Kelly v. Davis

• Court: North Carolina Supreme Court
• Writing for the Court: CLARKSON, Justice.
• Citation: Kelly v. Davis, 211 N.C. 1, 188 S.E. 853 (N.C. 1936)
• Decision Date: 16 December 1936
• Docket Number: 594.
• Parties: KELLY et al. v. DAVIS.

188 S.E. 853

211 N.C. 1

KELLY et al. v. DAVIS.

No. 594.

Supreme Court of North Carolina

December 16, 1936

Appeal from Superior Court, Moore County; Clayton Moore, Special Judge.

Suit by Ethel Kelly and others against Carl Davis, as executor of the will of S. G. Garner. From a judgment for plaintiffs defendant appeals.

Affirmed.

"Constructive trust" arises though there is no express or implied written or verbal declaration or intention to raise a trust where legal title to property is obtained by violation of duty to one equitably entitled thereto, and where property thus obtained is held in hostility to such person's beneficial rights of ownership.

The plaintiffs and defendant agreed to certain facts, and it was further agreed that the court below might render judgment thereon, with the right of the parties to except and assign error and appeal from the findings of the court.

The judgment of the court below is as follows:

"This cause coming on to be heard and being heard before the undersigned Judge, and a jury, after the jury had been duly selected, lawfully sworn and regularly empanelled, the parties in open court waived a trial by the jury and agreed to and signed the Statement of Facts set out in the record and requested the court to render and enter such judgment thereon as the Court might deem proper, each side reserving in open court the right to except and appeal to such judgment as the court might render and enter, whereupon, the Court upon such Statement of Facts concludes and holds as a matter of law as follows:

1. That the testator of the defendant, Carl S. Davis, Executor, having executed and delivered to Hugh M. Shields, deceased, predecessor in title of the plaintiffs, a warranty deed dated March 18, 1932, registered in the office of the Register of Deeds for Moore County in Deed Book 111, at page 367, therein conveying the lands described in paragraph 4 of the complaint, the defendant is now estopped to deny plaintiffs' title to said land in said deed described, and any title the defendant as executor of S. G. Garner, deceased, may have acquired by and through the Bank of Pinehurst, mortgagee, by foreclosure sale by it under said mortgage deed executed by S. G. Garner and Hugh M. Shields and wife, Kate M. Shields, bearing date of July 15, 1926, and registered in Book of Mortgages 43, at page 480, and the deed from said Bank of Pinehurst, mortgagee, dated June 24, 1935, and registered in Deeds Book 121, at page 346, office Register of Deeds of Moore County, fed the estoppel and enured to the benefit of the plaintiffs in this action.

2. The Court further holds as a matter of law that the said Hugh M. Shields and S. G. Garner in their lifetime having executed a mortgage deed to the Bank of Pinehurst for the purpose of securing money for their joint use and the use and benefit of the said Shields & Garner, and having agreed between themselves upon the dissolution of said partnership in the Spring of 1932 that they still owed said debt and that as to said indebtedness, said partnership was not dissolved and the parties agreed to remain jointly bound therefor and having subsequently made payments on said indebtedness after said dissolution, and whatever Hugh M. Shields or S. G. Garner in their lifetime may have done in regard to said indebtedness, enured to their benefit and that since the death of said Hugh M. Shields payments were made on said indebtedness by his administrator c. t. a. and C. S. Davis as agent of S. G. Garner, deceased, and whatever payment or payments made by said administrator of said Hugh M. Shields, deceased, c. t. a., or C. S. Davis as executor of the last will and testament of S. G. Garner, deceased, was made for the use and benefit of both and not for individual members of the partnership or their representatives, and when the said Carl S. Davis, executor of the last will and testament of S. G. Garner, deceased, caused title to the lands described in the complaint to be transferred to and assigned to him by the assignment of Dwight Scotten and deed procured to be made to him by reason of such assignment he took and now holds the title thereto in trust for the benefit of Hugh M. Shields, deceased, and his heirs at law him surviving, and in protection of the covenants of warranties made by S. G. Garner and Hugh M. Shields, his heirs and assigns.

Wherefore, upon the foregoing conclusions of law drawn from the said agreed statement of facts, It Is Considered, Ordered, and Adjudged and Decreed by the Court that the plaintiffs are the owners in fee and entitled to the immediate possession of the lands described in paragraph 4 of the complaint, and the defendant is not the owner thereof and has no right, title or interest therein, except a lien thereon for the sum of $116.03, being one-half of the amount of $221.00 and interest on said sum from May 30th, 1935, to date, by reason of the defendant's payment of said sum to the Bank of Pinehurst in payment of the mortgage deed made by Shields and Garner, the plaintiffs having paid said sum into court for the use and benefit of the defendant in full settlement, satisfaction and accord of said lien and deed from the Bank of Pinehurst to Carl S. Davis, Executor of S. G. Garner, deceased, recorded in Deed Book 121, at page 346, Register of Deeds office for Moore County is hereby declared null and void and ordered cancelled, and the mortgage deed from S. G. Garner and Hugh M. Shields and wife, Kate M. Shields, to the Bank of Pinehurst recorded in Book of Mortgages at page 480, office of Register of Deeds for Moore County and the lien declared for $116.03 are cancelled and removed of record as a cloud on plaintiff's title and the Register of Deeds is hereby authorized and directed to mark upon the margin of the deed from the Bank of Pinehurst, Mortgagee, to Carl S. Davis, deceased, as it appears on the record in the book aforesaid, 'This Deed cancelled by judgment of the Superior Court of Moore County, March Term, 1936, in an action therein pending, entitled Ethel Kelly, et als, v. Carl S. Davis, executor of the last will and testament of S. G. Garner, deceased,' and will also mark the index and cross-index of said deed on the index and cross-index of real estate conveyances in his office 'Cancelled,' and to mark upon the margin of said mortgage deed from Garner and Shields to the Bank of Pinehurst at it appears of record in Mortgage Deed Book 43, at page 480, 'This mortgage deed being fully paid and satisfied is cancelled of record,' and to mark the index and cross-index of said mortgage deed on the index and cross-index of such conveyances in his office 'Cancelled.' The Clerk of this Court will mark the index and cross-index of this judgment as it relates to the amount due the defendant by the plaintiffs, 'Cancelled.' The Clerk of this Court will tax the costs of the action against the defendant and the plaintiffs will have and recover their costs against the defendant.

And this cause is retired from the Docket.

Clayton Moore,

Special Judge, Presiding."

The only exception and assignment of error made by defendant in the court below is to the "signing and entering the judgment as appears in the record."

Mosley G. Boyette, of Carthage, for appellant.

Gavin & Jackson, of Sanford, for appellees.

CLARKSON Justice.

This is an action brought by plaintiffs against defendant to remove a cloud from the title to certain land and to declare a certain deed from the Bank of Pinehurst, mortgagee, to the defendant, Carl Davis, executor of S. G. Garner, deceased, void.

The court below decided that defendant was estopped from claiming title to the land in controversy. In this we can see no error.

In the agreed statement of facts are the following:

(1) On July 5, 1926, Hugh M. Shields and S. G. Garner made a mortgage to the Bank of Pinehurst to secure the sum of $3,000 on the land in controversy for borrowed money, each of them being equally responsible for the payment of same.

(2) For a long time prior to April 22, 1932, Shields and Garner were copartners, owning a mercantile business and certain real estate, including that...