Hoyle v. Bagby

117 S.E.2d 760 (1961)

253 N.C. 778

D. B. HOYLE v. J. A. BAGBY, d/b/a J. A. Bagby Construction Company.

No. 672.

Supreme Court of North Carolina.

January 20, 1961.

*761 Williams & Zimmerman, Durham, for defendant, appellant.

Lester W. Owen, Durham, for plaintiff, appellee.

HIGGINS, Justice.

Counsel for plaintiff, during the argument here, moved for leave to amend the complaint in order to amplify his allegations of fraud. However, neither the motion, nor the proposed amendment, was reduced to writing and filed in this Court as required by Rule 36, Rules of Practice in the Supreme Court, 221 N.C. 566. The motion and amendment are not in compliance with the rules and the Court cannot consider them.

The plaintiff alleged the defendant purposely misinformed him concerning the time he had been paid by Duke University and about the payments he had already received, "for the purpose of deceiving this plaintiff and to prevent the plaintiff from taking a lien on the job for services rendered, and to induce the plaintiff to continue work." We might be able to sustain plaintiff's allegationmore properly his conclusion that the defendant had perpetrated a fraud on him but for the detailed allegations of the facts upon which he relies to sustain the charge of fraud. Here are the details alleged: Duke University contracted to pay the defendant $34,500 to complete a road contract. After the work was under way the defendant contracted to pay the plaintiff a stipulated price per hour to furnish men and machines to help the defendant complete the contract. Plaintiff worked four *762 or five days beginning December 17, 1957, for which he was due $478. On December 20, the defendant drew $17,039.20 for work already done prior to the time plaintiff began. On January 31, 1958, the defendant received an additional $3,654. The plaintiff did not go back on the job until March 7, 1958, and he continued to work until May 23, 1958. On that date he was due $7,529. The plaintiff further alleged "that between the dates March 7, 1958, and May 23, 1958, this plaintiff inquired of the defendant about the payment for services rendered and was assured that when he, the defendant, was paid for the job that the plaintiff would certainly get his money." The plaintiff then alleges that on May 23, 1958, the defendant was paid $10,380.20 and that a balance of $3,400 was still due by Duke University.

It is noted that the defendant had agreed to pay the plaintiff when the defendant collected from Duke; and that the basis of defendant's fraud is that the very day on which the plaintiff completed his work the defendant received more than $10,000 in payment from Duke and did not comply with his promise to pay the plaintiff when he collected. The plaintiff's own allegations show that between the date of the conversations on which the plaintiff relies (between March 7 and May 23) and the date he completed his work, the defendant did not receive one cent from Duke University.

The defendant's promise to pay when he collected was not breached until after the plaintiff had completed the work. The promise at the time made was for future fulfillment. It may have been made in good faith. The promise to pay was not based on any false statement of an existing fact. The complaint falls short of alleging fraud. "It is the general rule that an unfulfilled promise cannot be made the basis for an action for fraud." Davis v. Davis, 236 N.C. 208, 72 S.E.2d 414, 415; Friend v. Talcott, 228 U.S. 27, 33 S. Ct. 505, 57 L. Ed. 718; Louisville Dry Goods Co. v. Lanman, 135 Ky. 163, 121 S.W. 1042, 28 L.R.A.,N.S., 363; Patuxent Development Co. v. Bearden, 227 N.C. 124, 41 S.E.2d 85, 87. In the Bearden case, this Court said: "Whatever may be the facts beyond the complaint, the pleading will be of no avail unless it sets up with sufficient particularity facts from which legal fraud arises or, where proof of actual fraud is necessary to relief, specifically alleges the fraudthat is, the fraudulent intentand particularizes the acts complained of as fraudulent so that the court may judge whether they are at least prima facie of that character."

The plaintiff may be able to allege facts from which a court and jury may reasonably infer the defendant's intent not to pay for the work existed at the time he made the commitment to do so; but to be fraudulent the intent not to pay must have existed in the defendant's mind at the time he made the promise which induced the plaintiff to do the work. The promise to pay must have been made (1) with the present intent not to carry it out and (2) with the purpose to induce the plaintiff to do work for which the defendant did not intend to pay. Davis v. Davis, supra; Williams v. Williams, 220 N.C. 806, 18 S.E.2d 364.

In overruling the defendant's plea in abatement, the superior court held: "The complaint of the plaintiff states a cause of action based upon fraud for obtaining money or moneys worth * * * and as such is not a debt or claim as is discharged by a `Discharge of Bankrupt.'" We call attention to the wording of the exception in the Bankruptcy Act: "A discharge in bankruptcy shall release a bankrupt from all his provable debts * * * except * * * (2) liabilities for obtaining money or property by false pretenses or false representations." The exclusion extends to money or propertynot to money or money's worth.

"In view of the well-known purposes of the bankrupt law, exceptions to *763 the operation of a discharge thereunder should be confined to those plainly expressed; and while much might be said in favor of extending these to liabilities incurred for services obtained by fraud, the language of the act does not go so far." Gleason v. Thaw, 236 U.S. 558, 35 S. Ct. 287, 289, 159 L. Ed. 717; Fidelity & Deposit Co. of Maryland v. Arenz, 290 U.S. 66, 54 S. Ct. 16, 78 L. Ed. 176.

The trial court's conclusion the complaint states a cause of action for fraud is not sustained. The order overruling the plea in abatement is reversed. However, the plaintiff, if so advised, may offer in the superior court the amendment to the complaint which he requested here. The plea in abatement will stand for hearing in the superior court if the plaintiff amends.

Reversed.