Graves v. Walston

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:

COURT: All right, any motions. MR. BRASWELL: Your honor, I would like for the record to show, that the plaintiffs move that the answer to Issue number four be set aside for that the answer is contrary to the evidence, contrary to the law and that it should be set aside in the interest of justice. I make the same motion with reference to the fifth one and I would move the court that judgment be entered notwithstanding the verdict for that the answers to the first three issues would entitle us to judgment notwithstanding the answer to the issues number four and number five and finally if the court does not so grant, then we move for a new trial. COURT: Well, the Court is of the opinion that a Directed Verdict should have been entered for the plaintiffs before they returned a verdict back. The motion to set aside the verdict as to issues four and five, motions are denied and the Court concludes however that notwithstanding the answers to these issues, judgment is to be entered for the plaintiffs and orders the defendants to convey all of their right, title and interest to the property to Terry Graves Heath upon tender by the plaintiff of the purchase price of $10,000.00 either in U. S. currency or certified check.

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:

Whenever a motion for a directed verdict made at the close of all the evidence is denied or for any reason is not granted, the submission of the action to the jury shall be deemed to be subject to a later determination of the legal questions raised by the motion. Not later than 10 days after entry of judgment, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict; or if a verdict was not returned such party, within 10 days after the jury has been discharged, may move for judgment in accordance with his motion for a directed verdict. In either case the motion shall be granted if it appears that the motion for directed verdict could properly have been granted. A motion for a new trial may be joined with this motion, or a new *489 trial may be prayed for in the alternative. If a verdict was returned the judge may allow the judgment to stand or may set aside the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed. If no verdict was returned the judge may direct the entry of judgment as if the requested verdict had been directed or may order a new trial. Not later than ten (10) days after entry of judgment or the discharge of the jury if a verdict was not returned, the judge on his own motion may, with or without further notice and hearing, grant, deny, or redeny a motion for directed verdict made at the close of all the evidence that was denied or for any reason was not granted.

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:

This is to avoid making a trap of the latter motion. At the time that a motion for directed verdict is permitted, it remains possible for the party against whom the motion is directed to cure the defects in proof that might otherwise preclude him from taking the case to the jury. A motion for judgment n. o. v., without prior notice of alleged deficiencies of proof, comes too late for the possibility of cure except by way of a complete new trial. The requirement of the motion for directed verdict is thus in keeping with the spirit of the rules to avoid tactical victories at the expense of substantive interests.

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:

If the motion for judgment notwithstanding the verdict, provided for in section (b) of this rule, is granted, the court shall also rule on the motion for new trial, if any, by determining whether it should be granted if the judgment is thereafter vacated or reversed, and shall specify the grounds for granting or denying the motion for the new trial. If the motion for new trial is thus conditionally granted, the order thereon does not affect the finality of the judgment. In case the motion for new trial has been conditionally granted and the judgment is reversed on appeal, the new trial shall proceed unless the appellate division has otherwise ordered. In case the motion for new trial has been conditionally denied, the appellee on appeal may assert error in that denial; and if the judgment is reversed on appeal, subsequent proceedings shall be in accordance with the order of the appellate division.

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:

1. Did the defendant, William L. Walston, agree at or before the sale on November 15, 1976 to take title in trust for Terry Graves Heath on the condition that the Bunting Brothers supply the purchase price? ANSWER: YES. 2. Did the plaintiffs rely on this agreement and allow the land to be bid in by the defendant, William L. Walston? ANSWER: YES. 3. If so, did the defendant William L. Walston bid in the property at a grossly inadequate price? ANSWER: YES. 4. Were the plaintiffs at all times ready, willing, and able to comply with the agreement? ANSWER: NO. 5. Did the defendant, William L. Walston, wrongfully put title to the land in the name of himself and his brother, George Walston? ANSWER: NO.

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.