Brannock v. Fletcher, 450

• Citation: 155 S.E.2d 532,271 N.C. 65
• Decision Date: 24 July 1967
• Docket Number: No. 450,450
• Parties: Daniel E. BRANNOCK and wife Jean W. Brannock, Plaintiffs, v. A. B. FLETCHER and wife Lexie Fletcher, Defendants.
• Court: United States State Supreme Court of North Carolina

Page 532

155 S.E.2d 532

271 N.C. 65

Daniel E. BRANNOCK and wife Jean W. Brannock, Plaintiffs, v. A. B. FLETCHER and wife Lexie Fletcher, Defendants.

No. 450.

Supreme Court of North Carolina.

July 24, 1967.

Harold R. Wilson, Alvin A. Thomas, Winston-Salem, for plaintiffs appellants.

Walter C. Holton, Winston-Salem, for defendants appellees.

SHARP, Justice:

Plaintiffs assign as error the dismissal of the action upon defendants' motion for nonsuit. We, therefore, consider the evidence in the light most favorable to them. Mills v. Lynch, 259 N.C. 359, 130 S.E.2d 541.

Plaintiffs, as vendees in an executory contract for the purchase and sale of a residence from defendants, were in possession of the property when the contract was signed on 13 November 1961. The total purchase price to be paid was $11,400.00. Defendants acknowledged the receipt of $400.00, and plaintiffs agreed to pay the balance in installments of $112.00' each month hereafter.' The first payment, therefore, was due December 13, 1961. At the time plaintiffs moved out, shortly after 1 June 1963, a total of eighteen payments, or $2,016.00 should have been made. This sum (if paid) plus the $400.00 down payment, would have made a total of $2,416.00 paid on the purchase price.

Both plaintiffs testified that they did not know the exact amount which they had paid on the contract, but after refreshing her recollection from the complaint, however, Mrs. Brannock testified that plaintiffs had paid a total of $2,600.71. This sum would be $184.71 in excess of the amount due under the contract at the time defendants demanded possession of the property on or about 1 June 1963 and at the time plaintiffs complied with defendants' demands by voluntarily vacating the premises. Yet, both Mr. and Mrs. Brannock testified that they were two or three months in arrears with that portion of the $112.00 monthly payment which they were to make directly to Mr. Fletcher. They said that he had agreed that they could 'make it up at the end.' Notwithstanding, Mrs. Brannock also made the flat statement that plaintiffs had paid $2,600.71 on the house when Mr. Fletcher demanded possession, and that they 'were not behind' with their payments at that time.

This state of the evidence, plus the minimal written contract, which patently does not embrace all the terms of the previous oral agreement between the parties and which does not stipulate the consequences of a default by either, necessitates a marshaling of legal principles which the briefs have not attempted. Since plaintiffs brought this action to recover the payments they had made, their theory necessarily is that defendants had rescinded the contract. Although the evidence discloses that their last payment was made more than three years before they brought this action, no question of the statute of limitation arises for the reason that the provisions of G.S. § 1--52 were not pleaded. G.S. § 1--52; Iredell County v. Crawford, 262 N.C. 720, 138 S.E.2d 539.

In a contract for the sale of land, the vendee may be given the right to possession prior to the conveyance of title either by the terms of the contract or by necessary implication. 55 Am.Jur., Vendor and Purchaser § 385 (1946). In the absence of any express or implied agreement, to the contrary, however, the vendee has no right to the possession until he has fully paid the purchase price. Allen v. Taylor, 96 N.C. 37, 1 S.E. 462; Annot., Right of vendor and purchaser respectively to possession pending performance, but before default, of executory contract for sale of real estate, 28 A.L.R. 1069 (1924); 8A Thompson, Real Property § 4449 (1963 repl.).

'It is well settled that the purchaser of land, when let into possession under the contract of purchase, is simply an occupant of it at the will of the vendor, and he so continues until the purchase money shall be paid. The vendor may at any time put an end to such occupancy by demanding possession after reasonable notice to quit; and, if it be not surrendered, then he may at once bring and maintain an action to recover the possession.'

Allen v. Taylor, supra at 39, 1 S.E. at 463.

Accord, Jones v. Boyd, 80 N.C. 258; Dowd v. Gilchrist, 46 N.C. 353; Love v. Edmonston, 23 N.C. 152; 55 Am.Jur., Vendor and Purchaser § 387 (1946). A vendee is not, however, such a tenant as may be evicted by summary ejectment under G.S. § 42--26 (N.C.Pub.L. 1868--'69, ch. 156); McCombs v. Wallace, 66 N.C. 481; nor, in the absence of an express provision in the contract, is a vendee in possession liable for rent prior to default. The interest on the unpaid purchase price is in lieu thereof--Mitchell v. Wood, 70 N.C. 297; Pearsall v. Mayers, 64 N.C. 549--or the sales price is presumed sufficient consideration for the intermediate occupation. 55 Am.Jur., Vendor and Purchaser § 363 (1946). Cf. Jones v. Jones, 117 N.C. 254, 23 S.E. 214. The payment by the vendee of the greater part of the purchase money makes no difference in the vendor's right to the possession of the property; 'but if the vendee should afterwards file a bill in equity for specific performance, he will not only be allowed a credit for his payments, but also be entitled to an account of the profits of the land made by the vendor after he shall have recovered possession.' Butner v. Chaffin, 61 N.C. 497, 498.

It has been held repeatedly that 'the relation between vendor and vendee in an executory agreement for the sale and purchase of land is substantially that subsisting between mortgagee and mortgagor, and governed by the same general rules.' Jones v. Boyd, supra, 80 N.C. [271 N.C. 71] at 261, accord, Crawford v. Allen and Realty Co. v. Crawford, 189 N.C. 434, 127 S.E. 521; Eubanks v. Becton, 158 N.C. 230, 73 S.E. 1009; Killebrew v. Hines, 104 N.C. 182, 10 S.E. 159; Allen v. Taylor, supra; Hook v. Fentress, 62 N.C. 229; 55 Am.Jur., Vendor and Purchaser § 354 (1946). As between the parties, the vendor may be considered a mortgagee and the vendee a mortgagor. Bank v. Loughran, 122 N.C. 668, 30 S.E. 17; Jones v. Boyd, supra; Ellis v. Hussey, 66 N.C. 501.

At common law, a mortgagee, in his character as the legal owner, was entitled to the immediate possession of the mortgaged premises even before breach of condition unless this right had been waived or it had been otherwise stipulated in the mortgage. Under the modern equitable doctrines, however, the mortgagor is entitled to remain in the possession of the property at least until breach of condition. Formerly, the rule was frequently stated as follows: 'It is familiar learning that, At least, after default of the mortgagor in paying the debt secured by the mortgage, the mortgagee is entitled to the possession, and is accountable to the mortgagor for rents and profits.' (Italics ours.) Weathersbee v. Goodwin, 175 N.C. 234, 235, 95 S.E. 491, 492; accord, Federal Land Bank of Columbia v. Jones, 211 N.C. 317, 190 S.E. 479; Montague v. Thorpe, 196 N.C. 163, 144 S.E. 691. More recently the rule is stated with the phrase italicized above omitted. Gregg v. Williamson, 246 N.C. 356, 98 S.E.2d 481; Mills v. Building & Loan Assn., 216 N.C. 664, 6 S.E.2d 549. Although a mortgagee in possession is accountable for the rents and profits which he receives from the premises, he may be made to account only in his action to foreclose or in the mortgagor's suit to redeem or in connection with voluntary payment. Anderson v. Moore, 233 N.C. 299, 63 S.E.2d 641; 2 Jones, Mortgages § 1426 (8th Ed., 1928); II Glenn, Mortgages § 216 (1943).

Like a mortgagor, a vendee who, by agreement with his vendor, is in possession of the property under an executory contract of purchase and sale, cannot be deprived thereof as long as he is not in default in the performance of his contract. 92 C.J.S. Vendor and Purchaser §§ 461, 464 (1955); 55 Am.Jur., Vendor and Purchaser §§ 438, 439, 444 (1946); Annot., When a vendor may recover possession from his vendee, 107 Am.St.Rep. 722 (1906); Annot., 94 A.L.R. 1239, 1263 (1935). It is implicit in the facts of this case that, notwithstanding the lack of an express provision to that effect in the written contract, plaintiffs were to have possession of the property. They were buying a house to live in; they were in possession of it at the time the contract was executed. At $112.00 a month, more than 8 years would have elapsed before they had paid for the property. It is not reasonable to suppose that they would have contracted to buy the house unless they had acquired, at the same time, the right to its immediate and continued possession. The necessary implication, therefore, is that plaintiffs were entitled to the possession of the property so long as they complied with the contract by making the payments as they came due. It is equally apparent from plaintiffs' evidence that the parties contemplated that, as soon as plaintiffs' debt had been reduced to an amount which they could finance, they would obtain a loan on the property and pay the purchase price in full. Until they could get a loan, however, defendants were obligated to carry the loan at Piedmont 'in their names.' No such provisions, however, were incorporated in the written contract. Therefore, plaintiffs were not legally obligated to procure a loan. Neal v. Marrone, 239 N.C. 73, 79 S.E.2d 239. They were, however, obligated to make each monthly payment as it became due, and the failure to pay any installment in full made the entire unpaid balance due and payable.

Unless supported by some new and independent consideration, an agreement by defendants that they might miss several payments and 'make it up at the end,' would not abrogate the acceleration provision of the contract if defendants later decided to enforce it. Certain-Teed Products Corp. v. Sanders, 264 N.C. 234, 141 S.E.2d 329; Craig v. Price, 210 N.C. 739, 188 S.E. 321. Under the circumstances disclosed by plaintiffs' evidence, however, defendant could not declare the entire balance due without first...