Tarkington v. Tarkington

COPELAND, Justice. Before this Court, plaintiff argues that the trial court failed to apply properly the presumption, well-established in this State, that when a wife furnishes the consideration for the purchase of property she did not intend to make a gift to her husband of an entirety interest. Instead, the law presumes that she had title conveyed in this form with the intent that the husband hold such an interest in trust for her. Overby v. Overby, 272 N.C. 636, 158 S.E. 2d 799 (1968); Wise v. Raynor, 200 N.C. 567, 157 S.E. 853 (1931); Deese v. Deese, 176 N.C. 527, 97 S.E. 475 (1918). This presumption is a judicial creation designed in part to ameliorate the harsh effects of the traditional rule that a wife was *506 subservient to her husband. It is furthermore an extension of the general rule of equity that “[t]he payment of the purchase money raises a resulting trust in favor of him who ‘furnishes’ or ‘pays’ or ‘owns’ the purchase money, unless a contrary intention, or a contrary presumption of law, prevents” such a result. Tire Co. v. Lester, 190 N.C. 411, 416, 130 S.E. 45, 48 (1925). Contrary to this general rule that the payment of purchase money raises a resulting trust in favor of the party who furnishes the money, such a resulting trust does not arise in favor of the husband where the husband provides the consideration. Instead there is the presumption of a gift to the wife of an entirety interest in the property. Honeycutt v. Bank, 242 N.C. 734, 89 S.E. 2d 598 (1955). In light of this, and in the context of the present day, some courts have done away with the presumption of a resulting trust for the benefit of the wife. Peterson v. Massey, 155 Neb. 829, 53 N. W. 2d 912 (1952); Emery v. Emery, 122 Mont. 201, 200 P.2d 251 (1948); Hogan v. Hogan, 286 Mass. 524, 190 N.E. 715 (1934); Tiffany, Law of Real Property § 272 (1939). The facts of the case before us offer no compelling reason to change this long-standing presumptive rule, favorable to the wife in this case. A resulting trust is presumed once the wife proves she provided the consideration for the property held as tenants by the entirety. Furthermore, if a resulting trust is created, it is created at the time of the execution of the deed. Cline v. Cline, 297 N.C. 336, 255 S.E. 2d 399 (1979). The record in the instant case shows that the plaintiff did provide all of the monetary consideration given for the interest received in the deed dated 18 April 1974. “The general rule is that the trust is created, if at all, in the same transaction in which the legal title passes, and by virtue of the consideration advanced before or at the time the legal title passes.” Id., at 344, 255 S.E. 2d at 405. Therefore, although the evidence also shows that both parties signed a note and deed of trust for the balance of the purchase price remaining after plaintiff’s contribution, and that the husband made some of the payments between that time and the separation of the parties in May 1977, those facts do not overcome the presumption of a resulting trust. Hanley v. Hanley, 152 N.E. 2d 879 (Ill. 1958). Applying the applicable law to the case subjudice, it is clear that Judge Martin failed to consider the legal presumption, which *507 our law provides the plaintiff wife, in making his findings of fact numbers 12 and 13: “12. The Court finds as a fact that there is no clear, strong and convincing evidence that at the time the property was titled in the name of the plaintiff and defendant as tenants by the entireties that there was any intention or agreement on the part of either of the parties that the plaintiff be the equitable owner of said property; 13. That from all the facts and circumstances surrounding the purchase of the property there does not appear to the Court to be sufficient facts based solely upon the marriage relationship to imply in law any intention on the part of the plaintiff or the defendant that the equitable ownership should be other than legal title or that the defendant was not entitled to beneficial interest as well as legal title.” Thus, because the trial court apparently misapprehended the law on the question before it, the case must be returned to Superior Court, Alamance County, for a new trial. It is possible for the husband, defendant here, to rebut the presumption of a resulting trust in favor of the wife by evidence that a trust was not intended. The burden is on the plaintiff to prove by clear, strong and convincing evidence that she provided the consideration for the purchase. Vinson v. Smith 259 N.C. 95, 130 S.E. 2d 45 (1963). A mere preponderance of the evidence is not sufficient. Hodges v. Hodges, 256 N.C. 536, 124 S.E.2d 524 (1962); McWhirter v. McWhirter, 155 N.C. 145, 71 S.E. 59(1911). Likewise, the burden on the defendant husband will be to rebut by evidence which is clear, strong and convincing the presumption, which the facts of this case establish, in favor of the plaintiff wife. Accordingly, the case must be remanded for a new trial so that the correct legal rules can be properly applied to the evidence before the trial court. Thus, there must be a New trial. Justice BROCK took no part in the consideration or decision of this case. *508 Justice CARLTON concurs in the result.