Watkins v. Watkins , 83 N.C. App. 587 ( 1986 )

351 S.E.2d 331 (1986) 83 N.C. App. 587

Carol WATKINS
v.
Hattie Mae WATKINS and Arnell Nixon
v.
Charles WATKINS.

No. 8610DC619.

Court of Appeals of North Carolina.

December 30, 1986.

M. Jean Calhoun, Raleigh, for plaintiff-appellant.

Kirk, Gay & Kroeschell by Joseph T. Howell, Wendell, for defendants-appellees.

HEDRICK, Chief Judge.

By Assignment of Error No. 4, based upon Exceptions Nos. 1 and 7, plaintiff contends that the trial court erred in denying her motion for directed verdict with respect to express trust. Plaintiff argues that the evidence was not clear and convincing that she and Charles held the property for defendants pursuant to an express trust and that the issue should not have been submitted to the jury. We disagree.

It is uniformly held to be the law in North Carolina 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, and equity will enforce such an agreement." Bryant v. Kelly, 279 N.C. 123, 129-30, 181 S.E.2d 438, 442 (1971) (citations omitted). Whenever land is conveyed to one party under such an agreement, whether this agreement is made at the time of conveyance or before, an express trust is created. Owens v. Williams, 130 N.C. 165, 41 S.E. 93 (1902). Where competent evidence is introduced to establish a parol trust, it is the duty of the judge to submit the issue to the jury and for the jury to decide whether the evidence is clear, strong, convincing and cogent. Taylor v. Wahab, 154 N.C. 219, 70 S.E. 173 (1911).

In the present case Charles Watkins testified that at the family meeting he and plaintiff agreed to obtain a loan to purchase the house and to take the title to the house in their names, and Hattie agreed to make all of the mortgage payments. He further testified that everyone, including plaintiff, understood "from day one" that the house would be owned by Hattie and it would be her responsibility to make the payments on the loan, obtained in his name to purchase the property. We hold the evidence in this case is sufficient to raise the issue of express trust and to support the verdict thereon, and the trial court correctly denied plaintiff's motion for directed verdict.

Plaintiff also assigns as error the trial court's denial of her motion for directed verdict on the issue of resulting trust. Plaintiff contends that the evidence was insufficient to raise the issue of resulting trust. Plaintiff argues that all of the evidence shows that Hattie did not pay the entire purchase price or obligate herself to do so at or before the transfer of the title to the property, and therefore that a resulting trust did not arise. We disagree.

In Bryant v. Kelly, 279 N.C. 123, 129, 181 S.E.2d 438, 441 (1971), our Supreme Court held that "a resulting trust arises, if at all, in the same transaction in which legal title passes, and by virtue of consideration advanced before or at the time legal title passes, and not from consideration thereafter paid." Where less than the entire purchase price is paid at the time of purchase, the party seeking imposition of the trust must have incurred an absolute obligation to pay the remainder as a part of the original transaction of purchase at or before the time of conveyance. Waddell v. Carson, 245 N.C. 669, 97 S.E.2d 222 (1957). The person seeking the imposition of a resulting trust need not be obligated directly to the grantee's lender; it is sufficient if he is obligated to the grantee, pursuant to a promise made before title passes, to make payments to the grantee for the remainder of the purchase price. Ray v. Norris, 78 N.C.App. 379, 337 S.E.2d 137 (1985), disc. rev. denied, 316 N.C. 378, 342 S.E.2d 897 (1986).

In the present case, there is evidence in the record tending to show that Hattie paid the closing costs for the house and agreed, prior to the transfer of title to Charles and Carol, to pay all of the mortgage payments. There is also evidence in the record tending to show that she made all of the mortgage payments, with the assistance of Linwood and Arnell. We hold that this evidence is sufficient for the jury to find that a resulting trust arose when Charles and Carol purchased the property and that the trial court correctly denied plaintiff's motion for directed verdict on this issue.

By Assignments of Error Nos. 7 and 8 purportedly based on Exceptions Nos. 7 and 8, plaintiff contends the trial court erred in denying her motion for a new trial on the grounds that: 1) the evidence was insufficient to justify the verdict; 2) the verdict was contrary to law; 3) manifest disregard by the jury of the court's instructions; and 4) "the irregularities and the surprise which occurred with the presentation of the defendant's evidence lead to evidence which was not able to be discovered and produced at trial by plaintiff." A motion for a new trial pursuant to G.S. 1A-1, Rule 59 is addressed to the discretion of the trial judge, and the court's ruling thereon is not reviewable on appeal absent a manifest abuse of discretion. Worthington v. Bynum and Cogdell v. Bynum, 305 N.C. 478, 290 S.E.2d 599 (1982). We have reviewed the record and hold that the record does not disclose that the trial court abused its discretion in denying plaintiff's motion for a new trial. These assignments of error are without merit.

By Assignments of Error Nos. 1 and 3, purportedly based on Exceptions Nos. 1, 3 and 7, plaintiff argues that the trial court erred in submitting issues and instructions on express trust and resulting trust. These assignments of error and exceptions do not raise questions for review not heretofore discussed. These assignments of error are meritless.

We have reviewed plaintiff's additional assignments of error, and find them to be wholly without merit.

No error.

JOHNSON and GREENE, JJ., concur in the result.

JOHNSON, Judge, concurring in the result.

I concur in the opinion up to the summary discussion of Assignments of Error Nos. 1 and 3, based on Exceptions Nos. 1, 3 and 7 wherein plaintiff contends that the court erred by submitting issues and instructions on express and resulting trusts in such manner that the jury was able and, in fact, did reach what appears to be inconsistent verdicts. I disagree with the opinion that these Assignments of Error raise questions already discussed in the opinion; therefore, I wish to more fully address these Assignments of Error.

A resulting trust issues from equity; whereas, an express trust issues from the remedies available at law. It is a fundamental rule that equity will not lend its aid where a plaintiff has a full and complete remedy at law. Jefferson Standard Life Ins. Co. v. Guilford County, 225 N.C. 293, 34 S.E.2d 430 (1945). Hence, the court should have instructed the jury to the effect that if the jury answered "yes" to issue 1, it need not address issues 2 and 3, but that if it answered "no" to issue 1, it should go on to issue 2. Likewise the court should have instructed the jury in the alternative regarding issues 2 and 3. By instructing the jury as it did, the court allowed the jury to reach what appears to be inconsistent verdicts. A cardinal distinction between an express trust and a trust by operation of law, which includes a resulting trust, is that the former is based upon a direct declaration or expression of intention embodied in a contract, whereas the latter is raised by a presumption of law based on acts or conduct that are not a direct declaration of intention. Bowen v. Darden, 241 N.C. 11, 13, 84 S.E.2d 289, 291 (1954) (emphasis added). Where there is an express contract, no implied contract can exist. John D. Latimer & Assoc. v. Housing Authority of Durham, 59 N.C.App. 638, 642, 297 S.E.2d 779, 782 (1982). Plaintiff here has failed to show prejudice; hence, the error is not fatal. "At worst, the jury answered yes to alternative theories of liability." Hall v. Mabe, 77 N.C. App. 758, 762, 336 S.E.2d 427, 429 (1985). Either way plaintiff cannot prevail and the property is impressed with a trust in favor of defendant Hattie Watkins, who is entitled to own the land in fee simple absolute, subject to her promise to pay the remainder of the purchase price. See Ray v. Norris, 78 N.C.App. 379, 337 S.E.2d 137 (1985), disc. rev. denied, 316 N.C. 378, 342 S.E.2d 897 (1986).