Opinion
(August Term, 1848.)
A. Purchased the land of B. at a sale under an execution he had against B., and at the sale declared he was buying in the land only as a security for other debts which were to be ascertained on a settlement with B., and thereby prevented B.'s friends from advancing the money to satisfy the execution. Afterwards the land was sold as the property of A. under an execution against him: Held, first, that the act making void parol contracts for the sale of land (Rev. Stat., ch. 50 sec. 8) did not bar B. from his remedy. Held, secondly, that the purchasers under the executions against A. held but the title he had, subject to all the equities against it, whether they had notice of such equities or not.
CAUSE removed from the Court of Equity of WILKES, at Spring Term, 1848.
Craige for plaintiff.
Guion for defendants.
This bill was filed in the court of equity for Wilkes County, by Joseph Vannoy against William H. Martin, Samuel P. Smith, and Joseph W. Hackett, and stated that the plaintiff was the owner of a tract of land lying adjacent to the town of Wilkesboro, which he leased in 1839 to one Thomas D. Kelly for a term of five years; that the defendant Martin, in 1841, recovered a judgment in the Superior Court of law for Wilkes against the plaintiff for about $860, and had an execution issued thereon and levied upon the said tract of land, and had it advertised for sale; that the plaintiff at that time resided in the county of Cherokee, at the distance of 200 miles from the place of sale, and that his lessee, (170) the said Kelly, went to the defendant Martin and told him that, as he believed the plaintiff was ignorant of the intended sale, and the land was valuable, being worth about $2,500, he would either buy it himself for the plaintiff or raise the money and pay off the debt for himself, when the defendant Martin told him that the would bid off the land himself, but would not keep it; that he had an unsettled account against the plaintiff and would hold it only as a security for whatever sum might be found to be due to him upon a settlement with the plaintiff. The bill stated further that the said land was sold in August, 1841, when the defendant Martin became the purchaser at the price of $810, and that the said Martin, after his purchase, several times acknowledged that he had the land only as security, and that the plaintiff had a right to redeem it; that the plaintiff and the defendant Martin afterwards came to a settlement of their accounts, when it was found that the balance due from the plaintiff to Martin was about $700, and that Martin offered to reconvey the said land upon being paid that sum; that the plaintiff was unable at the time to pay the said balance, but, not long afterwards, he procured $300 and handed it to one William W. Peden to pay the defendant, which was accordingly done on 25 December, 1842, and the said defendant gave a receipt therefor, expressing that the money was received towards the redemption of the said Vannoy's land; that the plaintiff subsequently paid on the same account the sum of $90 and was entitled to a credit for $76 more, received by Martin for him and not accounted for in their settlement. The bill then stated that the said defendants Smith and Hackett obtained a judgment against the defendant Martin and had an execution levied upon the said land as the property of the said Martin, and had it sold, when they became the purchasers at the price of about $1,000. The bill charged that the said defendants Smith and Hackett had, at the time when the (171) judgment was obtained against Martin, and when they had the land levied on and sold, full knowledge that the plaintiff had the right to redeem it, and that he had already paid near $400 towards such redemption. The bill prayed that the plaintiff might be permitted to redeem the land upon paying to the defendants Smith and Hackett whatever balance might be found to be due from him to the defendant Martin, upon their accounting for the rents and profits. The defendants all answered the bill. The answer of the defendant Martin denied that he had purchased the land upon any understanding or agreement whatever to hold it only as security, subject to the plaintiff's right to redeem it. On the contrary, it asserted that his purchase was absolute for himself, but that, afterwards, he had agreed to resell the land to the plaintiff at the price of $1,000, provided the money was paid by a certain agreed time, and that the plaintiff had failed to comply with the terms. He admitted the receipt of the sums of money stated in the bill, but said they were paid in part of the price for a repurchase, and not a redemption of the land. The answer claimed the benefit of the act of 1819 (Rev. Stat., ch. 50, sec. 8), making void all parol contracts for the sale of land. The answer of Smith and Hackett denied the plaintiff's right of redemption, and insisted that they had purchased without any notice of such right, and relied also upon the act of 1819. Replications were put in to the answers, proofs were taken, and the cause was set down for hearing and transmitted to this Court.
The facts of the case are left in very little doubt (172) by the testimony. The depositions of Thomas D. Kelly and William P. Waugh, the letter from the defendant Martin to the plaintiff, written 23 August, 1842, and the receipt given by the said defendant to the plaintiff's agent, Peden, on 25 December in the same year, expressed to be towards the redemption of the land, satisfy us that the defendant Martin purchased the said land under the execution in his favor, not absolutely for himself, but to hold the same merely as a security for his judgment, and for whatever other sum might be found to be due to him upon a settlement subsequently to be had with the plaintiff. We are satisfied, further, that he made representation to that effect at the time of sale which prevented the plaintiff's lessee, Kelly, or some other friend at his instance, from stopping the sale by paying off the amount due on the executions, or buying in the land for the plaintiff, and enabled the defendant Martin to purchase it at an undervalue. In either case it would be a gross fraud upon the plaintiff if the said defendant were permitted to set up an absolute title to the land, which it is the duty of a court of equity to prevent, and, in the way of preventing which, the act making void parol contracts for the sale of land does not stand. Turner v. King, 37 N.C. 132. The plaintiff, then, would be entitled as against the defendant Martin to redeem the land upon paying him whatever might be found to be due upon a general account. That being so, the plaintiff has the same right of redemption against the other defendants, Smith and Hackett, because they were purchasers at the sale under an execution against the defendant Martin. They purchased the land subject to all the equities against him, whether they had any knowledge of such equities or not. Freeman v. Hill, 21 N.C. 389; Polk v. Gallant, 22 N.C. 395; Rutherford v. Green, 37 N.C. 121. The plaintiff is, therefore, entitled to a decree for the redemption of the tract of (173) land mentioned in the pleadings upon paying to the defendants Smith and Hackett whatever sum may be found to be owing from him to the defendant Martin, with interest thereon, deducting therefrom whatever amount the said Martin and the other defendants have received from the rents and profits of the said land, and to ascertain these rents and profits, as well as the sum due and owing from the plaintiff to the defendant Martin, there must be a reference to the clerk of this Court.
PER CURIAM. Decree accordingly.
Cited: Barnes v. Brown, 71 N.C. 511; Hicks v. Skinner, ib., 541; Mulholland v. York, 82 N.C. 514; Cobb v. Edwards, 117 N.C. 252; Avery v. Stewart, 136 N.C. 439; Harrell v. Hagan, 150 N.C. 244.