Taylor v. Abernethy

• Decision Date: 18 October 2005
• Docket Number: No. COA04-651.,COA04-651.
• Court: North Carolina Supreme Court
• Parties: Harvey C. TAYLOR, Jr., Plaintiff, v. Don A. ABERNETHY, Individually and Jack C. Weir, Administrator CTA of the Estate of Romer Gray Taylor, Defendants.

620 S.E.2d 242

Harvey C. TAYLOR, Jr., Plaintiff, v. Don A. ABERNETHY, Individually and Jack C. Weir, Administrator CTA of the Estate of Romer Gray Taylor, Defendants.

No. COA04-651.

Court of Appeals of North Carolina.

October 18, 2005.

COPYRIGHT MATERIAL OMITTED

Appeal by defendant Abernethy from judgment entered 5 January 2004 by Judge James W. Morgan in Burke County Superior Court. Heard in the Court of Appeals 26 January 2005.

Wyatt, Early, Harris, Wheeler, LLP, by William E. Wheeler, High Point, for plaintiff-appellee.

Gorham, Crone, Mace & Green, LLP, by John W. Crone, III, Hickory, Sigmon, Sigmon & Isenhower, by C. Randall Isenhower, Newton, and Kilpatrick Stockton, LLP, by James H. Kelly, Winston-Salem, for defendant-appellant Abernethy.

STEELMAN, Judge.

Defendant, Don A. Abernethy, appeals the trial court's entry of judgment following a jury verdict, holding that Romer Gray Taylor (Romer) entered into a valid contract to convey his entire estate to his brother, plaintiff, Harvey C. Taylor, Jr. For the reasons discussed herein, we reverse and remand this matter for a new trial.

Romer was a lifelong resident of Burke County, North Carolina. Plaintiff was Romer's older brother. Defendant was Romer and plaintiff's nephew. Romer never married and had no children. Plaintiff moved to Pennsylvania after World War II and has continued to reside there. In 1978, plaintiff assisted Romer in the acquisition of a backhoe. On 7 October 1997, Romer executed a holographic will, which left his entire estate to defendant. On 22 October 1997, plaintiff filed a document with the Burke County Register of Deeds, which purported to be a contract to make a will between himself and Romer and was dated 10 July 1978. This contract stated that Romer would "immediately make a valid will devising to HARVEY C. TAYLOR and his heirs, assigns, and successors the entire estate of said ROMER GREY TAYLOR." The contract further provided that Romer agreed not to revoke the will made pursuant to its provisions. The contract was executed in the Commonwealth of Pennsylvania. Romer died on 18 January 1998. Following his death, defendant offered the holographic will for probate. Plaintiff instituted this action on 12 February 1998 seeking specific performance of the contract to make a will.

This matter initially came on for trial at the 29 August 2000 session of court. The jury found the signature of Romer on the contract to make a will was not genuine. Based upon this finding, the trial court dismissed plaintiff's action. Plaintiff appealed. On 19 March 2002, this Court filed an opinion finding error in part and remanded the case for a new trial. Taylor v. Abernethy, 149 N.C.App. 263, 560 S.E.2d 233 (2002), disc. review denied, 356 N.C. 695, 579 S.E.2d 102 (2003). We held the trial court erred in excluding plaintiff's proffered expert testimony concerning the genuineness of Romer's signature on the contract to make a will. Id. at 274-75, 560 S.E.2d at 240. We further held the trial court did not err in denying defendant's motion to dismiss based on Pennsylvania's six year statute of limitations. Id. at 275, 560 S.E.2d at 240-41.

This matter was retried before Judge James W. Morgan at the 1 December 2003 session of superior court. The trial judge submitted a single issue to the jury: "Is the signature on the document labeled Plaintiff's Exhibit A and entitled `Contract to Make a Will' the genuine signature of Romer Gray Taylor?"

The trial court entered judgment in favor of plaintiff following the jury's determination that it was indeed Romer's signature on the contract. The trial court directed the administrator CTA to deliver the entire estate to plaintiff. From entry of this judgment, defendant appeals.

We first address defendant's second argument in which he contends the trial court erred in permitting plaintiff's wife to testify concerning her conversations with the decedent, as well as permitting her to testify to conversations between plaintiff and Romer, which she overheard, as this violated Rule 601 of the North Carolina Rules of Evidence. We agree.

Rule 601, also known as the "dead man's statute," provides:

(c) Disqualification of interested persons. — Upon the trial of an action, or the hearing upon the merits of a special proceeding, a party or a person interested in the event, or a person from, through or under whom such a party or interested person derives his interest or title by assignment or otherwise, shall not be examined as a witness in his own behalf or interest, or in behalf of the party succeeding to his title or interest, against the executor, administrator or survivor of a deceased person, or the committee of a lunatic, or a person deriving his title or interest from, through or under a deceased person or lunatic, by assignment or otherwise, concerning any oral communication between the witness and the deceased person or lunatic.

N.C. Gen.Stat. § 8C-1, Rule 601(c) (2005). To be disqualified as a witness interested in the event of the action, the witness must have a "`direct legal or pecuniary interest in the outcome of the litigation.'" Etheridge v. Etheridge, 41 N.C.App. 39, 42, 255 S.E.2d 735, 738 (1979) (quoting Burton v. Styers, 210 N.C. 230, 231, 186 S.E. 248, 249 (1936)). "The key word in this phrase is `legal,'" since a pecuniary interest alone is insufficient to disqualify a witness under Rule 601. Rape v. Lyerly, 287 N.C. 601, 622, 215 S.E.2d 737, 750 (1975) (citations omitted). The reason for this rule is that "[individuals] quite often understand and interpret personal transactions and communications differently, at best; and the Legislature, in its wisdom, has declared that an ex parte statement of such matters shall not be received in evidence." Sherrill v. Wilhelm, 182 N.C. 673, 675, 110 S.E. 95, 96 (1921).

We hold that plaintiff's wife was an interested party for purposes of Rule 601. N.C. Gen.Stat. § 29-30 provides:

[T]he surviving spouse of an intestate or the surviving spouse who has petitioned for an elective share shall be entitled to take as his or her intestate share or elective share a life estate in one third in value of all the real estate of which the deceased spouse was seised and possessed of an estate of inheritance at any time during coverture....

N.C. Gen.Stat. § 29-30(a) (2005).

This section preserves to a surviving spouse the benefits that were formerly available as dower and curtesy. A surviving spouse is given this election so as not to be rendered penniless and would elect this option when the estate is small or insolvent. The statute limits the right of a married person to convey his or her real property free from the elective life estate provided by this section.

Taylor v. Bailey, 49 N.C.App. 216, 219, 271 S.E.2d 296, 298 (1980) (internal citations omitted). While both spouses are alive, the dower interests are referred to as being inchoate, since the right depends on the spouse owning the real estate dying first. City of Winston-Salem v. Yarbrough, 117 N.C.App. 340, 345, 451 S.E.2d 358, 362 (1994). "`An inchoate dower interest is not an estate in land nor a vested interest, but nevertheless, it acts as an encumbrance upon real property.'" Id. (citations omitted). Indeed, "[a]lthough ... an inchoate right of dower cannot be properly denominated an estate in land, nor indeed a vested interest therein, ... it is a substantial right, possessing in contemplation of law the attributes of property, and to be estimated and valued as such." Bethell v. McKinney, 164 N.C. 71, 75, 80 S.E. 162, 163 (1913).

A wife's inchoate downer interest in her living husband's land was held to render her incompetent to testify in a suit involving title to his land. Though common law dower has been abolished, the statutory scheme which replaced it seems to effect no change in the wife's status for this purpose.

Kenneth S. Broun, Brandis & Broun on North Carolina Evidence § 139, at 461-62 (6th ed.2004).

In the case of Linebarger v. Linebarger, the caveators of a will sought to introduce testimony of the wife of one of the caveators concerning the testator's declarations. 143 N.C. 229, 55 S.E. 709 (1906). If the caveators prevailed, they would have acquired an interest in the real estate belonging to the testator. Id. at 231, 55 S.E. at 710. Our Supreme Court held, based on the wife's inchoate dower interest, that the wife "had an interest in the property dependent upon the result of the controversy and ... was incompetent. The exception to the admission of her testimony must be sustained." Id. The Supreme Court based its holding on the dead man's statute as found in section 1631 of the Revised Code. Id. See Revised Code of North Carolina Ch. 34 § 1631 (1905). This statute was a predecessor to the current law embodied in Rule 601(c). The language of Section 1631 is identical to that found in Rule 601(c). Linebarger has not been overruled and is binding precedent. See Dunn v. Pate, 334 N.C. 115, 118, 431 S.E.2d 178, 180 (1993) ("the Court of Appeals ... has no authority to overrule decisions of [the] Supreme Court and [has] the responsibility to follow those decisions until otherwise ordered by the Supreme Court") (citation and internal quotation marks omitted).

In the instant case, plaintiff's wife's interest in Romer's real estate is the same as that of the witness in Linebarger. Plaintiff's wife has a direct legal interest in the property, thereby disqualifying her from testifying as to any oral communications between herself and Romer.

Plaintiff argues his wife's testimony was admissible under the holding of Rape, 287 N.C. 601, 215 S.E.2d 737. In Rape, the plaintiffs' father testified as to conversations he had with the deceased. Our Supreme Court affirmed the trial court's admission of the testimony, holding that where only personal property was at issue Linebarger was not applicable. Id. at 623-24, 215 S.E.2d at 751 (relying on Helsabeck v. Doub, 167 N.C. 205, 83 S.E. 241 (1914)...