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2004-UP-097 - Patel v. Patel

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Ghanshyam “Danny” Patel,        Respondent,

v.

Vinod Patel,        Appellant.


Appeal From Horry County
J. Stanton Cross, Jr., Master-in-Equity


Unpublished Opinion No. 2004-UP-097
Submitted February 9, 2004 – Filed February 17, 2004


AFFIRMED


H. Jay Haar, of Surfside Beach, for Appellant.         

William W. DesChamps, Jr., of Myrtle Beach, for Respondent.

PER CURIAM: This is an action for the collection of an indebtedness in the sum of $200,000.  Ghanshyam “Danny” Patel brought this action against Vinod Patel, alleging breach of contract, breach of contract accompanied by fraudulent act, constructive fraud, conversion, fraud and deceit based upon misrepresentation, and negligent misrepresentation.  The master-in-equity ruled in favor of Danny.  Vinod appeals, arguing a resulting trust theory.  We affirm. [1]

FACTS

Danny has owned and operated motels in the Myrtle Beach area since 1980.  Vinod is in the business of constructing and owning motels and is a thirty-five percent shareholder in Classic Investment, Inc., a South Carolina Corporation.  

In January 1998, Classic purchased unimproved real property in Surfside Beach for $500,000.  Vinod and Danny each advanced $250,000 to Classic to enable Classic to purchase the property.  The $250,000 loan from Danny to Classic was evidenced by a promissory note from Classic in favor of Danny.  Classic’s statement of assets, liabilities, and stockholders’ equity as of December 1999 showed a land value of $500,000.  After Classic purchased the property, it obtained a construction loan to build the motel, and each of the shareholders guaranteed the loan.  Classic also entered into a franchise agreement with Comfort Inn – the shareholders personally guarantying the obligations.  Danny was never a guarantor of any franchise obligation or construction loan.

By 2000, Danny had advanced the total principal sum of $575,000 to Vinod and Classic.  Classic received $375,000 and Vinod received $200,000, pursuant to Vinod’s request and for use in constructing the motel.  Danny testified that this $200,000 was independent of the $250,000 he advanced to Classic in January 1998.  In the confession of judgment, Classic admitted liability to Danny for the $375,000.  In addition, the Final Order and Judgment of Sale and Foreclosure confirmed the $375,000 indebtedness of Classic in favor of Danny.  This $375,000 indebtedness includes the $250,000 advance Danny made to Classic in January 1998.

Although Classic admitted liability to Danny for the $375,000, when Danny demanded payment from Vinod for his $200,000 indebtedness, Vinod refused.  Danny brought this action alleging breach of contract, breach of contract accompanied by fraudulent act, constructive fraud, conversion, fraud and deceit based upon misrepresentations, and negligent misrepresentation.  At the April 24, 2002 hearing, the master-in-equity ruled in favor of Danny and awarded judgment in the amount of $200,000 plus pre-judgment interest at the legal rate of 8¾% from January 7, 2000 to the date of the order and post-judgment interest at the rate of 12% per annum from the date of judgment until paid.  Vinod appeals, arguing the master erred in failing to find a resulting trust was created in which title to the property would be conveyed from Classic to Danny upon completion of the motel.

STANDARD OF REVIEW

Although an action to determine a resulting trust sounds in equity, Vinod’s resulting trust defense is based on an alleged contract between Classic and Danny for the reconveyance of Classic’s property.  Because an action on a contract is one at law, this action is at law.  Therefore, we may only correct errors of law and we are bound to uphold the master’s findings of fact unless there is no evidence that reasonably supports them.  Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976).

LAW/ANALYSIS

Vinod argues the $200,000 he received from Danny was not a loan, but partial repayment for the $250,000 sum he allegedly advanced on behalf of Danny to purchase the motel property in January 1998.  He contends Danny wanted to purchase the property, but could only come up with half of the purchase price; therefore, he provided the other half of the purchase price as a loan to Danny.  As a result, he claims the trial court erred in failing to find a resulting trust was created between him and Danny when he allegedly advanced $250,000 to Danny and agreed to convey the property to Danny at a later date. 

In asserting his resulting trust theory, Vinod claims that title to the land was placed in the name of Classic for Danny’s benefit.  We disagree and find the evidence shows Vinod and Danny each advanced $250,000 to Classic to enable Classic to purchase the real property.  A party attempting to prove the existence of a resulting trust in real property must show by clear, definite, unequivocal, and convincing evidence that the beneficiary of the trust paid a portion of the purchase money at the time of the transaction.  Glover v. Glover, 268 S.C. 433, 435, 234 S.E.2d 488, 489 (1977).  Vinod failed to meet this burden of proof.  He did not prove by definite, clear, unequivocal, and convincing evidence that the $250,000 Danny advanced to Classic in January 1998 was partial payment for the real property, instead of a loan to Classic.  The promissory note, confession of judgment, and final order all document that the $250,000 Danny advanced to Classic in January 1998 was a loan from Danny to Classic.  The promissory note, a written contract, is binding against a claimed contemporaneous oral agreement that would modify or vary it.  Ray v. South Carolina Nat’l Bank, Inc., 281 S.C. 170, 173, 314 S.E.2d 359, 361 (Ct. App. 1984).  Therefore, the written promissory note, and the other written evidence, is controlling over Vinod’s alleged oral agreement. 

Vinod alleges he intended for Classic to convey its property and assets of Classic to Danny at a later date for a price to be agreed upon.  However, for a resulting trust to be created, the beneficiary of the trust, Danny, was required to pay the monies at the time of the purchase of the property, not at some unspecified future date.  Glover, 268 S.C. at 435, 234 S.E.2d at 489.  In addition, to form a binding contract, there must be mutual manifestation of assent between the parties as to the contract terms, and certain terms, such as price, time, and place, are indispensable and must be set out with reasonable certainty.  McPeters v. Yeargin Constr. Co., 290 S.C. 327, 331, 350 S.E.2d 208, 211 (Ct. App. 1986).  If a contract does not fix a definite price term, there must be a definite method for ascertaining it.  Id.  Therefore, in the present case, because the alleged agreement for Classic to convey its property to Danny did not specify a date, price, or a method for ascertaining the price, it is not binding and is unenforceable. 

We find sufficient evidence establishing an express contract between Danny and Classic for a $250,000 loan.  However, even if the promissory note, confession of judgment, and final order did not document this express contract, we find the evidence shows the existence of an implied contract for repayment.  To have a contract implied by law, there must be a benefit conferred to a party, a realization of that benefit, and an inequitable retention of the benefit.  Myrtle Beach Hosp. Inc. v. City of Myrtle Beach, 333 S.C. 590, 596, 510 S.E.2d 439, 442 (Ct. App. 1998).  Danny conferred a benefit of $200,000 to Vinod.  Vinod realized that benefit by receiving and depositing the money into his account.  Vinod unjustifiably retained the $200,000 without conveying to Danny any valuable consideration.  Implied contracts are similar to restitution, which permits recovery of that amount the defendant has been benefited at the expense of the plaintiff in order to preclude unjust enrichment.  Costa & Sons Constr. Co. v. Long, 306 S.C. 465, 468, 412 S.E.2d 450, 452 (Ct. App. 1991).  Based on an implied contract theory, Danny should recover the $200,000 consideration he paid to Vinod.

As Vinod has not appealed the trial court’s findings regarding the interest to be awarded on the $200,000, the trial court’s findings are the law of the case.  First Union Nat’l Bank of South Carolina v. Soden, 333 S.C. 554, 556, 511 S.E.2d 372, 378 (Ct. App. 1998).  Therefore, we affirm the award of pre-judgment and post-judgment interest. 

CONCLUSION

Based on the above, we find no error of law by the trial judge.  Vinod’s resulting trust defense is unsubstantiated.  All the evidence establishes the $250,000 Danny advanced to Classic in January 1998 was a loan, and no binding contract existed for conveying Classic’s assets to Danny.  Thus, the $200,000 Danny gave to Vinod was not repayment of a loan, but was a loan to Vinod; hence, Danny is entitled to collect the $200,000 from Vinod.  Therefore, the order of the trial court is

AFFIRMED.

HEARN, C.J., ANDERSON and BEATTY, JJ., concur.


[1] We decide this case without oral argument pursuant to Rule 215, SCACR.