Title: Graves v. Walston

State: north-carolina

Issuer: North Carolina Supreme Court

Document:

275 S.E.2d 485 (1981) Willie M. GRAVES et al. v. William L. WALSTON and wife, Patty L. Walston; George H. Walston and wife, Jean H. Walston. No. 95. Supreme Court of North Carolina. March 4, 1981. *488 Braswell & Taylor by Roland C. Braswell, Goldsboro, for plaintiffs-appellees. James H. Toms, Hendersonville, for defendants-appellants. HUSKINS, Justice: Did the trial court err by entering a judgment notwithstanding the verdict for plaintiffs when plaintiffs had not moved for a directed verdict at the close of all the evidence? The answer is yes. The record on appeal as amended reveals that the following transpired after the jury verdict came in: As shown by the amended record, plaintiffs' counsel made three post verdict motions: (1) to set aside the answers to issues four and five, (2) for judgment notwithstanding the verdict and (3) for a new trial. The first motion was expressly denied. The second was granted. The third was never ruled on by the trial court. A motion for judgment notwithstanding the verdict is governed by Rule 50(b)(1) of the North Carolina Rules of Civil Procedure which provides: The plain meaning of the quoted rule is that a motion for judgment notwithstanding the verdict must be preceded by a motion for directed verdict at the close of all the evidence. Whitaker v. Earnhardt, 289 N.C. 260, 221 S.E.2d 316 (1976). The reason for that requirement has been explained by Professor Moore as follows: 5A Moore's Federal Practice § 50.08 (1980); see also 9 Wright and Miller, Federal Practice and Procedure § 2537 (1971). In the present case, plaintiffs did not move for directed verdict at the close of plaintiffs' evidence or at the close of all the evidence. Plaintiffs thus had no standing after the verdict to move for judgment notwithstanding the verdict and for that reason the trial court was without authority to enter judgment notwithstanding the verdict for plaintiffs. The Court of Appeals erred when it affirmed. The judgment notwithstanding the verdict for plaintiffs must therefore be vacated. The trial court did not rule on plaintiffs' third post verdict motion for a new trial. This was error. When a motion for judgment notwithstanding the verdict is joined with a motion for a new trial, it is the duty of the trial court to rule on both motions. Rule 50(c)(1) provides: See also Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 61 S. Ct. 189, 85 L. Ed. 147 (1940). The ruling on the alternative motion for a new trial becomes important where, as here, the judgment notwithstanding the verdict is overturned on appeal. Had the trial court conditionally denied the alternative motion, plaintiffs, as provided in Rule 50(c)(1), could have excepted and appealed conditionally therefrom. Incident to such conditional appeal, plaintiffs, as appellees, could have included their exceptions in the record on appeal and could have set out cross assignments of error allegedly entitling them to a new trial in the event the *490 judgment notwithstanding the verdict was reversed on appeal. Hoots v. Calaway, 282 N.C. 477, 193 S.E.2d 709 (1973). Had the trial court conditionally granted the alternative motion, the case could have proceeded to new trial upon remand following our reversal of the judgment notwithstanding the verdict, unless this Court on appeal also reversed the grant of a new trial. Dickinson v. Pake, 284 N.C. 576, 201 S.E.2d 897 (1974). We note judicially that the special superior court judge who tried this case is no longer on the bench. It would be inappropriate for another superior court judge who did not try the case to now pass upon plaintiffs' alternative motion for a new trial. Hoots v. Calaway, supra. We have reviewed the record and find error of law prejudicial to plaintiffs. Five issues were submitted to the jury and answered by it as follows: The answers to the first two issues, nothing else appearing, would entitle plaintiffs to judgment as a matter of law on the theory of a parol trust. In Bryant v. Kelly, 279 N.C. 123, 181 S.E.2d 438 (1971), we discussed at length the requirements for a parol trust. In Bryant, we said: North Carolina is one of a minority of states that has never adopted the Seventh Section of the English Statute of Frauds which requires all trusts in land to be manifested in writing. Even so, this Court has consistently enforced safeguards that considerably limit the application of the parol trust doctrine. Despite such limitations, this Court has always upheld parol trusts inland in the "A to B to hold in trust for C" situation. The rule is stated in Paul v. Neece, 244 N.C. 565, 94 S.E.2d 596 (1956) in these words: "[I]t is uniformly held to be the law in this State that where one person buys land under a parol agreement to do so and to hold it for another until he repays the purchase money, the purchaser becomes a trustee for the party for whom he purchased the land, and equity will enforce such an agreement." Moreover, a parol trust "does not require a consideration to support it. If the declaration is made at or before the legal estate passes, it will be valid even if in favor of a mere volunteer." Evidence of the establishment of a parol trust is required to be clear, cogent, and convincing; a mere preponderance of the evidence is not sufficient. 279 N.C. at 129-30, 181 S.E.2d at 441-42 (citations omitted). The third issue, while not a prerequisite to establishment of a parol trust, demonstrates overwhelmingly that equity is on the side of the plaintiffs. If on remand another jury trial is required, the presiding judge shall formulate and submit appropriate issues based upon the pleadings and the evidence offered at that time. In the present case, the parties stipulated and the jury found that William Walston agreed, at or before the foreclosure sale, to take title in trust for Terry Graves Heath on condition that the Bunting brothers supply the purchase price on behalf of plaintiffs. William Walston himself so testified. Terry Graves Heath and the other plaintiffs relied on that agreement, and *491 William Walston was permitted to bid in the land for $10,000. This establishes a parol trust in favor of Terry Graves Heath. Although plaintiffs alleged in their pleadings a constructive or resulting trust, the pleadings, pursuant to Rule 15(b) of the Rules of Civil Procedure, are in effect deemed amended to conform to the proof. Even so, filing a formal written amendment to the complaint by leave of the trial court is envisioned by the rule. A parol trust must be established by evidence clear, cogent and convincing; a mere preponderance of the evidence is not sufficient. Bryant v. Kelly, supra. We note from the charge in this case that the judge merely required plaintiffs to prove their case by the greater weight of the evidence. For the reasons stated, the decision of the Court of Appeals is reversed and the judgment for plaintiffs notwithstanding the verdict is vacated. The case is remanded to the trial court for a new trial in accord with this opinion. REVERSED AND REMANDED. CARLTON and MEYER, JJ., did not participate in the consideration or decision of this case.