Jefferson Standard Life Ins. Co. v. Guilford County

• Decision Date: 06 June 1945
• Docket Number: 667
• Citation: 34 S.E.2d 430,225 N.C. 293
• Parties: JEFFERSON STANDARD LIFE INS. CO. v. GUILFORD COUNTY
• Court: North Carolina Supreme Court

34 S.E.2d 430

225 N.C. 293

JEFFERSON STANDARD LIFE INS. CO. v. GUILFORD COUNTY

No. 667

Supreme Court of North Carolina

June 6, 1945

Civil action to recover balance due on promissory note executed by C. Clair Conner to plaintiff for money loaned--payment of which is alleged to have been assumed by defendant, etc.

I.Plaintiff bases its alleged right to recover on three separate causes of action as set forth in its complaint:

First On express contract, for payment of $79,674.45, with interest thereon at rate of 4 per cent per annum, from certain date balance due upon a promissory note for $100,000, dated 1 December, 1936, executed and delivered by one C. Clair Conner to plaintiff as evidence of a bona fide loan in the full amount of principal of said note, payable $5,000 on 1 December, 1937, and a like amount on 1 December each year thereafter until the full amount be paid, with acceleration clause therein, and secured by a duly registered deed of trust of even date therewith executed and delivered by C. Clair Conner, unmarried, to Julian Price, trustee conveying therein a certain lot of land in the city of High Point, payment of which note defendantGuilford County agreed to assume, and assumed by the terms of a deed dated 10 January, 1938, executed and delivered by C. Clair Conner and wife conveying to Guilford County the said lot of land (less a portion thereof which they had conveyed to the city of High Point for street widening purposes), and on which note Guilford County thereafter made payments, leaving the balance of principal as hereinabove stated, payment of which has been demanded and refused.

Second: On quantum meruit and to establish equitable lien therefor, for that pursuant to an agreement between C. Clair Conner and defendantGuilford County the money loaned by plaintiff, as evidenced by the note of C Clair Conner as described in the first alleged cause of action, was used in the purchase of a lot of land in the city of High Point, the one described in the deed of trust from C Clair Conner to Julian Price, trustee, and in the erection of a county building thereon, at the cost and reasonable worth of more than $121,000, to house and accommodate branch offices of the county government in said city, for, among other things, sessions of the Superior Court, which building was erected and is used for a public purpose, and is a necessary expense, and, hence, defendant is obligated to pay to plaintiff the balance of $79,674.45 with interest, due on said money loaned and invested in said property, and that plaintiff having furnished substantially all the moneys with which said lot and building were acquired, is entitled to an equitable lien on the land and building for the amount of said balance, and that defendant is estopped to deny said indebtedness to plaintiff and its right to such equitable lien.

Third: On the equitable principle of restitution, for that defendant, having elected not to rescind the transaction, and place parties in statu quo, but to hold and retain property, is obliged to do justice, under the circumstances, that is, to compensate plaintiff in the sum of $79,674.45, with interest.

II.Defendant, in answer to the various allegations in the several causes of action set up by plaintiff, denies liability to plaintiff in any aspect of the factual situation.And for further defense, summarily stated, avers:

1.That on 16 November, 1936, the then board of commissioners for the county of Guilford, at an adjourned meeting, adopted the following resolution:

'Motion made by Joe F. Hoffman, Jr., and seconded by J. W. Burke and carried, that Geo. L. Stansbury, Chairman, is hereby given power to negotiate with Clair Conner for the Bradshaw home place property in High Point, N. C., and to sign a contract for the purchase of same provided the property can be bought not to exceed $32,000.00.This deal to be consummated by the Chairman provided Conner will agree to furnish the County money to erect on said lot a building such as the Commissioners may specify and direct, the total purchase price of lot and building not to exceed $100,000.00, Conner to negotiate loan on said property for the complete cost price of lot, building and other improvements, said loan to run for twenty (20) years at an interest rate of four (4) per cent per annum, interest to be paid semiannually and principal to be reduced 1/20 each year.As soon as building is completed or within one year from this date the County will take deed to this property, and in said year formally assume Conner's total obligation on same.It is also agreed that the County will hold Conner harmless from the obligations incurred by him in connection with this project on behalf of the County.'

2.That thereafter on 23 November, 1936, and pursuant thereto, the then chairman of said board of commissioners in the name of Guilford County, as party of first part, entered into a contract with C. Clair Conner, as party of the second part, substantially as follows: That whereas an agreement had been entered into between the parties thereto, Guilford County, and C. Clair Conner, with the plaintiff here 'to provide funds for the purchase price of said property, and to erect a building and make other improvements thereon,'the parties thereto, for valuable consideration 'contract and agree as follows:

'(1)The party of the second part is to take title in his own name by a good deed in fee simple to the above referred to property, and to pay therefor in cash with funds to be provided by said Jefferson Standard Life Insurance Company the sum of Thirty Two Thousand Dollars ($32,000.00).

'(2)The party of the second part is to execute to Julian Price, Trustee for the Jefferson Standard Life Insurance Company, a deed of trust on said property to secure the payment of the purchase price of said lot, and also the money to be furnished to erect on said lot a building and other improvements as the Board of County Commissioners may specify and direct, the total price of lot and building and other improvements not to exceed One Hundred Thousand Dollars ($100,000.00), said loan to run for twenty (20) years at an interest rate of four (4) per centum per annum, interest to be paid semi-annually, and principal to be reduced one-twentieth (1/20) each year, and the party of the second part agrees to furnish to the party of the first part the money to erect said building and make said improvements on the lot above referred to as said money may be needed by the party of the first part for the purposes aforesaid.

'(3) As soon as said building is completed, or within one (1) year from the 16th day of November, 1936, the party of the first part will take deed to the above described property, and in said deed formally assume the party of the second part's total obligation on same, and the party of the second part hereby contracts and agrees that as soon as said building is completed, or within one (1) year from the 16th day of November, 1936, he will convey all of the above referred to property to the party of the first part, and will execute and deliver to the party of the first part a good fee simple deed therefor.

'(4) It is understood and agreed that in carrying out and discharging the conditions and obligations of this contract, the party of the second part is acting solely as the agent of, for the benefit of, and on behalf of the party of the first part, and the party of the first part hereby agrees to hold the party of the second part harmless from the obligations incurred by him in connection with this project on behalf of the party of the first part.

'(5)The party of the second part is not to receive any compensation for acting as agent as herein provided for.'

3.That pursuant to the agreement last above set forth C. Clair Conner, as agent for Guilford County, purchased and acquired the Bradshaw lot in the city of High Point from Mrs. Sallie J. Bradshaw, by deed dated 1 December, 1936, and duly registered in office of register of deeds of Guilford County, and thereafter executed and delivered a note to plaintiff in the principal sum of $100,000 bearing interest at the rate of four per centum per annum, securing same by execution and delivery of a deed of trust to Julian Price, Trustee, for the benefit of plaintiff, conveying the said lot of land.

4.That shortly thereafter the then board of commissioners of Guilford County let a contract, privately and without advertising for bids, etc., for the construction of said county building in the city of High Point, and had same constructed at cost of approximately $89,679.61, which together with purchase price of lot, and incidental expense, $32,004, amounted to a total of $121,683.61, part of which was paid out of the general funds of the county and a part of which was obtained from plaintiff on the note and deed of trust executed by C. Clair Conner, as hereinabove set forth.

5.That on 10 January, 1938, C. Clair Conner and wife executed a deed to Guilford County, which is duly registered, conveying the said Bradshaw lot and the building erected thereon, and in which deed the following appears:

'This conveyance is made subject to that certain deed of trust executed by C. Clair Conner to Julian Price, Trustee for Jefferson Standard Life Insurance Company, in the sum of One Hundred Thousand Dollars ($100,000.00) recorded in Book 797, page 211, in the office of the Register of Deeds, Guilford County, North Carolina, which indebtedness the party of the second part hereby assumes and agrees to pay.'

6.That C. Clair Conner did not, at any time, have or claim to have any right or interest in said property, but only was the medium chosen by the then board of commissioners and the plaintiff for the purpose of circumventing...