Rudisill v. . Whitener

59 S.E. 995, 146 N.C. 403, 1907 N.C. LEXIS 65

• Court: Supreme Court of North Carolina
• Decided: December 14, 1907
• Status: Published

Opinion

CoNNOR, J.,

after stating tbe facts: His Honor inadvertently failed to note tbe distinction between a suit brought to rescind and set aside a contract on tbe ground of alleged fraud in tbe factum, or in tbe treaty, and one in which defendant is resisting a bill for specific performance, without drawing into question tbe validity of tbe contract. ILe unduly narrowed tbe scope of tbe defense. If, for instance, "Whitener bad sued plaintiff to rescind tbe contract for that bis signature was obtained by fraud, in that it was read to him incorrectly and its true- contents suppressed, tbe instruction asked could not have been given. Tbe defendant, it is true, makes that charge, but in one aspect of bis answer bis defense is based upon tbe contention that, taking tbe contract as written, be was induced to sign tbe receipt and tbe agreement to sell bis land upon tbe express promise and assurance by tbe plaintiff that be would, in consideration and as a part of tbe transaction, transfer to him tbe option which plaintiff held on tbe Sigmon land. Tbe two papers constituted but one transaction, or agreement, and should be read together. They were written, signed and delivered simultaneously. Thus read, they constitute mutual covenants. Tbe defendant agrees to sell bis land, and tbe plaintiff agrees to transfer tbe Sigmon option, if be decides not to buy himself. The paper-writing, read in the light of the treaty, clearly represents that plaintiff is uncertain whether he will buy the Sigmon land— that, in good faith, he is considering the question. If in truth he had, at the time he signed the paper, détermined in his own mind that he would buy the land, and did not intend to let ■ defendant have it, and he induced defendant to believe that he was considering the question of buying, certainly a court administering equitable relief, upon well-settled equitable principles, would not interfere, but would leave plaintiff to his action for damages. While it is true that a provision'to do something in the future is not a misrepresentation of a fact, it is equally true, both in morals and equity, that, if one make a promise which he knows at the time he will not perform and has no intention of making good, he acquires no enforceable right against another, who honestly relies upon the promise. This is true when the contract is partially executed. If one, being insolvent, conceals his condition and promises to pay for goods with a preconceived purpose not to do so, no title will pass to him. Wilson v. White, 80 N. C., 280. In Des Farges v. Pugh, 93 N. C., 31, Ashe, J., says : “It matters not by what means the deception is practiced — whether by signs, by jvords, by silence, or by acts — provided that it i actually produce a false and injurious impression of such a nature that it may reasonably be supposed that, but for such deception, the vendor might never have entered into the contract.” While it is difficult to show the state of a man’s mind, if, by his acts and conduct it can be ascertained, it is as much a fact as the state of his digestion. Hill v. Gettys, 135 N. C., 373. If, therefore, at the time plaintiff signed the paper by which he agreed to transfer the option on the Sigmon land to defendant if he concluded not to buy it himself, he had determined to buy it, or, as he says, “it was understood” that he would buy it, we think that, whether or not it was sufficient to rescind an executed contract, such fact is available to de fendant in this action, wherein the plaintiff is invoking specific performance. The defendant is not driven to the proof of actual fraud, but may, by parol, show that he was induced by the words and acts of the plaintiff to believe that he would transfer to him the Sigmon option. This was a question for the jury. It is well settled — and we have no disposition to trespass upon the principle — that, “When the contract is in writing, is certain in its terms, is for a valuable consideration, is fair and just in all its parts and is capable of being enforced without hardship to either party, it is as much a matter of course for a court of equity to decree its specific performance as for a court of law to award damages for its breach.” 4 Pom. Eq., sec. 1404. “This right, however, is controlled by other equities.” Bispham' Eq., sec. 3.64. It will not be enforced “where the complainant does not come with clean hands or when equities exist on the other side which would render it unjust to grant the relief” (ib., 376), “or it is not clear that the minds of the parties have come together. The contract must be free from any fraud or misrepresentation, even though not fraudulent, mistake or illegality. The contract must be perfectly fair, equal and just in its terms and in its circumstancesPom., sec. 1405. That actual fraud need not be shown to resist a decree for specific performance is established by abundant authority. Romilly, M. R., in Baskcomb v. Beckwith, 8 L. R. Eq. Cas., 100, said: “Specific performance of a contract will not be enforced when defendant has contracted under a mistake, to which plaintiff has by his acts, even unintentionally, contributed.” The learned Judge says: “It is of the greatest importance that it should be understood that the most perfect, truth and the fullest disclosure should take place in all cases where the specific performance of a contract is required, and that, if this fails, even without any intentional suppression, the court will grant relief to the man who has been thereby deceived, provided he has acted reasonably and openly.”

Professor Eaton says: “When the aid of a court of equity is sought by way of specific performance, the principles of ethics have a more extensive sway than when a contract is sought to be rescinded. When a party calls for specific performance, he must, at every stage of the transaction, be free from imputation of fraud or deceit and show that his conduct has been honorable and fair.” Eq., 270. In Woolam v. Hearn, 7 Ves., 211 (2 White & Tudors L. C., 491), Sir William Grant says: “When equity is called upon to exercise its peculiar jurisdiction by decreeing a specific performance, the party to be charged is let in to show that, under the circumstances, the plaintiff is not entitled to have the agreement specifically performed, and there are many cases in which parol evidence of such circumstances has been admitted. * * * Where the terms of a written agreement have been ambiguous, so that, adopting one construction, they may reasonably be supposed to have an effect which the plaintiff did not contemplate, the court has, upon that ground only, refused to enforce the contract.” Calverley v. Williams, 1 Vesey Jr., 201. “Nor will a court of equity enforce a contract according to its terms, when to do so would violate the real object of the contract in the minds of the parties when the contract was made, and produce a result not contemplated at the time of the execution of the agreement.” 26 Am. and Eng. Enc., 68. The decisions of this Court are in harmony with the doctrines of equity in this respect. In Leigh v. Crump, 36 N. C., 299, Gaston, J., discussing a bill for specific performance, says: “We entirely acquit the plaintiff of intentional misrepresentation. And we hold that defendant has not shown that the plaintiff made any representation * * * variant from that which is set forth in the written contract.” He further says that there is nothing in the evidence which would bar an action for damages, where the actual damage could be recovered : “But he has preferred to aslc the aid of a court of equity to carry the contract into execution. The specific exe cution of a contract in equity is not a matter of absolute right in the party, but of sound discretion in tbe court. An agreement, to be carried into execution there, must be certain, fair and just in all its parts. Although it be valid at law, and, if it had been executed by all fjhe parties, it could not be set aside because of any vice in its nature, yet, if its strict performance be, under the circumstances, harsh and inequitable, a court of equity will not decree such performance, but leave the party to his legal remedy.” In Loyd v. Wheatly, 55 N. C., 267, Battle, J., citing Leigh v. Crump, says: “Even the mere fact that the contract is a hard one, and would press heavily on the defendant, will induce the court to withhold its aid and leave the plaintiff to his remedy at law. * * * We do not declare that it was obtained from the defendant by fraud. * * * The agreement is not, in our opinion, certain, fair and just in all its parts, and we cannot, therefore, declare its enforcement in this Court.” In Cannady v. Shepard, 55 N. C., 224, Nash, C. J., discussing a bill for specific performance, says: “The contract was not fair. The defendant was made to believe that the agreement as to the purchase of the land was binding upon him. The contract was hard and oppressive on the defendant. There is no eqrdty in the claim of the plaintiff.” Love v. Welch, 97 N. C., 200; Ramsey v. Green, 99 N. C., 215. Numerous cases may be found in the reports in which relief has been denied upon the ground that the contract is harsh, uncertain, unjust, oppressive, regardless of actual fraud. An examination of the testimony of both plaintiff and defendant discovers ample evidence that Whitener never intended to sell his home unless he got the Sigmon land, near by. Mr. Aderholt, plaintiff’s witness, who wrote the papers and witnessed them, and who, although not told to Whitener, was to have an interest in the land, says: “We knew that day that, if Whitener sold his tract, he wanted the Sigmon land and the option, but I do not know that he understood that day that he would get it; that Rudisill told him that he would have to go home aud decide, before he could tell him if he would turn over the option.” Plaintiff says: “We had never fully decided to take the Sigmon land that day. I think it was understood we should take it. They (M. E. Rudisill and Aderholt) said that day they would help me buy it, and I thought that day we would buy' it.” M. E. Rudisill, who was 'present and heard the conversation, said that plaintiff positively refused to sell the option: “Brother, Aderholt and myself own one-third each in .the Sigmon land and are to be equally interested in the Whitener land.” Defendant says: “They knew that day that I wasn’t going to sell my place unless I could get the Sigmon place, and the agreement was that I was to have the option. They knew I wouldn’t trade unless I got the Sigmon place. * * * I told them afterwards that I was still willing to sell if I could get the Sigmon land.” His wife says that she heard her husband say: “ 'You have got your hands on the only land my wife will go to.’ Then Ader-holt said, 'What will you give us for the option on the Sigmon land?’ My husband answered, 'One hundred dollars, or the roughness on my place.’ Aderholt was drawing the papers, and then it was my husband came in and said we were to get the Sigmon land. I am willing to stand by the agreement if they will.’ ” There is evidence on the part of the plaintiff tending to show that plaintiff, his brother, M. E. Rudisill, and Mr. Aderholt, his brother-in-law, had, at the time the papers were signed, an understanding that they were to buy both the Sigmon and Whitener lands. We do not hold that in order to make a valid contract they were under any legal obligation to tell this to Whitener, but it is manifest that they knew that if they did tell him the exact state of their minds, their understanding and purpose, he would not enter into the agreement.

It is not necessary to suggest that the paper was not correctly read to defendant. The evidence does not create the impression' on our minds that it was incorrectly read, but tbe entire evidence strongly tends to show that defendant was induced by the acts and declarations of plaintiff to believe that he was to get the Sigmon option, and thereby secure another home, if he parted with the one which he then had. If, upon an appropriate issue, the jury so find, he should‘not be compelled to convey his home to plaintiff. The jury may well say, as was said by Judge Gaston, “We acquit the plaintiff of actual misrepresentation,” but we find that the contract, in the light of the status of the parties, their acts and declarations, was not “certain, fair and just in all its parts.” If they so find, the court, administering equity in accordance with an enlightened standard of morals applied to the daily transactions off men, will not compel performance on one part and permit the plaintiff to refuse to transfer the Sigmon land. The true principle is well stated by defendant’s wife when she says: “I am willing to stand by the agreement if they will.” The jury find that no damage is sustained.by the refusal of defendant to execute the deed. An impression has prevailed to some extent that, because “The distinction between actions at law and suits in equity is abolished” by the Constitution, equitable rights and remedies are thereby destroyed. This Court has uniformly held that no -such result follows the change in the forms of procedure. Ely v. Early, 94 N. C., 1; Boles v. Caudle, 133 N. C., 528, and many other cases.

It is sometimes difficult to so frame issues for the jury that equitable rights and principles are presented. The purpose of the reformed procedure certainly was not to destroy or impair those rights and remedies which the experience of the ages had shown to be essential to a system of enlightened jurisprudence. Professor Pomeroy, in, his admirable work on “Code Eemedies,” says that the difficulty of administering legal and equitable remedies in one form of action has been experienced in the “Code States,” and that “The same difficulty presented itself to the advocates of the new procedure in England while the measure was pending in Parliament; it was obviated by inserting in the 'Supreme Court of Judicature Act’ the following clause: 'Generally, in all matters in which there is any conflict between the rules of equity and the rules of the common law with reference to the same matter, the rules of equity shall prevail.’ ” In this case the issues do not very clearly present the matters of fact in controversy and upon which the judgment of the court should rest. It cannot be that the question whether the contract is one which a court of equity will enforce specifically is to be decided by the jury. The ultimate decision of the case is to express, not the arbitrary discretion of the Judge, but the sound judicial discretion, guided by the principles and rules which have heretofore been adopted and applied by chancellors in similar cases. The judgment is, of course, subject to review by this Court. We would suggest that,, upon another trial of this cause, the question presented by defendant’s prayer for instruction be submitted in' the form of an issue, or question of fact.

There must be a

New Trial.