Case Name: W. M. FIELDS v. W. G. BROWN and G. C. GRAVES
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1912-10-23
Citations: 160 N.C. 295
Docket Number: 
Parties: W. M. FIELDS v. W. G. BROWN and G. C. GRAVES.
Judges: 
Reporter: North Carolina Reports
Volume: 160
Pages: 295–301

Head Matter:
W. M. FIELDS v. W. G. BROWN and G. C. GRAVES.
(Filed 23 October, 1912.)
1. Fraud — Deceit—Pleadings—Parties—Possession—Claim to Property.
In an action to recover possession of a mule taken in exchange for a horse, and for damages for deceit and false warranty as to the horse, a demurrer of a codefendant on the ground that his name appeared only in the title, without allegation as to him, should not be sustained when it is alleged in the complaint that the defendants were in joint possession of the mule, and appeared that both had replevied the mule, and given the bond required by statute, it being evidence against the party demurring, not only as to his possession, but as to his claim to the property.
2. Fraud — Deceit — Contract — Election — Affirmance — Damages— Procedure.
One who has fraudulently been induced to enter into a contract may elect to repudiate the contract and recover back what he may have received under it, and recover what he may have parted with, or its value; or he may affirm the contract, keeping whatever property or advantage he may have derived under it, and recover in an action of deceit the damages caused him by the fraud.
3. Same — Equity—Rescission.
While, as a rule, a party to a contract induced by fraud may not elect to rescind it and recover damages for the fraud, the rule is based upon a perfect rescission of the contract, where the defrauded party has sustained no damages except those he may have actually paid thereunder; and it has no application where he may not thus be placed in statu quo, as where he has suffered damages which the rescission and the damages based thereon cannot repair.
4. Fraud — Deceit — Contract—Replevin—Consistent Causes of Action.
An action for deceit in the making of false representations inducing plaintiff to exchange a mule with defendant for a horse is not necessarily inconsistent with a previous replevin to recover the mule. «
5. Fraud — Deceit — Contracts — Damages—Right of Action — Conditions Precedent.
In an action for deceit in the making of false representations inducing the plaintiff to exchange a mule for defendant’s horse, the plaintiff may enforce his rights under the contract and at the same time maintain his action for deceit, without offering to return the benefits he may have received under the contract, as a condition precedent.
6. Fraud — Deceit — Tort — Waiver—Damages—Implied Promise to Pay.
In an action of deceit, in mating false representations which induced the plaintiff to exchange his mule for defendant’s horse, the plaintiff may waive the tort and recover his damages as for money had and received upon an implied promise of the defendant to pay it.
7. Fraud — Deceit—Scienter—Evidence.
In an action of deceit in making false representations which induced the plaintiff to exchange his mule for defendant’s horse, there was evidence tending to. show that the defendant made the false representations that the horse was sound of body and limb, without defect, and was gentle, safe, and was an “all-round” good horse, suitable to the plaintiff’s needs, etc., which were calculated, intended to, and did deceive: Held, the evidence is sufficient to prove the defendant’s scienter.
8. Courts — Jurisdiction — Pleadings — Damages Alleged — Part Recovery.
When the complaint states a cause of action for deceit and false warranty, alleged in good faith, in such sum as will confer jurisdiction upon the Superior Court, that" court does not lose its jurisdiction thus acquired by failure of the plaintiff to pro.ve the damages alleged in its entirety; and, Held,, in this case, that if the lower court was correct in holding that no damages for deceit in the sale of a horse could be recovered, yet the recovery upon the warranty alone in a sum less than that necessary to be alleged to confer jurisdiction would not oust the jurisdiction acquired by the court.
Appeal by plaintiff from Justice, J., at May Term, 1912, of Moore.
The facts are sufficiently stated in the'oj)inion of the Court bj Mr. Justice Walker.
.Mclver & Williams and W. JR. Glegg for plaintiff.
Cr. W. McNeill and U. L. Spence f$r defendant.

Opinion:
WalKER, J.
Plaintiff brought this action to recover possession of- a bay mare mule, named Nell, which he exchanged with the defendant for a bay mare, and for damages for deceit and false warranty. It was alleged in tbe complaint tbat defendant Brown, wbo was tbe owner of tbe bay mare at tbe time of tbe exchange, falsely represented to plaintiff tbat tbe mare was sound, in good condition, and possessed of fine qualities, and, particularly, tbat sbe was (1) sound of body and limb in every particular; (2) was without defect in every respect; (3) tbat sbe would work anywhere sbe was bitched— to wagon, plow, buggy, or elsewhere; (4) tbat sbe was gentle and safe for ladies and children to drive; (5) tbat sbe was an all-round good horse, suitable in all particulars for tbe needs of tbe plaintiff on tbe farm. Tbat tbe representations were false, intended to deceive, and did deceive tbe plaintiff, and induced him, with other promissory representations, to make tbe trade. There was also a count for false warranty, upon tbe same grounds.
Defendant G. C. Graves demurred because there were no allegations as to him in the complaint and bis name was not mentioned, as be avers, except in the title of tbe case. Tbe demurrer was sustained, and we think erroneously so. There was an allegation tbat Graves and Brown were in joint possession of tbe mule, and while this is denied in tbe answer, it must be taken as true upon demurrer. If Graves was in possession with Brown, plaintiff properly joined him in this action for tbe recovery of tbe property. Haughton v. Newberry, 69 N. C., 456; Webb v. Taylor, 80 N. C., 305; Bowen v. King, 146 N. C., 385. Besides, Graves replevied tbe property with Brown, both giving bond with Mr. George W. McNeill as surety thereon, and taking tbe same from plaintiff's possession. This is some evidence, not only of Graves' possession, but of bis claim to tbe property, and be will not now be beard, under -these facts, to assert tbat be is not a proper party.
Tbe plaintiff has elected, as be bad tbe light to do, to sue for tbe mule, upon tbe ground tbat tbe fraud avoided tbe contract of exchange, and, therefore, tbat be is entitled to be restored to its possession and to have judgment for any resulting or consequential damages he has sustained by tbe deceit and false warranty. Pritchard v. Smith, ante, 79. A person who has been fraudulently induced to enter into a contract has tbe choice of several remedies. He may repudiate tbe contract, and, tendering back wbat be bas received under it, may recover wbat be bas parted witb or its value; or be may affirm tbe contract, keeping whatever property or advantage be has derived under it, and may recover in an action of deceit tbe damages caused by tbe fraud. While bis affirmance may preclude him from rescinding tbe contract, it. does not prevent bis maintaining an action of deceit. Moreover, if sued upon tbe contract, be may set up tbe fraud as a defense, or as a basis of a claim for damages by way of recoupment or counterclaim. And in a proper case tbe defrauded party may be entitled to tbe equitable remedies of rescission and cancellation or reformation. As a general rule, however, tbe defrauded party cannot both rescind and maintain an action of deceit. If be elects to rescind tbe contract, be may recover wbat be bas parted witb under it, but cannot recover damages for tbe fraud. The latter rule, as applied to a perfect rescission of tbe contract, is based, not alone upon the principle that tbe party bas elected bis remedy, but also on tbe fact that be bas sustained no damage. 20 Oye., 87, 88, and 89, and notes. This rule, of course, is bottomed upon tbe theory that be bas suffered no loss that will not be fully repaired by tbe return to him of wbat be bas given up. If, however, a perfected rescission does not place tbe injured party in statu quo-, as where be bas suffered damage which tbe rescission and tbe remedies based thereon cannot repair, there is no principle of law which prevents him from thereafter maintaining an action of deceit, and in such cases a recovery bas uniformly been allowed. 20 Oye., p. 89 and notes, citing Faris v. Lewis, 2 B. Mon. (Ky.), 375; Lenox v. Fuller, 39 Mich., 268; Warren v. Cole, 15 Mich., 261; 1 Bigelow on Fraud, 67. So an action for deceit in tbe making of false representation inducing plaintiff to sell goods to defendant bas been held not necessarily inconsistent witb a previous action of replevin to recover tbe goods. Lenox v. Fuller, 39 Mich., 268; Welch v. Seligman, 72 Hun. (N. Y.), 138, 25 N. Y. Suppl., 363. See, also, Dean v. Yates, 22 Ohio St., 388; 20 Cyc.. p. 89, note. Since tbe defrauded party to tbe contract bas tbe-right to affirm it, retain its benefits, and also recover damages for tbe fraud, be may sue to enforce bis rights under tbe contract and at tbe same time maintain an action for deceit. Where a person by tbe practice of fraud obtains money from another under such circumstances that be has no right to retain it, tbe defrauded party may waive tbe tort and recover tbe money in an action for money bad and received, upon tbe theory of an implied promise to pay it. . A return or an offer to return what plaintiff has received under tbe contract induced by tbe fraud is not a condition precedent to bis maintaining an action of deceit (if be does not disaffirm), since be is entitled to tbe benefit of bis contract plus tbe damages caused by tbe fraud. 20 Cyc., pp. 90 and 91, and notes. See, also, May v. Loomis, 140 N. C., 350.
Tbe demurrer should have been overruled. Tbe court, upon tbe evidence, directed a judgment of nonsuit against tbe plaintiff, under tbe statute, as to tbe deceit, upon tbe ground, as we were told at tbe bearing, that there was no proof of any scienter. An examination of tbe testimony convinces us that there was evidence of tbe "fraud and the scienter, and of every other element required to make tbe fraud actionable. The case, in this respect, is not unlike Whitmire v. Heath, 155 N. C., 304; Robertson v. Holton, 156 N. C., 215; Hodges v. Smith, 158 N. C., 256, and same case at this term, 159 N. C., 525. Upon tbe general subject of what is sufficient to constitute, actionable fraud and deceit, see, also, Unitype Co. v. Ashcraft, 155 N. C., 63; Cash Register Co. v. Townsend, 137 N. C., 652; Whitehurst v. Insurance Co., 149 N. C., 273; Pollock on Torts (7 Ed.), 276, and other authorities cited in Unitype Co. v. Ashcraft, supra. Tbe nonsuit was, therefore, erroneous.
There was evidence that defendant Brown made tbe representations; that they were calculated and intended to deceive, and did deceive. Lunn v. Shermer, 93 N. C., 164; Black v. Black, 110 N. C., 398; Ashe v. Gray, 88 N. C., 190 (s. c., on rehearing, 90 N. C., 137), all actions against horse-traders.
But if tbe ruling as to tbe deceit bad been correct, tbe court erred when it disregarded, tbe cause of action as to tbe false warranty. Plaintiff bad originally stated a cause of action within tbe jurisdiction of tbe court, and 'the mere fact that be failed to prove a part of it did not oust tbe jurisdiction as to tbe other part. Tbis is clearly established by tbe cases. This Court said in Long v. Fields, 104 N. C., 221: "It has been settled by a line of decisions in tbis Court, and manifestly upon mature consideration, that where there is a.warranty of soundness in tbe sale of a horse, tbe vendee may declare in tort for a false warranty and add a count in deceit,, or, under tbe new procedure, a second cause of action in tbe nature of deceit, and though tbe sum demanded be less than $200 tbe action will not be deemed one founded on contract, and tbe Superior Court will have jurisdiction," citing Bullinger v. Marshall, 70 N. C., 520; Ashe v. Gray, 88 N. C., 190; s. c., on rehearing, 90 N. C., 137; Harvey v. Hambright, 98 N. C., 446. See, also, Bowers v. R. R., 107 N. C., 721. In Brock v. Scott, 159 N. C., 513, Justice Allen thus stated tbe rule: "Nor do we think it is true, as contended by tbe defendant, that tbe Superior Court has no jurisdiction of tbe plaintiff's cause of action. Tbe plaintiff alleges in bis complaint facts which, if true, entitle him to a judgment for more than $200, and it has been repeatedly held that it is tbe sum demanded in good faith which determines tbe jurisdiction. Sloan v. R. R., 126 N. C., 487; Cromer v. Marsha, 122 N. C., 564; Horner School v. Wescott, 124 N. C., 518; Boyd v. Lumber Co., 132 N. C., 186; Shankle v. Ingram, 133 N. C., 254; Thompson v. Express Co., 144 N. C., 392." In Martin v. Goode, 111 N. C., 288, tbe Court said: "Should tbe sum demanded be reduced under $200,' by failure of proof, or by sustaining a demurrer to any part thereof, or to some of tbe causes of action, tbe jurisdiction would not thereby be ousted, except when tbe sum is so palpably demanded in bad faith as to amount to a fraud on tbe jurisdiction." To tbe same effect is tbe language of tbe present Chief Justice in Sloan v. R. R., supra. If tbe plaintiff in good faith alleges a cause of action within tbe jurisdiction of tbe Superior Court, tbe latter does not lose its jurisdiction thus acquired by tbe failure of plaintiff to prove tbe allegation in its entirety, or because be has fallen short of proving all or any part of it. Tbe allegation of tbe pleading made in good faith fixes tbe jurisdiction of tbe court. More closely following our case, perhaps, is Ashe v. Gray, on the rehearing, 90 N. C., 137, in which the Court said: "The complaint being for a tort, sustains the jurisdiction, though the charge of a guilty knowledge of the falsity of the representations which influenced the plaintiff in making the contract of exchange may not have been proved, and for the want of which no issue was asked to be made up." This seems to be conclusively against the ruling of the court by which the action was dismissed as to the false warranty.
The judgment must be reversed and a new trial had according to the law of the case as we have declared it to be.
Beversed.