Cowart v. Whitley

Court of Appeals of North Carolina

Cowart v. Whitley

251 S.E.2d 627, 39 N.C. App. 662, 1979 N.C. App. LEXIS 2538

CourtCourt of Appeals of North Carolina

DecidedFebruary 6, 1979

Docket7820SC117

StatusPublished

Cited by6 cases

This text of 251 S.E.2d 627 (Cowart v. Whitley) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Cowart v. Whitley, 251 S.E.2d 627, 39 N.C. App. 662, 1979 N.C. App. LEXIS 2538 (N.C. Ct. App. 1979).

Pincite

Opinion

*664 VAUGHN, Judge.

The judgment must be reversed unless the evidence discloses that, as a matter of law, plaintiffs claim is barred by the statute of limitations. Any contradictions in the evidence must be resolved in favor of plaintiff on defendants’ motion for a directed verdict.

The action was brought, pursuant to G.S. 39-15, to set aside the conveyance made in March of 1970 on the grounds of fraud. The action is subject, therefore, to a three-year statute of limitation. The cause of action, however, “shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.” G.S. 1-52(9). This statute is to be interpreted as meaning that the period of limitation begins to run when the fraud is known or should have been discovered in the exercise of ordinary diligence. Ewbank v. Lyman, 170 N.C. 505, 87 S.E. 348 (1915); Peacock v. Barnes, 142 N.C. 215, 55 S.E. 99 (1906). As stated by Chief Justice Stacy, “[a] party having notice must exercise ordinary care to ascertain the facts, and if he fail to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired, had he made the necessary effort to learn the truth of the matters affecting his interests.” Blankenship v. English, 222 N.C. 91, 92, 21 S.E. 2d 891, 892 (1942).

There is clearly a factual controversy as to when plaintiff had actual knowledge of the allegedly fraudulent conveyance. Plaintiff says it was in May of 1976, while defendants say it was in 1970. Obviously the directed verdict could not have been entered on the basis of actual knowledge by plaintiff. The next question, therefore, is whether the evidence compels the conclusion that plaintiff, as a matter of law, should have discovered the fraud more than three years prior to the time this suit was started. Consideration of that question, of course, requires that the evidence be considered in the light most favorable to plaintiff. When the evidence is viewed in that light, we conclude that it presented a factual question for resolution by the jury. Under the facts of this case, the mere registration of the deed to the defendant corporation cannot be said to be sufficient to start the running of the statute of limitations on plaintiff’s claim. Elliott v. Goss, 250 N.C. 185, 108 S.E. 2d 475 (1959); Vail v. Vail, 233 N.C. 109, 63 S.E. 2d 202 (1951); Tuttle v. Tuttle, 146 N.C. 484, 59 S.E. *665 1008 (1907). Whether there are other circumstances that should have put plaintiff on notice, prior to the return of the execution indicating that the Whitleys had no property upon which to levy, is a question for resolution by the trier of fact.

The judge also erred when he ordered that the notice of Lis Pendens be cancelled. The statute provides that, upon proper application, the court may cancel the Lis Pendens after the action “is settled, discontinued or abated.” G.S. 1-120. The result of plaintiff’s timely appeal is that his litigation is still pending.

Reversed.

Judges MARTIN (Robert M.) and MITCHELL concur.

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*664 VAUGHN, Judge.

The judgment must be reversed unless the evidence discloses that, as a matter of law, plaintiffs claim is barred by the statute of limitations. Any contradictions in the evidence must be resolved in favor of plaintiff on defendants’ motion for a directed verdict.

The action was brought, pursuant to G.S. 39-15, to set aside the conveyance made in March of 1970 on the grounds of fraud. The action is subject, therefore, to a three-year statute of limitation. The cause of action, however, “shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.” G.S. 1-52(9). This statute is to be interpreted as meaning that the period of limitation begins to run when the fraud is known or should have been discovered in the exercise of ordinary diligence. Ewbank v. Lyman, 170 N.C. 505, 87 S.E. 348 (1915); Peacock v. Barnes, 142 N.C. 215, 55 S.E. 99 (1906). As stated by Chief Justice Stacy, “[a] party having notice must exercise ordinary care to ascertain the facts, and if he fail to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired, had he made the necessary effort to learn the truth of the matters affecting his interests.” Blankenship v. English, 222 N.C. 91, 92, 21 S.E. 2d 891, 892 (1942).

There is clearly a factual controversy as to when plaintiff had actual knowledge of the allegedly fraudulent conveyance. Plaintiff says it was in May of 1976, while defendants say it was in 1970. Obviously the directed verdict could not have been entered on the basis of actual knowledge by plaintiff. The next question, therefore, is whether the evidence compels the conclusion that plaintiff, as a matter of law, should have discovered the fraud more than three years prior to the time this suit was started. Consideration of that question, of course, requires that the evidence be considered in the light most favorable to plaintiff. When the evidence is viewed in that light, we conclude that it presented a factual question for resolution by the jury. Under the facts of this case, the mere registration of the deed to the defendant corporation cannot be said to be sufficient to start the running of the statute of limitations on plaintiff’s claim. Elliott v. Goss, 250 N.C. 185, 108 S.E. 2d 475 (1959); Vail v. Vail, 233 N.C. 109, 63 S.E. 2d 202 (1951); Tuttle v. Tuttle, 146 N.C. 484, 59 S.E. *665 1008 (1907). Whether there are other circumstances that should have put plaintiff on notice, prior to the return of the execution indicating that the Whitleys had no property upon which to levy, is a question for resolution by the trier of fact.

The judge also erred when he ordered that the notice of Lis Pendens be cancelled. The statute provides that, upon proper application, the court may cancel the Lis Pendens after the action “is settled, discontinued or abated.” G.S. 1-120. The result of plaintiff’s timely appeal is that his litigation is still pending.

Reversed.

Judges MARTIN (Robert M.) and MITCHELL concur.

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Bluebook (online)

251 S.E.2d 627, 39 N.C. App. 662, 1979 N.C. App. LEXIS 2538, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cowart-v-whitley-ncctapp-1979.

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