Norfleet v. . Hawkins , 93 N.C. 392 ( 1885 )

On the trial the defendant's counsel requested his Honor to charge the jury that the deed from Betty McCraw to her husband was presumed in law to be void unless it was shown to be made upon a fair consideration, and it devolved upon the plaintiff to show this by a preponderance of testimony, and if she fails to do so, the second issue should be found in the affirmative. We do not exactly comprehend what the learned counsel meant by a fair consideration as in the execution of a power, except simply to effect a sale, no consideration is necessary. But we take it from the argument made in the case that what was meant by a fair consideration was that (396) the relation of husband and wife was of such a nature as to give the husband an influence over his wife so as to raise such a suspicion with respect to contracts between them that the law would throw the burden upon him to show that the transaction was fair and free from any undue influence. It was contended that certain fiduciary relations, such as trustees and cestui que trust, attorney and client, guardian and ward, etc., are sufficient to raise a presumption of fraud as a matter of law, and that, owing to the intimate relation of husband and wife, the same legal presumption applies to transactions between them; and to support this position the counsel cited the cases of McRae v. Battle,69 N.C. 98; Boyd v. De La Montague, 73 N.Y. 498; Darlington's Appeal, 86 Penn. St., 512. We concede that the doctrine enunciated by the counsel is well supported by authorities, and has a general application to all persons standing in a fiduciary relation, including husband and wife.

It is well settled that a wife may execute a power and even appoint to her husband. 2 Washburn on Real Property, 607; 1 Sugden on Powers, 99. In the execution of a power there is no contract between the donee of the power and the appointee. The donee is the mere instrument by which the estate is passed from the donor to the appointee, and when the appointment is made the appointee at once takes the estate from the donor as if it had been conveyed directly to him. The doctrine of a presumption of fraud arising from fiduciary relations in almost every case where it has been enforced had reference to contracts between the parties, and but few cases are to be found where it has been applied to the execution of a power, and in these cases only when, by the execution of the power, some interest of the donee in the estate appointed passed to the appointee. And the learned counsel in his researches upon the subject has been able to refer us to but two or three cases in which the doctrine has been held to apply to the execution of a power by the wife in favor of her husband, to wit, the case of Boyd v. De La Montague, 73 N.Y. 498.

This was a transfer of the wife's leasehold to her husband; (397) there was no fraud, but both parties acted under a mutual mistake, and Darlington's Appeal, 86 Penn. State, where the wife two months after marriage, being in bad health and weak mind, conveyed her real estate to her husband for the consideration of one dollar, reserving a life estate; and in this State the case of McRae v. Battle, supra. But that was a case where the power reserved to the donor in an antenuptial settlement was executed so as to pass a subsisting interest of the wife in the estate appointed, and it was held to be in violation of the terms of the settlement and in contravention of the intention of the parties clearly deducible from the deed of settlement.

The only other case cited involving the question of a power executed by a married woman to her husband was the case of Taylor v. Eatman,92 N.C. 602.

There the case turned upon the validity of the execution of a naked power of appointment which the feme covert had exercised in favor of her husband; and although the appellant was represented in this Court by counsel distinguished for his ability and indefatigable research, no such point was pressed or even raised. In the application of the doctrine of presumptive fraud to the execution of a power by a married woman in favor of her husband there is a distinction between a power appendant and a power collateral. The former is where the execution of the power attaches on the interest of the donee and takes effect out of his estate, and the latter is a mere naked power and does not attach upon his interest, but enables him to create an estate independent of his own. 4th Kent, 350. In the former case, according to the decision inMcRae v. Battle, supra, it is held to apply, but that is as far as it seems ever to have been extended. It can have no application to the case of the execution of a mere naked or collateral power. We take the distinction to be that when there is a contract between the parties, or the donee of a power in executing the power at the same time transfers some interest of his own in the estate, affects in some way his interest, there is a presumption of law that that transaction is fraudulent, and the (398) burden of showing its fairness is upon him who seeks to support it and to show that he has taken no advantage of his influence and that the arrangement is fair and conscientious. But when the transaction is the execution of a mere naked power, the law raises no presumption of fraud, but it is a question of fact for the jury, to be decided by them upon the facts and circumstances of each case that may be submitted to their determination.

Here the deed of Betty McCraw to her husband did not affect any interest of hers, it being to take effect at her death, and the jury have found as a fact that the deed executed by Betty McCraw to her husband in execution of the power vested in her was not done by the fraudulent and undue influence of her husband, F. M. McCraw. That was conclusive, and after the finding, as his Honor held, the exception taken to the refusal of his Honor to admit the evidence of the transcript from the county court of Granville, and the other point pressed in the argument as to the statute of limitations and constructive notice, became immaterial. Our conclusion is there was no error, and the judgment of the Superior Court is affirmed.

No error. Affirmed.

Cited: Sims v. Ray, 96 N.C. 89; Chewing v. Mason, 158 N.C. 580;Darden v. Mathews, 173 N.C. 189; White v. White, 189 N.C. 237; Roane v.Robinson, 189 N.C. 632; Sorrell v. Sorrell, 198 N.C. 465.