120 N.C. 362 | N.C. | 1897
Lead Opinion
This is a suit by the creditors of Alspaugh to subject to the payment of Alspaugh’s debts certain land conveyed to Hine by Alspaugh, as administrator of Gr. "W. Norwood, by deed in fee dated January 16, 1881, and recorded in 1893. The plaintiffs allege that while this deed was in form an absolute deed, it was, in fact, merely a security for money advanced by Hine to Alspaugh; and that Hine was never in truth the purchaser of the property, having never paid one dollar of the consideration recited in the deed, but that the same was paid by Alspaugh; that the deed was made upon the secret trust that Hine should r'econvey to Alspaugh upon the payment of the loan; and that, therefore, the said deed was incapable of registration and void as to creditors. None of the debts herein sued on were incurred before 1891; and none were reduced to judgment before May, 1894. Upon the execution of the deed of 1891, Hine loaned Alspaugh $1,200 and also $2,000 on the 8th day of February, 1890, when he executed to [ Alspaugh a bond for title to convey to Alspaugh, upon the 1 payment of the said loans then aggregating $3,200, the land conveyed to Hine by said deed. At divers times on and prior to January 8, 1894, Hine paid to or for Alspaugh sums of money which, with the $3,200, aggregated over $6,000, and on said day Hine and Alspaugh came to a full settlement, whereby Hines surrendered to Alspaugh all said evidences of debt, in consideration of which Alspaugh relinquished all interest in the land and agreed to surrender to Hine his bond for title. This bond was actually surrendered in January, 1896, being regarded in the interim by both parties as fully satisfied and cancelled. Upon the trial the
IVe think there was no error in the intimation of his Honor, although we cannot agree with him in treating the deed of January 16, 1881, as a mortgage. It was not intended as a mortgage, and had none of its essential features. Littleton, Section 332, says: “If a feoffment be made upon such condition that if the feoffor pay to the feoffee, at a certain day, &c., forty pounds of money, then ■the feoff or may re enter; in this case the feoffee is called tenant in mortgage.'' “A mortgage at common law was a conveyance of land, sometimes in fee and sometimes of a lesser estate, with a stipulation called a clause of defeasance, ty which it was provided that in case a certain sum of money were paid by the feoffor to the feoffee, on a day named, the conveyance should be void, and either the estate should by virtue of the defeasance, revest in feoffor, or he should be entitled to call upon the feoffee for a recon-veyance of the same.” Bispham’s Eq. Vol. 1, Section 150. Practically the same definition is. given in Pingrey on Mortgages, Vol. 1, Section 6. In all definitions of a mortgage the estate reverts to the grantor or feoffor Fetter’s Eq.,
In this case the deed was made by said Alspaugh as administrator of the estate of G-. W. Norwood to said Bine, reciting that, by virtue of an order of the Superior Court of Forsyth county and after due notice, he sold the land at public auction to said Hine, he being the highest bidder, at the price of $235. It is alleged in the complaint that one Tise bid off the land, but this fact is neither positively admitted nor proved, and in any event is immaterial, as he sets up no claim whatever. Alspaugh, as administrator, and Alspaugh, as an individual, are entirely distinct personalities in law. If, as administrator, he sold to himself, or to a stranger to hold in trust for himself, his deed was voidable, but not void, and he could be held to account only by the heirs at law or creditors of Norwood. This deed was not intended as a mortgage and cannot be construed as such, for in the event of its defeasance the land would revert to the heirs of Norwood. The legal title never was in Alspaugh, but remained in the heirs of Nor-wood until it vested in Hine by operation of the deed made by Alspaugh merely as the hand of the court. It cannot be said that the legal title to land sold under execution ever vests in the Sheriff, but in proper cases his deed is valid because he sells as the agent of the law under the mandate of the court. If he sells to another for the benefit of himself, his deed therefor, however tainted, can in no sense be construed into a mortgage, because in case of defeasance the land could never revert to him.
The deed of January 16, 1881, made by Alspaugh, as administrator, was intended to convey to Hine a fee simple estate in the land, and did convey such an estate, subject
The rule as to' the kind of resulting trusts, herein considered, almost universally adopted by text writers and approved by the courts, is that of Lord Chief Baron Eyre, in
Resulting trusts, arising by operation or construction of law, do not come within the Statute of Frauds, and may be proved by parol. Lew in, supra, p. 667; Fetter, supra, Section 128; Bispham, supra, Section 80; Am. & Eng. Enc. Vol. 10, pp. 25 and 26; Foy v. Foy, 3 N. C., 296; Shelton v. Shelton, 58 N. C., 292; Riggs v. Swan, 59 N. C., 118; Whitfields. Gates, Ibid, 136; Shields v. Whitaker, 82 N. C., 516. In fact, in this State they are generally known as “parol trusts.” 6 N. C., Digest, p. 466; 7 Ibid, p. 431, and cases cited. As such trusts are incapable of registration they cannot be affected by the registry laws.
At the time this trust arose Alspaugh does not appear to have awed any one but Hine. Even if there had then been outstanding debts of Alspaugh, Hine, holding the legal title, together with an equitable lien upon the resulting trust, occupied a strongly defensive position.
This equity could not have been sold under execution, as it was not a pure and unmixed trust. Everett v. Ddby, 104 N. C., 479; Love v. Smathers, 82 N. C., 369. In Hinsdale v. Thornton, 75 N. C., 381, Pearson, C. J., says: “Where one has an estate in equity,' viz., a trust estate, which enables him to call for the legal estate without further condition, save the proof of the facts which establish
While an equitable interest in land may not be transferred by parol, it may be abandoned or released to the holder of the legal title by matter in pais, provided such intention of the parties is clearly shown./ Brown on Statute of Frauds, p. —; Greenleaf Ev., Vol. 1, 302; 2 Story Eq. Jur., 770; Cummming v. Arnold, 3 Met., 494; Faw v. Whittington, 72 N. C., 321; Miller v. Pierce, 104 N. C.. 389; Falls v. Carpenter, 21 N. C., 237; Banks v. Banks, 77 N. C., 186; Herren v. Rich, 95 N. C., 500; Holden v. Purefoy, 108 N. C., 163; Taylor v. Taylor, 112 N. C., 27; Fortune v. Watkins, 94 N. C., 304. In McDougald v. Graham, 75 N. C., on p. 316, Pearson, C. J., says: “We conclude that by force of sale and the cancellation of the notes and title bond, the defendant became the absolute owner of the land.” In Taylor v. Taylor, 112 N. C., on p. 30, Avery, J., says: “†\ here the vendee enters under a bond for title and has executed notes for the purchase money, which are held by the vendor, the surrender of bond and notes by the holders to the maker and obligor, respectively, has been repeatedly declared such a renunciation as would annul the contract of purchase.”
This settlement, being in entire good faith, extinguished all of Alspaugh’s equitable rights in said property and, by annexing the beneficial ownership to the legal title, vested in Hine a fee simple estate, certainly as against any of the plaintiffs. As we have seen, unless the deed of Alspaugh as administrator conveyed a fee simple, then the title remained in the heirs of Norwood. If, to its character as a fee simple deed, we superadd the qualities cf a mortgage, we are forced to the following remarkable conclusions:
1. That the same instrument can be the deed of one party and the mortgage of another; 2. That a mortgage can be made by one having neither the legal nor the equitable title; 3. That a presumed defeasance can revest land where it was never vested, and can cause it to revert to one who never owned it. 'We do not feel called upon to adopt so novel and strained a construction simply to create a constructive fraud in law where it is admitted that no actual fraud exists in fact.
Dissenting Opinion
dissenting: On the 16th of October, 1879, the defendant, Alspaugh, as administrator of Norwood, sold the real estate in controversy at the price of $235, at which sale the plaintiffs allege that one Tise bid off the property for the defendant. Alspaugh. This property was a vacant lot in the city of Winston at the time of the sale. And it is alleged and not denied that Alspaugh took charge
This, to my mind, so clearly makes this deed from Al-spaugh to Hiñe a mortgage, without a clause of defeasance, that it would seem almost unnecessary to cite authorities to show that it is. But as it is not admitted that it is a mortgage, indeed, as it is contended that it is not a mortgage, I will cite some of the authorities which, I think, sustain my position that it is a mortgage.
Where it is shown that the conveyance is a security for debt, and that was the real object of the conveyance, it is a mortgage. Bispham, Section 154.
If the conveyance is to secure a debt, it is a mortgage, whether it is absolute in form or has a clause of defeasance. 3 Pomeroy Eq. Jur., Section 1192, note 1.
An absolute deed is a mortgage if it is a security for debt. 3 Pomeroy, supra, Section 13 96.
The true test as to whether it is a mortgage, is, whether it was given as a security for debt. “Once a mortgage, always a mortgage.'’ Pomeroy, supra, Section 1193. At the time of making a mortgage, the mortgagor cannot waive his right to redeem. Bispham, Section 153. ‘ ‘Once a mortgage, always a mortgage.'’ Ana if once a mortgage, the parties cannot, by any stipulation between them, “no matter how explicit,’’ change it from a mortgage to an absolute conveyance. Pomeroy, Section 1194.
An absolute deed made as a security for money is, iu effect, a mortgage, and cannot be registered, and is void as to creditors. Gulley v. Macy, 84 N. C., 434; Gregory v. Perkins, 15 N. C., 50.
And the mortgagor and mortgagee, or grantor and grantee (if you choose to call them so), cannot afterwards, by any agreement between them, change this deed into an absolute conveyance. They may agree that the grantee shall surrender his debts in full payment and satisfaction of the fee simple interest, and this will not change the estate into an absolute estate. And though the deed be redelivered, still the transaction will be fraudulent and void as to the creditors of the grantor at the time or before this agreement took place, by which the grantee agreed to surrender his debts and hold the deed as an absolute conveyance. Halcombe v. Ray, supra. Indeed, every phase of the case now under consideration is discussed and decided by this strong, clear, ringing opinion of Chief Justice Ruffin. And before passing upon the case now before the court we should read and consider well the opinion in Halcombe v. Ray.
The intelligent Judge who .tried this case below called this conveyance, from the defendant, Alspaugh, to the defendant, Hiñe, a “mortgage” and treated it as such, although he held that the plaintiffs were not entitled to recover. "When it gets here and is considered under the light of authorities which the court below probably did not have at hand, it is found that it cannot be sustained if it is called a mortgage. And, therefore, it is sought to sustain this transaction between Alspaugh and Hine by calling it a trust. But whether you call it a mortgage or a trust, the facts and the transaction are the same. It is still a secu-
The doctrine stated in these cases is not disputed, but it has no application here. The doctrine of these cases is that where A buys land and has the deed made to B, with a parol trust in favor of 0, this is good; for the reason that such conveyances are not within the Statute of Frauds and no creditors are interested. And so is this deed, from
The defendants also attempt to distinguish this case from Halcombe v. Ray, Gregory v. Perkins and Gulley v. Macey, upon the ground that Alspaugh did not have the legal title, which they say was in the heirs of Norwood. Bat if he did not have the legal title, he had bought it through Tise and had paid for it in 1880, as his report shows. And this gave him an equitable estate in the lot, and no one is interested in the legal title but Norwood’s heirs, and they are not complaining. Indeed, it must be supposed that they have ratified the sale made, and the purchase money paid seventeen or eighteen years ago, and no complaint made by them until now. This deed put the legal title in Hine, even as against Norwood’s heirs. Highsmith v. Whitehurst, at this term. But if Alspaugh only had the equitable title, he had the right to mortgage this. Bank v. Clapp, 76 N. C., 482: White v. Jones, 88 N. C., 166.
But there is another reason why the defendants cannot avail themselves of this plea, even if it could do them any good, and I do not think it could. And that is this: They are estopped to do so. The defendant, Alspaugh, cannot do so. He cannot defeat the claims of creditors, upon the ground that he is not the legal owner of the property. In fact he makes no such defence. He does not even file an answer. Hine cannot do so, as he holds under Alspaugh and agreed to reconvey to him upon Alspaugh’s paying
The plaintiffs put in evidence the report of Alspaugh, showing that Tise was the purchaser of the lot at the price of §235, and Alspaugh’s settlement of the Norwood estate showing that Alspaugh had charged himself with this sale and had settled for the same. And the undisputed evidence was that all the debts of the plaintiffs were made before the 8th of January, 1894, the alleged date of settlement, these debts having been made in 1891, 1892 and 1893. This being so, they were brought within the rule laid down in Holcombe v. Ray, and the plaintiffs were entitled to have the deed from Alspaugh to Hine, dated January 16, 1881, declared void as to their debts. Upon the allegations in the complaint and the admissions in the answer, the evidence of the defendant, Hine, and the undisputed evidence as to the date of the plaintiff’s debts, it was the duty of the Judge to charge the jury that, if they believed the evidence, they should find the first, third and fourth issues in the affirmative.