Vail v. Vail, 63 S.E.2d 202 (N.C. 1951). · Go Syfert
Vail v. Vail, 63 S.E.2d 202 (N.C. 1951). Cases Citing This Book View Copy Cite
“having notice must exercise ordinary care to ascertain the facts, and if he fails to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired, had he made the necessary effort to learn the truth. . . .”
292 citation events (144 in the last 25 years) across 14 distinct courts.
Strongest positive: Constr. Managers, Inc. v. Amory (ncbizct, 2019-05-17)
Treatment trajectory · 1952 → 2026 · click a year to view as-of
1952 1989 2026
Top citers, strongest first. 50 distinct citers.
examined Cited as authority (verbatim quote) Constr. Managers, Inc. v. Amory (2×) also: Cited as authority (quoted)
N.C. Bus. Ct. · 2019 · quote attribution · 2 verbatim quotes · confidence high
confidential of fiduciary relation imposes upon the one who is trusted the duty to . . . disclose all material facts affecting the relation.
discussed Cited as authority (verbatim quote) Honeycutt v. Weaver (2×) also: Cited "see, e.g."
N.C. Ct. App. · 2018 · signal: see also · quote attribution · 1 verbatim quote · confidence high
hen the statute of limitations has started running against the ancestor, but at his death the action is not barred, the statute continues to run against the heir or devisee.
examined Cited as authority (verbatim quote) Starnes v. Commissioner (4×) also: Cited as authority (quoted)
4th Cir. · 2012 · signal: see, e.g. · quote attribution · 4 verbatim quotes · confidence high
having notice must exercise ordinary care to ascertain the facts, and if he fails to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired, had he made the necessary effort to learn the truth. . . .
examined Cited as authority (verbatim quote) Dalton v. Dalton (2×) also: Cited as authority (quoted)
N.C. Ct. App. · 2004 · quote attribution · 2 verbatim quotes · confidence high
fraud may be said to embrace all acts, omissions, and concealments
discussed Cited as authority (rule) Pridgen v. Carlson
N.C. Bus. Ct. · 2025 · confidence medium
However, “ ‘the failure of the defrauded person to use diligence in discovering the fraud may be excused where there exists a relation of trust and confidence between the parties.’ ” Vail v. Vail, 233 N.C. 109, 116 (1951). 101.
discussed Cited as authority (rule) Hart v. First Oak Wealth Mgmt., LLC (2×) also: Cited "see, e.g."
N.C. Bus. Ct. · 2025 · confidence medium
App. 643, 655 (2017) (quoting Vail v. Vail, 233 N.C. 109, 116 (1951)). 153.
discussed Cited as authority (rule) Taylor v. Bank of America, N.A.
N.C. · 2024 · confidence medium
Typically, however, a duty of inquiry begins “when an event occurs to ‘excite [the aggrieved party’s] suspicion or put [that party] on such inquiry as should have led, in the exercise of due diligence, to a discovery of the fraud.’ ” Forbis v. Neal, 361 N.C. 519, 525 (2007) (first alteration in original) (quoting Vail v. Vail, 233 N.C. 109, 117 (1951)).
cited Cited as authority (rule) Oliver v. Brown & Morrison, Ltd.
N.C. Bus. Ct. · 2022 · confidence medium
App. at 293 (quoting Vail v. Vail, 233 N.C. 109, 114 (1951)); see also Abbitt v. Gregory, 201 N.C. 577, 598 (1931).
discussed Cited as authority (rule) Cummings v. Carroll
N.C. · 2021 · confidence medium
We conclude that the approach adopted by the Court of Appeals with respect to this issue was a reasonable one and will adopt it as our own. ¶ 53 As we have previously stated, “[f]raud has no all-embracing definition”; instead, as a general proposition, fraud “may be said to embrace all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another, or the taking of undue or unconscientious advantage of another.” Vail v. Vail, 233 N.C. 109, 113 (1951) (cleaned up).
discussed Cited as authority (rule) Cummings v. Carroll
N.C. · 2021 · confidence medium
We conclude that the approach adopted by the Court of Appeals with respect to this issue was a reasonable one and will adopt it as our own. ¶ 53 As we have previously stated, “[f]raud has no all-embracing definition”; instead, as a general proposition, fraud “may be said to embrace all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another, or the taking of undue or unconscientious advantage of another.” Vail v. Vail, 233 N.C. 109, 113 (1951) (cleaned up).
discussed Cited as authority (rule) Wells Fargo Bank, N.A. v. Stocks
N.C. · 2021 · confidence medium
Rather, “there must be facts and circumstances sufficient to put the [drafting party] on inquiry which, if pursued, would lead to the discovery of the facts constituting the [mistake].” Vail v. Vail, 233 N.C. 109, 117 , 63 S.E.2d 202, 208 (1951) (citations omitted). ¶ 17 Here the cause of action accrued when plaintiff should have discovered the error in the loan documents.
discussed Cited as authority (rule) Wells Fargo Bank, N.A. v. Stocks
N.C. · 2021 · confidence medium
Rather, “there must be facts and circumstances sufficient to put the [drafting party] on inquiry which, if pursued, would lead to the discovery of the facts constituting the [mistake].” Vail v. Vail, 233 N.C. 109, 117 , 63 S.E.2d 202, 208 (1951) (citations omitted). ¶ 17 Here the cause of action accrued when plaintiff should have discovered the error in the loan documents.
discussed Cited as authority (rule) Loray Master Tenant, LLC v. Foss N.C. Mill Credit 2014 Fund I, LLC
N.C. Bus. Ct. · 2021 · confidence medium
“In general terms, a fiduciary relation is said to exist [w]herever confidence on one side results in superiority and influence on the other side; where a special confidence is reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing the confidence.” Vail v. Vail, 233 N.C. 109, 114 (1951) (citation and internal quotation marks omitted). 35.
discussed Cited as authority (rule) Howell v. Heafner (2×)
N.C. Bus. Ct. · 2020 · confidence medium
Our Supreme Court has long held that “a fiduciary relation is said to exist [w]herever confidence on one side results in superiority and influence on the other side; where a special confidence is reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing the confidence.” Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951) (citation and internal quotation marks omitted).
discussed Cited as authority (rule) Weare v. Bennett Brothers Yachts, Inc.
E.D.N.C. · 2020 · confidence medium
De facto fiduciary relationships exist “[w]herever confidence on one side results in superiority and influence on the other side; where a special confidence is reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing the confidence.” King, 369 N.C. at 464 (quoting Vail v. Vail, 233 N.C. 109, 114 (1951)).
cited Cited as authority (rule) Beam v. Sunset Fin. Servs., Inc.
N.C. Bus. Ct. · 2019 · confidence medium
Vail v. Vail, 233 N.C. 109, 116 , 63 S.E.2d 202, 207 (1951) (internal citation omitted). 70.
cited Cited as authority (rule) Chisum v. Campagna
N.C. Bus. Ct. · 2019 · confidence medium
App. 283, 293 , 603 S.E.2d 147, 155 (2004); Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951); Evans v. Neill, 2011 N.C.
discussed Cited as authority (rule) Old South Apparel, LLC v. JEB Designs, Inc.
E.D.N.C. · 2017 · confidence medium
Fraud Under North Carolina law, five elements are required for fraud: “(1) a false representation or concealment of a material fact; (2) reasonably, calculated to deceive; (3) made with intent to deceive; (4) and which does, in fact, deceive; (5) to the hurt of the injured party.” Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 205 (1951).
cited Cited as authority (rule) Jackson v. Minnesota Life Insurance Co.
E.D.N.C. · 2017 · confidence medium
Vail v. Vail, 233 N.C. 109, 116 , 63 S.E.2d 202, 207 (1951); Carlisle v. Keith, 169 N.C.App. 674, 683 , 614 S.E.2d 542, 548 (2005).
examined Cited as authority (rule) King v. Bryant (8×) also: Cited "see"
N.C. · 2017 · confidence medium
“In general terms, a fiduciary relation is said to exist [w]herever confidence on one side results in superiority and influence on the other side; where a special confidence is reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing the confidence.” Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951) (internal quotation marks omitted).
examined Cited as authority (rule) Poulos v. Poulos (4×)
N.C. Bus. Ct. · 2016 · confidence medium
Nevertheless, the Court concludes that Plaintiff has presented sufficient evidence to raise an issue of material fact regarding whether she was injured by Dr. Poulos’ actions. 109, 114, 63 S.E.2d 202, 206 (1951) (“[I]t is the duty of a person in whom confidence is reposed by virtue of the situation of trust arising out of a confidential or fiduciary relationship to make a full disclosure of any and all material facts within his knowledge relating to a contemplated transaction with the other party to such relationship, and any concealment or failure to disclose such facts is a fraud.”). 2…
discussed Cited as authority (rule) Loftin v. Qa Invs. LLC
N.C. Bus. Ct. · 2015 · confidence medium
In such an instance, “failure to do so constitutes fraud.” Id. (quoting Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951)). {39} North Carolina follows the general rule that, “[i]n all averments of fraud, duress or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” N.C.
examined Cited as authority (rule) Wells Fargo Bank (3×) also: Cited "see"
N.C. Ct. App. · 2015 · confidence medium
Stat. § 1-52 (9), has held that “the mere registration of a deed, containing an accurate description of the locus in quo and indicating on the face of the record facts disclosing the alleged fraud, will not, standing alone, be imputed for constructive notice of the facts constituting the alleged fraud, so as to set in motion the statute of limitations.” Vail v. Vail, 233 N.C. 109, 117 , 63 S.E.2d 202, 208 (1951).
discussed Cited as authority (rule) SOFT LINE, S.P.A. v. ITALIAN HOMES, LLC
N.C. Bus. Ct. · 2015 · confidence medium
“A party having notice must exercise ordinary care to ascertain the facts, and if he fail [sic] to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired, had he made the necessary effort to learn the truth of the matters affecting his interests.” Blankenship v. English, 222 N.C. 91, 92 , 21 S.E.2d 891, 892 (1942), quoted in Vail v. Vail, 233 N.C. 109, 116 , 63 S.E.2d 202, 207 (1951); see also Pembee Mfg.
discussed Cited as authority (rule) The Caper Corporation v. Wells Fargo Bank, N.A.
4th Cir. · 2014 · confidence medium
Notably, the general rule charging "[a] person who executes a written instrument ... with knowledge of its contents” and foreclosing a related action for fraud ”do[es] not apply to situations in which the person making the misrepresentations stands in a fiduciary relationship to the signing party.” Bowman, 316 S.E.2d at 621 (citing Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 206 (1951)).
discussed Cited as authority (rule) Cebula v. The Givens Estates, Inc.
N.C. Ct. App. · 2014 · confidence medium
In an attempt to persuade us to reach a different result, Plaintiff notes that “‘the failure of the defrauded person to use diligence in discovering the fraud may be excused where there exists a relation of trust and confidence between the parties,’” Vail v. Vail, 233 N.C. 109, 116 , 63 S.E.2d 202, 207 (1951) (quoting 54 C.J.S., Limitations of Actions, § 194 -17- (1948)), and argues that she reposed special confidence in Defendant due to their shared Christian faith.
cited Cited as authority (rule) Rutledge v. Wells Fargo Bank, N.A. (In re Rutledge)
Bankr. M.D.N.C. · 2014 · confidence medium
Id. at 155 (quoting Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 206 (1951)) (internal quotation marks omitted).
cited Cited as authority (rule) State v. Lalinde
N.C. Ct. App. · 2013 · confidence medium
Vail v. Vail, 233 N.C. 109, 113 , 63 S.E.2d 202, 205 (1951) (emphasis added) (internal citations and quotation marks omitted).
discussed Cited as authority (rule) Szulik v. Tagliaferri
S.D.N.Y. · 2013 · confidence medium
“Where a relation of trust and confidence exists between the parties, there is a duty to disclose all material facts, and failure to do so constitutes fraud.” Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 206 (1951) (internal quotation marks and citation omitted).
cited Cited as authority (rule) Deyton v. Estate of Waters
N.C. Bus. Ct. · 2013 · confidence medium
App. at 294 , 603 S.E.2d at 156 (citing Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951)).
examined Cited as authority (rule) Bdm Investments v. Lenhil, Inc. (3×) also: Cited "see"
N.C. Bus. Ct. · 2012 · confidence medium
App. LEXIS 1154 , at *5 (2008) (citing Small v. Dorsett, 223 N.C. 754, 761 , 28 S.E.2d 514, 518 (1944)). “[I]t is generally held that when it appears that by reason of the confidence reposed the confiding party is actually deterred from sooner suspecting or discovering the fraud, he ‘is under no duty to make inquiry until something occurs to excite his suspicions.’” Id. (citing Vail v. Vail, 233 N.C. 109 , 116−17, 63 S.E.2d 202, 208 (1951) (quotations omitted)). {66} Plaintiffs allege that they could not have discovered and did not discover the fraud and misrepresentations of the Def…
discussed Cited as authority (rule) Kaylor v. Fox (2×) also: Cited "see"
N.C. Ct. App. · 2008 · confidence medium
"Where a confidential relationship exists between the parties, failure to discover the facts constituting fraud may be excused." Small v. Dorsett, 223 N.C. 754, 761 , 28 S.E.2d 514, 518 (1944) (citation omitted). "[I]t is generally held that when it appears that by reason of the confidence reposed the confiding party is actually deterred from sooner suspecting or discovering the fraud, he `is under no duty to make inquiry until something occurs to excite his suspicions. '" Vail v. Vail, 233 N.C. 109, 116-17 , 63 S.E.2d 202, 208 (1951) (emphasis added, quotation omitted).
discussed Cited as authority (rule) Forbis v. Neal
N.C. · 2007 · confidence medium
See, e.g., Bennett, 265 N.C. at 156 , 143 S.E.2d at 318 (involving a defendant who allegedly defrauded the heirs of his business partner who was also his brother); Vail v. Vail, 233 N.C. 109, 116-17 , 63 S.E.2d 202, 207-08 (1951) (involving a defendant who allegedly defrauded his mother); Small v. Dorsett, 223 N.C. 754, 760-62 , 28 S.E.2d 514, 517-18 (1944) (involving a banker who allegedly defrauded his customer, a long time friend and widow with no business experience).
cited Cited as authority (rule) Toomer v. Branch Banking and Trust Co.
N.C. Ct. App. · 2005 · confidence medium
App. 283, 293 , 603 S.E.2d 147, 155 (2004) (quoting Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951)), disc. review denied, 359 N.C. 286 , 610 S.E.2d 717 (2005).
discussed Cited as authority (rule) Misenheimer v. Burris (2×)
N.C. Ct. App. · 2005 · confidence medium
Vail v. Vail, 233 N.C. 109, 113 , 63 S.E.2d 202, 205 (1951) (citations and quotations omitted) (emphasis supplied).
discussed Cited as authority (rule) Mroz v. Hoaloha Na Eha, Inc.
D. Haw. · 2005 · confidence medium
The court in Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 208 (1951) stated that “[i]n addition to the [public] record, there must be facts and circumstances sufficient to put the defrauded person on inquiry which, if pursued, would lead to the discovery of facts constituting the fraud.” See also Romero v. Sanchez, 83 N.M. 358 , 492 P.2d 140, 142 (1971) (internal citations omitted) (“[I]f the party is to be bound by the record even if reasonable diligence would not have led to its examination, he will likely be the victim of ‘a rule of thumb rather than a live principle of law, [which] …
discussed Cited as authority (rule) White v. Consolidated Planning, Inc. (2×)
N.C. Ct. App. · 2004 · confidence medium
In Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951), the Supreme Court explained: “In general terms, a fiduciary relation is said to exist ‘[w]herever confidence on one side results in superiority and influence on the other side; where a special confidence is reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing the confidence.’ ” Id. (quoting 37 C.J.S.
cited Cited as authority (rule) State Farm Fire & Casualty Co. v. Darsie
N.C. Ct. App. · 2003 · confidence medium
App. 680, 682-83 , 292 S.E.2d 169, 170-71 (1982); Vail v. Vail, 233 N.C. 109, 116-17 , 63 S.E.2d 202, 208 (1951).
examined Cited as authority (rule) Governor's Club, Inc. v. Governors Club Ltd. Partnership (6×) also: Cited "see"
N.C. Ct. App. · 2002 · confidence medium
App. 213, 216 , 510 S.E.2d 702, 704 (1999) (plaintiff came close to alleging constructive fraud, but was missing an allegation that Gailor took advantage of her position of trust for the purpose of benefitting herself, thus the acts alleged failed to state a claim for constructive fraud) with Terry, 302 N.C. at 84 , 273 S.E.2d at 678 (held plaintiffs complaint sufficient to state claim for constructive fraud when defendant used position of trust and confidence to take advantage of his ill brother and purchase his business at a price below market value); Link v. Link, 278 N.C. 181, 193 , 179 S.…
discussed Cited as authority (rule) Stamm v. Salomon
N.C. Ct. App. · 2001 · confidence medium
System, Inc., 317 N.C. 110, 116-17 , 343 S.E.2d 879, 884 (1986) (citations omitted); Vail v. Vail, 233 N.C. 109, 113 , 63 S.E.2d 202, 205 (1951) (quoting 37 C.J.S., Fraud, s 1, p. 204) (“in general terms fraud may be said to embrace ‘all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another, or the taking of undue or unconscientious advantage of another.’ ”).
discussed Cited as authority (rule) PITTS v. AMERICAN SECURITY INS. CO.
N.C. Bus. Ct. · 2000 · confidence medium
App. 329, 332 , 385 S.E.2d 537, 539 (1989) (citing Vail v. Vail, 233 N.C. 109, 116 , 63 S.E.2d 202, 207 (1951)). {63} Finally, Plaintiff has not shown that Ms. Pitts relied upon the conduct of the American Security Defendants to her prejudice.
discussed Cited as authority (rule) Ridenhour v. International Business MacHines Corp.
N.C. Ct. App. · 1999 · confidence medium
See, e.g., Terry v. Terry, 302 N.C. 77, 84 , 273 S.E.2d 674, 678-79 (1981) (defendant used position of trust and confidence to take advantage of his ill brother and purchase his business at a price below market value); Link v. Link, 278 N.C. 181, 193 , 179 S.E.2d 697, 704 (1971) (defendant husband took advantage of relationship with wife to obtain shares of stock as part of a separation agreement); Vail v. Vail, 233 N.C. 109, 115 , 63 S.E.2d 202, 207 (1951) (defendant son took advantage of relationship of trust to obtain deed to property from his mother).
discussed Cited as authority (rule) Cardiovascular Diagnostics, Inc. v. Boehringer Mannheim Corp.
E.D.N.C. · 1997 · confidence medium
CDI relies on the second type that exists “[w]herever confidence on one side results in superiority and influence on the other side; where a special confidence is reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence.” Vail v. Vail, 233 N.C. 109 , 63 S.E.2d 202, 206 (1951) (citations omitted).
discussed Cited as authority (rule) Barger v. McCoy Hillard & Parks
N.C. · 1997 · confidence medium
See, e.g., Terry, 302 N.C. at 84 , 273 S.E.2d at 678 (defendant used position of trust and confidence to take advantage of his ill brother and purchase his business at a price below market value); Link v. Link, 278 N.C. 181, 193 , 179 S.E.2d 697, 704 (1971) (defendant husband took advantage of relationship with wife to obtain shares of stock as part of a separation agreement); Vail v. Vail, 233 N.C. 109, 115 , 63 S.E.2d 202, 207 (1951) (defendant son took advantage of relationship of trust to obtain deed to property from his mother).
discussed Cited as authority (rule) Faulkenbury v. TEACHERS'AND STATE EMPLOYEES'RETIREMENT SYSTEM
N.C. Ct. App. · 1993 · confidence medium
Satisfaction of such a fiduciary duty requires more than mere notification to the beneficiaries but imposes a "duty of the person in whom the confidence is reposed to exercise the utmost good faith ... and to refrain from abusing such confidence by obtaining any advantage to himself at the expense of the confiding party." Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951).
discussed Cited as authority (rule) Faulkenbury v. Teachers' & State Employees' Retirement System
N.C. Ct. App. · 1993 · confidence medium
Satisfaction of such a fiduciary duty requires more than mere notification to the beneficiaries but imposes a “duty of the person in whom the confidence is reposed to exercise the utmost good faith . . . and to refrain from abusing such confidence by obtaining any advantage to himself at the expense of the confiding party.” Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951).
discussed Cited as authority (rule) Frizzell Construction Co. v. First Citizens Bank & Trust Co.
E.D.N.C. · 1991 · confidence medium
Dairy Foundation, Inc. for the proposition that in order for a breach of fiduciary duty to occur, First Citizens must have taken advantage of its position to its own benefit. 311 N.C. 679, 685 , 319 S.E.2d 139, 143 (1984) (citing Vail v. Vail, 233 N.C. 109, 114 , 63 S.E.2d 202, 206 (1951)).
examined Cited as authority (rule) Bamberger v. Bernholz (4×)
N.C. Ct. App. · 1989 · confidence medium
The Supreme Court established the essential elements of actionable fraud as follows: “(1) [A] false representation or concealment of a material fact; (2) reasonably calculated to deceive; (3) made with intent to deceive; (4) and which does, in fact, deceive; (5) to the hurt of the injured party.” Vail v. Vail, 233 N.C. 109, 113 , 63 S.E.2d 202, 205 (1951).
discussed Cited as authority (rule) Myers & Chapman v. Thomas G. Evans
N.C. · 1988 · confidence medium
See, e.g., Ragsdale v. Kennedy, 286 N.C. 130, 138 , 209 S.E. 2d 494, 500 ; Myrtle Apartments v. Casualty Co., 258 N.C. 49, 52 , 127 S.E. 2d 759, 761 ; Foster v. Snead, 235 N.C. 338, 339-40 , 69 S.E. 2d 604, 606 (1952) (representation must be made with fraudulent intent); Vail v. Vail, 233 N.C. 109, 113 , 63 S.E. 2d 202, 205 (1951) (third essential fact needed to establish actionable fraud is intent to deceive); Ward v. Heath, 222 N.C. 470, 472 , 24 S.E. 2d 202, 205 (1943) (material elements of fraud include intent to deceive).
discussed Cited as authority (rule) Sandra Lynch v. Universal Life Church (2×)
4th Cir. · 1985 · confidence medium
The statute has been construed to provide that an action for fraud accrues and limitations begin running “when the aggrieved party discovers the facts constituting the fraud, or when, in the exercise of reasonable diligence, such facts should have been discovered.” Vail v. Vail, 233 N.C. 109, 116 , 63 S.E.2d 202, 207 (1951).
ROBERT E. VAIL, WILLIAM C. VAIL, S. PERRY VAIL, and WINNIE VAIL YOW,
v.
v. B. VAIL and Wife, FAY VAIL
675.
Supreme Court of North Carolina.
Feb 2, 1951.
63 S.E.2d 202
Glyde E. Gooch and Roberson, Haworth & Reese for plaintiffs, appellants. , J. J. Shields and Thomas Turner for defendants, appellees.
Johnson.
Cited by 121 opinions  |  Published
4 passages pin-cited by 3 cases
Pinpoint authority: bottom 87%
Citer courts: Fourth Circuit (2) · North Carolina Business Court (1) · Court of Appeals of North Caro… (1)
JOHNSON, J.

Tbe evidence in this ease tends to show these determinative factors: (1) that the defendant, Victor B. Vail, the grantee in the deed, stood in a confidential or fiduciary relation with the grantor, Mrs. Minnie P. Vail; and (2) that she retained possession and control of the lands embraced in the deed during the remainder of her life. These crucial circumstances being made to appear, along with the rest of the evidence offered below, made out a prima facie case entitling the plaintiffs to go to the jury on both the issue of fraud and that of the statute of limitations.

The issue of fraud: Fraud has no all-embracing definition. Because of the multifarious means by which human ingenuity is able to devise means to gain advantages by false suggestions and concealment of the truth, and in order that each case may be determined on its own facts, it has been wisely stated “that fraud is better left undefined,” lest, as Lord Hardwiche put it, “the craft of men should find a way of committing fraud which might escape a rule or definition.” Furst v. Merritt, 190 N.C. 397 (p. 404), 130 S.E. 40. However, in general terms fraud may be said to embrace “all acts, omissions, and concealments involving a breach of legal or equitable duty and resulting in damage to another, or the taking of undue or unconscientious advantage of another.” 37 C.J.S., Fraud, Section 1, p. 204.

These essential facts must appear in order to establish actionable fraud: “(1) a false representation or concealment of a material fact; (2) reasonably calculated to deceive; (3) made with intent to deceive; (4) and which does, in fact, deceive; (5) to the hurt of the injured party.” Ward v. Heath, 222 N.C. 470, 24 S.E. 2d 5. The material elements of fraud, a commission of which will justify the court in setting aside a contract or other transaction, are stated by Barnhill, J., in Ward v. Heath, supra, as follows: “First, there must be misrepresentation or concealment. Second, an intent to deceive or negligence in uttering falsehoods with intent to influence the acts of others. Third, the representations must be calculated to deceive and must actually deceive. And, fourth, the party complaining, must have actually relied upon the representations.”

The nature and extent of the proofs required to establish fraud depend to a large extent on the relationship of the parties, and ordinarily, “a greater degree of proof is required to show fraud as between parties dealing at arm’s length than is necessary where the fraud feasor sustains a[*114] confidential relation toward bis alleged victim.” 37 C.J.S., Fraud, Section 114, p. 432.

Where a relation of trust and confidence exists between tbe parties, “there is a duty to disclose all material facts, and failure to do so constitutes fraud.” 37 C.J.S., Fraud, Section 16, p. 247.

23 Am. Jur., Fraud and Deceit, Section 14, p. 765, states tbe rule thus: “Where a confidential or fiduciary relationship exists, it is tbe duty of tbe person in whom tbe confidence is reposed to exercise tbe utmost good faith in tbe transaction and to refrain from abusing such confidence by obtaining any advantage to himself at tbe expense of tbe confiding party. Should be obtain such an advantage, be will not be permitted to retain tbe benefit; and tbe transaction will be set aside even though it could not have been impeached bad no such relation existed, whether tbe unconscionable advantage was obtained by misrepresentations, concealment or suppression of material facts, artifice, or undue advantage.”

Tbe rule is amplified in 23 Am. Jur., Fraud and Deceit, Section 81, p. 858, as follows: “It is a well-settled principle of tbe law of fraud, applied particularly by courts of equitable jurisdiction, that it is tbe duty of a person in whom confidence is reposed by virtue of tbe situation of trust arising out of a confidential or fiduciary relationship to make a full disclosure of any and all material facts within bis knowledge relating to a contemplated transaction with tbe other party to such relationship, and any concealment or failure to disclose such facts is a fraud. This principle is universally observed, although tbe transaction cannot be impeached if no such relationship exists.”

For a comprehensive discussion of what constitutes a confidential or fiduciary relation, see Abbitt v. Gregory, 201 N.C. 577 (p. 598), 160 S.E. 896. In general terms, a fiduciary relation is said to exist “Wherever confidence on one side results in superiority and influence on tbe other side; where a special confidence is reposed in one who in equity and good conscience is bound to act in good faith and with due regard to tbe interests of tbe one reposing tbe confidence.” 37 C.J.S., Fraud, Section 2, p. 213. Suffice it to say, without more, that as between principal and agent, tbe relation applies with all of its rigor in all of its implications. McNeill v. McNeill, 223 N.C. 178, 25 S.E. 2d 615; 37 C.J.S., Fraud, Section 16, pp. 248 and 249; Am. Jur., Fraud and Deceit, Section 14, p. 763 et seq.

Tbe defendants, contending that tbe evidence was insufficient to take tbe case to tbe jury on tbe issue of fraud, urge that there is no evidence showing that Victor B. Vail said or did anything at tbe time tbe deed was signed to prevent bis mother from reading it, and that in tbe absence of some proof that she did not read the deed, or was prevented from reading it, she being literate, is presumed to have read it. On this premise,[*115] defendants contend that the evidence does not justify tbe inference that Minnie P. Tail was deceived by anything her son Victor said or did. Defendants say the case is governed by the rule which ordinarily precludes a literate person who signs an instrument from asserting, in the absence of fraud, that he did not read the instrument and was ignorant of its purport. The defendants rely on the decisions in Ward v. Heath, supra; Colt Co., v. Kimball, 190 N.C. 169, 129 S.E. 406, and cases therein cited.

The defendants’ position is untenable and the authorities relied on are distinguishable. In the cases cited, the parties were dealing at arm’s length, and in neither of the eases was the complaining party lulled into security by fraud or artifice of the other party and thereby prevented from reading the instrument. In the instant case the parties stood in a confidential relation, and the evidence tends to show elements of positive fraud and deception, reasonably calculated to dull the mother’s call to vigilance and justify her in not discovering the contents of the deed: It appears in evidence that Mrs. Vail was a widow about seventy-two years of age when she made the deed; that she lived alone; that “Victor was accustomed to looking after his mother, running a great many errands and performing many personal services for her”; that he helped collect her rents. It is also in evidence that two days after his mother’s funeral Victor confessed to some of the plaintiffs that: . . . “I gave the wrong description and had the deed made out to the old home place instead of the little place that mother told me I could have on Vail Alley. I came by this property wrong. ... I got it wrong. I will deed it back to the estate just any time you all say so.”

The evidence here, standing as it does undenied and unexplained, is sufficient to support these findings and inferences: that Mrs. Vail, reposing confidence in her son, Victor, directed him, as her agent, to have the small Vail Alley lot run off and deed thereto prepared so she might convey it to him as a gift; that he, in breach of his trust, surreptitiously substituted the description of the larger, more valuable Vail home place on South Main Street; that by fraudulently suppressing the true state of facts while silently pretending that the deed contained the Vail Alley property, he thereby procured from his mother lands not intended by her to be conveyed, and that she, under the circumstances of the confidential relation with her son, was lulled into security by his fraud and signed the deed without discovering, in the exercise of due diligence, the true state of facts. In short, we conclude that the evidence, measured by the applicable rules of law, is sufficient to sustain, though not necessary to impel, a finding of all the essential elements of fraud. That makes it a prima facie case for the jury.

[*116] The issue of the statute of limitations: The defendants having set up the three-year statute of limitations, G.S. 1-52, subsection 9, in bar of plaintiffs’ right to recover, the burden of proof devolved upon the plaintiffs to show that their cause of action was not barred, i.e., the burden was upon the plaintiffs to show that their cause of action did not accrue until sometime within, the period of three years next before the commencement of the action. Taylor v. Edmunds, 176 N.C. 325, 97 S.E. 42; Sanderlin v. Cross, 172 N.C. 234, 90 S.E. 213; Hooker v. Worthington, 134 N.C. 283, 46 S.E. 726; 54 C.J.S., Limitations of Actions, Section 388, p. 527.

Under the statute pleaded here, a cause of action, like this one, to set aside an instrument for fraud, accrues, and limitations begin running, when the aggrieved party discovers the facts constituting the fraud, or when, in the exercise of reasonable diligence, such facts should have been discovered. Blankenship v. English, 222 N.C. 91, 21 S.E. 2d 891; Wimberly v. Furniture Stores, 216 N.C. 732, 6 S.E. 2d 512, and cases therein cited. See also 34 Am. Jur., Limitations of Actions, Section 165, p. 132.

And it is the accepted rule that “knowledge by the defrauded person of facts which in the exercise of proper diligence would enable him to learn of the fraud ordinarily is equivalent to discovery of fraud.” 54 C.J.S., Limitations of Actions, Section 189, p. 188. The rule is concisely stated by Stacy, C. J., in Blankenship v. English, supra: “A party having notice must exercise ordinary care to ascertain the facts, and if he fails to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired, had he made the necessary effort to learn the truth of the matters affecting his interests.” In this respect the law regards the means of knowledge as knowledge itself. Hargett v. Lee, 206 N.C. 536, 174 S.E. 489; Pasquotank County v. Surety Co., 201 N.C. 325, 160 S.E. 176; 54 C.J.S., Limitations of Actions, Section 189, p. 190. However, it is generally held that “the failure of the defrauded person to use diligence in discovering the fraud may be excused where there exists a relation of trust and confidence between the parties.” 54 C.J.S., Limitations of Actions, Section 194, p. 198. This is so for the reason that a confidential or fiduciary relation imposes upon the one who is trusted the duty to exercise the utmost of good faith and to disclose all material facts affecting the relation. Also, a confidential relation by its very nature presupposes that the confiding party, in deference to the confidence and trust reposed in the other party, may in a measure relax his faculties of vigilance and act upon the assumption, until notice to the contrary, that the person in whom confidence is reposed will disclose, in the honest performance of his duty, all of the essential facts connected with the relation and take no unfair advantage. Accordingly, it is generally held that when it appears that by reason of the confidence reposed the confiding party is actually deterred from sooner suspecting[*117] or discovering the fraud, he “is under no duty to make inquiry until something occurs to excite his suspicions.” 54 C.J.S., Limitations of Actions, Section 194, p. 199.

In Small v. Dorsett, 223 N.C. 754, bot. p. 761, 28 S.E. 2d 514, quoting from 34 Am. Jur., Limitation of Actions, Section 168, p. 135, the applicable rule is stated as follows: “Where a confidential relationship exists between the parties, failure to discover the facts constituting fraud may be excused. In such a case, so long as the relationship continues unre-pudiated, there is nothing to put the injured party on inquiry, and he cannot be said to have failed to use due diligence in detecting the fraud.

. . . Similarly, an agent, sued for fraud, cannot set up that the principal should have suspected him.”

Our decisions hold that the mere registration of a deed, containing an accurate description of the locus in quo and indicating on the face of the record facts disclosing the alleged fraud, will not, standing alone, be imputed for constructive notice of the facts constituting the alleged fraud, so as to set in motion the statute of limitations. In addition to the record, there must be facts and circumstances sufficient to put the defrauded person on inquiry which, if pursued, would lead to the discovery of the facts constituting the fraud. Tuttle v. Tuttle, 146 N.C. 484, 59 S.E. 1008; Modlin v. Railroad, 145 N.C. 218, 58 S.E. 1075; Stubbs v. Motz, 113 N.C. 458, 18 S.E. 387. All the more is this so where the parties stand in the confidential relation of principal and agent, wherein the duty of the principal to investigate becomes subordinate to that of the agent to disclose the true state of facts.

It appears in evidence that Minnie P. Yail lived only three years, seven months, and eight days after the deed was executed. The action was instituted by the plaintiffs seven months and five days after her death. The deed shows on its face that the “use, control and ownership” of the property was reserved for Mrs. Vail during the rest of her life. This reservation, nothing else appearing, supports the inference that she retained possession of the property until her death. And such evidence of possession becomes a relevant circumstance bearing heavily on the issue of the statute of limitations. It, when considered in connection with the confidential relation of the parties, is sufficient on this record to sustain the inference and conclusion that after the deed was made by Mrs. Vail nothing occurred during the rest of her life to excite her suspicion or put her on such inquiry as should have led, in the exercise of due diligence, to a discovery of the fraud, and that therefore the plaintiffs’ action is not barred by the statute of limitations.

The defendants contend that the nonsuit below should be affirmed on authority of the decisions in Massengill v. Oliver, 221 N.C. 132, 19 S.E. 2d 253; Blankenship v. English, 222 N.C. 91, 21 S.E. 2d 891; and[*118] Sanderlin v. Cross, 172 N.C. 234, 90 S.E. 213. These cases are distinguishable. No confidential relation appears to have existed in either of them. In Sanderlin v. Cross, supra, and in Massengill v. Oliver, supra, the grantors did not, as in the instant ease, retain possession of the locus in quo. In the Sanderlin case the grantees immediately went into and remained in the open, notorious possession of the lands for more than thirteen years before the death of the grantor. It also appears that the timber was cut and removed from a large portion of the land seven or eight years before the suit was instituted. The Massengill case involved farm lands. There, the grantee went immediately into and remained in open, undisputed possession for more than nine years before the suit was commenced. In the Blankenship case, the plaintiff acquired title to real property, subject to a contract of record permitting the timber to be cut within three years, thinking the time for cutting was eighteen months. At the trial he admitted he was told a week after the purchase that the time was three years. After being so put on notice, he failed to examine the public records or bring suit for wrongful cutting within three years. Therefore, having slept on his rights for more than three years after notice, clearly his action was barred by limitations.

The defendants stress the evidence tending to show that one of the plaintiffs, W. C. Yail, knew his brother Yictor had a deed for the home place before his mother’s death. However, it is not made to appear when W. 0. Yail received notice, nor does it appear that he ever passed on to his mother his information about the deed. Be that as it may, the wrong here complained of was solely against Minnie P. Yail. She alone had the right to maintain an action for redress in her lifetime; as long as she lived, limitations could run only against her. No right of action accrued to the plaintiffs until her death, and therefore until then limitations did not run against them. Holt v. Holt, 232 N.C. 497, 61 S.E. 2d 448. See also 9 Am. Jur., Cancellation of Instruments, Section 45, p. 389. What is here said, of course, is not at variance with the rule that when the statute of limitations has started running against the ancestor, but at his death the action is not barred, the statute continues to run against the heir or devisee. Frederick v. Williams, 103 N.C. 189, 9 S.E. 298.

With the case going back for a new trial, we refrain from further comment or discussion, since the defendants’ evidence, as indicated in aspects of the cross-examinations, may develop a different state of facts surrounding the execution of the deed and subsequent events from what now appears on the prima facie level.

The judgment of the court below is

Reversed.