Whitford v. Gaskill

• Decision Date: 10 February 1997
• Docket Number: No. 399PA95,399PA95
• Court: North Carolina Supreme Court
• Parties: Diane WHITFORD v. Dessie Pittman GASKILL and Alice Pittman Lewis Durham

Page 690

480 S.E.2d 690

345 N.C. 475

Diane WHITFORD v. Dessie Pittman GASKILL and Alice Pittman Lewis Durham

No. 399PA95.

Supreme Court of North Carolina.

Feb. 10, 1997.

Nelson W. Taylor, III, Morehead City, for plaintiff-appellee.

Wheatly, Wheatly, Nobles & Weeks, P.A. by C.R. Wheatly, III, Beaufort, for defendant-appellants.

LAKE, Justice.

Defendants appeal from a decision of the Court of Appeals holding that a statutory short-form power of attorney must expressly confer the authority to make a gift of real property in order to be valid, and that the power of attorney here did not convey such authority.

George W. Pittman, Jr., now deceased, owned and lived in his family homeplace on a parcel of land in Carteret County, North Carolina. Mr. Pittman became concerned about what would happen to the homeplace when he died. Mr. Pittman wanted to be assured that the homeplace would not be taken from his wife, Rose Lupton Pittman, and specifically, that neither his daughter, the plaintiff, his wife's daughter from a previous marriage, nor any federal agency could take the property upon his death.

On 18 November 1988, Mr. Pittman met with John Harris, an attorney, and conveyed his concerns regarding the property. Harris prepared a power of attorney giving Mrs. Pittman authority to act for Mr. Pittman including the power to transfer real property. The power of attorney generally followed but modified the statutory short-form power of attorney set forth in N.C.G.S. § 32A-1 and stated in pertinent part that Mrs. Pittman had

full power to act in my name, place and stead in any way which I myself could do if I were personally present with respect to the following matters as each of them is defined in Chapter 32A of the North Carolina General Statutes to the extent that I am permitted by law to act through an agent.

Moreover, the power of attorney stated that Mrs. Pittman had the specific authority to conduct

real property transactions, including the power to transfer the real estate known as the homeplace that I inherited from my mother.

(Emphasis added.) The italicized phrase above was added to the statutory short-form power of attorney found in N.C.G.S. § 32A-1. Mr. Pittman signed the power of attorney. Shortly thereafter, Harris prepared a deed conveying the property from Mr. Pittman to Dessie Pittman Gaskill and Alice Pittman Lewis Durham, the defendants and Mr. Pittman's sisters. Mrs. Pittman signed the deed at the direction of Mr. Pittman and in the presence of both Mr. Pittman and a notary public. The deed was subsequently recorded in the Carteret County Register of Deeds office. Mrs. Pittman delivered the deed to the defendants on 23 November 1988. At the time of delivery, the property was worth $75,000. The defendants did not pay the Pittmans any consideration for the property.

Mr. Pittman died intestate on 22 April 1990. Mrs. Pittman and the plaintiff were then the only persons entitled to inherit under the Intestate Succession Act of North Carolina. Mrs. Pittman is now deceased, and thus plaintiff (Mr. Pittman's daughter) and Mrs. Pittman's daughter, the two persons Mr. Pittman specifically sought to deny, would be entitled to so inherit the homeplace.

On 24 October 1990, plaintiff initiated this action alleging that the deed to the defendants signed by Mrs. Pittman as attorney-in-fact for Mr. Pittman was void. In an amended complaint, plaintiff alleged that the deed was invalid because Mr. Pittman was not mentally competent at the time he signed the power of attorney. On 25 February 1992, plaintiff filed a motion for summary judgment. The trial court heard the motion and granted partial summary judgment in plaintiff's favor after finding that the deed signed by Mrs. Pittman was void and of no effect. On appeal, the Court of Appeals affirmed the trial court and held that an attorney-in-fact may not convey real property by gift unless the power of attorney expressly confers the authority to make gifts of real property. Whitford v. Gaskill, 119 N.C.App. 790, 792, 460 S.E.2d 346, 347 (1995).

The defendants' appeal raises two intertwined issues. First, does an attorney-in-fact have the authority to make gifts of real property on behalf of the principal if not expressly authorized to do so in the power of attorney? Second, if specific authorization is required, is the word "transfer," when added to the standard wording of the statutory short-form power of attorney, sufficient to confer express authorization to make gifts of real property?

Whether an attorney-in-fact has the authority to make gifts of real property without being expressly authorized to do so in the power of attorney document is a question of first impression in North Carolina. Nearly every jurisdiction that has considered this issue has concluded that:

[a] general power of attorney authorizing an agent to sell and convey property, even though it authorizes him to sell for such price and on such terms as to him shall seem proper, implies a sale for the benefit of the principal, and does not authorize the agent to make a gift of the property, or to convey or transfer it without a present consideration inuring to the principal.

Annotation, Power of attorney as authorizing gift or conveyance or transfer without a present consideration, 73 A.L.R. 884 (1931). See also Johnson v. Fraccacreta, 348 So.2d 570 (Fla.Dist.Ct.App.1977); King v. Bankerd, 303 Md. 98, 492 A.2d 608 (1985); Brown v. Laird, 134 Or. 150, 291 P. 352 (1930). The basic premise behind the majority rule is that an attorney-in-fact is presumed to act in the best interests of the principal. See Bankerd, 303 Md. at 108, 492 A.2d at 613. Since...