Court Opinion

ID: 9845334
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:19:13.487158+00
Date Added: 2024-06-11T09:16:01.420679
License: Public Domain

RodmáN, J.,
dissenting: I concur in the dissenting opinion of Higgins, J. I do not understand there is disagreement in the Court as to what must be established to rescind a contract on the ground of fraud. Our disagreement in this case relates to the application of the law to the facts as alleged and admitted by the demurrer.
The legal principle here controlling was aptly stated by Barnhill, J. in Harding v. Insurance Co., 218 N.C. 129, 10 S.E. 2d 599. He said: “Representations concerning the value of real property or its condition and the adaptation to particular uses will not support an action in deceit unless the purchaser has been fraudulently induced to forbear inquiries which he would otherwise have made, and if fraud of this latter description is relied on as an additional ground of action, it must be specifically set forth in the declaration. Parker v. Moulton, 14 Mass. 99; 19 Am. Rep. 315. ‘It is generally held that one has no right to rely on representations as to the condition, quality or character of property, or its adaptability to certain uses, where the parties stand on an equal footing and have equal means of knowing the truth. The contrary is true, however, where the parties have not equal knowledge and he to whom the representation is made has no opportunity to examine the property or by fraud is prevented from making an examination.’ 12 R.C.L. 384. When the parties deal at arms length and the purchaser has full opportunity to make inquiry but neglects to do so and the seller resorted to no artifice which was reasonably calculated to induce the purchaser to forego investigation action in deceit will not lie.”
*277Parker, J.
reduced the rule to two terse sentences. He said: “The right to rely on representations is inseparably connected with the correlative problem of the duty of the representee to use diligence in respect of representations made to him. The policy of the courts is on the one hand, to suppress fraud and, on the other, not to encourage negligence and inattention to one’s- own interest.” Calloway v. Wyatt, 246 N.C. 129, 97 S.E. 2d 881.
Here, defendant alleges plaintiff’s agent represented that the property was not subject to restrictions prohibiting its use for business purposes. He impliedly asserts that he contracted to purchase with the intent to use for business purposes. When the contract was executed, defendant knew he was obligating himself to take the property subject to whatever restrictions appeared in plaintiff’s record title. The objectionable restriction appears in plaintiff’s record title. Defendant could have ascertained what restrictions appeared in plaintiff’s title as easily as the purchaser in Calloway v. Wyatt, supra, could have ascertained about the inadequate water supply. In one case the truth could have been ascertained by turning on a water spigot, in the other, by looking at the recorded deeds constituting plaintiff’s chain of title.
How simple it would have been to have required a statement in the contract that none of the restrictions would prohibit the use of the property for business purposes. Defendant’s allegations that he reasonably relied on the statement of plaintiff’s agent is not admitted by the demurrer, because it is, in my opinion, not a statement of fact, but on the admitted facts is an erroneous legal conclusion.