Hare v. . Weil

196 S.E. 869, 213 N.C. 484

• Court: Supreme Court of North Carolina
• Decided: May 4, 1938
• Status: Published

Opinion

Winborne, J.

On the factual situation presented by the record on this appeal, we hold that the judgment as of nonsuit was properly entered.

It is well settled in this jurisdiction that the cestui que trust has the right to buy at the trust sale unless fraud or collusion is alleged or proved. Monroe v. Fuchtler, 121 N. C., 101, 28 S. E., 63; Hayes v. Pace, 162 N. C., 288, 78 S. E., 290; Winchester v. Winchester, 178 N. C., 483, 101 S. E., 25; Simpson v. Fry, 194 N. C., 623, 140 S. E., 295; Bunn v. Holliday, 209 N. C., 351, 183 S. E., 278; Hill v. Fertilizer Co., 210 N. C., 417, 187 S. E., 577; Bank v. Hardy, 211 N. C., 459, 190 S. E., 730.

In the present case there is no allegation of fraud or collusion in the foreclosure sale. On the contrary, the plaintiffs affirm the sale, and allege that defendants bought at the sale under a parol trust agreement to hold the land for them.

It is uniformly held to be the law in this State that where one person buys land under a parol agreement to do so and to hold it for another until he repays the purchase money, the purchaser becomes a trustee for the party for whom he purchased the land. Equity will enforce such an agreement. Cohn v. Chapman, 62 N. C., 92; Cobb v. Edwards, 117 N. C., 244, 23 S. E., 241; Owens v. Williams, 130 N. C., 165, 41 S. E., 93; Avery v. Stewart, 136 N. C., 426, 48 S. E., 775; Allen v. Gooding, 173 N. C., 93, 91 S. E., 694; Peterson v. Taylor, 203 N. C., 673, 166 S. E., 800.

In Owens v. Williams, supra, Furches, C. J., said: “Whenever land is conveyed to one party under an agreement that he is to hold it for another, he becomes a trustee, whether this agreement is made at the time of the conveyance or is made before, and the land is conveyed in pursuance of said agreement. This is an express trust and an equitable trust.” Holden v. Strickland, 116 N. C., 185; Sykes v. Boone, 132 N. C., 199, 43 S. E., 645; Lutz v. Hoyle, 167 N. C., 632, 83 S. E., 749; Allen v. Gooding, supra; Rush v. McPherson, 176 N. C., 562, 97 S. E., 613.

Where purchase has been made at public or judicial sale, and the purchaser who paid the money out of his own funds agreed to hold the land subject to the right of the person, whose land he bought, and to reconvey the legal title upon repayment of his outlay, it has been held generally in this State that a valid parol trust is created in favor of the former owner of the land. Cobb v. Edwards, supra; Owens v. Williams, supra; Rush v. McPherson, supra; Cunningham v. Long, 186 N. C., 526, 120 S. E., 81.

Parol trust does not require a consideration to support it. If the declaration is made at or before the legal estate passes, it will be valid even in favor of a mere volunteer. Pittman v. Pittman, 107 N. C., 159, 12 S. E., 61; Blackburn v. Blackburn, 109 N. C., 488, 13 S. E., 937; Sykes v. Boone, supra.

Applying these principles to the facts of the present case, and conceding that there is sufficient evidence upon which to base a parol trust, we are of opinion, and so hold, that the evidence on this appeal clearly shows that the parol trust, if any existed, has been abandoned or released to the defendants by the acts and conduct of the plaintiffs. In Gorrell v. Alspaugh, 120 N. C., 362, 27 S. E., 85, Douglas, J., said: “While an equitable interest in land may not be transferred by parol, it may be abandoned or released to holder of the legal title by matter in pais— provided such intention is clearly shown.” Wells v. Crumpler, 182 N. C., 350, 109 S. E., 49. In Lewis v. Gay, 151 N. C., 168, 65 S. E., 907, the Court said: “Parties may by parol rescind, or by matter in pais abandon” rights in land.

In 65 C. J., 955, it is stated: “A cestui que trust, or one claiming to be such, who is competent to act for himself, may be estopped, or waive his right, to enforce a trust in his favor by words or acts on his part which, expressly or by implication, show an intention to abandon, or not to rely upon or assert, such trust, as by acquiescing, with knowledge of all the material facts, in the alleged trustee’s acts in dealing with, or disposing of, the property in a manner inconsistent with the existence or continuation of a trust.”

In Banks v. Banks, 77 N. C., 186: “To constitute an abandonment or renunciation of claim there must be acts or conduct positive, unequivocal, and inconsistent with his claim of title.”

Defendants plead as an estoppel the lease agreement of 23 March, 1931. Plaintiffs admit execution of it, and do not challenge its force and effect by pleading fraud or by other equitable defense.

Matters in the nature of an equitable defense must be pleaded. Toler v. French, ante, 360, and cases cited. McIntosh, N. C. Prac. & Proc., 483.

The language of this agreement is clear and explicit. A reading of it manifests the clear intention of the plaintiffs to recognize the defendants as the landlord, and to assume for themselves the role of tenants. In addition to this, the agreement shows that plaintiffs took an option to buy the land from the defendants, not at the price paid by the defendants at the foreclosure sale, nor for the amount 'of indebtedness due by plaintiffs to defendants and secured by deed of trust to Smith, trustee, but at an increased purchase price, plus moneys expended by defendants in keeping up installments on the indebtedness to the Land Bank and for-taxes and plus interest. The execution of this agreement is conduct positive, unequivocal and inconsistent with the claim of title under the alleged parol agreement. It is not in harmony with the existence or continuation of the trust, and manifests conclusively an intention not to rely thereon.

While the lease agreement is evidence introduced by the defendant, it is proper to be considered on motion for judgment as of nonsuit under authority of Harrison v. R. R., 194 N. C., 656, 140 S. E., 598, wherein Stacy, G. J., speaking to the question, said: “In considering the last motion, the defendants’ evidence, unless favorable to the plaintiff, is not to be taken into consideration, except when not in conflict with plaintiff’s evidence, it may be used to explain or make clear that which has been offered by plaintiff,” citing S. v. Fulcher, 184 N. C., 663, 113 S. E., 169.

We have considered all other exceptions and find them without merit. The judgment below is

Affirmed.

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