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Britt v. Britt, 359 S.E.2d 467

North Carolina Supreme Court











Quick Notes

Loss of bargain damages must be proved with reasonable certainty before they are allowed

Book Name

Torts Cases, Problems, And Exercises.  Weaver, Third Edition.  ISBN:  978-1-4224-7220-0.



o         Whether Betsy in a claim for faud may recovery damages for the loss of a bargin?  No.




o         Against Pl - for Parol, For Pl - for unjust enrichment, and for Pls for Fraud.


o         Reversed.  There was not sufficient evidence to support a claim of unjust enrichment or fraud.


o         Affirmed in part, Reversed in Part, And Remanded In Part.





Pl Betsy & Robert (Bobby)

Df Billy

What happened?


o         Betsy Britt brought action, seeking to impose a parol trust (this is an oral trust that is created verbally by a settlor) on certain real property or for restitution for benefits bestowed by her on the defendants and for damages, including punitive damages, for fraud.

o         Robert Dixon Britt was made a party plaintiff after the action was filed.

Amway Distributors

o         In 1977 the two Pl - were working as Amway distributors for Billy Britt.

o         Robert or Bobby Britt and Billy Britt are brothers.

Bought Horse Farm

o         In August 1977, Billy Britt purchased a farm in Orange County known as Magnolia Hill Farm which had been operated as a horse farm since 1972.


o         Bobby and Betsy Britt would occupy the farm.

o         Billy Britt promised Betsy and Bobby that when they "hit the diamond level" of Amway sales, he would convey the farm to them if they would repay to him his investment in the farm.

Maintenance & Operation

o         It was agreed that Bobby and Betsy would "repair and maintain the farm . . . and operate the stable business to carry the farm."

o         They were to live on the farm and retain any surplus income as compensation.

Payment Book Delivered

o         Billy Britt delivered to Betsy Britt a payment book for monthly payments of $378.63

o         Payments on this debt were to be paid from the income from the farm.

o         He also told her that she was to pay from the farm income $1,033.63 per month on a purchase money note secured by a second deed of trust on the farm.

Betsy Wanted Agreement in Writing

o         He said it wasnt necessary.

o         He was a man of his word

o         Betsy said "I'm putting so much money in the farm and all and I'd like some kind of protection."

o         First offered her to be an employee and Betsy said no.

o         Britt said how would you feel about having accruing stock in the corporation each time you made a mortgage payment, then you would be accruing more stock?"

Result of Conversation

o         Betsy kept making mortgage payments.

Marriage fell apart, Kicked Out

o         Britt kicked her off the frame.


No Stock Issued


Oddity Notes (Not Part Of Case)

o         It is me, or does Betsy where the pants in the relationship?

o         Its odd that Betsy does all the paying.

o         Its odd that Betsys bother-in-law kicks of off of the farm.

Courts Response Reliance & Unjust Enrichment She Was Paid

o         Not sufficient evidence that the plaintiff Betsy Britt was injured by relying on the representation.

o         Cannot recover in unjust enrichment for the value of her services in managing the farm because she was paid for those services pursuant to an express contract.

o         Cannot say she was injured by relying on a promise to her which caused her to continue working on the farm when she received compensation.


Betsy Contends Relied on Billys Stock Representation

o         Contends that she was injured by making the payments on the farm indebtedness and for the repairs and maintenance when she relied on Billy Britt's representation.


Courts Response

o         The funds to make these payments were generated by farm operations.

o         If Betsy had not stayed on the farm she would not have had these funds.

o         She has not shown a loss to her by staying on the farm after her conversation with Billy Britt.


Betsy Contends Injured by not receiving stock in corporation.


Courts Response Question of First Impression

o         The plaintiff has not sued for breach of contract which she could have done for the failure of Billy Britt to have the stock issued to her.

o         The gravamen [basis for a grievance] of a claim for fraud is the damage to a person for a change in position based on the reliance on a false statement.

o         The damage is caused by this change of position and not the lost bargain.


Split In jurisdictions

o         There is a split among the jurisdictions which have decided this question.

o         A majority allows damages for the lost bargain as well as for the change in position.
A minority limits damages to that caused by a change in position.


Court Do No Have to Choose

o         All jurisdictions which have passed on the question hold that loss of bargain damages must be proved with reasonable certainty before they are allowed.


In this case

o         There is no evidence that Betsy Britt was damaged by not receiving stock.

o         The evidence does not show for what purpose the corporation was to be organized or that it ever was organized.

o         There is no evidence as to the value of the stock.

o         Betsy Britt has not shown she was damaged by the failure to receive stock.



*** Class Rule ***

Element Fraud based on Misrepresentation

1.       a representation;

2.       thats false and;

3.       its materiality;

4.       Defendants knowledge of the falsity or a reckless disregard (scienter);    ***

o         Scienter - Bad state of mind

1.       intent that the representation be acted upon;   (Same as intent to deceive)

2.       the Pl's ignorance of its falsity;

3.       the Pl's justifiable reliance upon the truth;    ***

4.       the hearer's right to rely thereon; and

5.       the Damages where proximate injury.



Class Notes