Case ID: nc_150/html/0242-01.html
Source: Caselaw Access Project
Author: {"author": "Walker, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

AMOS HARRELL et al. v. CORA HAGAN et al.
    (Filed 10 March, 1909.)
    1. Trusts and Trustees — Resulting Trusts — Conversation With Deceased Person — Evidence.
    In an action to engraft a resulting trust on lands alleged to have been bought by O. at a public sale in behalf of H., both deceased, testimony of witnesses who are parties and interested in the result of the action as to a conversation between O. and II. tending to establish the trust is incompetent. (Revisal, sec. 1631.)
    2. Procedure — Final Judgment — Interpleader.
    After the courts have passed upon the merits of a controversy, and an appeal had and determined by the Supreme Court, an interpleader by new parties should not be allowed, as an independent action should have been brought; but while this is an irregularity, the court below may proceed, under this decision, as the case is now constituted.
    ActioN tried before W. R. Allen, J., and a jury, at February Term, 1909, of Edgecombe.
    
      R. G. Allsbrook and G. M. T. Fountain for plaintiffs.
    
      F. S. Spruill and W. O. Howard for defendants.
   Walker, J.

This action was brought for the recovery of land and was before this Court on appeal at Spring Term, 190S (147 N. C., 111). We then decided in favor of the defendants and directed judgment to be entered accordingly in the Superior Court. After the opinion and judgment of this Court had been certified to the court below, Martha Cale, W. W. Owens and others interpleaded, and alleged that they were the owners of the land as heirs of O. H. Owens. The defendants answered the interplea, and averred that C. H. Owens bought the land at a sale made by H. A. Gilliam, trustee of Eagles & Crisp, bankrupts, upon a parol agreement that he would hold it in trust for Opperlina Harrell, under whom they claimed the land. Issues were submitted to the jury, which, with the answers thereto, were as follows:

1. “Was there a parol agreement between C. H. Owens and Opperlina Harrell that Owens would buy in the tract of land for ber and bold it in trust until tbe rents from tbe land and proceeds from tbe sale of timber repaid bim tbe purchase money, and then that tbe land should be hers?” Answer: “Yes.”

2. “Has Owens received from the rents and sales of- timber a sum sufficient in amount to repay bim?” Answer: “Yes.”

In order to establish tbe parol trust, two of tbe defendants, who are interested in tbe result of this action, - were permitted to testify, over tbe objection of tbe interpleaders, that they beard a conversation between O. H. Owens and Opperlina Harrell, in which Owens agreed to buy tbe land at tbe sale of tbe trustee and bold tbe same in trust for ber. Tbe admitted evidence tended to show that C. H. Owens bad agreed with Opperlina Harrell to buy tbe land at tbe sale in trust for ber, and that as soon as be bad received rents and profits sufficient to reimburse himself she should have it. Mrs. Harrell stayed on tbe land twelve months and then moved to Macclesfield, where she occupied a home provided for ber by O. H. Owens. Tbe year before Owens died be told ber that “be was through with tbe land and she could take it.” It also appears from tbe pleadings, and was not controverted on tbe argument before us, that at tbe time of tbe sale, and prior to tbe adjudication of bankruptcy, Opper-lina Harrell bad executed a mortgage to B. F. Eagles, who afterwards sold tbe land under tbe power obtained in tbe mortgage to S. M. Crisp, a member of tbe firm of Eagles & Crisp, to whom tbe debt was really due; that on 1 January, 1891, Opperlina Harrell executed to Eagles & Crisp a second mort'gage, which was unsatisfied and in force when S. M. Crisp bought at tbe sale made under tbe first mortgage by B. E. Eagles. There was testimony other than that of Cora and Earror Harrell as to tbe agreement of 0. H. Owens with Opperlina Harrell.

Tbe defendants contended that tbe purchase by B. E. Crisp at tbe -sale under tbe first mortgage did not change his fiduciary relation towards Opperlina Harrell and vest tbe title to tbe land absolutely in bim, but that in equity tbe effect of the purchase was to remove an outstanding encumbrance, tbe amount paid for tbe land being tacked to that secured by tbe second mortgage, under tbe rule that a second mortgagee cannot buy tbe land at a sale under tbe first mortgage and bold tbe ’same, discharged of the trust created by the two mortgages, but he is eutitled only to add the amount paid by him to the debt due under the second mortgage. Taylor v. Heggie, 83 N. C., 244. It was also contended that as Opperlina Harrell, under the said rule, had an equitable estate in the land at the time of the purchase by C. H. Owens at the sale made by H. A. Gilliam, trustee, the agreement of Owens created a- valid parol trust in her favor, under former decisions of this Court. Vannoy v. Martin, 41 N. C., 169; Vestal v. Sloan, 76 N. C., 127; Sykes v. Boone, 132 N. C., 199; Avery v. Stewart, 136 N. C., 426. We prefer not to consider these interesting'questions at this time, as there was error in the- admission of testimony, which requires another trial of the case, at which the evidence may be materially changed and an entirely Mew state of facts presented.

The testimony of Cora and Farr or Harrell as to the conversation between 0. H. Owens and Opperlina Harrell was incompetent, under prior rulings of this Court. Wilson v. Featherstone, 122 N. C., 747; Witty v. Barham, 147 N. C., 479. The witnesses were both interested in the result of this action and parties thereto, and 0. H. Owens and Opperlina Harrell were dead. Whether the construction by-the court of Revisal, sec. 1631 (The Code, sec. 59.0), is the correct one, it is useless for us now to discuss. The true meaning of the statute and the intent of the Legislature have been settled by this Court in well-considered opinions, which we are not disposed to disturb.

There was error in admitting the testimony of the two witnesses, as above indicated, for which the interpleaders are entitled to a new trial. The other exceptions need not be considered at this time.

We do not approve the course adopted in the court below of allowing the interplea to be filed by new parties after this Court had fully passed upon the merits of the pending action and directed judgment to be entered in favor of the defendants. The interpleaders should have been required to bring an independent action. The plaintiffs are not interested in their controversy with the defendants, and, besides, the pending suit had been settled by final judgment. While this is an irregularity, the court may proceed in the case as now constituted.

New Trial.