Stokes v. Smith

• Decision Date: 16 October 1957
• Docket Number: No. 95,95
• Citation: 246 N.C. 694,100 S.E.2d 85
• Court: North Carolina Supreme Court
• Parties: Jasper STOKES and wife, Reba Stokes, Hattie C. Stokes, Gladys Stokes McLawhorn, Lyman G. Stokes and wife, Mary Stokes, Bernice L. Stokes and wife, Edna Earl Stokes, and Eleanor Jean Ostrander and husband, Alfred Ostrander, v. Eugene SMITH and wife, Ruth W. Smith, Kirby Smith and wife, Clara Smith, Ralph Smith and wife, Mary A. L. Smith, Cora Bob Smith Turnage, Larry W. Smith, Jr. and wife, Darlene Smith, and Dorothy W. Smith and Roy Turnage, Jr. Blaney McLawhorn Moore, Jennie Nichois, Dorothy Cayton, Nina Deaver, Ben McLawhorn, Ed McLawhorn, and Eugene McLawhorn, Intervenors.

Page 85

100 S.E.2d 85

246 N.C. 694

Jasper STOKES and wife, Reba Stokes, Hattie C. Stokes Gladys Stokes McLawhorn, Lyman G. Stokes and wife, Mary Stokes, Bernice L. Stokes and wife, Edna Earl Stokes, and Eleanor Jean Ostrander and husband, Alfred Ostrander, v. Eugene SMITH and wife, Ruth W. Smith, Kirby Smith and wife Clara Smith, Ralph Smith and wife, Mary A. L. Smith, Cora Bob Smith Turnage, Larry W. Smith, Jr. and wife, Darlene Smith, and Dorothy W. Smith and Roy Turnage, Jr Blaney McLawhorn Moore, Jennie Nichois, Dorothy Cayton, Nina Deaver, Ben McLawhorn, Ed McLawhorn, and Eugene McLawhorn, Intervenors.

No. 95

Supreme Court of North Carolina.

Oct. 16, 1957

L. W. Gaylord, Sr., L. W. Gaylord, Jr., and M. E. Cavendish, Greenville, for intervenors Nina Deaver, Dorothy Cayton, and Jennie Marie Nichols, appellants.

Albion Dunn, Greenville, for defendant appellees.

RODMAN, Justice.

Plaintiffs have served no case on appeal, have filed no assignments of error, and have filed no brief or appeal bond. Defendants' motion to dismiss plaintiff's appeal is allowed.

The children of Mary Jones McLawhorn contend that the facts stipulated establish as a matter of law that Exum Dail was a mere conduit to pass the title of Mrs. McLawhorn's property to her husband, and since the deed from Mrs. McLawhorn and husband to Dail was not probated as required for a valid conveyance from wife to husband (G.S. § 52-12), he acquired no title to the property, but upon her death was a tenant by courtesy consummate. Grant the soundness of the premise, and the conclusion follows. Pilkington v. West, N.C., 99 S.E.2d 798; Ingram v. Easley, 227 N.C. 442, 42 S.E.2d 624. But the facts stipulated do not support the premise. Whether Dail was a bona fide purchaser or a strawman was a question of fact. The burden rests upon those asserting the invalidity of the deed to establish that it is not in fact what it purports to be. McCullen v. Durham, 229 N.C. 418, 50 S.E.2d 511. The mere fact that on the following day the property was conveyed to the husband and the consideration recited in each deed was the same is not sufficient to conclusively establish that Dail was a mere means to accomplish an illegal purpose. Intervenors had a right to insist on findings of fact by a jury or by the court, but here they have stipulated the facts. It is not stipulated as a fact that the transaction was not bona fide and for a proper purpose. We attach no importance to the use of the word 'reconcey' in connection with the conveyance from Dail to McLawhorn. The parties did not, on the oral argument or by brief, suggest it meant more than a transmission of a title from Dail to Ed McLawhorn.

Having concluded that title was vested in Ed McLawhorn, we are called upon to determine, if we can from the stipulated facts, the meaning and effect of the phrase 'subject to the homestead rights of the said Ed McLawhorn' used in the decree appointing commissioners and in the deed from the commissioners to Smith for the McLawhorn property.

The facts stipulated do not disclose all of the parties or the character or purpose of the actions in which the commissioners were appointed and the order of sale was made. Was Mrs. McLawhorn a party? Were the commissioners appointed to consummate a voluntary disposition of the land by Ed McLawhorn? If so, was his wife a party to the conveyance? Were the actions in which the decree was entered merely for the purpose of declaring a debt and a lien on McLawhorn's property against which he could assert his homestead exemption and a postponement of the sale of the land allotted as his homestead until the termination of that right?

Defendants strenuously insist that the question has been definitely settled by Joyner v. Sugg, 132 N.C. 580, 44 S.E. 122; Davenport v. Fleming, 154 N.C. 291, 70 S.E. 472; Kirkwood v. Peden, 173 N.C. 460, 92 S.E. 264; and Hicks v. Wooten, 175 N.C. 597, 96 S.E. 107. Each of those cases dealt with voluntary conveyances made by the property owner and the scope and effect of language used by the grantor. It is not here stipulated that the decree under which the sale was made was entered to consummate and give effect to a voluntary conveyance made by the property owner; and because the facts stipulated do not establish the controlling effect of those cases, we deem it necessary to point out what we think are now well-established principles relating to the homestead.

Statutory provision was made for the exemption from sale under execution of certain kinds of property of an impoverished debtor as early as 1773. Rev.Stat. 1837, c. 45, § 7; Rev.Code 1854, c. 45, §§ 7, 8, 9, 10. It was not until the adoption of the Constitution in 1868 that we wrote into our organic law the right of a judgment debtor to claim as exempt from sale under execution both real and personal property. These constitutional provisions and the statutes enacted to give effect thereto have in the past been fruitful sources of litigation.

The Legislature in 1869 enacted a statute requiring the allotment of the homestead before a levy under execution. C. 137, P.L.1869. Portions of that Act now appear as G.S. §§ 1-371, 372, 375, 376, 379, and 386. The statute, by express language, commands the sheriff to lay off a homestead to the judgment debtor before any levy is made. The provisions of the statute are mandatory. Sales made under execution merely for the purpose of providing funds to pay a debt are, when the homestead of the judgment debtor has not been allotted, void. Poe v. Hardie, 65 N.C. 447; Taylor v. Rhyne, 65 N.C. 530; Waters v. Stubbs, 75 N.C. 28; Mebane v. Layton, 89 N.C. 396; McCracken v. Adler, 98 N.C. 400, 4 S.E. 138; Morrison v. Watson, 101 N.C. 332, 7 S.E. 795, 1 L.R.A. 833; Mobley v. Griffin, 104 N.C. 112, 10 S.E. 142; Ferguson v. Wright, 113 N.C. 537, 18 S.E. 691; Williams v. Johnson, 230 N.C. 338, 53 S.E.2d 277.

A sale of decedent's land by judicial decree for the purpose of making assets to pay his debts is not within the letter of the statute but is clearly within the spirit of the law. Hence it has been consistently held that a homestead, where the right exists, must be allotted before lands of the decedent can be sold to pay his debts. Rocky Mountain Savings & Trust Co. v. McDearman, 213 N.C. 141, 195 S.E. 531; Fulp v. Brown, 153 N.C. 531, 69 S.E. 612; Shields v. Allen, 77 N.C. 375; Hinsdale v. Williams, 75 N.C. 430.

The constitutional right of a debtor to a homestead and the statutory right to have it allotted before levy and sale were not controversial. But when the allotment was made, what should the sheriff sell? Should he sell the entire tract subject only to the right of the judgment debtor to use and occupy the allotted area for his life and the life of his widow or the minority of his children or should the officer exclude from the sale the entire area allotted as a homestead and sell only the remaining land, if any, of the judgment debtor? The Legislature in 1870 provided the answer. It enacted: 'It shall not be lawful to levy or sell under execution for any debt the reversionary interest in any land included in a homestead until after the termination of the homestead interest itself: Provided, that the statute of limitations shall not run against any debt owing by the holder of the homestead affected by this section, during the existence of his interest in the homestead.' C. 121, § 1, Laws 1869-70 (Battle's Rev.1873, c. 55, § 26).

As early as 1871 the Court said: 'Only the interest of a debtor in land in excess of the homestead can be levied upon and sold; and this excess must be ascertained by appraisers properly appointed.' Taylor v. Rhyne, supra. It explained the reason for the legislation, saying: 'That act (c. 121, Laws 1870) was intended to prorect the owner of a homestead by the purchaser against any vexatious litigation which might be instituted by the purchaser of a reversionary interest. Such interest, if sold, would yield but little to an execution creditor in satisfaction of his debt, and in nine cases out of ten would be purchased by speculators.' Poe v. Hardie, supra. In this connection it was said in Kirkwood v. Peden, supra [173 N.C. 460, 92 S.E. 266]: 'The only reason for keeping a judgment in full force and effect during the existence of the homestead is to subject the reversionary interest to its payment when the homestead expires, as such interest cannot be sold under execution during the life of the homestead.' As noted in Mebane v. Layton, supra, § 1 of the Act of 1870 was not brought forward in the Code of 1883. The reason for the omission is not clear.

Divergent views are expressed in the older cases with respect to the basis for the exemption from levy and sale, during the existence of the homestead right, of the lands allotted as a homestead. Some of the cases predicate this exemption on the statute; others predicate the right on the Constitution itself. No matter what the basis for the exemption, the cases are in agreement that the land allotted as the homestead is exempt from levy and sale under execution during the existence of the homestead right. Lambert v. Kinnery, 74 N.C. 348; Hinsdale v. Williams, supra; Gheen v. Summey, 80 N.C. 187; Mebane v. Layton, supra; Markham v. Hicks, 90 N.C. 204; Vanstory v. Thornton, 112 N.C. 196, 17 S.E. 566; Fulp v. Brown, supra; Crouch v. Crouch, 160 N.C. 447, 76 S.E. 482; Brown v. Harding, 171 N.C. 686, 89 S.E. 222; Cheek v. Walden, 195 N.C. 752, 143 S.E. 465; Miller v. Little, 212 N.C. 612, 194 N.C.92; Cleve v. Adams, 222 N.C. 211, 22 S.E.2d 567; Sample v. Jackson, 225 N.C. 380, 35 S.E.2d 236

Though there was agreement on this aspect of the law relating to homestead, from the time of the adoption of the Constitution until after the turn of the century, sharp disagreement often existed among members of the Court in respect to an interpretation of § 8 of art. X of the Constitution, providing: '* * * no deed made by the owner of the homestead...