Carlisle v. . Carlisle

Denny, J. This appeal presents two questions for our determination: (1) Can a husband and wife enter into an enforceable parol agreement for the wife to hold real property for their joint benefit where the real property is conveyed to the wife pursuant to the agreement, by a third party, at the request of the husband? (2) Can the wife be required to account to the husband for profits realized under a partnership agreement, covering a period in excess of three years, when the partnership was under the management and control of the wife and her personal services inured to its benefit, and the agreement was not executed in accordance with the requirements of G. S., 52-12? It is settled law with us that a parol trust in favor of a grantor cannot be engrafted upon a written deed conveying a fee simple title to land, where nothing appears in the instrument to indicate otherwise than that the absolute title was to pass to the grantee. Gaylord v. Gaylord, 150 N. C., 222, 63 S. E., 1028; Chilton v. Smith, 180 N. C., 472, 150 S. E., 1; Perry v. Sou. Surety Co., 190 N. C., 284, 129 S. E., 721; Penland v. Wells, 201 N. C., 173, 159 S. E., 423. However, since the seventh section of the English Statute of Frauds, which forbids the creation of a parol trust in land, has never been enacted in this jurisdiction, parol trusts may *465 be enforced where the grantee takes title to property under an express agreement to hold the property for the benefit of another, other than the grantor. Owens v. Williams, 130 N. C., 165, 41 S. E., 93; Sykes v. Boone, 132 N. C., 199, 43 S. E., 645; Avery v. Stewart, 136 N. C., 426, 48 S. E., 775; Taylor v. Wahab, 154 N. C., 219, 70 S. E., 173; Ricks v. Wilson, 154 N. C., 282, 70 S. E., 476; Lutz v. Hoyle, 167 N. C., 632, 83 S. E., 749; Boone v. Lee, 175 N. C., 383, 95 S. E., 659; Rush v. McPherson, 176 N. C., 562, 97 S. E., 613; Reynolds v. Morton, 205 N. C., 491, 171 S. E., 781; Taylor v. Addington, 222 N. C., 393, 23 S. E. (2d), 318. In the instant case the plaintiff paid the purchase price for the land and took title in the name of another, to wit, Jennie Gaines. Having paid the purchase price, a resulting trust in plaintiff’s favor was created, and Jennie Gaines held the property as a trustee for him. Harris v. Harris, 178 N. C., 7, 100 S. E., 125; Tire Co. v. Lester, 190 N. C., 411, 130 S. E., 45. The complaint alleges, however, that the defendant took title from Jennie Gaines, pursuant to an agreement between the plaintiff and defendant, that she would hold the property for their joint benefit until a corporation could be formed under the laws of North Carolina, at which time she would convey the property to said corporation. It is further alleged that their respective interests in the partnership were to be preserved by an .equal division of the capital stock of the corporation. The plaintiff and defendant being man and wife, the fact that the plaintiff paid the purchase price and caused title to be taken in his wife’s name does not create a resulting trust in his favor for a one-half undivided interest in the land which he now claims; but, on the contrary, where a husband pays the purchase money for land and has the deed made to his wife, the law presumes he intended it to be a gift to the wife. Thurber v. LaRoque, 105 N. C., 301, 11 S. E., 460; Arrington v. Arrington, 114 N. C., 116, 19 S. E., 351; Ricks v. Wilson, supra; Singleton v. Cherry, 168 N. C., 402, 84 S. E., 402; Nelson v. Nelson, 176 N. C., 191, 96 S. E., 986; Tire Co. v. Lester, supra; Carter v. Oxendine, 193 N. C., 478, 137 S. E., 424. This presumption, however, is one of fact and is rebuttable. Faggart v. Bost, 122 N. C., 517, 29 S. E., 833; Flanner v. Butler, 131 N. C., 155, 42 S. E., 547; Carter v. Oxendine, supra; Bank v. Crowder, 194 N. C., 312, 139 S. E., 604. Moreover, G. S., 52-2, provides: “Subject to the provisions of Section 52-12, regulating contracts of wife with husband affecting corpus or income of estate, every married woman is authorized to contract and deal so as to affect her real and personal property in the same manner and with'the same effect as if she were unmarried, but no conveyance of her real estate shall be valid unless made with the written assent of her husband as provided by section six *466 of article ten of tbe constitution, and her privy examination as to tbe execution of tbe same taken and certified as now required by law.” Therefore, a married woman is under no legal handicap which would prevent her from entering into an oral agreement with her husband to hold title to real estate for his benefit or for their joint benefit. Ritchie v. White, write, 450. And to rebut the presumption of a gift to the wife, and to establish a parol trust in his favor, no greater degree of proof is required than is required to establish a parol trust under any other circumstances. To rebut the presumption of a gift to the wife, and to establish a parol trust, the evidence must be clear, strong, cogent and convincing. Avery v. Stewart, supra; Taylor v. Wahab, sirpra; Glenn v. Glenn, 169 N. C., 129, 86 S. E., 622; Anderson v. Anderson, 177 N. C., 401, 99 S. E., 106; Whitten v. Peace, 188 N. C., 298, 124 S. E., 571. We think his Honor erred in holding as a matter of law that the plaintiff cannot establish title to a one-half undivided interest in the real property involved in this action, under the allegations of his complaint. We come now to the second question presented. The plaintiff seeks an accounting by the defendant as a partner and not as a trustee. He alleges the defendant is a trustee for him of a one-half undivided interest in the real property involved herein, but there is no allegation in the complaint to the effect that any funds have come into the hands of the defendant from rents or profits from the land which she holds as his trustee, but on the contrary, plaintiff alleges the property has been used by the plaintiff and defendant as partners since 1931, in the operation of a camp for girls. A husband and. wife may enter into a partnership agreement and be answerable for the partnership debts made for and on behalf of the firm with third parties. Dorsett v. Dorsett, 183 N. C., 354, 111 S. E., 541; Bristol Grocery Co. v. Bails, 177 N. C., 298, 98 S. E., 768. But, as between husband and wife, where the partnership agreement purports to affect or change any part of the real estate of the wife or the accruing income thereof, for a longer period than three years next ensuing the making of the contract, or if the agreement impairs or changes the body or capital of the personal estate of the wife, or the accruing income thereof, for a longer period than three years next ensuing the agreement, the contract is void unless executed in accordance with the requirements of G. S., 52-12, the pertinent part of which reads: “No contract between a husband and wife made during coverture shall be valid to affect or change any part of the real estate of the wife, or the accruing income thereof for a longer time than three years next ensuing the making of such contract, or to impair or change the body or capital of the personal estate of the wife, or the accruing income thereof, for a longer time than three years next ensuing the making of such contract, unless such con *467 tract is in writing, and is duly proved as is required for conveyances of land; and upon the examination of the wife separate and apart from her husband, as is now or may hereafter be required by law in the probate of deeds of femes covert, it shall appear to the satisfaction of such officer that the wife freely executed such contract, and freely consented thereto at the time of her separate examination, and that the same is not unreasonable or injurious to her.” Daughtry v. Daughtry, ante, 358, 34 S. E. (2d), 435. Furthermore, G. S., 52-10, provides: “The earnings of a married woman by virtue of any contract for her personal services, . . . shall be her sole and separate property as fully as if she had remained unmarried.” Croom v. Lumber Co., 182 N. C., 217, 108 S. E., 735. Therefore, we think the partnership agreement is void and unenforceable, as between the plaintiff and defendant, under the facts alleged, since the agreement was not executed in the manner and form required by law. The judgment of the court below, in so far as it holds the defendant is the sole owner of the real estate described in the complaint in this action, is reversed. But, in so far as the judgment holds the defendant is the owner of the business operated as Camp Carlisle, situated on the real estate involved in this action, and that the plaintiff has no interest in said business nor in the profits arising therefrom, the judgment is affirmed. Reversed in part. Affirmed in part.