Perkins v. Perkins

• Decision Date: 19 November 1958
• Docket Number: No. 243,243
• Court: North Carolina Supreme Court
• Parties: Evalyn Carson PERKINS v. Sidney E. PERKINS.

Page 663

105 S.E.2d 663

249 N.C. 152

Evalyn Carson PERKINS v. Sidney E. PERKINS.

No. 243

Supreme Court of North Carolina.

Nov. 19, 1958

Clayton & London, Charlotte, for plaintiff.

Peter H. Gerns, Charlotte, for defendant.

DENNY, Justice.

We shall first consider the plaintiff's appeal.

The plaintiff assigns as error the overruling of her demurrer ore tenus to the defendant's first further answer and defense by way of counterclaim or crossaction.

The plaintiff is relying on two grounds for reversal of the ruling on her demurrer ore tenus.

It is conceded that the deed from Thomas P. Perkins and wife to the plaintiff is a fee simple deed on its face. It further appears from the defendant's evidence that Thomas P. Perkins held the absolute fee simple title to the property involved in this controversy at the time he and his wife executed the deed dated 17 August 1950, conveying the property to the plaintiff.

It is well settled in this jurisdiction that a deed absolute on its face cannot be converted into a mortgage without allegation and proof that the clause of redemption was omitted by reason of ignorance, mistake, fraud, or undue advantage. Streator v. Jones, 5 N.C. 449; Bonham v. Craig, 80 N.C. 224; Egerton v. Jones, 102 N.C. 278, 9 S.E. 2; Norris v. McLam, 104 N.C. 159, 10 S.E. 140; Sprague v. Bond, 115 N.C. 530, 20 S.E. 709; Newton v. Clark, 174 N.C. 393, 93 S.E. 951; Williamson v. Rabon, 177 N.C. 302, 98 S.E. 830; Newbern v. Newbern, 178 N.C. 3, 100 S.E. 77; Chilton v. Smith, 180 N.C. 472, 105 S.E. 1; Davenport v. Phelps, 215 N.C. 326, 1 S.E.2d 824, 825.

In the last cited case, Stacy, C. J., speaking for the Court pointed out that Pearson, J., in delivering the opinion in Sowell v. Barrett, 45 N.C. 50, said:

'Since the case of Streator v. Jones, , there has been a uniform current of decisions, by which these two principles are established in reference to bills which seek to correct a deed, absolute on its face, into a mortgage or security for a debt:

'1. It must be alleged, and of course, proven, that the clause of redemption was omitted by reason of ignorance, mistake, fraud or undue advantage;

'2. The intention must be established, not merely by proof of declarations, but by proof of facts and circumstances, dehors the deed, inconsistent with the idea of an absolute purchase. Otherwise, title evidenced by solemn deeds would be, at all times, exposed to the 'slippery memory of witnesses."'

Moreover, in order to correct a deed absolute on its face into a mortgage, it must not only be alleged and proven that the clause of redemption was omitted by reason of ignorance, mistake, fraud or undue advantage, the quantum of proof in such case must be clear, strong and convincing. Davenport v. Phelps, supra; Ray v. Patterson, 170 N.C. 226, 87 S.E. 212.

The second ground upon which the plaintiff argues that her demurrer should have been sustained is bottomed on the ground that the defendant was not a party to the deed under which the plaintiff holds the title, and, therefore, he has no legal or equitable right to have the deed reformed. We think this position is also well taken.

It is said in Sills v. Ford, 171 N.C. 733, 88 S.E. 636, 638, "A court of chancery cannot (for example) change an agreement between A. and B. into one between A. and C.' Bispham's Pr. of Equity, § 468. * * * The authorities are uniform in holding that the relief by reformation of a written instrument will be granted to the original parties thereto, and to those claiming under or through them in privity. Eaton on Equity, p. 621; 24 Am. and Eng.Enc. (2d Ed.), p. 655, and note 87, and Adams v. Baker, 24 Nev. 162, 51 p. 252, in which case it was held: 'In all cases of mistake in written instruments, courts of equity will interfere only as between the original parties, or those claiming under them in privity, such as personal representatives, heirs, devisees, legatees, assignees, voluntary grantees or judgment creditors, or purchasers from them, with notice of the facts. Story's Equity Jurisprudence, § 165.'

We hold that no privity exists between the plaintiff and the defendant under the facts revealed on the record before us. Hege v. Sellers, 241 N.C. 240, 84 S.E.2d 892; Sills v. Ford, supra; Moore v. Moore, 151 N.C. 555, 66 S.E. 598. However, if privity did exist between the plaintiff and the defendant, Thomas P. Perkins and wife would not be necessary parties since they conveyed their entire interest in the property to the plaintiff. Sills v. Ford, supra; Moore v. Moore, supra.

In view of the absence of any allegation in the defendant's pleadings to the effect that the clause of redemption was omitted by ignorance, mistake, fraud or undue advantage, together with the fact that the defendant was not a party to the instrument he seeks to reform, or in privity with the plaintiff in relation thereto, the demurrer ore tenus should have been sustained, and we so hold.

The plaintiff assigns as error the overruling of her demurrer ore tenus to the defendant's second further answer and defense by way of counterclaim or crossaction. The only allegation in this crossaction upon which the defendant bottoms his right to establish a parol trust in his favor is as follows: 'That plaintiff agreed with the defendant to hold the said property in trust for him, and to reconvey the same under the agreement, that the said property was purchased wholly and completely from the funds of this defendant, and before he married the plaintiff, that the conditions of the trust have been satisfied * * *.'

This allegation is not sufficient to warrant the submission of an issue pursuant thereto for the purpose of establishing a parol trust. If the defendant had alleged that the deed was made to plaintiff with the understanding and agreement that she would hold the property in trust for him and would convey the same to him upon the payment of a certain sum or sums of money to her, or upon the performance of some specific act or acts upon which the agreement was predicated, and had further alleged that he had complied with the conditions upon which the agreement was based, he would have stated a cause of action. He does allege that the conditions of the trust have been satisfied. What conditions? These he does not specify or disclose. The payment of the original purchase price by the defendant for the property in litigation before he married the plaintiff, is nothing more than the recital of a fact which is neither pertinent to nor challenged by the plaintiff in this action.

It is essential in a case like this for the pleader to allege the facts and circumstances that led up to and created the trust relationship. Rhodes v. Jones, 232 N.C. 547, 61 S.E.2d 725.

'It is well settled that the averments as to set-off or counterclaim must be definite and certain. Vague, general, and indefinite allegations are not sufficient. The counterclaim is substantially the allegation of a cause of action on the part of the defendant against the plaintiff, and it ought to be set forth with * * * precision and certainty.' American Nat. Bank of Richmond, Va., v. Hill, 169 N.C. 235, 85 S.E. 209, 210; American Nat. Bank of Richmond Va., v. Northcutt, 169 N.C. 219, 85 S.E. 210; G.S. § 1-135.

In Smith v. McGregor, 96 N.C. 101, 1 S.E. 695, 699, it is likewise said: 'A counter-claim should be alleged with clearness and precision; its nature, and the consideration supporting it, when, how, and where it arose, should be stated with reasonable certainty. This the statute requires; and, moreover, it is necessary to just and intelligent procedure. The counter-claim is substantially the allegation of a cause of action on the part of the defendant against the plaintiffs, and it ought to be set forth with the same precision as if alleged in the complaint.'

Moreover, the defendant alleges in paragraph two of this cross-action that the plaintiff paid no consideration whatsoever for said property when the same was purchased by the defendant; that she has no financial interest in the property and that he is...