Moore v. Greenville Banking & Trust Co.

• Decision Date: 24 September 1919
• Docket Number: 177.
• Citation: 100 S.E. 269,178 N.C. 118
• Parties: MOORE v. GREENVILLE BANKING & TRUST CO.
• Court: North Carolina Supreme Court

100 S.E. 269

178 N.C. 118

MOORE v. GREENVILLE BANKING & TRUST CO.

No. 177.

Supreme Court of North Carolina

September 24, 1919

Appeal from Superior Court, Pitt County; Guion, Judge.

Action by Mrs. M. S. Moore against the Greenville Banking & Trust Company. From judgment for defendant, plaintiff appeals. No error.

Where it appears that no such estate in husband and wife as that by the entireties was intended, but that it was the purpose they should hold as tenants in common in proper cases, the instrument of conveyance will be reformed to carry out the intention.

The action was brought by the feme plaintiff against the defendant to recover of it an alleged deposit of $2,090.56 and to recover damages for refusal of defendant to honor plaintiff's check. (This last cause of action, however has been abandoned.) The facts out of which this controversy arose may be briefly stated as follows:

Prior to the fall of 1915, plaintiff's husband, who is a party to this action, and W. L. Hall, were doing a partnership business in the town of Greenville, and engaged in buying and selling farm products. The firm carried a banking account with defendant, and for the purpose of securing overdrafts executed to defendant company their note for $2,000 appearing in the record. W. M. Moore signed this note as surety. Thereafter said firm and the said W. M. Moore, as surety, became indebted to defendant bank in the sum of $2,090.56. The firm became financially distressed, failed and refused to pay the note. Hall was absolutely insolvent. Moore refused to pay, stating "that all of his property was in his wife's name, and the bank could whistle for its money." Thereupon, the credit of the firm having been given upon the bona fide belief of the bank in Moore's solvency, the bank investigated Moore's financial condition. This investigation disclosed that Moore had had considerable property, the title to all of which had become vested in his wife, the plaintiff. It found that plaintiff and her husband were the joint owners of a valuable residential lot in the town of Greenville, which they had purchased in 1908, and which they sold in the fall of 1915 for $12,000 cash, $6,000 of which was deposited by W. M. Moore in the National Bank of Greenville in the name of the plaintiff, and the other $6,000 was deposited in the defendant bank by said W. M. Moore in the name of the plaintiff.

The bank finding that Moore did not intend to pay his obligation as surety, and otherwise, sought advice as to how it might protect itself from loss, and was advised that, upon the voluntary conversion of said real estate into cash, the estate by entirety was dissolved; that its common-law incidents no longer applied; that one-half of the purchase price received for said lot, to wit, $6,000, became the sole property of W. M. Moore, and liable for his debts; that Moore had no legal right to give the plaintiff all of the said purchase price, and thereby defeat the payment of his joint and individual liability to the bank. Thereupon the bank, under date of February 1, 1916, notified the plaintiff of her status at the bank, and of the indebtedness of her husband, and of his refusal to meet his obligation, and further notified her that in order to protect itself from loss it would charge her account with an amount sufficient to pay the indebtedness due by said W. M. Moore; the bank contending that the plaintiff knowingly permitted Moore to perpetrate a fraud upon the bank, and was a party thereto in so far as she accepted all of said purchase price received for said lot in furtherance of the plan of W. M. Moore to defeat his liability to the bank, and thereupon the bank charged the amount of said note and interest to said fund received by virtue of the sale of said lot as aforesaid, and the plaintiff was duly notified that the bank would not honor any check drawn on said account, which reduced the amount of said account below the sum of $2,090.56. Upon receipt of this notice the plaintiff drew a check on defendant bank, which it refused to pay, and which if it had paid, would have reduced the balance in her name below the amount of defendant's claim, and thereupon the feme plaintiff brought this action to recover said deposit of the bank. Thereafter W. M. Moore, her husband, was made a party, as appears in the record.

When the case was first heard, there was a mistrial, and thereafter the trial judge rendered judgment in favor of the plaintiff upon the pleadings, from which judgment the defendant appealed. This court, on the appeal, granted a new trial, and the case upon the second hearing, having been heard upon its merits, the result was that the jury answered all of the issues against the plaintiff, finding by its verdict that the money in defendant bank was the sole property of W. M. Moore, and placed by him in plaintiff's name for the purpose of defrauding the bank. Plaintiff appealed.

F. G. James & Son, of Greenville, and W. F. Evans, of Raleigh, for appellant.

Albion Dunn and Skinner & Whedbee, all of Greenville, for appellee.

WALKER, J. (after stating the facts as above).

The case was before this court at the spring term, 1917, and the decision below was reversed. It is reported in 173 N.C. at page 180, 91 S.E. 793. A careful review of that opinion clearly shows that the governing principles of law involved in this litigation have already been passed upon by the court favorably to the defendant. Especially is this so when we take into consideration the full force of the following excerpt from our opinion found on the bottom of page 183 of 173 N. C., on page 795 of 91 S. E.:

"In the present instance, as we have seen, the claim of the defendant bank is against both the partnership and the individual members, who indorsed its note as sureties, and, under the doctrine recognized and approved by these and like authorities [supra] on the subject, if the facts should be established as alleged and contended for by defendant bank, the right of appropriation, to the extent required to satisfy the claim, would arise to the bank and the defendant is therefore entitled, as stated, to have the questions determined on proper issues. And the principle is in no way affected by the fact that the deposit now stands in the name of the plaintiff, the bank having taken it in ignorance of the true conditions affecting its rights. If, as defendant avers, it was in fact and truth the husband's property, and placed in the wife's name with intent to defraud creditors and the husband being insolvent, she was a volunteer, or if she participated in the fraudulent purpose, in such case the attempted appropriation is avoided by our statute to prevent fraudulent gifts and conveyances (Revisal, §§ 960-962), and the question can, for the purposes of this defense, be considered and dealt with as if the deposit stood in the name of the husband, a course pursued with approval in Citizens' Bank v. Garnett, 21 Kan. 354, an apt authority for the disposition we make of the present appeal."

On the new trial below, issues submitted, with the annexed answers thereto of the jury, were as follows:

"(1) Is the defendant, W. M. Moore, indebted to the Greenville Banking & Trust Company, and, if so, in what amount? Answer: Yes, $1,748.

(2) Was the property purchased of T. E. Hooker paid for with the individual funds of Mrs. M. S. Moore? Answer: No.

(3) Was W. M. Moore the owner of the money deposited in the defendant bank? Answer: Yes.

(4) Were the proceeds of the property sold to W. H. Long deposited in the Greenville Banking & Trust Co., in the name of M. S. Moore for the fraudulent purpose of preventing the Greenville Banking & Trust Co. from collecting the amount due and owing it by W. M. Moore? Answer: Yes."

These issues seem to cover the questions, which this court directed to be submitted to the jury, and the answers thereto all seem to have been in favor of the defendant bank. Whether the deed from Hooker and wife to Moore and wife creates a tenancy in common or an estate by the entirety, it would seem, under the facts, that a conversion of the estate took place, as it was intended that it should do so, upon the execution of the deed to Long. That there was an intention to convert the estate by the entirety into an estate in severalty is evidenced by the fact that the husband attempted to give all of his interest therein to the plaintiff, his wife.

We do not deem it necessary to consider, or to decide, whether the voluntary conversion of the land into money by the sale to W H. Long, nothing more appearing, divested the proceeds of every attribute of an estate by the entirety, simply by the conversion itself, because we are of the opinion that, by the very conduct of the parties, such a conversion and divestiture resulted, and it was manifestly so intended, as we will show, when the fund was divided into halves and deposited by the mutual consent of the parties, one half thereof in the defendant bank and the other half in the National Bank of Greenville. Mrs. Moore asserts that the deed for the Hooker lot was bought with her own money, which was derived from other property owned by her in Grimesland. We will state this matter more at large and in substantially her own way. She admits, in her reply to the answer of the defendant, that for several years prior to October 22, 1915, the Hooker lot was held in the name of the plaintiff and her husband, W. M. Moore, "by deed in the entirety," but that, in fact, it was bought and paid for with her individual money, and that, when the deed was written, it was by inadvertence of the draftsman conveyed to both husband and wife by the entirety, and that after the discovery of the same she and her husband agreed that it might be so held, as...