Metropolitan Life Insurance v. Dial

*346 Clarkson, J. "Willis Dial, father of the defendant Bettie Dial, died intestate about 1893, seized and possessed of 585 acres of land in Pembroke Township, Robeson County, North Carolina, and left surviving him seven children. These children were all living on the land at the time of their father’s death, and, in 1906, desiring to effect a division in a simple and inexpensive method, they quitclaimed to Peter Dial, Jr., their brother and cotenant, these lands for the sole and specific purpose of dividing the same according to agreed shares. The defendant Bettie Dial, then a young woman, joined in this quitclaim deed. Peter Dial, Jr., carrying out the provisions of the agreement to divide the land, promptly executed and delivered unto all the heirs of Willis Dial, except Bettie, deeds for their respective shares in and to- this land. Peter Dial, Jr., and the defendant Bettie Dial lived on together in the old home, which was situated on the 182.4 acres (the subject matter of this action), which represented the remainder of the 585 acres after conveying to the other heirs their respective shares. The use and occupancy of these 182.4 acres by Peter and Bettie were under exactly the same circumstances and in the same manner after the execution of the quitclaim deed in 1906, as it was before that time, Bettie claiming the northern half and Peter claiming the southern half of the land. In 1910, Bettie erected a house on the northern half of this land, and has continued in possession, not only of the house, but also the northern half of this land since that time. Both had an undivided interest therein, which was recognized and respected by the other, and it was understood between them that Bettie, upon a division, was to get the northern half and Peter the southern half thereof. Bettie Dial was born on this land, was living in the old home at the time of her father’s death, and has lived on this land until the present day; she has never executed but one paper, which she did by making her mark, she being unable to read and write, and that one paper was executed by her in the belief that it was necessary in order for her to have her interest, her inheritance, in her father’s estate set aside to her; she has never received a deed from Peter Dial, Jr.; has never received a cent from the loan made by the plaintiff to Peter Dial, Jr.; has always claimed her interest in the 182.4 acres which are the subject matter of this action, and has shown that she claimed the same by cultivating the northern portion thereof, renting the same out, receiving the rents therefor, and putting the said northern portion to such use as the nature thereof would permit. Peter Dial, Jr., and Bettie Dial lived on the 182.4 acres of land, which had definite, known, and visible boundaries. Although there was no actual dividing line between Peter and Bettie, as between them, it was *347 agreed, upon a division, that she was to have the northern portion and he the southern portion of the 182.4 acres. Peter Dial, Jr., 'in his answer admitted that although the title to the land described in the complaint was in his name, yet it was that portion of the estate of his father intended for himself and his sister, Bettie Dial, and that he only claimed one-half of the same; that he lived on one portion of said land and she upon another; and that he had, through an honest mistake, given an encumbrance upon the entire 182.4 acres when he only intended to give an encumbrance upon his interest therein. On 13 June, 1927, Peter Dial, Jr., and wife, executed to the Baleigh Banking and Trust Company a deed of trust on the entire 182.4-acre tract to secure a loan of $2,500 made to him by plaintiff. On account of default in payment the deed of trust was foreclosed and the land sold thereunder on 23 July, 1931, plaintiff becoming the purchaser at said sale for the amount of its debt, plus accrued interest and taxes, the purchase price being $800.00 in excess of the original debt. Defendant Bettie Dial claims one-half of the tract of land, contending that Peter Dial, Jr., had verbally agreed to transfer legal title to her for one-half of the said tract. Plaintiff instituted this action to recover possession under its title obtained as purchaser at the foreclosure sale. The court below held: “The court is of the opinion, under all the circumstances in evidence, that Bettie Dial is not barred by the statute of limitations, nor does she hold by adverse possession; and the court is also of the opinion that the plaintiff is not an innocent taker for value without notice.” We think, under the facts and circumstances of this case, the holding of the court below correct. In Gaylord v. Gaylord, 150 N. C., 222 (225-6), is the following: “The alleged deed recites a valuable consideration paid by defendant Sam Gaylord, the grantee in the deed; contains a habendum, £to have and to hold the said tract of land, free and clear of all privileges and appurtenances thereunto belonging, to the said Sam M. Gaylord and his heirs in fee simple, forever,’ and also the covenants, ‘that the grantor is seized of the premises in fee simple and hath the right to convey the same; that they are free from all encumbrances, and that the grantor will warrant and defend the title to the same against the lawful claim of all persons,’ etc.; and the authorities are to the effect that in a deed of this character, giving on the face clear indication that an absolute estate was intended to pass, either by the recital of a valuable consideration paid or by an express covenant to warrant and defend the title, no trust would be implied or result in favor of the grantor by reason of the circumstance that no consideration was in fact paid (citing numerous authorities). . . . (p. 230) The main current of decision is in this direction, and established that a trust cannot be fastened on an *348 absolute deed by evidence that the grantee paid no consideration, or that he agreed to take and hold the premises from the grantor (citing authorities). . . . (p. 231) The same position is very well expressed by- Green, J., in Cain v. Cox, supra (23 W. Va., 594, 605) : Un this state of facts, what was the operation of this deed of 1854, whereby Rezin Gain conveyed this tract of land to his sisters upon a parol trust for his own use? In Troll v. Carter, 15 W. Va., 578, this Court decided: “If land be conveyed by a deed of bargain and sale for a merely nominal consideration, the courts of equity will not receive parol evidence to prove that the grantee agreed to hold the land for the grantor’s use, as the deed in such a case must have been made for the express purpose of divesting the grantor of his title and vesting the same in the grantee. Such parol evidence, if admitted, would defeat the very purpose for which the deed was made, and must be regarded as contradicting the deed, and the general rule of evidence requires in such cases the rejection of parol evidence.” ’ ” The principle in the Gaylord case, supra, is well settled law in this jurisdiction. It is not applicable in the present action. In 1893 Willis Dial died seized and possessed of some 585 acres of land, which, descended to his heirs at law — some seven in number. They were tenants in common of the entire tract. On 12 February, 1906, they agreed upon a division and the land was surveyed in seven plots, and each heir at law was to receive his or her share of the said 585 acres of land, as per the survey. To facilitate a division, without consideration, a quitclaim deed of the land was made to Peter Dial, Jr., who in turn conveyed to each heir at law (as he had agreed to do) his or her share, with the exception of Bettie Dial. He neglected to do this, although Bettie Dial was recognized by Peter Dial, Jr., at all times as the owner of one-half of the 182.4 acres, and was in possession with her brother, Peter Dial, Jr., and later in possession of the northern half, in the ’ division with her brother. In Power Co. v. Taylor, 191 N. C., 329 (332), is the following: “Partition deeds between tenants in common operate only to sever the unity of possession and convey no title. Harrington v. Rawls, 136 N. C., 65; Harrison v. Ray, 108 N. C., 215.” Burroughs v. Womble, 205 N. C., 432. In Wallace v. Phillips, 195 N. C., 665 (670), it is said: “Ordinarily, when there is a partition of realty, by deed or action, between tenants in common, it only severs the unity of possession and conveys no title.” Parol evidence is permissible to show the facts constituting the possession, manner of acquiring it, and the length of time the possession has existed. Lewis v. Lewis, 192 N. C., 267 (268). *349 The deed in the present action was executed and delivered for the purpose of a partition between the heirs at law — theretofore agreed upon. The grantee, Peter Dial, Jr., carried out the agreement as to five of the heirs at law, but failed to convey to Bettie Dial. Peter Dial, Jr., was a naked trustee — no consideration passed. It was a conditional delivery — this could be shown by parol. Jefferson Standard Life Ins. Co. v. Morehead, ante, 174. In fact, Peter Dial, Jr., in his answer says: “That the title to said land was in the name of this defendant, being that portion of the estate of his father intended for himself and his sister, Bettie Dial, the codefendant, and that he held the same in trust, this defendant living on one portion of said lands, and his said codefendant on another portion thereof, and that at the time of the execution of the said deed of trust, this defendant was under the impression that he had a right to execute a mortgage or deed of trust upon his interest in said land, which was about 100 acres, and that he thought when he signed said deed of trust that he was only executing the same against his said interest,” etc. In the judgment is the following: “The answer of Peter Dial, Jr., asserts that he holds the land in controversy under trust for Bettie Dial and his statement as part of the ‘pleadings’ is to be ‘taken as part of the agreed facts’; and he is grantee in the deed and has the right to set up a parol trust in order to perform his duty as trustee in execution of his trust.” On this aspect of the case plaintiff in its brief does not state this as one of the questions involved, nor is it considered in its brief. It does except to the judgment. The second question involved: “Was the court in error in holding upon the agreed statement of facts that plaintiff is not an innocent purchaser for value without notice ?” We think not. In the findings of fact is the following: “That default was made in the deed of trust above referred to, and the lands advertised to be sold on 23 July, 1931, at the courthouse door in Lumberton, N. C., at which time and place Bettie Dial, seeing the advertisement in the newspaper, appeared and objected to the sale of that portion of the lands she claimed, to wit, the northern half thereof, and that pursuant to the sale the trustee executed a deed to the Metropolitan Life Insurance Company, in which deed is embraced the entire tract of 182.4 acres, said deed duly recorded in Book 8-E, page 419, under which deed the plaintiff claims it is entitled to be declared the owner in fee simple of the entire tract of land set out and described in the complaint.” Before plaintiff purchased the land it was notified by Bettie Dial of her claim. In the findings of fact is also the following: “That the plaintiff had no actual knowledge of the existence of the parol agreement above *350 recited, or the fact that there was no consideration actually paid in the deed from all of the heirs at law of Willis Dial, deceased, to Peter Dial, Jr.” In Wynn v. Grant, 166 N. C., 39 (45), it is said: “ ‘Constructive notice from the possession of the means of knowledge will have the effect of notice, although the party was actually ignorant, merely because he would not investigate. It is well settled that if anything appears to a party calculated to attract attention or stimulate inquiry, the person is affected with knowledge of all the inquiry would have disclosed.' Bunting v. Ricks, 22 N. C., 130; Le Neve v. Le Neve, 2 White and Tudor’s Leading Cases in Equity, 144; Wittkowsky v. Gidney, 124 N. C., 437; Blackwood v. Jones, 57 N. C., 54; May v. Hanks, 62 N. C., 310; McIver v. Hardware Co., 144 N. C., 478. The rule is thus put in Wilson v. Taylor, 154 N. C., 211. ‘A party who may be affected by notice must exercise ordinary care to ascertain the facts, and if he fails to investigate when put upon inquiry, he is chargeable with all the knowledge he would have acquired if he had made the necessary effort to discover the truth, citing Hulbert v. Douglas, 94 N. C., 122; Bryan v. Hodges, 107 N. C., 492.” West v. Jackson, 198 N. C., 693 (694); Austin v. George, 201 N. C., 380 (381); Hargett v. Lee, 206 N. C., 536 (539). Some of the badges of constructive notice are as follows: (a) The ownership of 585 acres by the heirs of Willis Dial, deceased. (b) That there were seven heirs of Willis Dial, among them the defendant Bettie Dial. (c) The execution, not of a warranty deed, but a quitclaim deed to these 585 acres by six of these heirs to the seventh heir, Peter Dial, Jr., for “good causes and consideration, and especially for ten dollars.” (d) Deeds by this seventh heir, Peter, on the same day the said quitclaim deed was executed to each of five of these heirs for a portion of the 585 acres, but no deed to Bettie. (e) The continued possession of the defendant Bettie, the sixth grantor in said quitclaim deed, of a portion of the 585 acres, which had not been conveyed to the other five grantors, her possession and use being the same after as it was before the execution of said quitclaim deed in 1906. (f) The erection of a house by the defendant Bettie on the northern half of the remainder of 585 acres (the 182.4-acre tract, which is the subject matter of this action), and her full occupation and use of said house together with the northern half of these lands as her own; claiming it, cultivating it, renting it, and in every way using it as her own. (g) Recognition by the grantee Peter of her interest in said lands. (h) And finally, notice given by Bettie at the foreclosure sale of the land when the plaintiff became the purchaser.. *351 In Grimes v. Andrews, 170 N. C., 515 (524), we find: “The judge left the tenth issue undisturbed, we presume, for the purpose of ascertaining whether the defendants had been in possession, claiming the land as their own, as bearing on the question of notice to plaintiff of defendant’s equity, growing out of the alleged parol trust, the general rule being that possession constitutes such notice. Justice Dillard said, in Heyer v. Beatty, 83 N. C., 289: ‘The rule in equity undoubtedly is that a party taking with notice of an equity takes subject to that equity; that is to say, he is assumed to take and hold only such interest in the property conveyed as his vendor might honestly dispose of, having due regard to the equities existing against him in favor of others. Adams Eq., 151; Webber v. Taylor, 55 N. C., 9; Maxwell v. Wallace, 45 N. C., 251. And the kind of notice spoken of in said rule may he an actual or constructive notice. In this case there is no pretense of actual notice to the plaintiff of the right claimed by defendant, but it is plainly implied, from the terms in which the instruction was asked, that the defendant claimed only to affect the legal title of the plaintiff with a trust from a notice by construction from the mere fact of his possession at the time of the sale. Possession is suggestive of title or right in the possessor, and a prudent man should and would inquire into such apparent right before trading with another; and if he do not, it is but just to the rights of the party in possession to hold the purchaser as affected with notice of the equities in his favor,’ ” citing numerous authorities. This matter, under the statement of agreed case, was left to the court below, who found “that the plaintiff is not an innocent taker for value without notice,” and there was evidence to support the finding. For the reasons given, the judgment of the court below is Affirmed.