178 S.E. 579 | N.C. | 1935
The Wilmington Furniture Company is a corporation of North Carolina, and was organized in 1905, and since the date of organization engaged in the retail furniture business in Wilmington, North Carolina. The capital stock was $14,000, represented by one hundred and forty shares of the par value of $100.00 per share. Henderson Cole, prior to February, 1916, had acquired one hundred and thirty-seven of said shares, and on said date caused to be issued to his wife, Maggie B. Cole, forty-one shares, and ten shares each to eight of his children, and fifteen shares to a son, Henderson Cole, Jr.
Prior to 17 May, 1916, the American Bank and Trust Company of Wilmington was the owner of certain property known as 208 North Front Street, and at said time the said property was subject to the lien of a certain mortgage deed, dated 27 August, 1915, and duly recorded. Said mortgage deed was made by the Hanover Trust Company to the Massachusetts Mutual Life Insurance Company to secure an indebtedness of $20,000, evidenced by a note of said Hanover Trust Company. Thomas E. Cooper, president of the American Bank and Trust Company, testified at the trial: "If my memory serves me correctly, Mr. Cole, I believe, was secretary and treasurer or president of the Wilmington Furniture Company and the dominating factor. I sold him the property, as president of the bank, for $40,000. He was to pay $20,000 and assume responsibility for a mortgage which was given to some life insurance company. He was to pay $2,500 in cash and give a second mortgage for $17,500. (Q.) Did he tell you at the time for what purpose he was purchasing the property? (A.) Yes, sir. (Q.) What? (A) For the Wilmington Furniture Company. In pursuance to our agreement, Mr. Cole paid the $2,500 which he was to pay in cash and executed the deed of trust for $17,500. I think he paid $500 cash the day we agreed to sell it to him and paid $2,000 some days later. The *842 check you hand me, being No. 6377, amount $500.00, on the Wilmington Furniture Company, H. Cole, Secretary and Treasurer, dated 5 June, 1916, payable to the order of American Bank and Trust Company, was for the initial $500.00 payment to close the transaction. . . . The check which you hand me for $2,000.00, signed by the Wilmington Furniture Company, H. Cole, Secretary and Treasurer, . . . completed the $2,500 to be paid on the deal. . . . If he had requested me to give the deed to the Wilmington Furniture Company and take the deed of trust back, I don't think I would have had the deed of trust drawn that way. . . . I don't think I would have accepted it. I probably would have done it if he had demanded and insisted upon it, because, if we had deeded the property to the Wilmington Furniture Company and they had executed a mortgage it would have been given to the commercial agencies, and in that way it would probably have caused them to lose their rating in Bradstreet and Dun; and it was to my interest and the bank's interest that Mr. Cole keep up his credit, and so Mr. Cole could give a mortgage and it would not impair the furniture company."
There was evidence tending to show that the notes for $17,500, evidencing the balance of the purchase price to be paid to the American Bank and Trust Company, "were charged to the Wilmington Furniture account and carried as a liability against them and not as against Mr. Cole. In other words, the entire transaction was handled as the Wilmington Furniture Company, with the approval of Mr. Cole."
Henderson Cole was a director of the American Bank and Trust Company of Wilmington, which was afterwards merged into the Commercial National Bank. Said Cole, together with other directors of said bank, on 18 October, 1922, procured the intervener, Royal Indemnity Company, to execute a depository bond to the Treasurer of North Carolina in the sum of $25,000. These directors also executed an indemnity agreement to protect said bondsman. As an inducement to the surety company Cole signed a financial statement representing that his net worth was $104,000, and including in his list of assets the equity in a store building known as No. 208 N. Front Street. In like manner Cole and the other directors signed an indemnity agreement indemnifying the intervener, Fidelity and Deposit Company of Maryland, in executing a depository bond of $15,000 with the Federal Land Bank of Columbia. The interveners, representing the Commercial National Bank, set up claims upon notes of $4,200, and $2,443.74, and $5,000.
Henderson Cole died on 15 December, 1922. After his death the plaintiff procured a public accountant to audit the business in the year 1922, and this audit tended to show that the property in controversy belonged to the estate of Cole, and an item of rent for the property *843 amounting to $5,000 a year was set up in the statement. The said auditor also installed a new set of books for the plaintiff and made an entry on the general ledger as of 1 January, 1923, showing a credit balance in favor of the Cole estate in the amount of $1,004.14.
Thereafter certain income tax reports were made by different field agents of the Government and the Craft report tended to show that the property in controversy was treated by the plaintiff as belonging to the estate of Henderson Cole, and this report was approved by the president of the plaintiff company.
Subsequent reports for the years 1919 to 1922 disclose that the said brick store building was listed as an asset of the company, and there was evidence that income taxes were finally paid on the basis that the plaintiff corporation owned the store building.
Thereafter Maggie B. Cole, administratrix, filed an inventory with the clerk as required by statute and included in such inventory as an assent of the estate of Henderson Cole one lot and store at 208 N. Front Street. Subsequent reports of the administratrix contain the same declaration.
In November, 1924, Maggie B. Cole, widow of the deceased, filed a petition for dower, alleging that at the time of his death her husband, Henderson Cole, owned a store building known as 208 N. Front Street. This dower proceeding was never completed.
On 7 June, 1923, the plaintiff instituted this suit against the defendants, alleging in substance that it had paid the entire purchase price of the property, and at the time the property was bought Henderson Cole created, by agreement with the owners of the property, a trust whereby the plaintiff was to become the beneficial owner of the property. Voluminous pleadings were filed by all parties and the matter was heard by a referee. Much evidence was offered before the referee, who conducted a number of hearings and who afterwards submitted a clear and comprehensive report containing detailed findings of fact and his conclusions of law thereon. The parties field exceptions to the report, proffering pertinent issues and demanding a jury trial.
The cause came to trial at the December Term, 1933, before Cranmer, J., who submitted the following issues:
1. "Was the real property described in the pleadings as `208 North Front Street' purchased by Henderson Cole, with the understanding and agreement that he would buy the same for the Wilmington Furniture Company, and hold same in trust for it?"
2. "Did plaintiff furnish the consideration for the conveyance to Henderson Cole of the property described in the pleadings?"
3. "Is the plaintiff stopped from claiming title to the said property as against the Royal Indemnity Company, the Fidelity and Deposit *844 Company, and Joseph A. Gamble, received of the Commercial National Bank, as alleged in the answer?"
The jury answered the first issue "Yes"; the second issue "Yes"; and the third issue "No."
From judgment upon the verdict the interveners appealed. The three primary and determinative questions of law presented by the appeal are:
1. Was there competent evidence of a parol trust?
2. Was such trust abandoned and the title to the property revested in Henderson Cole prior to his death?
3. Is the plaintiff precluded by the principle of estoppel from claiming title to the property?
The various methods of creating trusts were first epitomized in Wood v.Cherry,
The chief evidence as to the declarations of Henderson Cole at the time of transmission of legal title to 208 N. Front Street was contained in the testimony of Thomas E. Cooper, president of the grantor bank. Mr. Cooper testified over objection that Henderson Cole told him at the time of acquiring the title that it was his purpose to purchase the property for the plaintiff Wilmington Furniture Company. The interveners *845 assert that the witness should not have been allowed to state the "purpose" of Cole in purchasing the property. Obviously, the word was used to designate for whom Cole was acting in the transaction, and hence the declaration was competent.
While there was abundant evidence upon which the jury might have found that no parol trust existed, nevertheless there was competent evidence of such existence, and the trial judge properly submitted the issue to the jury. Therefore, the first question must be answered "Yes."
The jury also found in response to the second issue, upon competent evidence, that the plaintiff furnished the consideration for the conveyance, and it is thoroughly settled that the payment of the purchase money raises a resulting trust in favor of him who furnishes or pays the purchase money, "unless a contrary intention or a contrary presumption of law prevents." Tire Co. v. Lester,
The second question of law raises the question as to the evidence or means of proving or establishing the abandonment of a trust. The plaintiff corporation was owned and controlled by the family of Henderson Cole. He organized the corporation, managed it, directed its policy, financed its operations when necessary, and expanded it by wise management from its infancy until it became an important business concern. There is no evidence in the record that Henderson Cole was indebted to anybody at the time he acquired title to the property, nor was there evidence that the corporation was insolvent at that time, or at any subsequent time.
The interveners apparently proceeded upon the theory that Mr. Cole, during his lifetime, considered the property as his own and dealt with it accordingly, and that after his death, when it was discovered that he had signed indemnity agreements in the sum of $40,000 to protect the interveners in giving depository bonds, his heirs at law, who were the stockholders of the corporation, undertook "to get their fodder out of the rain" by setting up a parol trust, so as to wrench the title of the property out of Henderson Cole and put it in the corporation, where the interveners could not reach it. The jury could have inferred the facts to have been as the interveners contended, but it is apparent that in answering the first and second issues as shown by the record that it did not follow or adopt the theory of the interveners.
The interveners further contend that, even if the title was originally vested in the plaintiff corporation, it abandoned the title resulting in revesting the same in Henderson Cole. This idea of abandonment is based upon (a) payment of rent to Cole during his lifetime for five *846 months preceding his death in 1922; (b) a certain payment of $600.00 on the mortgage indebtedness of the property, which sum was apparently refunded to the plaintiff by Cole; (c) various checks for salary to Cole as an officer of the corporation; (d) various checks issued by the corporation and placed to the credit of Cole.
The pertinent decisions in this State are to the effect that an abandonment may be express or implied. Discussing the subject in Banks v.Banks,
Did the corporation intend to abandon the title? Could more than one inference be drawn by reasonable minds from the various dealings between Cole and the corporation? Upon these questions the evidence was conflicting. Therefore, abandonment became an issue of fact to be determined by a jury. Harper v. Battle,
The third proposition of law invoking the principle of estoppel stands practically upon the same footing as the contention with respect to abandonment. After the death of Mr. Cole a new system of bookkeeping was inaugurated by the plaintiff and a statement of the business dealings made, which did not include the land in controversy as an asset of the corporation, and which showed a balance due by the corporation to the estate of Cole in the sum of $1,004.14. There were also certain income tax reports submitted by the corporation, which tended to show that at one time the title to the property was deemed and considered as a part of the estate of Henderson Cole and at another time the property of the corporation. In interpreting such evidence it must be borne in mind that the plaintiff corporation was under no obligation to the interveners, and that these book entries and income tax reports were made *847
after the death of Mr. Cole and after the interveners had assumed liability on the depository bonds hereinbefore mentioned. There was no issue of fraud or bad faith, and the case was not tried upon such theory. Manifestly, the interveners were not misled nor induced to extend credit to Henderson Cole upon the strength and credibility of such entries and dealings. See Wellsv. Crumpler,
(4) The party estopped "must intend or expect that his conduct or representations will be acted on by the party asserting the estoppel or by the public generally."
(5) "The representations or conduct must have been relied and acted on by the party claiming the benefit of estoppel."
(6) "The party claiming the benefit of estoppel must have so acted, because of such representations or conduct, that he would be prejudiced if the first party be permitted to deny the truth thereof."
The jury, in answer to the third issue upon a correct charge, found that the plaintiff was not estopped as against the interveners. Obviously, a different situation would be presented if the controversy was between the plaintiff and the heirs at law of the estate of Henderson Cole.
There are one hundred and thirteen exceptions and a voluminous record, and it would be wholly impossible to undertake to discuss all of these exceptions. A careful and patient examination of the entire record leads the Court to the conclusion that the question has been fairly tried, according to correct principles of law, and the jury, in the face of sharp divergence and irreconcilability of evidence, adopted the theory and contentions of the plaintiff.
Affirmed.