Britt v. Britt
1987 N.C. LEXIS 2387, 359 S.E. 2d 467, 320 N.C. 573 (1987)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A claim for unjust enrichment requires a non-gratuitous, measurable benefit conferred upon a defendant who consciously accepted it, but such a claim is barred if an express contract between the parties covers the same subject matter. Fraud requires a false representation of a past or existing fact, made with knowledge of its falsity and intent to induce reliance, resulting in injury; mere non-performance of a promise is insufficient to establish fraudulent intent unless the promisor had no intention of fulfilling it at the time it was made.
Facts:
- Billy Britt orally promised Betsy Britt and other plaintiffs that he would convey the farm to them when they "hit diamond."
- This oral promise to convey the farm was unenforceable under the statute of frauds because it was not in writing.
- Betsy Britt, expecting to receive the farm, made significant improvements to the farm property.
- Billy Britt was aware of these improvements as Betsy Britt made them.
- Betsy Britt and Billy Britt had a separate, express agreement for Betsy Britt's operation of the farm, where her compensation included living rent-free in the house and retaining any surplus income from the farm operations.
- Betsy Britt made payments on the indebtedness (mortgage) on the farm.
- In March 1984, Billy Britt told Betsy Britt to leave the farm.
- Betsy Britt continued making payments on the farm's indebtedness after she was told to leave.
- Betsy Britt requested that Billy Britt put their arrangement in writing, to which Billy Britt responded by asking how she would feel about accruing stock in a corporation he was forming each time she made a mortgage payment.
- No stock was ever issued to Betsy Britt.
Procedural Posture:
- Plaintiffs, including Betsy Britt, filed a claim in Superior Court (likely Orange County, implied by the remand instructions) asserting, among other things, a claim for a parol trust, unjust enrichment, and fraud.
- The claim for a parol trust was dismissed at a lower court level.
- The case was reviewed by the North Carolina Court of Appeals.
- Plaintiff Betsy Britt appealed specific questions regarding unjust enrichment and fraud to the Supreme Court of North Carolina.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
1. Is a plaintiff entitled to restitution for improvements and payments made to a defendant's farm under an unenforceable oral promise to convey land, when there is also an express contract that governs compensation for the farm's operation? 2. Is mere non-performance of a promise, without additional evidence of an intent not to fulfill it at the time of making, sufficient to establish a claim for fraudulent misrepresentation?
Opinions:
Majority - WEBB, Justice
1. Yes, a plaintiff may be entitled to restitution for improvements and certain payments made under an unenforceable oral promise to convey land, provided the benefits were not officious and were consciously accepted by the defendant, but no, the plaintiff is not entitled to restitution for services or payments if they are covered by an express contract governing the same compensation. The court reasoned that while the oral promise to convey the farm was unenforceable, it prevented Betsy Britt's actions in making improvements from being officious because she could reasonably expect payment if the farm was not conveyed. Billy Britt's awareness of the improvements supported this. However, the court found error in allowing the jury to consider the reasonable value of Betsy Britt's services in operating the farm because an express contract already existed for her compensation (living rent-free and retaining surplus income), and the law will not imply a contract where an express one exists (Concrete Co. v. Lumber Co.). Regarding payments on the farm indebtedness, if the express contract did not stipulate these be paid from gross income, Betsy Britt could be entitled to compensation for any reduction in her agreed-upon compensation. Payments made after she was told to leave the farm in March 1984 would be considered officious and thus not compensable. Damages for improvements should be measured by the enhancement to the farm's value, not merely the cost of expenditures (Wright v. Wright). 2. No, mere non-performance of a promise is not sufficient to establish a claim for fraudulent misrepresentation. The court reiterated that fraud requires a false representation of a past or existing fact, made with knowledge of its falsity and intent to induce reliance, resulting in injury (Johnson v. Insurance Co.). Evidence of an unfulfilled promise is insufficient unless it shows the promisor made the promise with no intention of fulfilling it at the time it was made (Hoyle v. Bagby). Betsy Britt's evidence only showed non-performance of Billy Britt's promise to issue stock, which is insufficient to prove fraudulent intent based on precedent (Williams v. Williams, Vincent v. Corbett). Furthermore, Betsy Britt failed to demonstrate injury from relying on the representation, as her services were already compensated by an express contract, and her payments on the farm were from funds generated by the farm operations, not shown as a personal loss. The court also noted that while some jurisdictions allow 'loss of bargain' damages in fraud, Betsy Britt failed to prove such damages with reasonable certainty, providing no evidence of the corporation's existence, purpose, or the stock's value. The court affirmed the fraud claim dismissal and reversed and remanded the unjust enrichment claim for a new trial.
Analysis:
This case significantly clarifies the interplay between express contracts and quasi-contractual claims like unjust enrichment, reinforcing the principle that an implied contract will not supersede an existing express agreement covering the same subject matter. It also sets a high evidentiary bar for proving fraud based on unfulfilled promises, requiring concrete proof of intent not to perform at the time the promise was made, moving beyond mere non-performance. The court's discussion on damages for fraud, while not definitively adopting a majority or minority rule, underscores the necessity of proving specific and ascertainable injury, especially for 'loss of bargain' damages, which must be demonstrated with reasonable certainty. This outcome impacts future cases by guiding the framing of claims and the evidence required to succeed in both unjust enrichment and fraud actions.
