Mims v. Mims

• Decision Date: 03 January 1984
• Docket Number: No. 8210SC1126,8210SC1126
• Citation: 310 S.E.2d 130,65 N.C.App. 725
• Court: North Carolina Court of Appeals
• Parties: Allen L. MIMS, Jr. v. Marsha P. MIMS.

Page 130

310 S.E.2d 130

65 N.C.App. 725

Allen L. MIMS, Jr. v. Marsha P. MIMS.

No. 8210SC1126.

Court of Appeals of North Carolina.

Jan. 3, 1984.

McDaniel, Heidgerd & Schiller by L. Bruce McDaniel, Raleigh, for plaintiff-appellant.

Sullivan & Pearson, P.A. by Mark E. Sullivan, Raleigh, for defendant-appellee.

JOHNSON, Judge.

This appeal involves the attempt of plaintiff Allen Mims to establish sole ownership of certain real property by means of a resulting trust in his favor. Plaintiff presents three questions for review, all raising the common issue of whether the facts of record support the judgment entered. Specifically, whether plaintiff produced sufficient evidence of his intention to retain sole ownership of the property to rebut the presumption that he intended to make a gift of an entirety interest to his former wife Marsha Mims to mandate the declaration of a resulting trust in his favor. Plaintiff argues that he presented "overwhelming relevant, material and unrefuted evidence" to prove that he took no actions supporting a finding of gift, that he did not intend to make such a gift, and did not, in fact, make a gift of the property to the defendant. Consequently, plaintiff argues that the trial court erred in making certain findings of fact, in failing to make certain other findings, and abused its discretion by denying plaintiff's motions to set aside the verdict. For the reasons set forth below, we hold that the relevant and material facts of record do not support the trial court's conclusion of law that the presumption of gift was not rebutted, and therefore, the judgment awarding defendant a one-half interest in the subject property must be reversed. We will first give a brief review of the history of this case, as it has some bearing on the resolution of the issues presented by this appeal.

I

Plaintiff and defendant were married in 1973, separated in 1977, and divorced in 1978. In 1974, the plaintiff purchased a residential house and lot, title being taken in both names. It was undisputed that he paid the entire consideration from his separate funds. Plaintiff originally filed this action seeking reformation of the deed based on a mutual mistake and a judgment declaring him the sole owner of the property. He alleged, inter alia, that it had always been the intention and the understanding of the parties that the property was to be his alone and that both names appeared on the deed only because their real estate agent had erroneously advised them that North Carolina law so required. Defendant opposed reformation of the deed conveying the property to both parties as tenants by the entirety, and her motion for summary judgment was granted. On appeal plaintiff argued, inter alia, that although it was not mentioned specifically in the pleadings, the evidentiary showing on the summary judgment motion was sufficient to vest beneficial title in him alone on a theory of resulting trust.

Ultimately the case reached the Supreme Court. The court upheld summary judgment for the defendant wife on the grounds that the mistake was one of law, not fact, and therefore reformation of the deed on the basis of mutual mistake was not supported by the evidentiary showing as a matter of law. Mims v. Mims, supra, 305 N.C. at 45, 286 S.E.2d at 783 (Hereafter "Mims" ). However, the court also held that the evidentiary forecase on summary judgment indicated that the plaintiff would be able to rebut the presumption of gift arising when a husband purchases real property and title is taken in the names of both spouses jointly, and make out a prima facie case for a resulting trust in his favor at trial. 305 N.C. 59, 286 S.E.2d at 791.

In the course of its opinion on the issue of resulting trust, the court examined prior North Carolina law controlling the presumption of resulting trust in interspousal conveyances when the wife provided the consideration and the contrary presumption of gift when it was the husband who furnished the consideration. In what is now considered a landmark decision, the Court in Mims concluded that the original rationale for employing different presumptions for husbands and wives is no longer viable, and held that the presumptions should be equalized and a gift implied whether the husband or the wife provided the consideration. 305 N.C. at 48, 286 S.E.2d at 788. The presumptive gift rule was made applicable to all cases not governed by the Equitable Distribution Act. However, that aspect of Mims is not involved in this appeal because it was the plaintiff husband who furnished the consideration in this case.

In the course of reviewing the sufficiency of plaintiff's evidentiary forecast, the court outlined the general rules governing his claim for a resulting trust. These general rules are also determinative of the case sub judice and may be summarized as follows: ¹

1. A resulting trust arises when a person becomes invested with title to real property under circumstances which in equity obligate that person to hold the title and to exercise ownership for the benefit of another. A trust of this sort does not arise from or depend upon any agreement between the parties; it results from the fact that one person's money has been invested in land and the conveyance taken in the name of another. The trust is created in order to effectuate what the law presumes to have been the intention of the parties in these circumstances--that the person in whom the land was conveyed holds it as trustee for the person who supplied the purchase money.

2. At common law the rule is subject to the qualification that where the person who pays the price is under a legal, or even, a moral obligation to maintain the person in whose name the purchase is made, there is a presumption in equity that the purchase is intended as an advance or gift to the recipient.

3. To make out a prima facie case for a resulting trust plaintiff must rebut the presumption of gift by evidence that he intended no gift.

4. The presumption is one of fact and not of law, and may be rebutted by evidence of circumstances tending to show a contrary intent or that the purchaser did not intend the ostensible grantee to take beneficially.

5. A resulting trust arises, if at all, in the same transaction in which legal title passes, and by virtue of consideration advanced before or at the time legal title passes.

6. In the final analysis, whether or not a resulting trust arises in favor of the person paying the consideration for a transfer of property to another depends on the intention, at the time of transfer, of the person furnishing the consideration, and such intention is to be determined from all the attendant facts and circumstances.

7. When a party proves by clear, cogent, and convincing evidence that he or she did not intend to make a gift of an entirety interest in the property to his or her spouse, the presumption of gift will have been rebutted. The parties will then stand as if they were not man and wife, that is, they stand as other parties and the general rule prevails.

8. When the presumption of gift is rebutted the effect is automatically to create a resulting trust in favor of the party furnishing the purchase price.

The court stated that it was undisputed that plaintiff furnished from his separate funds the entire consideration for the real property before or at the time title passed, and concluded that "[t]he only factual issue, therefore, is plaintiff's intent at the time he furnished the consideration." 305 N.C. at 57, 286 S.E. at 790. The court continued, "[i]f, therefore, plaintiff can prove at trial by clear, cogent, and convincing evidence that he did not intend to make a gift of an entirety interest in the property to defendant, then he will have rebutted the presumption of gift." Id. at 57-58, 286 S.E.2d at 790.

The court also summarized the evidentiary forecast established by the parties' pleadings, affidavits and documentary evidence as follows:

It shows that plaintiff supplied the entire purchase price for the property from money he received from his father and grandfather. He at all times intended for the property to be his alone and so advised the defendant at and before the closing. Defendant "agreed with me that this real estate was mine and mine alone." Plaintiff acquiesced in placing title in both his and defendant's names only because he was advised by his real estate agent that North Carolina law so required.

305 N.C. at 59, 286 S.E.2d at 791. On the basis of this forecast, ² the case was remanded to the Superior Court.

II

Upon remand to the trial court, the parties waived a jury trial. The only factual issue to be determined was the plaintiff's intent at the time he furnished the consideration for the property, that is, at the time of the closing on 12 December 1974. Plaintiff presented the testimony of several witnesses, including himself, his father and several friends of his and his wife. The only witness testifying for the defense was defendant Marsha Mims.

On the whole, the evidence presented by plaintiff was consistent with the evidentiary forecast he presented in opposition to defendant's summary judgment motion. Defendant's own testimony conflicted with plaintiff's account of conversations between the parties prior to the closing with regard to plaintiff having discussed with defendant the realtor Richard Smith's statement regarding the necessity for title being taken in both names, with regard to plaintiff's having advised defendant that he intended the property to be his alone, and with regard to defendant's having agreed with plaintiff that the real estate was to be his alone. However, plaintiff's father and friends, Paul Simpson and Danford Josey all testified that at the relevant times, plaintiff had stated in their presence that the house was to be his alone and further, that they had never heard plaintiff state that he was making a gift of the property to Mrs. Mims or Mrs. Mims claim that...