Warr v. Carolina Power & Light Co.

• Decision Date: 04 August 1960
• Docket Number: No. 17693,17693
• Court: South Carolina Supreme Court
• Parties: Leon WARR, Respondent, v. CAROLINA POWER & LIGHT COMPANY and J. H. Ryan, Appellants.

Page 799

115 S.E.2d 799

237 S.C. 121

Leon WARR, Respondent, v. CAROLINA POWER & LIGHT COMPANY and J. H. Ryan, Appellants.

No. 17693.

Supreme Court of South Carolina.

Aug. 4, 1960.

Spruill & Harris, L. C. Wannamaker, Cheraw, A. Y. Arledge, Charles F. Rouse, Raleigh, for appellants.

Benny R. Greer, James P. Mozingo, III, Archie L. Chandler, Darlington, Edward E. Saleeby, Hartsville, for respondent.

MOSS, Justice.

This is a fraud and deceit action to recover actual and punitive damages, brought by Leon Warr, the vendor of certain real property, and the respondent herein, against Carolina Power and Light Company, as principal, and J. H. Ryan, as its agent, the appellants herein.

The complaint of the respondent alleges that he was the owner of a tract of land in Chesterfield County, South Carolina, containing 115 1/2 acres, and that J. H. Ryan, an agent of Carolina Power and Light Company, approached the respondent prior to November 11, 1957 and represented to the respondent that one F. B. Creech desired to purchase the said tract of land, and that 'the only use and only purpose of buying the land was for planting trees, and that he was only allowed to pay from Twenty-five Dollars to Sixty Dollars an acre; that said agent falsely assured Leon Warr that they were only paying Sixty Dollars an acre for good, cleared land to plant trees on, when in fact they had made purchases in excess of Forty-two Dollars an acre and had paid as much as Two Hundred Dollars an acre for property adjoining or near the property described above.' It is further alleged that the said agent knew that the representations made by him were false and were made with the intent of having the respondent rely thereon; it is then alleged that the respondent relied upon the false and fraudulent representations so made and did, on November 11, 1957, convey to F. B. Creech, for a consideration of $5,000, the said tract of land. It is further alleged that F. B. Creech was actually an agent for Carolina Power and Light Company, and that the said property was being purchased for the purpose of creating a lake in connection with the erection of a steam plant by Carolina Power and Light Company. It is also alleged that the consideration of $5,000 paid for said tract of land was between $18,000 and $28,000 less than the defendant company had paid prior to said time and has paid since for similar type land on a per acre basis. The respondent also alleges that he would not have executed and delivered the said deed if he had known that the property was to be used for a lake site rather than for a tree farm. He asserts that the appellants made false statements as to the intended use of said land, upon which he relied, and that by reason of the fraud and deceit practiced upon him, he has sustained injury and damage. The gravamen of the respondent's complaint is that he was deceived by the appellants' concealment of the truth and the false representation as to the intended use to be made of the tract of land. He alleges that the false statement was that the tract of land was to be used to create a tree farm and that he sold the land at a price which was 'less than the defendant company has paid * * * for similar type land on a per acre basis.'

The appellants made a motion to strike certain allegations of the complaint as being irrelevant and redundant. They also demurred to the complaint upon the grounds that the complaint does not state facts sufficient to constitute a cause of action, in that: (a) The representations alleged to have been falsely made to and relied on by the respondent are not such as in law give rise to a cause of action for fraud and deceit; (b) That no statement of fact is alleged which wrongfully influenced the respondent to sell and convey his land; (c) That no statement of fact is alleged which would justify the respondent's reliance on statements allegedly made; and (d) No facts are alleged which show any damage suffered by the respondent as a result of any fraud and deceit practiced upon him.

The Honorable J. Woodrow Lewis, Resident Judge of the Fourth Circuit, denied the motion to strike and overruled the demurrer interposed by the appellants. The case is before this Court pursuant to timely notice of intention to appeal, and the exceptions raise the same questions as were before the Circuit Court. In view of the conclusion we hereinafter reach, it becomes unnecessary for us to determine whether there was error on the part of the lower Court in refusing to strike certain allegations of the complaint. The question for determination is whether there was error on the part of the trial Judge in overruling the demurrer.

We should point out that this is not an action for rescission of the deed made by the respondent but is an action at law for damages sustained by reason of the fraud and deceit alleged to have been practiced upon him by the appellants. We have held that a defrauded party to a contract may tender back the consideration received by him and sue for a rescission of the contract, or retain the consideration and sue for damages. Bank of Johnston v. Jones et al., 141 S.C. 98, 139 S.E. 190; Turner v. Carey, 227 S.C. 298, 87 S.E.2d 871. In this case the respondent has elected to affirm the deed, retain the consideration received for the sale of the land, and has brought this action at law for fraud and deceit against the vendee to recover damages alleged to have been sustained by reason of the fraud and deceit practiced upon him by the appellants.

When there is a demurrer to a complaint, we must be guided by the rule set forth in Roper et al. v. South Carolina Tax Commission et al., 231 S.C. 587, 99 S.E.2d 377, 378, where we said:

'It is elementary that in passing upon a demurrer, the Court is limited to a consideration of the pleadings under attack, all of the factual allegations whereof that are properly pleaded are for the purpose of such consideration deemed admitted. Spell v. Traxler, 229 S.C. 466, 93 S.E.2d 601. If a complaint states any cause of action, a demurrer should not be sustained. Fleming v. Pioneer Life Ins. Co., 178 S.C. 226, 182 S.E. 154. It has also been held that when a fact is pleaded, whatever inferences of law or conclusions of fact may properly arise from it, are to be regarded as embraced in such averment. Bryant v. Smith, 187 S.C. 453, 198 S.E. 20.'

However, the filing of a demurrer by the appellants does not admit that they were guilty of fraud and deceit because this allegation constitutes nothing more than a conclusion of the pleader, which is not admitted by the demurrer. A demurrer admits the facts well pleaded in the complaint but does not admit the inferences drawn by the plaintiff from such facts, and it is for the Court to determine as to whether or not such inferences are justifiable. Alderman v. Bivin, 233 S.C. 545, 106 S.E.2d 385.

In this action for fraud and deceit, the respondent, in order to state a good cause of action, must allege (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity; (5) his intent that it should be acted upon by the person; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) and his consequent and proximate injury. Jones v. Cooper, 234 S.C. 477, 109 S.E.2d 5; Mishoe v. General Motors Acceptance Corporation, 234 S.C. 182, 107 S.E.2d 43; Outlaw v. Calhoun Life Ins. Co., S.C., 113 S.E.2d 817. It is essential that the facts and circumstances which constitute the fraud should be st out clearly. Bookhart et al. v. Central Electric Co-op., Inc., 222 S.C. 289, 72 S.E.2d 576. The complaint must allege facts which would afford a basis upon which a jury could properly find support for each of the elements above set forth, and if the complaint fails to allege facts to support any one of the elements of fraud and deceit, then the complaint is fatally defective. Jones v. Cooper, supra, and Able v. Equitable Life Assur. Society of United States, 186 S.C. 381, 195 S.E. 652.

It is the position of the appellants that even though the alleged statement made by J. H. Ryan to the respondent was false, as to the intended use of the land being purchased, such was not material in inducing the respondent to sell and convey the land in question. It is also asserted that the complaint fails to allege any facts as to injury or damage sustained by the respondent as a result of the alleged false representation made by the appellants.

The allegations of the complaint do not show that any fiduciary relationship existed between the respondent and the appellants, or that the respondent expressly reposed any trust or confidence in Ryan, who was purchasing the land for his corporate principal. Our inquiry here is as to the materiality of the alleged false statement that the tract of land being sold was going to be used as a place for planting trees and as a tree farm, and the failure to disclose that the land was to be used as a lake site by the Carolina Power and Light Company.

It has been held that if either party to a transaction conceals some fact which is material, which is within his own knowledge, and which it is his duty to disclose, he is guilty of fraud. Nondisclosure becomes fraudulent only when it is the duty of the party having knowledge of the facts to uncover them to the other. In the case of Holly Hill Lumber Co., Inc. v. McCoy, 201 S.C. 427, 23 S.E.2d 372, 376, this Court said:

'And this brings up the question, when does such duty rest upon either party to any transaction? The duty to disclose may be reduced to three distinct classes: First, where it arises from a pre-existing definite fiduciary relation between the parties; second, where one party expressly reposes a trust and confidence in the other with reference to the particular transaction in question, or else...