Edwards v. Culbertson

• Decision Date: 22 November 1892
• Citation: 16 S.E. 233,111 N.C. 342
• Parties: EDWARDS v. CULBERTSON.
• Court: North Carolina Supreme Court

16 S.E. 233

111 N.C. 342

EDWARDS v. CULBERTSON.

Supreme Court of North Carolina

November 22, 1892

Appeal from superior court, Chatham county; WHITAKER, Judge.

Action by Samson Edwards against Jennie Culbertson for money paid and for a lien on land purchased therewith. Judgment for plaintiff for amount paid without a lien. Plaintiff appeals. Modified.

Defendant by promising to marry plaintiff, obtained from him money which she invested in lands, and afterwards refused to marry him. Held defendant was a trustee for the amount thus fraudulently obtained, which was made a charge on the lands so purchased.

T. B Womack, for appellant.

John Manning, for appellee.

SHEPHERD C.J.

According to the finding of the jury the defendant fraudulently obtained of the plaintiff the sum of $275.25, for the purpose of purchasing the land described in the complaint, and that the fraud consisted in "falsely and fraudulently promising and pretending that, if the plaintiff would let her have the said sum of money for said purpose, she would marry him in a very short time, and that the land to be purchased with the said money should be in lien of her right of dower which she would acquire" by the said marriage. Upon this verdict, his honor rendered a judgment in favor of the plaintiff for the recovery of the amount so fraudulently obtained, but refused to declare it a charge upon the land purchased by the defendant with the said money, the land still remaining in her hands. Were there nothing more than a mere promise to marry, it is plain that a violation of it would not entitle the plaintiff to any equitable relief, but we must infer from the verdict that the defendant did not intend to perform the promise at the time it was made, and that she intended it, as well as the additional agreement to hold the land in lieu of dower, simply as a trick or contrivance by which to cheat and defraud the plaintiff of his money. By submitting to the verdict and judgment, the defendant (even if she could successfully do so) is precluded from denying that she obtained the money under circumstances which the law denounces as fraudulent, and, this being so, it cannot be doubted that if the specific money had been retained by her and could have been identified, the plaintiff, in a proper action, could have recovered it. If this be true, why may not the money be traced into the land and declared to be a charge thereupon? This is a somewhat novel question in this state, but in view of well-settled equitable principles, as well as authorities in other jurisdictions, it is believed to be unattended with any very serious difficulty.

The only decision of this court to which we have been referred as bearing upon the question is that of Campbell v. Drake, 4 Ired. Eq. 94. The plaintiff filed a bill in equity against the heirs at law of one Farrow, praying that they be declared trustees of certain land purchased by their ancestor with money stolen by him of the plaintiff while in the employment of the latter as his clerk. The court said that it was "not at all like the cases of dealings with trust funds by trustees, executors, guardians, factors, and the like, in which the owner of the fund may elect to take either the money or that in which it was invested;" and it was accordingly held that the plaintiff was not entitled to the particular relief asked for. It was strongly intimated however, by RUFFIN, C.J., in delivering the opinion, that the plaintiff might "have the land declared liable as a security for the money laid out for it." It was not stated upon what principle this could be done, but we apprehend that it was based upon the general proposition that, whenever a person has obtained the property of another by fraud, he is a trustee ex maleficio for the person so defrauded, for the purpose of recompense or indemnity. "One of the most common cases," remarks Judge Story, "in which a court of equity acts upon the ground of implied trusts in invitum, is when a party receives money which he cannot conscientiously withhold from another party." Story, Eq. Jur. § 1255. And he states it to be a general principle that "whenever the property of a party has been wrongfully misapplied, or a trust fund has been wrongfully converted into another species of property, if its identity can be traced, it will be held in its new form liable to the rights of the original owner, orcestui que trust." Id. § 1258; Hill, Trustees, 222; Whitley v. Foy, 6 Jones, Eq. 34; Taylor v Plumer, 3 Maule & S. 562; Knatchbull v. Hallett, 13 Ch. Div....