Harrell v. Powell

Annotate this Case

106 S.E.2d 160 (1958)

249 N.C. 244

Florence HARRELL, a Widow, v. H. Emmett POWELL and wife, Mildred F. Powell; Wayne Re-Development Company, Incorporated, and N. E. Mohn, Jr.

No. 306.

Supreme Court of North Carolina.

December 10, 1958.

Dees & Dees, George N. Vann, Goldsboro, and Lucas, Rand & Rose, Wilson, for plaintiff.

Hubbard & Jones, Clinton, McLendon, Brim, Holderness & Brooks and Hubert B. Humphrey, Greensboro, for defendants.

BOBBITT, Justice.

We do not consider the clause and sentence stricken from paragraph 8. Plaintiff's petition, filed under Rule 4(a), 242 N.C. 766, on which certiorari was granted, related only to paragraphs 9-17, both inclusive.

*163 Plaintiff's only exception and assignment of error is to the entire order of Judge Parker.

The questions presented in plaintiff's brief relate to whether paragraphs 9-17, both inclusive, considered as a whole, allege facts sufficient to constitute a cause of action for fraud. Whether any of the stricken allegations include facts germane to an action to set aside the contract and deed on the ground of the alleged mental incapacity of L. J. Harrell is not presented or considered.

An analysis of the long and complicated federal statute cited as the "Housing Act of 1950," 64 Stat. (Part I) 48 et seq., 12 U.S.C.A. § 1701 et seq., is unnecessary. We assume, for present purposes, that the proposal and enactment of the federal legislation materially affected the market value of the land underlying the housing project.

Bills introduced, committee reports thereon and legislation enacted in the Congress, are public records, available for inspection by any interested person. The Harrells, through counsel or otherwise, could have obtained full and accurate information concerning the proposed and enacted legislation.

However, plaintiff alleged that the Harrells in fact had no knowledge or information concerning the proposed or enacted legislation; that, if they had had such knowledge or information, they would not have sold and conveyed their property for $27,397; and that Powell, having such knowledge, in his dealings with the Harrells, undertook ("schemed") to purchase and did purchase the property at a price substantially less than its fair market value.

It is not alleged that Powell (or any defendant) made a false representation to the Harrells or by word or deed diverted them from full inquiry or investigation concerning any matter pertinent to the market value of their property. The gravamen of the alleged fraud is Powell's silence, that is, his failure, on his own initiative, to advise the Harrells as to such matters. Plaintiff alleged that it was his legal duty to do so.

In the Annotation, "Duty of purchaser of real property to disclose to the vendor facts or prospects affecting the value of the property," 56 A.L.R. 429, the annotator, citing decisions, states the rule as follows: "In the absence of any fiduciary relationship between the parties, the prospective purchaser of land is under no legal obligation to disclose to the vendor facts, much less prospects, within his knowledge, which materially affect the value of the property, where the vendor does not specifically question him in reference thereto, * * *." In accord: 55 Am.Jur., Vendor and Purchaser Sec. 87; 91 C.J.S. Vendor and Purchaser § 57.

In Smith v. Beatty, 37 N.C. 456, Daniel, J., for this Court, marked the distinction in these words: "A vendee, who knows that there is a gold mine on the land, is not compelled to disclose that fact to the vendor. But if he is interrogated as to his knowledge of such a thing, and he then denies any knowledge of the mine, this denial will make the transaction fraudulent."

Suffice to say, it is not alleged that the Harrells addressed any question to Powell (or any defendant) or that Powell (or any defendant) made any statement to the Harrells relevant to the market value of the Harrell property.

Plaintiff's position is that Powell's relationship to the Harrells was that of a fiduciary or quasi-fiduciary. The asserted basis for this position is that the Harrells "trusted him and had confidence in him," because Powell "was occupying a public position of trust," to wit, Executive Director of said Authority.

If a fiduciary relationship existed, plaintiff would have sound ground for her further contention that it was Powell's legal duty to affirmatively disclose all relevant facts concerning the market value of the Harrell property; but, in our opinion, the facts alleged do not establish a fiduciary relationship between Powell and the Harrells. *164 The facts alleged by plaintiff are quite different from the factual situations considered by this Court in Abbitt v. Gregory, 201 N.C. 577, 160 S.E. 896, and Speight v. Branch Banking & Trust Co., 209 N.C. 563, 183 S.E. 734, cited by plaintiff. Here, under the facts alleged, the only relationship between the Harrells and Powell was that of vendor and purchaser.

Admittedly, as asserted by plaintiff, public office is a public trust. But it should be noted that Lexington Insulation Co. v. Davidson County, 243 N.C. 252, 90 S.E.2d 496, and State v. Williams, 153 N.C. 595, 68 S.E. 900, cited by plaintiff, involved, respectively, (1) the relationship of a person who was chairman of its board of commissioners to Davidson County, and (2) the relationship of a person who was a member of its board of aldermen to the City of New Bern.

We are concerned only with the relationship of Powell to the Harrells, not with the relationship of Powell to said Authority. The facts alleged are that Powell, in his transactions with the Harrells, was acting solely as an individual. Unquestionably, a public official occupies a fiduciary relationship to the governmental unit or agency which he serves; but it does not follow therefrom that his relationship to a private citizen from whom he, as an individual, purchases property, is that of a fiduciary.

Having reached the conclusion that paragraphs 9-17, both inclusive, considered as a whole, do not allege facts sufficient to constitute a cause of action to set aside said conveyances on the ground of fraud, the order of Judge Parker is affirmed.

By demurrer ore tenus (filed) in this Court, defendants assert that the complaint fails to state facts sufficient to constitute a cause of action and that the facts alleged show that plaintiff's right to bring this action "is barred by laches and otherwise." Suffice to say, certiorari granted under Rule 4(a) brings to this Court for immediate review only the petitioner's exceptions to rulings made by the court below.


PARKER, J., not sitting.