Hinton v. . West

ClaRksoN, J. Was the court below correct in sustaining the judgment of nonsuit ? We think not. We do not pass on the truth or falsity of the evidence. Our province here is to determine if there is sufficient evidence to be submitted to the jury, more than a scintilla. The deed of trust from Hinton and his wife was made to- Paul 0. West, trustee, for his brother, Saul West. The plaintiffs’ evidence indicates that he was dealing with Paul C. West in the negotiations for the loan and Paul C. West, trustee, for the sale; that Paul C. West was acting in a dual capacity as trustee and agent for Saul West, and was the primary party to the purchase. We think that there was sufficient evidence to be submitted to a jury and a presumption arose from the evidence, if believed by them, which would require the defendants to show that the transaction was fair and free from oppression. *715 In Whitehead v. Hellen, 76 N. C., 99 (100), Pearson, C. J., said: “Courts of equity look with jealousy upon all dealings between trustees and their cestuis que trustent; and if this mortgagor had by deed released his equity of redemption, we should have required the plaintiff to take the burden of proof and satisfy us that the man, whom he had in his power, manacled and fettered by a mortgage and a peremptory power of sale, had, without undue influence and for fair consideration, executed a release of his right to redeem the land.” ... At page 101: “Courts endeavor to take hold of the substance and not the shadow, and will not allow the administration of justice to be evaded by forms, deeds, or ‘men of straw.’ By way of illustration, in our case, the plaintiff, feeling oppressed by the absurdity of a man’s buying at his own sale, gets one Bernard to buy the land for him. He and May, the original mortgagee, convey to Bernard and he conveys to plaintiff. Bernard is ‘a man of straw.’ “But the plaintiff says, ‘I am no man of straw, I paid money for this mortgage debt, and bought the land at public sale.’ ‘True,’ say the court, ‘but did you thereby relieve yourself from the equity of redemption ? “Once a mortgage, always a mortgage,” is a trite maxim of courts of equity. By your purchase of the notes secured by the mortgage, you acquired all of the rights of May, and put yourself in his place — he could not have bought at his own sale — and it follows that you could not buy at a sale which was made by you, and of which you had the entire control.’ ” Ruffin, J., in McLeod v. Bullard, 84 N. C., 515 (531-2), quoting from Whitehead case, continues:- “Bigelow, in his work on Fraud, page 160, says, there are certain relations, termed relations of confidence, from the existence of which the law raises a presumption of fraud, in any dealings that may take place between the parties, because of the undue advantage which the situation itself gives to one over the other. Of these ‘relations of confidence,’ he enumerates eight in number, and in the following order: Attorney and client; principal and agent; partners; trustees and cestuis que trustent; guardian and ward; executors and administrators; mortgagor and mortgagee; parent and child. Thus, he places the relation of mortgagor and mortgagee 'with the other well-defined and universally acknowledged fiduciary relations. Upon principle this should be so. It is due to good faith and common honesty that such a presumption should arise in every case where confidence is reposed, and the property and interest of one person are committed to another. To every such person, his trust should be a sacred charge — not to be regarded with a covetous eye.” Rehearing, 86 N. C., 210; Harrelson v. Cox, ante, 651. *716 In Abbitt v. Gregory, 201 N. C., 577 (598), it is said: “Tbe relation may exist under a variety of circumstances; it exists in all cases where there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence. 'It not only includes all legal relations, such as attorney and client, broker and principal, guardian and ward, partners, principal and agent, trustee and cestui que trust, but it extends to any possible case in which a fiduciary relation exists in fact and in which there is confidence reposed on one side, and resulting domination and influence on the other.’ 25 C. J., 1119. In Pomeroy’s Equity Jurisprudence, Vol. 2, sec. 956 (3d Ed.), it is said: 'Courts of equity have carefully refrained from defining the particular instances of fiduciary relations in such a manner that other and perhaps new cases might be excluded. It is settled by an overwhelming weight of authority that the principle extends to every possible case in which a fiduciary relation exists as a fact, in which there is confidence reposed on one side and the resulting superiority and influence on the other. The relation and the duties involved in it need not be legal; it may be moral, social, domestic, or merely personal.’” Lee v. Pearce, 68 N. C., 76 (79); Puckett v. Dyer, 203 N. C., 684 (690-1); Bolich v. Ins. Co., 206 N. C., 144 (151-2); Lockridge v. Smith, 206 N. C., 174 (178-9). We think the case of Simpson v. Fry, 194 N. C., 623, is distinguishable from the facts in the present case. In that case it is said, at page 627: “The grantee in the deed of trust is a trustee for both debtor and the creditor, with respect to the property conveyed. The creditor can exercise no power over his debtor, with respect to said property, because of its conveyance to the trustee, with power to sell, upon default of the debtor.” In the present case the evidence indicated that the trustee acted for himself or for the creditor, or acted together. He obtained a conveyance of the equity of redemption from the debtor. We think such power was exercised over the debtor that would require the defendants to show the transaction was fair and free from oppression. The capacity was dual. In the present case the evidence indicates inadequacy of consideration. In Leonard v. Power Co., 155 N. C., 10 (16), it is said: “Where there is inadequacy of consideration, but it is not gross, it may be considered in connection with other evidence upon the issue of fraud, but will not, standing alone, justify setting aside a contract or other paper-writing on the ground of fraud.” In King v. R. R., 157 N. C., 44 (65), it is said: “When due weight is given to these matters, and there is evidence that the consideration is inadequate, it is a circumstance which, in connection with other eircum- *717 stances, may be submitted to tbe jury, and if grossly inadequate, it alone is sufficient to carry tbe question of fraud or undue influence to tbe jury. Pom. Eq. Jur., Vol. 2, sec. 926-7.” Hill v. Ins. Co., 200 N. C., 502 (509-10). Tbe defendants contend tbat there was evidence of ratification. Tbe evidence so indicates. Tbis is a matter for tbe jury to determine under a proper issue and instruction. Tbe “plat of Gideon ILinton property owned by Paul C. "West,” when properly proved, is some evidence. From tbe view we take of tbe evidence, tbe judgment of tbe court below is Eeversed. CoNNOR, J., dissents.