Opinion
September Term, 1890.
Real Estate — Declaring Trusts — Plaintiff and Defendant — Possession — Trustee for Another's Benefit — Account — Evidence — Admissions.
1. In an action for the possession of certain lands, the defendant answered, alleging that the plaintiff, pursuant to previous understanding, purchased them for defendant, but took title, to be held in his own name until he could pay the purchase-money advanced, to which payment the rents were to be applied. Plaintiff went into possession and so continued for several years: Held, (1) that the defendant was entitled to have plaintiff declared a trustee to hold the lands for his benefit, to the extent of defendant's interest therein; (2) that the statute of limitations was no bar to defendant's action.
2. Conversations, before and at the time of the transaction between plaintiff and defendant, tending to show plaintiff's knowledge of his trust, are clearly admissible as evidence.
3. Plaintiff's admissions to third persons, subsequent to the transaction, tending to establish the trust, are admissible as evidence.
4. The plaintiff plead a docketed judgment, which was a valid and subsisting lien upon whatever interest defendant had in the lands: Held, that the court erred in directing an account of this judgment and refusing to direct the payment of the same.
5. Discussion by Merrimon, C. J., of the evidence necessary to establish a trust.
APPEAL at Spring term, 1890, of HERTFORD, from Whitaker, J.
(135) W. D. Pruden for plaintiff (appellant).
E. F. Aydlett and J. W. Albertson, Jr., for defendant.
The defendant had purchased the land in controversy and paid a large part of the purchase-money, but did not get the title for it. Afterwards judgment was obtained against him for the balance of the purchase-money, and the land was sold to satisfy that judgment, and, at the sale thereof, the plaintiff purchased and took the title therefor. The defendant, however, alleges that the plaintiff, at the time of, and before, the sale, agreed, by parol, to aid him by purchasing the land for him, and taking the title to it to himself, and holding it in trust for the defendant, to be conveyed to him when, and as soon (136) afterwards, as he should pay the plaintiff the amount of money the latter paid for it, at the instance of the defendant, and that the plaintiff did purchase the land in pursuance of such agreement, charged with such trust in favor of the defendant. The plaintiff denies that he made any such or like agreement.
It is conceded that such a trust, when it exists, may be upheld and enforced, but it is contended that the evidence produced on the trial to prove its existence was incompetent, or, if competent, was insufficient in quantity and kind to establish it. The plaintiff, testifying in his own behalf, stated that the parol agreement was substantially as alleged by him in the pleadings. The defendant was certainly an eligible witness to prove and pertinent fact that might be proven by parol evidence. It was material to prove the parol agreement, as alleged, and the testimony of the defendant was competent and pertinent for that purpose. The testimony of several witnesses as to admissions and declarations of the plaintiff, on numerous occasions after he purchased the land, in respect to the alleged agreement, was competent as corroboratory of the evidence of the defendant. But such evidence would not, of itself, be sufficient to establish the alleged trust. It should be supplemented and strengthened by pertinent facts and circumstances admitted or proven to exist dehors the deed for the land taken by the plaintiff, inconsistent with his purpose, to purchase the same exclusively for himself, and tending more or less strongly to show a purpose to create the trust. The trust is in derogation of what is expressed in the deed, and the burden is on the party asserting its existence to make it appear by certain, strong and convincing proof. The court is slow to declare and establish such trust except upon the strongest pertinent proofs. It looks anxiously for facts and circumstances pointing to it, in addition to the simple evidence as to the agreement creating it. Brown v. Carson, 45 N.C. 272; Clement v. Clement, 54 N.C. 184; Leggett (137) v. Leggett, 88 N.C. 108; Williams v. Hodges, 95 N.C. 32; Smiley v. Pearce, 98 N.C. 185; McNair v. Pope, 100 N.C. 404.
There were admissions in the pleadings and evidence other than that which went directly to prove the agreement, tending strongly to show that the plaintiff agreed to aid the defendant and purchase the land in trust, as alleged. The evidence, we think, was pertinent and sufficient, if the jury believed it. It was in evidence, and not controverted, so far as appears, that the defendant at first purchased the land for $4,300; that of this sum, he paid at once $2,800; that the plaintiff afterwards purchased it at the price of $3,097; that at the time of his purchase, it was worth from $12,000 to $15,000, and that at the time he had a mortgage of the defendant's interest in it to secure a debt due from him to the plaintiff for about $700, which debt and mortgage yet remain undischarged. Now, it would be most unreasonable to infer, and highly improbable, that the defendant would be content to lose the money he had paid for the land, and to allow the mortgage debt to remain undischarged, when the land, at the time the plaintiff purchased it, was worth four times what he paid for it! This is especially so, in view of the relation of the parties as mortgagor and mortgagee. And, more over, it is scarcely probable that the plaintiff could, or would, be so unconscionable as to take the defendant's land at such a sacrifice. It appears that, shortly after the plaintiff bought the land, he took possession of it and held it for seven or eight years, and this might go to show that he bought it for himself; but this fact is shorn of its force by repeated admissions and declarations made to the defendant, and several other witnesses, at various times — some of them as late as 1885 — to the effect that he held the land in trust for the defendant.
The defendant's cause of action is not barred by the statute of limitation, nor by the lapse of time. There was evidence tending to prove that the plaintiff took and held possession of the land by agreement with the defendant, recognizing the latter's right, and the (138) jury so found, within a short period before this action was brought. The failure to close the trust for so long a while seems to have been by the mutual assent of the parties.
We are, therefore, of opinion that the several exceptions to evidence received on the trial are unfounded, and that the court properly gave judgment declaring the trust in favor of the defendant. We think, however, it erred in refusing to embrace, in the order directing an account, the docketed judgment mentioned and specified in the pleadings in favor of the plaintiff and against the defendant, and refusing to direct the payment of the same. That judgment was a lien upon whatever interest the defendant had in the land, subject to the two prior liens of the plaintiff. The court had jurisdiction of the parties to the judgment, the land upon which it was a lien; it was before the court, and, so far as appears, there was no valid objection to it. There was no reason why the court should not administer the plaintiff's right to have it paid, or direct that it share, in its order, the proceeds of the sale of the land. It was not essential that it should be enforced by the ordinary execution. The jurisdiction of the court, as to it, was sufficient to enable it to enforce the line. Currie v. Clark, 101 N.C. 321. The judgment appealed from must be so enlarged in its scope as to embrace the judgment just mentioned and direct its payment, and the judgment, thus enlarged, must be.
Affirmed.
(139)