Stewart v. McDade, 738

• Decision Date: 11 April 1962
• Docket Number: No. 738,738
• Citation: 124 S.E.2d 822,256 N.C. 630
• Court: North Carolina Supreme Court
• Parties: L. E. STEWART and wife, Nonie D. Stewart, et al. v. Geace M. McDADE.

Page 822

124 S.E.2d 822

256 N.C. 630

L. E. STEWART and wife, Nonie D. Stewart, et al. v. Geace M. McDADE.

No. 738

Supreme Court of North Carolina.

April 11, 1962

Bonner D. Sawyer, Hillsboro, Reade, Fuller, Newsom & Graham, Durham, for plaintiffs.

Max D. Ballinger, Greensboro, for defendant.

MOORE, Justice.

Defendant's assignments of error pose the general question, whether or not the matters decided by the jury's verdict are sufficient predicate for the relief granted by the court in the judgment.

Issues arise on the pleadings, and their formation must have regard to the phases of the evidence pertinent thereto. Brown v. Daniel, 219 N.C. 349, 352, 13 S.E.2d 623. Exclusive of matters settled by stipulation, the only issues of fact raised by the complaint and answer in the case at bar are those which were submitted to and answered by the jury. Defendant set up no affirmative defenses. The execution of the release having been established by the verdict, its force and effect was a question of law for the court.

Defendant contends that, notwithstanding the jury's finding that she executed the release for a valuable consideration, the complaint fails to state facts sufficient to constitute a cause of action and the demurrer should have been sustained.

In the first place, defendant asserts that the subject of the release is a mere possibility and a contract with respect thereto is against public policy and void. Under the old practice an assignment of a mere expectancy of an heir apparent could not be enforced in an action at law. Cannon v. Nowell, 51 N.C. 436; Fortescue v. Satterthwaite, 23 N.C. 566. But equity gave effect to the assignment of a mere expectancy or possibility as a contract, in the absence of proof of fraud or imposition. Mastin v. Marlow, 65 N.C. 695; McDonald v. McDonald, 58 N.C. 211. The present rule in this jurisdiction is clearly stated in Price v. Davis, 244 N.C. 229, 93 S.E.2d 93, in which Denny, J. (now C. J.) discusses the decisions of this Court bearing on the subject. In Price the ancestor had four sons and four daughters. For a specified consideration paid by the ancestor each of the four daughters released to him any and all right to share in his estate. There was no contention that the amounts paid the daughters were not fair shares of the estate. It was held that the releases were binding and the daughters were estopped thereby to claim any part of the estate. The principles involved are fully discussed, and the opinion points out that 'There is no allegation or contention of bad faith, overreaching or fraud on the part of the ancestor, or disability of any one of the four daughters.'

North Carolina follows the majority rule. 35 N.C.Law Rev. 127 (1956). 'If fraud and gross inequality are not present, the consideration for the release will usually be held fair even though its amount may later turn out to be an inadequate share of the estate. The burden of proving want of consideration is on the party asserting said want.' ibid., p. 131. The majority rule is stated as follows: 'Generally, the release of an expectant share to an ancestor, fairly and freely made, in consideration of an advancement or for other valuable consideration, excludes the heir from participation in the ancestor's estate at his death. It is necessary that the person executing the release was at the time competent to contract, that the release was not obtained by means of fraud or undue influence, and that the instrument or transaction in question be sufficient to constitute a release or a contract creating a bar; and the burden of proving want of consideration for the release is on the party asserting such want.' 26A C.J.S. Descent & Distribution § 62, pp. 656, 657. In the case of Re Edelman's Estate, 148 Cal. 233, 82 P. 962 (1905) it is said: 'It is true that where the heir sought to transfer or convey his interest in the estate of an ancestor to a third person, equity, before it would give effect to such transfer, required evidence from that third person of the good faith and fairness of the transaction, the very apparent reason being that designing persons should not take advantage of the improvidence or penury or inexperience of one to strip him of his prospective inheritance. An additional reason was that such a transfer, made without the knowledge of the ancestor, was in a certain sense a fraud upon him. Both these reasons are eliminated, however, and with their elimination the rule ceases when the release is made to the ancestor himself; for, in the first...