MALLARD, C.J.
Plaintiff alleged the following in paragraph 8 of the complaint:
"That there is now due and owing to the plaintiff from the defendant the sum of One Hundred Eighty-Five Thousand ($185,-000.00) Dollars, together with interest thereon at the rate of six (6%) per cent per annum from December 28, 1967, no part of which amount has been paid.”
Defendant in answering this allegation of the complaint said:
“That the allegations contained in Paragraph 8 of the complaint are untrue and are denied.”
It is elementary that issues arise upon the pleadings when a material fact is asserted by one party and denied by the other. G.S. 1-196; G.S. 1-198. An issue of fact arises-when a material allegation appearing in the complaint is denied in the answer. Baker v. Construction Corp., 255 N.C. 302, 121 S.E. 2d 731 (1961). “Á material fact is one which constitutes a part of the plaintiff’s cause of action or the defendant’s defense.” Wells v. Clayton, 236 N.C. 102, 72 S.E. 2d 16 (1952). See also In Re Wallace, 267 N.C. 204, 147 S.E. 2d 922 (1966).
G.S. 1-200 requires:
“Issues shall be framed in concise and direct terms, and prolixity and confusion must be avoided by not having too many issues. The issues arising upon the pleadings, material to be tried, must be made up by the attorneys appearing in the action, or by the judge presiding, and reduced to writing, before or during the trial.”
The rule as to the duty of the trial judge is succinctly stated by Justice Sharp in Heating Co. v. Construction Co., 268 N.C. 23, 149 S.E. 2d 625 (1966), as follows:
“The sum and substance of the foregoing precepts is that it is the duty of the judge to submit such issues as are necessary to settle the material controversies in the pleadings. In the absence of such issues, without admissions of record sufficient to justify the judgment rendered, this Court will remand the case for a new trial. Tucker v. Satterthwaite, 120 N.C. 118, 27 S.E. 45.”
In the case before us the issue of indebtedness was raised by the pleadings. There does not appear in the pleadings or stipulations an admission, nor was there a determination by the jury, that the plaintiff was entitled to recover any sum of the defendant. Absent an admission of indebtedness in the pleadings or by stipulation, or [709]*709a finding by the jury that the defendant was indebted to the plaintiff, it was error for the judge to enter the judgment in this case. Oil Co. v. Fair, 3 N.C. App. 175, 164 S.E. 2d 482 (1968).
We refrain from discussing the evidence in detail since a new trial is awarded. Baker v. Construction Co., supra. However, we deem it necessary to discuss assignments of error based upon exceptions to certain testimony of Flowers and Whitley.
The evidence tended to show that the notes sued on were payable to Flowers and Whitley. Flowers, by endorsement, transferred his interest in the notes to Whitley. Flowers and Whitley, as plaintiff's witnesses, were permitted to testify, over objection by the defendant, about personal transactions and communications between them and Hyder.
The court attempted to limit or restrict the testimony of the witness Flowers by instructing the jury on one occasion as follows:
“Members of the jury, again, the Court instructs you that the answers to the previous question, and this further testimony, is offered for the sole purpose of disclosing the basis of this witness’ opinion as to the mental capacity of the deceased, and assist you in determining the credibility, or worthiness of belief of that opinion, if you find that it does tend to do so, and for no other purpose, and these instructions will apply to the following testimony at each time that an objection is made by counsel to this witness’ testimony, and overruled by the Court, until you are further advised by the Court that the instructions do not apply.”
Flowers testified, over objection, that Hyder told him in the presence of Whitley that the two of them were his (Hyder’s) best friends. Some of the testimony of Flowers tended to show that Hyder repeatedly told them he was in a bad financial condition and that Flowers and Whitley helped him by obtaining a commitment for a loan of one million dollars. Immediately after this the following occurred-:
“Q. Tell the jury what else he said. OBJECTION. OVERRULED. EXCEPTION.
DEFENDANT’S EXCEPTION NO. 28.
THE COURT: It is admitted under the instructions previously given you concerning this witness’ testimony, members of the jury.
A. Mr. Hyder then said this would enable him to keep the [710]*710company, and he recalled his conversation in Florida with us in reference to what we — OBJECTION. OVERRULED. EXCEPTION.
DEFENDANT’S EXCEPTION NO. 29.
A. Mr. Hyder said that with this million dollars, I can continue to operate the Clay Hyder Trucking Lines; I’m not forced to sell it, and, in my original obligation to you, stands, in full, and, one other thing, that you and Mr. Whitley would have to operate this company, that was one of the stipulations — MOTION TO STRIKE ANSWER. MOTION DENIED. DEFENDANT EXCEPTS.
DEFENDANT’S EXCEPTION NO. 30.
THE COURT TO THE JURY: You will not consider the witness’ remark that that was one of the stipulations, members of the jury, in any point in your deliberations.
Q. Well, Mr. Flowers, is that what Mr. Hyder said to you? OBJECTION. OVERRULED. EXCEPTION.
DEFENDANT’S EXCEPTION NO. 31.
A. That’s what Mr. Hyder said to me.
THE COURT: OVERRULED. It is admitted for the purpose previously given, concerning this witness’ testimony, members of the jury.”
We think that the instructions and rulings by the court tended to confuse the jury when the motion to strike was denied, and then partially allowed. It was confusing when the judge told them not to consider the witness’ remark that “that was one of the stipulations” -and then permitted counsel in substance to repeat and the witness to answer the same question. It was also confusing to the jury to instruct them “it is admitted for the purpose previously given, concerning this witness’ testimony.”
We do not think that the jury could follow and properly apply the many different instructions given by the court in its effort to limit and restrict to the issue of mental capacity the effect of the testimony of Flowers and Whitley relating to their conversations and communications with Hyder.
Flowers and Whitley were both permitted to testify in substance, over objection, that Hyder had been in bad financial condition and requested their help, that he had the notes sued on and 'each .stated their conclusion as to what Hyder wanted to do with the [711]*711notes and many other things, and also that the two notes were to be given to them in settlement for what they had done for him in obtaining a commitment for a million dollar loan.
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MALLARD, C.J.
Plaintiff alleged the following in paragraph 8 of the complaint:
"That there is now due and owing to the plaintiff from the defendant the sum of One Hundred Eighty-Five Thousand ($185,-000.00) Dollars, together with interest thereon at the rate of six (6%) per cent per annum from December 28, 1967, no part of which amount has been paid.”
Defendant in answering this allegation of the complaint said:
“That the allegations contained in Paragraph 8 of the complaint are untrue and are denied.”
It is elementary that issues arise upon the pleadings when a material fact is asserted by one party and denied by the other. G.S. 1-196; G.S. 1-198. An issue of fact arises-when a material allegation appearing in the complaint is denied in the answer. Baker v. Construction Corp., 255 N.C. 302, 121 S.E. 2d 731 (1961). “Á material fact is one which constitutes a part of the plaintiff’s cause of action or the defendant’s defense.” Wells v. Clayton, 236 N.C. 102, 72 S.E. 2d 16 (1952). See also In Re Wallace, 267 N.C. 204, 147 S.E. 2d 922 (1966).
G.S. 1-200 requires:
“Issues shall be framed in concise and direct terms, and prolixity and confusion must be avoided by not having too many issues. The issues arising upon the pleadings, material to be tried, must be made up by the attorneys appearing in the action, or by the judge presiding, and reduced to writing, before or during the trial.”
The rule as to the duty of the trial judge is succinctly stated by Justice Sharp in Heating Co. v. Construction Co., 268 N.C. 23, 149 S.E. 2d 625 (1966), as follows:
“The sum and substance of the foregoing precepts is that it is the duty of the judge to submit such issues as are necessary to settle the material controversies in the pleadings. In the absence of such issues, without admissions of record sufficient to justify the judgment rendered, this Court will remand the case for a new trial. Tucker v. Satterthwaite, 120 N.C. 118, 27 S.E. 45.”
In the case before us the issue of indebtedness was raised by the pleadings. There does not appear in the pleadings or stipulations an admission, nor was there a determination by the jury, that the plaintiff was entitled to recover any sum of the defendant. Absent an admission of indebtedness in the pleadings or by stipulation, or [709]*709a finding by the jury that the defendant was indebted to the plaintiff, it was error for the judge to enter the judgment in this case. Oil Co. v. Fair, 3 N.C. App. 175, 164 S.E. 2d 482 (1968).
We refrain from discussing the evidence in detail since a new trial is awarded. Baker v. Construction Co., supra. However, we deem it necessary to discuss assignments of error based upon exceptions to certain testimony of Flowers and Whitley.
The evidence tended to show that the notes sued on were payable to Flowers and Whitley. Flowers, by endorsement, transferred his interest in the notes to Whitley. Flowers and Whitley, as plaintiff's witnesses, were permitted to testify, over objection by the defendant, about personal transactions and communications between them and Hyder.
The court attempted to limit or restrict the testimony of the witness Flowers by instructing the jury on one occasion as follows:
“Members of the jury, again, the Court instructs you that the answers to the previous question, and this further testimony, is offered for the sole purpose of disclosing the basis of this witness’ opinion as to the mental capacity of the deceased, and assist you in determining the credibility, or worthiness of belief of that opinion, if you find that it does tend to do so, and for no other purpose, and these instructions will apply to the following testimony at each time that an objection is made by counsel to this witness’ testimony, and overruled by the Court, until you are further advised by the Court that the instructions do not apply.”
Flowers testified, over objection, that Hyder told him in the presence of Whitley that the two of them were his (Hyder’s) best friends. Some of the testimony of Flowers tended to show that Hyder repeatedly told them he was in a bad financial condition and that Flowers and Whitley helped him by obtaining a commitment for a loan of one million dollars. Immediately after this the following occurred-:
“Q. Tell the jury what else he said. OBJECTION. OVERRULED. EXCEPTION.
DEFENDANT’S EXCEPTION NO. 28.
THE COURT: It is admitted under the instructions previously given you concerning this witness’ testimony, members of the jury.
A. Mr. Hyder then said this would enable him to keep the [710]*710company, and he recalled his conversation in Florida with us in reference to what we — OBJECTION. OVERRULED. EXCEPTION.
DEFENDANT’S EXCEPTION NO. 29.
A. Mr. Hyder said that with this million dollars, I can continue to operate the Clay Hyder Trucking Lines; I’m not forced to sell it, and, in my original obligation to you, stands, in full, and, one other thing, that you and Mr. Whitley would have to operate this company, that was one of the stipulations — MOTION TO STRIKE ANSWER. MOTION DENIED. DEFENDANT EXCEPTS.
DEFENDANT’S EXCEPTION NO. 30.
THE COURT TO THE JURY: You will not consider the witness’ remark that that was one of the stipulations, members of the jury, in any point in your deliberations.
Q. Well, Mr. Flowers, is that what Mr. Hyder said to you? OBJECTION. OVERRULED. EXCEPTION.
DEFENDANT’S EXCEPTION NO. 31.
A. That’s what Mr. Hyder said to me.
THE COURT: OVERRULED. It is admitted for the purpose previously given, concerning this witness’ testimony, members of the jury.”
We think that the instructions and rulings by the court tended to confuse the jury when the motion to strike was denied, and then partially allowed. It was confusing when the judge told them not to consider the witness’ remark that “that was one of the stipulations” -and then permitted counsel in substance to repeat and the witness to answer the same question. It was also confusing to the jury to instruct them “it is admitted for the purpose previously given, concerning this witness’ testimony.”
We do not think that the jury could follow and properly apply the many different instructions given by the court in its effort to limit and restrict to the issue of mental capacity the effect of the testimony of Flowers and Whitley relating to their conversations and communications with Hyder.
Flowers and Whitley were both permitted to testify in substance, over objection, that Hyder had been in bad financial condition and requested their help, that he had the notes sued on and 'each .stated their conclusion as to what Hyder wanted to do with the [711]*711notes and many other things, and also that the two notes were to be given to them in settlement for what they had done for him in obtaining a commitment for a million dollar loan. In brief, under the guise of limiting the testimony for the sole purpose of disclosing the basis of the opinion of the witness as to the mental capacity of the deceased, and assisting the jury to determine the credibility or worthiness of belief of that opinion, the court permitted Flowers and Whitley to tell of the conversations with Hyder about the very transactions that were involved in the case. We think this was directly in contravention of the express terms of G.S. 8-51 which reads in pertinent part as follows:
“Upon the trial of an action, or the hearing upon the merits of a special proceeding, a party or a person interested in the event, or a person from, through or under whom such a party or interested person derives his interest or title by assignment or otherwise, shall not be examined as a witness in his own behalf or interest, or in behalf of the party succeeding to his title or interest, against the executor, administrator or survivor of a deceased person, or the committee of a lunatic, or a person deriving his title or interest from, through or under a deceased person or lunatic, by assignment or otherwise, concerning a personal transaction or communication between the witness and the deceased person or lunatic; . . .”
In the case of Sherrill v. Wilhelm, 182 N.C. 673, 110 S.E. 95 (1921), it is said:
“We think a fair test in undertaking to ascertain what is a ‘personal transaction or communication’ with the deceased about which the other party to it cannot testify is to inquire whether, in case the witness testify falsely, the deceased, if living, could contradict it of his own knowledge. Carey v. Carey, supra. Death having closed the mouth of one of the parties, it is but meet that the law should not permit the other to speak of those matters which are forbidden by the statute. Men quite often understand and interpret personal transactions and communications differently, at best; and the Legislature, in its wisdom, has declared that an ex parte statement of such matters shall not be received in evidence. Such is the law as it is written, and we must obey its mandates.”
In the case before us Whitley is a party interested in the event, and Whitley received by assignment an interest in the notes from Flowers. They were both testifying in the interest of Whitley and against the representative of the deceased Hyder. The testimony re[712]*712lated to a personal transaction or communication between them and the deceased Hyder. The personal representative had not “opened the door” by testifying or offering the testimony of the deceased person. See Stansbury, N. C. Evidence 2d, § 66.
If Flowers and Whitley were testifying falsely about their personal transactions and communications with Plyder, as to whether the notes were given for a valuable consideration and as to whether the notes were executed and delivered by Hyder, then the logical party to rebut such testimony would be Hyder. When death sealed the lips of Hyder, we think the statute G.S. 8-51 sealed Flowers’ and Whitley’s lips. The statute itself contains only two exceptions, one of which relates to the identity of the driver of a motor vehicle, and the other relates to cases in which the representative of the lunatic or deceased person has “opened the door” by testifying or offering the testimony of the deceased or insane person.
In McLeary v. Norment, 84 N.C. 235 (1880), and other cases involving the mental capacity of a deceased person, the Supreme Court has stated what seems to be another exception to the above statute which provides that after a witness has stated his opinion as to the mental capacity of such deceased person, and where this opinion has been formed from conversations and communications with such person, it is competent to offer such in evidence as constituting the basis of such opinion. While it is conceded that a sane declaration by a person may be some evidence of sanity, the statute as written by the Legislature does not contain this exception.
The plaintiff cites In Re Hinton, 180 N.C. 206, 104 S.E. 341 (1920), and quotes from it and the case of McLeary v. Norment, supra, as authority for the admission of the testimony of Flowers and Whitley relating to personal transactions and communications with Hyder. We do not think that the principles of law enunciated in these two cases and others of like import can be applied as a correct interpretation and application of the statute G.S. 8-51 in relation to the facts in this case.
In the case before us the testimony of Flowers and Whitley tended directly to establish, in addition to the mental capacity of Hyder, the execution and delivery of the notes and the consideration involved in the transaction.
In this case the statute G.S. 8-51 is in conflict with the rule that testimony of personal transactions and communications is competent on the question of the mental capacity of a deceased person where the opinion of the interested witness as to the mental competency has been formed from conversations and communications [713]*713with such deceased person. We think that when these two principles ■of law conflict with each other because the testimony of an interested witness concerning personal transactions and communications with .a deceased person tends directly to establish the material facts in issue, in addition to mental capacity, then the statute should control.
The rule that evidence offered is admissible if it is competent for any purpose ought not to be used as a sword with which to .attack a decedent’s estate by destroying the express provisions of G.S. 8-51. We think that the shield provided by G.S. 8-51 excludes that testimony of Flowers and Whitley which tended directly to establish the execution and delivery of the two notes, as well as the consideration given for them. In Re Will of Chisman, 175 N.C. 420, 95 S.E. 769 (1918).
When all the competent and incompetent evidence that was admitted is considered, we think there was sufficient evidence to overrule the motion for nonsuit. However, we do not express an opinion with respect to what the competent evidence on a new trial will ■show.
There were other assignments of error with respect to the admission of evidence and to the charge of the court; some of them have merit, but we do not discuss them for the reason they may not recur on a new trial.
Because of the errors herein pointed out, the defendant is .awarded a
New trial.
Britt and PáeiceR, JJ., concur.