that he was very desirous of obtaining a certain adjoining tract of land, and this desire of the defendant was known to the plaintiff, and was a material inducement to an exchange of property; that the land is not adjoining, and this fact was well known to the plaintiff; and thus the horse was obtained by actual fraud from the defendant, and he asks that the contract may be rescinded. This new matter set up by the defendant, is connected with, and forms a material part of the contract, out of which this cause of action arose, and constitutes a proper counterclaim; and we must consider whether he is entitled to the relief which he demands.

The maxim of caveat emptor, is a rule of the common law, applicable to contracts of purchase of both real and personal property, and is adhered to, both in courts of Law and courts of Equity, where there is no fraud in the transaction. Where land has been sold, and a deed of conveyance has been duly delivered, the contract becomes executed, and the parties are governed by its terms, and the purchaser's only right of relief, either at law or in equity, for defects or incumbrances, depends, in the absence of fraud, solely upon the covenants in the deed which he has received. Rawle on Covenants for Title, 45...