Timothy M. Sirk
Keyser, West Virginia
Attorney for the Appellants
Charles B. Howard
Bowles, Rice, McDavid, Graff & Love
Charles Town, West Virginia
Attorney for the Appellees
This Opinion was delivered PER CURIAM.
1. "If one, with knowledge of a fraud which would
relieve him from a contract, goes on to execute it, he thereby
confirms it, and can not get relief against it. He has but one
election to confirm or repudiate the contract, and, if he elects to
confirm it, he is finally bound by it." Syllabus, Hutton v.
Dewing, 42 W.Va. 691, 26 S.E. 197 (1896).
2. "If there is no genuine issue as to any material fact summary judgment should be granted but such judgment must be denied if there is a genuine issue as to a material fact." Syllabus point 4, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).
This is an appeal by Blake C. Martin and Charles A.
Martin from an order of the Circuit Court of Mineral County
granting ERA Goodfellow Agency, Inc., and other individuals named
as defendants, summary judgment in a fraud action instituted by the
appellants. On appeal, the appellants claim that there were
genuine issues of material fact in the case at the time the court
awarded summary judgment and that, under the circumstances, summary
judgment was inappropriate. After reviewing the questions
presented and the documents filed, this Court disagrees.
Accordingly, the judgment of the Circuit Court of Mineral County is
On May 5, 1989, Blake C. Martin and Charles A. Martin
entered into a contract to purchase a parcel of real estate located
in Mineral County from Elizabeth H. Vane. Ms. Vane was represented
by ERA Goodfellow Agency, Inc., in the sale.
Prior to entering into the contract, the appellants examined the property on two occasions. According to their complaint, while they were considering the transaction, they were informed that "the subject real property included a legal, adequate, and effectively functional septic system and drain field."
After entering into the contract, but before closing,
appellant Blake C. Martin detected that there were problems with
the septic system and discussed the problems with ERA Goodfellow
Agency's employee, Barbara Payton. During the discussions, Mr.
Martin indicated that he was not going to close the transaction
until he had received something in writing to protect his rights
relating to the septic system.
During the discussions, although the complete extent of
the septic system problems was unclear, the appellants and the
seller agreed to resolve the problems by establishing an escrow
account before closing. The escrow agreement provided that the
parties would escrow $1,000.00 of the purchase price to be used for
the purpose of installing, repair, or transferring the septic
system located upon the property. Further, the agreement provided
that the appellants would pay and absorb the costs of correcting
the septic system over and above the $1,000.00 and that if the
repairs cost less than $1,000.00 the excess in the account would be
paid to the seller.
Following the closing of the transaction, the appellants
learned that the septic system problems were very extensive and
instituted the present legal proceeding in which they took the
position that the septic system was defective and that, as a
consequence, they suffered damages resulting from the purchase of
the property. They claimed that "[t]he representations made by the
Defendants, acting individually and in concert, regarding the
existence, condition and sufficiency of the septic system and drain
field were facts material to the transaction from the Plaintiffs
[sic] perspective," and that "[t]he Defendants, individually and in
concert, made the aforementioned false representation with the
intent to deceive and defraud the Plaintiffs and the intent to
induce Plaintiffs [sic] reliance on such representations." They
also took the position that they "reasonably believed the
Defendants [sic] representations to be true and in justifiable
reliance thereon entered into a contract for the purchase of the
said property . . . and suffered injury as a proximate result of
Defendants' misrepresentations made individually and in concert."
Following the institution of the proceeding, the
defendants moved for summary judgment and, in conjunction with the
motion, the deposition of appellant Blake C. Martin was taken. In
that deposition, Mr. Martin indicated that Barbara S. Payton, an
employee of ERA Goodfellow Agency, Inc., which was representing the
seller, Elizabeth Vane, in the sale, made representations to him
concerning the septic system and its condition. In essence, he
indicated that Ms. Payton stated that the system existed and was
In the same deposition, Mr. Martin testified that about
a week before the contract for the purchase of the Vane property
was entered into, he became concerned about the septic system and
he discussed it with the seller and the sales agent. He
acknowledged that as a result of the discussions, the parties
agreed to escrow $1,000.00 of the purchase price to go toward the
repair of the septic system. He also testified that he understood
that if correction of the system cost more than that amount, he
would pay for the overage.
After taking the summary judgment motion and the
accompanying evidence under consideration, the Circuit Court of
Mineral County granted the defendants below summary judgment. It
is from that ruling that the appellants now appeal.
In the present proceeding, the appellants claim that
there were genuine issues of material fact in the case at the time
the circuit court granted summary judgment and that, under the
circumstances, summary judgment was improper.
Generally, in West Virginia the essential elements in an
action for fraud are: (1) that the act of fraud was committed by
the defendant; (2) that it was material and false; (3) that
plaintiff relied upon the misrepresentation and was justified in
relying upon it; and (4) that plaintiff was damaged because he
relied upon it. Horton v. Tyree, 104 W.Va. 238, 139 S.E. 737
After examining the allegations of the appellants'
complaint in the present case, this Court believes that, in
essence, the appellants alleged these elements in the complaint
and, in essence, set forth a cause of action for fraud.
Other law in West Virginia indicates, however, that where
a party discovers fraud after entering into a contract, but before
the contract is performed, that party must either elect to rescind
the contract on the basis of the fraud or affirm the contract and
accept the performance of the party who committed the fraud. The
law further indicates that if the defrauded individual elects to
affirm the contract and accept the performance of the party who
committed the fraud, he thereby waives any subsequent action for
fraud. Hutton v. Dewing, 42 W.Va. 691, 26 S.E. 197 (1896). In the
single syllabus point of the Hutton case, the Court states the rule
If one, with knowledge of a fraud which would relieve him from a contract, goes on to execute it, he thereby confirms it, and can not get relief against it. He has but one election to confirm or repudiate the contract, and, if he elects to confirm it, he is finally bound by it.
See also, Rollyson V. Bourn, 85 W.Va. 15, 100 S.E. 682 (1919), and
Manss-Bruning Shoe Mfg. Co. v. Prince, 51 W.Va. 510, 41 S.E. 907
(1902); White v. National Steel Corp., 742 F.Supp. 312 (N.D.W.Va.
Under these principles, the Court believes that even if
the appellants in the present case could prove that they were
induced into entering into the contract in question by the
fraudulent representations of the defendants relating to the septic
system, the fraud, and their right to bring an action because of
it, would be waived if the evidence showed that they were aware of
it before the contract was executed or performed and if they chose
to accept execution of performance of the contract rather than to
This Court stated in syllabus point 4 of Aetna Casualty
& Surety Co. v. Federal Insurance Co. of New York, 148 W.Va. 160,
133 S.E.2d 770 (1963), that "[i]f there is no genuine issue as to
any material fact summary judgment should be granted but such
judgment must be denied if there is a genuine issue as to a
In the present case, the deposition of appellant Blake C.
Martin rather conclusively shows that before the contract in
question was performed by the parties, Mr. Martin was clearly aware
that there were problems with the septic system and that any
representations made by the defendants regarding the existence,
condition, and sufficiency of the septic system were not
necessarily correct. After learning of the problems and after the
escrow account had been established, he chose not to rescind the
contract, but instead he elected to accept the performance of the
seller along with the escrow arrangement.
This Court believes that under the principles set forth
in Hutton v. Dewing, supra, the appellants' election not to rescind
the contract but to affirm it and accept the performance with the
escrow modification, in effect, constituted a waiver of any fraud
growing out of representations initially made regarding the
condition of the septic system.
Under the circumstances of the case, the Court believes
that there was no genuine issue as to any material fact at the time
of entry of summary judgment and that the trial court properly
granted summary judgment.
The judgment of the Circuit Court of Mineral County is,