Honeycutt v. Citizens National Bank in Gastonia
89 S.E.2d 598
N.C.
1955
Check Treatment
Bobbitt, J.

The ultimate questions for decision are these: 1. Did the plaintiff own all or any part of the property in controversy as of the date of her husband’s death? 2. If so, is she precluded from asserting her claims against defendants, based on such ownership, by her acceptance of benefits under her husband’s will?

A deed to husband and wife, nothing else appearing, vests the title in them as tenants by entirety. Byrd v. Patterson, 229 N.C. 156, 48 S.E. 2d 45, and cases cited. The fact that the husband paid the entire purchase price, standing alone, does not affect the character of the estate vested in husband and wife. Where a husband purchases realty and causes the conveyance to be made to his wife, the law presumes that it is a gift and no resulting trust arises; and to rebut the presumption of gift and establish a resulting trust the evidence must be clear, strong and convincing. Shue v. Shue, 241 N.C. 65, 84 S.E. 2d 302, and cases cited. This well established rule applies with equal force when the husband purchases realty and causes the conveyance to be made to himself and his wife, as tenants by entirety, rather than to the wife as sole owner. In Morton v. Lumber Co., 154 N.C. 278, 70 S.E. 467, the *742 husband paid the purchase price and caused the deed to be made to himself and his wife; and it was held that the title vested in them as tenants by entirety. In Akin v. Bank, 227 N.C. 453, 42 S.E. 2d 518, the husband paid the purchase price and caused the deed to be made to the trustee of a passive trust, for the benefit of himself and his wife; and it was held that, by virtue of our Statute of Uses, G.S. 41-7, the title vested in them as tenants by entirety.

Here there is no evidence to rebut the presumption of gift. Indeed, the Finding of Fact (#3) is that on and prior to 29 January, 1950, “C. E. Honeycutt and his wife, Bright E. Honeycutt, were the owners, as tenants by the entirety,” of the lands here involved.

In passing, we note that a different rule applies when the wife' pays the purchase price in money, as in Deese v. Deese, 176 N.C. 527, 97 S.E. 475, or in land, incident to an exchange of partition deeds, as in Wood v. Wilder, 222 N.C. 622, 24 S.E. 2d 474. But we are not concerned here with the common law and statutory bases for these decisions.

True, C. E. Honeycutt and wife, Bright E. Honeycutt, purported to convey the lands here involved to Rosebro; and Rosebro and wife purported to convey the identical lands to C. E. Honeycutt. The explicit Finding of Fact (#3) is that this transaction was “solely for the purpose of accomplishing an indirect conveyance of the plaintiff’s property to her husband.” Further, the explicit Finding of Fact (#4) is that there was not attached to such purported deed from the Honeycutts to Rosebro “a certificate of a proper probate officer reciting that at the time of its execution the same is not unreasonable or injurious to the rights of the said Bright E. Honeycutt as required by General Statutes of North Carolina, 52-12.” The certificate is solely to the effect that the Honeycutts appeared before the Notary Public and acknowledged their execution of the purported deed.

In the absence of a certificate by the examining officer incorporating a statement of his findings that the conveyance was not unreasonable or injurious to the wife, such purported conveyance was void. Such a judicial or quasi-judicial determination and certificate is indispensable to the validity of a conveyance by a wife to her husband. G.S. 52-12; Best v. Utley, 189 N.C. 356, 127 S.E. 337. Since the purported deed to Rosebro was void, it follows that the purported deed from the Rosebros to C. E. Honeycutt is wholly ineffectual as a conveyance of title.

As stated by Barnhill, J., now Chief Justice: “A married woman cannot convey her real property to her husband directly or by any form of indirection without complying with the provisions of G.S. 52-12. Any manner of conveyance — testamentary devises excepted — otherwise than as therein provided is void.” Ingram v. Easley, 227 N.C. 442, 42 S.E. 2d 624, and cases cited.

*743 The contention that G.S. 52-12 was repealed by Ch. 73, s. 21, 1945 Session Laws, now codified as G.S. 47-116, is without merit. In fact, Section 19 of said 1945 Act re-enacts G.S. 52-12, leaving intact and unimpaired the provisions presently applicable. Subsequently, G.S. 52-12 was amended in respects not material here by Ch. 111, 1947 Session Laws, and again by Ch. 1006, 1951 Session Laws. Suffice it to say, G.S. 52-12 and G.S. 47-116 relate to different subjects. There is no conflict.

As to lands owned by C. E. Honeycutt and wife, Bright E. Honeycutt, as tenants by entirety, when the husband died, the wife, as surviving tenant, became the sole owner. No right, title or interest of any kind passed to the executor for the benefit of the creditors or devisees of the husband. Underwood v. Ward, 239 N.C. 513, 80 S.E. 2d 267; Davis v. Bass, 188 N.C. 200, 124 S.E. 566. The proceeds of sales made by the executor, subsequent to the death of C. E. Honeycutt, as set forth in the Findings of Fact (#13 and #17) are deemed to have the same status as such lands.

As to lands owned by C. E. Honeycutt and wife, Bright E. Honey-cutt, previously sold and conveyed by them, nothing else appearing, the husband and the wife had equal right, as tenants in common, to the proceeds derived from such sales. Wilson v. Ervin, 227 N.C. 396, 42 S.E. 2d 468.

The cash paid as purchase price ($32,230.00) was collected by C. E. Honeycutt, deposited in his personal bank account, and upon his death passed into the hands of the executor. If it be conceded that, upon dissolution of the estate by entirety by their j oint conveyance, the wife, by gift or by contract, might have relinquished her right to one-half the purchase price so collected (see Deese v. Deese, 176 N.C. 527, 97 S.E. 475), the explicit Finding of Fact (#10) is “that no agreement or contract was made at any time between the said C. E. Honeycutt and his wife, Bright E. Honeycutt, prior to his death with reference to the distribution, division or disposal of said funds which totaled $32,230.00, and no portion of said sum was paid over to the said Bright E. Honey-cutt by either C. E. Honeycutt during his lifetime or the said bank as his Executor after his death.” Furthermore, the explicit Finding of Fact (#14) negatives any suggestion that the purchase by C. E. Honey-cutt on 21 September 1948, of the Fairmont Park Property, which prop-ertj was conveyed to C. E. Honeycutt and wife, Bright E. Honeycutt, as tenants by entirety, affects the determination of this controversy. (It is noted that Finding of Fact #10 purports to bring forward paragraph 7 of the Stipulations, but through obvious inadvertence fails to include the $10,000.00 cash payment by the Gastonia Brush Company.)

*744 The balance purchase price notes, for $25,000.00 and $1,037.50, secured by deeds of trust on the respective properties, were made payable to “C. E. Honeycutt and wife, Bright E. Honeycutt.” Subsequent to the death of C. E. Honeycutt, the executor collected the $25,000.00 note. The $1,037.50 note remains unpaid, but the present judgment does not cover this item.

Our conclusion is that, when C. E. Honeycutt died, plaintiff, in her own right, as against the estate of C. E. Honeycutt, owned in fee the unsold portion of the lands here involved and a one-half interest in the money and notes received from the lands previously sold and conveyed , by their joint deeds.

Appellants seek to invoke the doctrine of equitable election. They contend that by her acceptance of benefits under her husband’s will, plaintiff is estopped from claiming against his estate that which otherwise belongs to her. The court below held that the doctrine of equitable election has no application to the facts of this case. We agree.

The right to dispose of property by will is statutory. Pullen v. Comrs., 66 N.C. 361; Alexander v. Johnston, 171 N.C. 468, 88 S.E. 785. A testator may dispose of property owned by him at the time of his death, which otherwise would descend to his heirs or be distributed to his next of kin. G.S. 31-40.

The doctrine of equitable election is in derogation of the property right of the true owner. Hence, the intention to put a beneficiary to an election must appear plainly from the terms of the will. Lamb v. Lamb, 226 N.C. 662, 40 S.E. 2d 29; Bank v. Misenheimer, 211 N.C. 519, 191 S.E. 14; Rich v. Morisey, 149 N.C. 37, 62 S.E. 762. Ordinarily, where the testator attempts to devise specific property, not owned by him, to a person other than the true owner, and provides other benefits for the owner of such specific property, such beneficiary is put to his election. Sandlin v. Weaver, 240 N.C. 703, 83 S.E. 2d 806; Trust Co. v. Burrus, 230 N.C. 592, 55 S.E. 2d 183. Even so, if it appears that the testator erroneously' considered the specific property so devised to be his own, no election is required. Byrd v. Patterson, supra; Benton v. Alexander, 224 N.C. 800, 32 S.E. 2d 584; Elmore v. Byrd, 180 N.C. 120, 104 S.E. 162. An election is required only when the will confronts a beneficiary with 'a choice between two benefits which are inconsistent with each other.

Here the testator devises to his wife, “my right, title and interest and estate which I may have in and to our residence property located at 1133 East Franklin Avenue, Gastonia; N. C.” (This property is not the subject of controversy.) He bequeathed to his wife the proceeds of his insurance policies and “all of my personal effects,” etc. Thereupon, he bequeathed and devised “all of the residue of my property of every *745 nature and kind and wheresoever situate” to defendant bank as trustee, to be disposed of as directed. (Italics added.)

The testator,’in express terms, disposes only of property owned by him. Lamb v. Lamb, supra. The succinct statement of Barnhill, J., now Chief Justice, in Byrd v. Patterson, supra, is applicable here: "Her (the widow’s) property was not devised to another so as to compel her to decide whether she would stand on her rights or abide by the terms of the will.”

The case of Elmore v. Byrd, supra, is directly in point. There the wife purported to convey her separate property to her husband, but the deed was void for failure to meet the requirements of Rev. 2107, now G.S. 52-12. Upon the husband’s death, he devised “the lands of which he was seized,” to his widow, for life, with remainder to others; and bequeathed his personal property to her upon like terms. It was held that the realty described in the void deed was hers, in her own right, and that the doctrine of equitable election did not apply.

As in the Elmore case, it appears probable that the testator made his will under the mistaken belief that the realty described in the void deed was owned by him. Too, it appears probable that the wife thought the said realty was owned by her husband by virtue of the void deed. The testator might have made a different will had he been aware of the true status of the property. On the other hand, had the widow been confronted with the necessity of making an election she might have dissented from the will. These are matters in the realm of speculation. The determinative fact is that the will itself, which is the only basis on which the doctrine of equitable election may be invoked, contains no provision that manifests an intent that an election was required.

For reasons stated, the assignments of error are overruled and the judgment is

Affirmed.

WinborNE, J., took no part in the consideration or decision of this case.