Bank of Glade Spring v. McEwen

• Decision Date: 13 November 1912
• Citation: 76 S.E. 222,160 N.C. 414
• Parties: BANK OF GLADE SPRING v. McEWEN et al.
• Court: North Carolina Supreme Court

76 S.E. 222

160 N.C. 414

BANK OF GLADE SPRING v. McEWEN et al.

Supreme Court of North Carolina

November 13, 1912

Appeal from Superior Court, Ashe County; Daniels, Judge.

Action by the Bank of Glade Spring against S. M. McEwen and others. From an order setting aside a consent judgment, plaintiff appeals. Reversed.

So much of a consent judgment which did not receive the consent of two of defendants and prejudiced their rights was not binding upon them.

T. C Bowie, of Jefferson, for appellant.

R. L Ballou, of Jefferson, for appellees.

WALKER J.

This case was brought here by the appeal of the plaintiff from an order upon a motion of the defendants to set aside a consent judgment, and presents the following facts:

Plaintiff as a judgment creditor of S. M. McEwen, brought an action by the above title to impeach and set aside two deeds of trust, one executed on October 16, 1909, by S. M. McEwen and his wife, Nannie B. McEwen, to G. L. Park, as trustee, to secure a debt due to W. J. McEwen for $2,500, which amount had been advanced to the plaintiff by said W. J. McEwen at the request and for the benefit of the defendant S. M. McEwen, and the other executed on October 18, 1909, by the said S. M. McEwen to T. E. Parker, as trustee, for the benefit of Nannie B. McEwen, to secure the payment to her of $2,500, which she had loaned to her husband, S. M. McEwen. Issues were submitted to the jury, and answered as follows:

"(1) Was the deed of trust from S. M. McEwen and wife to G. L. Park, trustee, on October 16, 1909, made with the intent to hinder, delay, defeat, and defraud the plaintiff? Answer: Yes.

"(2) If so, did W. J. McEwen have knowledge of said fraudulent intent and participate therein? Answer: Yes.

"(3) Was the deed of trust from S. M. McEwen and wife to Eugene Parker, trustee, on October 18, 1909, made with intent to hinder, defeat, delay, and defraud the plaintiff? Answer: Yes.

"(4) If so, did Nannie B. McEwen have knowledge of the fraudulent intent of her husband, S. M. McEwen, and participate therein? Answer: Yes."

Judgment was entered upon the verdict to the effect that the deeds of trust should be canceled, and defendant W. J. McEwen having moved in apt time to set aside the verdict to the extent that it affected his interests adversely, and the judge having intimated that he would grant the motion, the plaintiff's and defendants' attorneys agreed, at the suggestion of the court, that the equities of the parties should be adjusted and settled upon the following basis: The issue of fraud as to W. J. McEwen to be set aside and the land described in the deed of trust to G. L. Park to be sold and the proceeds of sale to be applied, first, to the costs of the action, and the balance to the payment of the debt for $2,500 due to W. J. McEwen, and then to the payment of the judgment creditors, and any surplus to be paid to Nannie B. McEwen. This agreement was inserted in the consent judgment, which was signed by Judge Lyon and the attorneys of the respective parties at fall term, 1911. This judgment was entered without the knowledge or consent of Mrs. Nannie B. McEwen or her husband, and without any authority given by them, or either of them, to their attorneys to consent to the judgment, and really against their consent. These defendants, after having successfully applied for an injunction to Judge W. J. Adams, moved before Judge F. A. Daniels, at spring term, 1912, to set aside the consent decree, because they had not, in fact, agreed thereto, and had given no authority to their attorneys to do so. Judge Daniels found and stated the facts in his judgment upon the motion, and, among others, that the attorneys acted without authority, but, instead of setting aside the judgment in toto, he modified it by striking out so much of it as directed that a part of the proceeds of the sale of the second tract of land be applied to the payment of the judgment creditors of S. M. McEwen, and then proceeded to order a sale of the land first described in the deeds of trust, for the purpose of paying the costs and the debt of $2,500 due to W. J. McEwen, and, if the proceeds of that sale should prove insufficient for the designated purpose, then that the tract last described should be sold to pay any balance due, with a direction that the surplus, if any, should be paid to S. M. McEwen and wife, Nannie B. McEwen. Plaintiff excepted to this judgment, and appealed.

The learned judge was manifestly right in holding that so much of the alleged consent judgment, signed by Judge Lyon, as did not receive the consent of the defendants S. M. McEwen and wife, Nannie B. McEwen, and which prejudiced their rights, was not binding upon them, but, instead of amending or reforming the judgment, he should have set it aside altogether. It appears that the defendants McEwen and wife held the land by entireties, and it is insisted by their counsel that it could not be sold to pay the judgment creditors of the husband, unless with the consent of both, and only to the extent that they had incumbered it, and the court could not sell it without their consent, which was not given. They rely on Bruce v. Nicholson, 109 N.C. 202, 13 S.E. 790, 20 Am. St. Rep. 562, where it was held by this court: "Under a conveyance of land in fee to husband and wife, they take, not as tenants in common, or joint tenants, but by entireties with the right of survivorship, each being seised per tout et non per my. Neither can convey or incumber the estate without the assent of the other, nor can the interest of either become subject to the lien, or any proceeding to sell for the satisfaction of any judgment during their joint lives. *** The nature of this estate forbids and prevents the sale or disposal of it, or any part of it, by the husband or wife without the assent of both. The whole must remain to the survivor. The husband cannot convey, incumber, or at all prejudice such estate to any greater extent than if it rested in the wife exclusively in her own right. He has no such estate as he can dispose of to the prejudice of the wife's estate. The unity of the husband and wife as one person, and the ownership of the estate by that person, prevents the disposition of it otherwise than jointly. As a consequence neither the interest of the husband nor that of the wife can be sold under execution so as to pass away title during their joint lives, or as against the survivor after the death of one of them. It is said in Rorer on Judicial Sales that 'no proceeding against one of them during their joint lives will, by sale, affect the title to the property as against the other one as survivor, or as against the two during their joint lives. Neither party to such tenancy can sell or convey his or her interest, for it is incapable of being separated.' He cites many authorities to support what he thus says. Indeed, it seems that the estate is not that of the husband or the wife. It belongs to that third person recognized by the law, the husband and the wife. It requires the co-operation of both to dispose of it effectually. Rorer, Judicial Sales, § 549; Freeman, Cotenancy, §§ 73, 74; 4 Kent, 362; Simonton v. Cornelius, 98 N.C. 433 ." The law, as thus stated, may be subject to some qualification not applicable to the facts of this case, and therefore not considered.

The principle of law as to an estate by entireties is merely noticed to show that in this case the court could not sell the land held in entireties, except under the deeds of trust, without the consent of defendants, as that matter was not involved in the suit. It amounted to illegal sequestration. It is found by Judge Daniels that defendants, McEwen and wife, never consented to the judgment, and that counsel had no authority to consent for them. This was known to plaintiffs at the time the consent judgment was entered, for it was stated in open court by defendants' counsel that they had not consulted with their clients in regard to the proposed consent judgment, as they lived at a great distance, in Tennessee, and there was no chance of doing so.

Where the relation of attorney and client exists, the law of principal and agent is generally applicable, and the client is bound, according to the ordinary rules of agency, by the acts of his attorney within the scope of his authority. 4 Cyc. 932. The power of an attorney, with reference to the release of his client's interests, is fully considered in Hall v. Presnell, 157 N.C. 290, 72 S.E. 985, and we therein said: "As said in Bank v. Hay, 143 N.C. 326 : 'There is a general rule that, when one deals with an agent, it behooves him to ascertain correctly the scope and extent of his authority to contract for and in behalf of his alleged principal, for, under any other rule, it is said every principal would be at the mercy of his agent, however carefully he might limit his authority. The power of an agent is not unlimited unless in some way it either expressly or impliedly appears to be so, and the person who proposes to contract with him as agent for his principal should first inform himself where his authority stops or how far his commission goes, before he closes the bargain with him. Briggs v. Insurance Co., 88 N.C. 141; Ferguson v. Mfg. Co., 118 N.C. 946 .' No one could reasonably suppose that it was within the scope of an attorney's authority to release a debt or any party to a note, or to do anything which would have that effect, when his commission extended only to the collection of the debt. It is stated in the books that an attorney has no implied authority to work any discharge of a debtor but upon actual payment of the full amount of the debt and that in money. He cannot release sureties or indorsers nor enter a retraxit, when it is a final bar (Lambert v....