Kee v. . Dillingham

DeviN, J. The defendants’ demurrer ore terms, interposed in the court below, on the ground that the plaintiffs’ complaint did not state facts sufficient to constitute a cause of action was properly overruled, as was their demurrer to the plaintiffs’ evidence. While some of the matters complained of as grounds for the relief sought would seem to *265 involve mere expressions of opinion or promissory representations, we think there are allegations and evidence in support which under the principle stated in Bank v. Yelverton, 185 N. C., 314, 117 S. E., 299, are sufficient to withstand a demurrer and to carry the case to the jury. Kemp v. Funderburk, 224 N. C., 353, 36 S. E. (2d), 155; Ward v. Health, 222 N. C., 470, 24 S. E. (2d), 5; Silver v. Skidmore, 213 N. C., 231, 195 S. E., 775; Haywood v. Morton, 209 N. C., 235, 183 S. E., 280: Clark v. Laurel Park Estates, 196 N. C., 624 (635), 146 S. E., 584; Blackman v. Howes, 185 P. (2), 1019, 174 A. L. R., 1004; Annotation 1010. The defendants excepted to the instructions given the jury on the issue of damages and to the court’s failure definitely to point out the matters to he taken into consideration in determining this issue. The court charged the jury as follows: “If these defendants were induced by false and fraudulent representations to sign this contract then they would be entitled to recover at your hands, for such improvements as they placed upon the property less a reasonable rental for the use thereof since the time that they entered it, the 10th day of September, 1947. The court has and does charge you that certain items are not real estate. A floor heating plant, cupboards in the kitchen, the Venetian blinds are household and linoleum is household furniture and no realty. Such additions as the plaintiff's, if you come to consider the third issue, made to the premises less a reasonable rental they would be entitled to recover, and these items held to be personal property they would be entitled to remove from the premises if the contract is held, as plaintiffs insist upon in the second issue, and the defendants insist that it should not be. The plaintiffs ask you to answer that issue in the sum of $2,000 less a reasonable amount of rentals for the period that they have occupied the premises. What that rental should be is a matter for you to determine in the light of all the facts that have been developed.’’ This appears to be the only instruction given the jury on this issue. The plaintiffs’ suit is for rescission of the contract to pay $5,500 for the property on the ground of fraud, and also for the recovery as damages for expenditures made for permanent improvements on the house contracted for in order to complete it. Ordinarily a suit for rescission of a contract may not be joined with an action for its breach or damages tor fraud, but where special damages have been sustained as the result of the fraud practiced, rescission of the contract will not bar a recovery tor damages. Lykes v. Grove, 201 N. C., 254, 159 S. E., 360. The rule ns, if rescission of the contract does not place the injured party in statu e/uo. as where he has suffered damages which cancellation of the contract cannot repair, there is no principle of law which psrevents him from maintaining his action for damages caused by the other party’s fraud. *266 Fields v. Brown, 160 N. C., 295, 76 S. E., 8. The rule is well stated in 9 Am. Jur., 385, as follows : “A vendee in possession who rescinds a contract for the sale of land because of the misrepresentation of the vendor is entitled to the purchase money paid, the value of permanent improvements erected in good faith, the amount of taxes paid, and interest on these several sums, deducting from the aggregate the value of the rent while the vendee remained in possession.” Under this rule it was permissible for the plaintiffs to seek to strike down the contract ab initio, if procured by fraud, and, for the purpose of restoring the status quo ante, to recover such expenditures as they were induced by the fraud to make for permanent improvements on the real property of the defendants, less rental value while in possession. This, however, would not include money paid for personal property which plaintiffs would have right to remove, nor for expenditures voluntarily made for improvements with knowledge of all the facts or after discovery of the fraud alleged, nor money paid defendants for other lots as claimed. An examination of the charge on this issue leads to the conclusion that the trial judge inadvertently omitted to give the jury sufficiently definite instructions to guide them to an intelligent determination of the question (Lewis v. Watson, ante, 20, 47 S. E. (2d), 484; Yarn Co. v. Mauney, 228 N. C., 99, 44 S. E. (2d), 601; McNeill v. McNeill, 223 N. C., 178 (182), 25 S. E. (2d), 615; Spencer v. Brown, 214 N. C., 114, 198 S. E., 630), and that the defendants are entitled to a new trial. In this view it is unnecessary to consider other exceptions noted during the trial brought forward in defendants’ assignments of error. New trial.