STATE of North Carolina
v.
John R. BANKS.
No. 7420SC845.
Court of Appeals of North Carolina.
February 19, 1975.*862 Atty. Gen. Rufus L. Edmisten by Asst. Atty. Gen. Charles R. Hassell, Jr., Raleigh, for the State.
Kenneth W. Parsons, Charlotte, for defendant-appellant.
PARKER, Judge.
By the only assignment of error brought forward in his brief, defendant challenges the sufficiency of the evidence to take the case to the jury. In this connection we treat defendant's motion for a directed verdict as though it had been a motion to dismiss the action or a motion as in case of nonsuit, State v. Holton, 284 N.C. 391, 200 S.E.2d 612 (1973), and apply the same well established rules in testing the sufficiency of the evidence. So doing, we find the evidence sufficient and that defendant's motion was properly denied.
The elements of the offense of obtaining property by false pretense are (1) a false representation by the defendant, by conduct, word or writing, of a subsisting fact, (2) which is calculated and intended to deceive, (3) which does in fact deceive, and (4) by which defendant obtains something of value from another without compensation. State v. Houston, 4 N.C.App. 484, 166 S.E.2d 881 (1969). The false representation that land is free from encumbrances, when knowingly made in order to effect a sale, as in State v. Munday, 78 N.C. 460 (1878), or to obtain a loan, as in State v. Howley, 220 N.C. 113, 16 S.E.2d 705 (1941), may be the subject matter of the offense, and conviction therefor will be sustained where the evidence is sufficient to support a jury finding that all of the elements of the crime exist.
In the present case the evidence is uncontradicted that the representation was made that the land was free from any and all encumbrances. The warranty in the deed expressly so stated. The evidence that this representation was false was also uncontradicted. Defendant contends that nevertheless the case should not have been submitted to the jury because, so he argues, the evidence was insufficient to support a jury finding either (1) that Harris relied upon the representation and was thereby induced to part with his money, or (2) that defendant knowingly made the representation.
On the first point, defendant stresses that there was no evidence that defendant made any oral or written representations to Harris as to the status of the title to the land excepting the covenants contained in the deed, and he points to the testimony of Harris, brought out on cross-examination, to the effect that, while he read the deed on the morning the sale was closed, he could not remember whether he read it before or after he gave his check for it and that he could not say whether he read it while he was still in the lawyer's *863 office where the sale was closed or while he was on his way to the office of the Register of Deeds, where he filed the deed for recording at 10:20 a. m. on 13 July 1973. We do not view this uncertainty in Harris's testimony such as to preclude the jury from finding that in parting with his money he relied upon defendant's representation that the property was free from encumbrances. Harris held a real estate license and had dealt in real estate over a period of years. In his opinion the property was worth $38,000.00, the amount he had agreed to pay for it, when he delivered his check to defendant for the full balance of the contract price on 13 July 1973 and received in return the deed from the defendant. He testified that he knew that "a warranty deed normally states that it is free and clear of all encumbrances, debts or liens," and he held a contract, signed by defendant, entitling him to purchase the property "conditional upon the Seller being able to convey a good and marketable title free and clear of encumbrances." In view of this contractual provision, defendant's mere action in handing the deed to Harris and accepting the check in return from him constituted an implied representation that the land was free from encumbrances. Viewing all of the evidence in the light most favorable to the State, resolving any uncertainties and discrepancies in Harris's testimony in its favor, and giving the State the benefit of all legitimate inferences which might reasonably be drawn from the evidence, we find it sufficient to support a jury finding that Harris did rely upon defendant's representation when he parted with his money.
We also find the evidence sufficient to support a jury finding that in signing and delivering the deed and accepting Harris's check, defendant knew he was representing that the property was clear of encumbrances. There was evidence that defendant had previously worked in a bank, where Harris had first known him, and that when the sale was closed he had for some time been the chief corporate officer in a company engaged in the construction business. The covenant against encumbrances was expressed in plain and unambiguous English language. Defendant signed the deed containing the covenant and had previously signed the sale contract, which was also expressed in clear language, by which his company agreed to sell only conditional upon being able to convey the property free and clear of encumbrances. The jury could find from this evidence that defendant well knew and understood the nature of the representation which he made by signing and delivering the deed and that by those actions he intended to deceive Harris and to induce him to part with his money.
Finally, citing State v. Phifer, 65 N.C. 321 (1871) and State v. Knott, 124 N.C. 814, 32 S.E. 798 (1899), for the well-established proposition that a promise to do something in the future, however false, is not a false pretense within G.S. § 14-100, defendant contends that under the evidence in this case the representation that the lot was free from encumbrances must be construed to have been no more than a promise by the seller that the prior mortgage would be paid after the sale was closed. Again we do not agree. Defendant's argument appears to be that, because of the language in the sale contract that the seller would hold the initial payment of $32,932.47 in escrow until the sale should be closed, it would have been unlawful for the seller to use these funds to pay off the prior mortgage at any time prior to the final closing, from which defendant derives the conclusion that the practical effect of the warranty against encumbrances under the factual setting of this case is that it could only amount to a promise to do something in the future. Defendant's argument ignores the fact that at all times the seller was legally free to use other funds to pay off the prior mortgage indebtedness which it admittedly owed and that not one word is said in the sale contract about using any portion of the sale price for this purpose. It is, of course, true that in closing real estate sales it is not at all unusual that portions of the purchase *864 price will be applied to pay off existing encumbrances, but this is done as an essential part of the closing itself, and it would be an unusual transaction indeed in which the buyer parted with his cash in exchange for no more than the seller's unsupported promise to pay off then existing liens at some future time. Certainly nothing in the evidence in the present case suggests that Harris agreed to any such arrangement or that at the time he paid the balance of the purchase price in full he even had any reason to believe that any prior lien existed. The covenant against encumbrances in the deed given to Harris is expressed in the present tense, and we see no circumstance in the present case to support defendant's contention that the representation contained in the clear language employed meant something other than what it plainly said.
In the trial and judgment appealed from we find
No error.
BROCK, C. J., and BRITT, J., concur.