MacMillan Buick Co. v. Rhodes

2 S.E.2d 699, 215 N.C. 595, 1939 N.C. LEXIS 321

Opinion

Stacy, C. J.

Where a sale has been effected by actionable fraud, the purchaser usually has an election of remedies:

1. The one grounded upon recission or renunciation. Fields v. Brown, 160 N. C., 295, 76 S. E., 8; Van Gilder v. Bullen, 159 N. C., 291, 74 S. E., 1059.

2. The other based upon affirmation. Kennedy v. Trust Co., 213 N. C., 620, 197 S. E., 130; May v. Loomis, 140 N. C., 350, 52 S. E., 725.

In the latter, the purchaser may bring an action to recover for the fraud by which he was induced to make the purchase, or he may recoup any damages which he has sustained if the seller sue him for money due on the contract, or other failure to perform it. Frick Co. v. Shelton, 197 N. C., 296, 148 S. E., 318.

It was error, therefore, to instruct the jury in the instant case not to answer the sixth and seventh issues, if the fifth issue were answered in the affirmative. This was equivalent to limiting the defendant to a single remedy, i.e., one predicated on rescission or renunciation, whereas he had. elected to affirm the contract and to recoup his damages by way of counterclaim. Pryor v. Foster, 130 N. Y., 171.

The case of Abel v. Bworsky, 195 N. C., 867, 142 S. E., 475, cited in support of the rulings below, is not at variance herewith. That was an action grounded on rescission or renunciation, and there was evidence tending to show the plaintiffs had ratified the sale after discovering the fraud. This is not our case. True, the defendant here has ratified the contract of purchase after discovering the fraud according to the jury’s answer to the fifth issue, but his defense is based upon affirmation rather than recission or renunciation. Herein lies the distinction between the two cases. Eatification is not a bar to the defendant’s counterclaim, but is in substantiation thereof. Frick Co. v. Shelton, supra; May v. Loomis, supra.

It is also observed that the motion for judgment non obstante vere-dicto, which, in effect, is but a belated motion for judgment on the pleadings, apparently was not well advised. Little v. Furniture Co., 200 N. C., 731, 158 S. E., 490; Jernigan v. Neighbors, 195 N. C., 231, 141 S. E., 586; Rankin v. Oates, 183 N. C., 517, 112 S. E., 32.

The defendant is entitled to a new trial. It is so ordered.

New trial.