Stanley v. Cox, 597

• Decision Date: 20 January 1961
• Docket Number: No. 597,597
• Citation: 117 S.E.2d 826,253 N.C. 620
• Court: North Carolina Supreme Court
• Parties: Harry R. STANLEY and wife, Mae K. Stanley, v. Merle D. COX.

Page 826

117 S.E.2d 826

253 N.C. 620

Harry R. STANLEY and wife, Mae K. Stanley, v. Merle D. COX.

No. 597

Supreme Court of North Carolina.

Jan. 20, 1961

Adam Younce, Greensboro, for plaintiffs, appellants.

Smith, Moore, Smith, Schell & Hunter by Charles E. Melvin, Jr., Greensboro, for defendant, appellee.

PARKER, Justice.

Plaintiffs state in their brief, 'the validity of defendant's claim of lien is governed by the state of the law in 1951, and involves the validity of the court's decree as a consent judgment for a lien to secure alimony in the divorce action of that year. G.S. 50-11. * * * In 1951 a consent judgment for alimony entered in an action for divorce a vinculo was unenforceable as a decree of court.'

Ruffin, C. J., said for the Court in Rogers v. Vines, 28 N.C. 293: 'Now, 'alimony' in its legal sense may be defined to be that proportion of the husband's estate which is judicially allowed and allotted to a wife for her subsistence and livelihood during the period of their separation. ' This has been quoted with approval in Hester v. Hester, 239 N.C. 97, 79 S.E.2d 248, and in Taylor v. Taylor, 93 N.C. 418.

The divorce judgment recites, 'by consent of the plaintiff, it is further ordered and decreed that the plaintiff shall pay to the defendant each, every and all the payments specified in the aforesaid agreement dated January 19, 1951.' The agreement referred to in the divorce judgment is an executed separation agreement and property settlement, and is not alimony or a contract for alimony. For a discussion of the clear distinction between the provisions and considerations for a property settlement and those for alimony see 17A Am.Jur., Divorce and Separation, § 883 et seq. In the absence of a provision in the executed separation agreement and property settlement here to the contrary, it is not avoided or nullified by the subsequent divorce of the parties. Jenkins v. Jenkins, 225 N.C. 681, 36 S.E.2d 233, and cases cited; 42 C.J.S. Husband and Wife § 602, p. 188. See Jones v. Lewis, 243 N.C. 259, 90 S.E.2d 547, to the effect that an executed property settlement is not affected by a mere reconciliation and resumption of cohabitation.

Plaintiffs state further on in their brief, 'plaintiffs do not attack the validity of the judgment as an approval of the contract for alimony. They attack only the lien of the judgment and seek to remove it as a cloud on title.' Plaintiffs contend that the lien upon the estate and property of plaintiff to make the payments to Merle D. Cox set forth in the separation agreement and property settlement cannot be enforced as a contract for the reason that Merle D. Cox did not consent to the lien of the judgment, and they so allege.

The judgment recites, 'by consent of the plaintiff * * * it is further ordered and adjudged that said payments shall be and remain a lien upon the estate and property of the plaintiff.' There appears on the face of the judgment the following: 'Plaintiff consents to the last paragraph of the foregoing decree: Harry R. Stanley, Norman A. Boren, Attorneys for the Plaintiff.'

It seems settled beyond question that liens can be created by agreement. 33 Am.Jur., Liens, p. 421. Generally, a lien can be created only by the owner, or by some person authorized by him. 33 Am. Jur., Liens, p. 423.

This Court said in Winborne v. Guy, 222 N.C. 128, 22 S.E.2d 220, 222: 'The doctrine may be stated in its most general form, that every express executory agreement in writing, whereby the contracting party sufficiently indicates an intention to make some particular property, real or personal, or fund, therein described or identified, a security for a debt or other obligation, * * *, creates an equitable lien upon the property so indicated, which is enforceable against the property in the hands not only of the original contractor, but of his heirs, administrators, executors, voluntary assignees and purchasers or encumbrancers with notice. * * * Where there is an intention coupled with a power to create a charge on property, equity will enforce such charge against all except those having a superior claim. Such liens are simply a right of a special nature over the thing which constitutes a charge or encumbrance upon the thing itself.' The first sentence quoted also appears in Godwin v. Murchison Nat. Bank, 145 N.C. 320, 59 S.E. 154, 17 L.R.A.,N.S., 935, and is taken from what now appears in Pomeroy's Equity Jurisprudence, 5th Ed., Vol. 4, p. 696, and also in earlier editions of Pomeroy. This language of Pomeroy has been approved by the Supreme Court of the United States in Walker v. Brown, 165 U.S. 654, 17 S.Ct. 453, 41 L.Ed. 865, and in United States v. Butterworth-Judson Corp., 267 U.S. 387, 45 S.Ct. 338, 69 L.Ed. 672. The doctrine clearly indicates an application of the maxim, equity regards as done that which ought to be done.

'In equity, any agreement in writing, however informal, made by the owner of land, upon a valid consideration, by which an intention is shown that the land shall be security for the payment of money by him, creates an equitable lien upon the land.' Tiffany, Real Property, 3rd Ed., Vol. 5, § 1563, p. 659.

'The form or particular nature of the agreement which shall create a lien is not very material, for equity looks at the final intent and purpose rather than at the form; and if the intent appear to give, or to charge, or to pledge property, real or personal, as a security for an obligation, and the property is so described that the principal things intended to be given or charged can be sufficiently identified, the lien follows. Among the kinds of agreement from which liens have been held to arise, the following are some important examples: Executory agreements which do not convey or transfer any legal estate in the property, but which stipulate that the property shall be security, or which pledge it, for the performance of an obligation.' Pomeroy's Equity Jurisprudence, 5th Ed., Vol. 4, § 1237, pp. 702-703.

This is said in 33 Am.Jur., Liens, p. 428: 'An equitable lien on particular property, real or personal, enforceable against the owner, his heirs, personal representatives, or transferees, except bona fide purchasers for value, may be created by an express agreement by such owner that such property shall stand or be held as security for the payment of a specified debt or other obligation.'

A good example of an equitable lien is found in Walker v. Brown, supra [165 U.S. 654, 17 S.Ct. 456]. In that case, one T. E. Brown addressed to Walker & Co. a letter advising them that a loan of bonds, to the face value of $15,000, previously made by him to one Lloyd, for the use of the latter's firm, was 'with the understanding that any indebtedness that they may be owing you at any time, shall be paid before the return to me of these bonds, or the value thereof, and that these bonds or the value thereof are at the risk of the business of Lloyd & Co., so far as any claim you may have against said Lloyd & Co. is concerned.' Upon the faith of this letter Walker & Co. made sales to Lloyd & Co., and the latter firm subsequently failed. Shortly after the letter was written, and before the failure, Brown induced Lloyd & Co. to return to him the bonds, which he thereupon settled upon his wife. On a bill filed by Walker & Co., the Supreme Court of the United States held that the letter gave them an equitable lien on the bonds which could be asserted as against Brown's wife, who was a mere volunteer.

Webster, New International Dictionary, 2nd Ed., defines the word consent: '4. Law. Capable, deliberate, and voluntary assent or agreement to, or concurrence in, some act or purpose, implying physical and mental power and free action.' Black's Law Dictionary, 4th Ed., defines the term consent: 'A concurrence of wills. Voluntarily yielding the will to the proposition of another; acquiescence or compliance therewith.'

The divorce judgment recites that the lien was created by consent of the plaintiff, and his consent is shown by the signature of his attorneys to the judgment. Considering the consent part of the divorce judgment to ascertain the intent of the parties, it seems manifest that the consent of plaintiff to the provision creating a lien to secure the payments specified in the separation agreement and property settlement between him and his wife was a concurrence of wills and agreement and contract between him and Merle D. Cox. Certainly, it was not an agreement or contract with anyone else. This Court said in Coppersmith & Sons v. Aetna Ins. Co., 222 N.C. 14, 21 S.E.2d 838, 840: 'The signing of a written contract is not necessarily essential to its validity.' The fact that Merle D. Cox by herself or by her attorney did not sign the consent part of the divorce judgment does not affect its validity as a consent part of the judgment. LaLonde v. Hubbard, 202 N.C. 771, 164 S.E. 359.

A consent judgment is the contract of the parties entered upon the records with the approval and sanction of a court of competent jurisdiction. In re Will of Pendergrass, 251 N.C. 737, 112 S.E.2d 562. It depends for its validity upon the consent of both parties, without which it is void. Ledford v. Ledford, 229 N.C. 373, 49 S.E.2d 794.

The attorneys for plaintiff, one of whom is a plaintiff in the instant case, having signed the consent part of the divorce judgment creating the lien plaintiffs assail, are presumed to have acted in good faith, and to have had the necessary authority from their client, and not to have betrayed his confidence or to have sacrificed his rights. Gardiner v. May, 172 N.C. 192, 89 S.E. 955. No lack of authority on their part is averred in plaintiffs' complaint. The consent of Merle D. Cox to the divorce part of the divorce judgment creating the lien in effect is alleged in the complaint as follows: 'Merle D. Cox claims that the terms of the divorce judgment, as recorded * * *, creates a lien on plaintiffs' one-fourth undivided interest...