Dunn v. Dunn

212 S.E.2d 407 (1975)

24 N.C. App. 713

Jack DUNN, and his wife, Joann Smith Dunn v. David E. DUNN, Jr., and his wife, Gertrude M. Dunn.

No. 7416SC912.

Court of Appeals of North Carolina.

March 5, 1975.

Certiorari Denied May 6, 1975.

*409 William A. Vaden, Greensboro, for plaintiff.

Jennings G. King, Laurinburg, for defendant.

Certiorari Denied by Supreme Court May 6, 1975.

CLARK, Judge.

The evidence is ample to support the jury finding that the plaintiff executed the deed for his one-half undivided interest in the lands to the defendant with the understanding and agreement that the plaintiff would have the option to repurchase the said one-half interest as alleged. There was evidence that the oral agreement had been reduced to writing in the form of an option to repurchase, which was prepared by the defendants' attorney and that defendant falsely represented that he and his wife had executed the option, had put it in a safe place and would deliver it to plaintiff later. The fact that the value of the property conveyed was much greater than the consideration for the deed is a factor tending to support the agreement. McKinley v. Hinnant, 242 N.C. 245, 87 S.E.2d 568 (1955).

The evidence is also sufficient to support the jury finding that defendant fraudulently induced the plaintiff to execute the deed. The evidence that defendant made statements to his sister that he did not intend to reconvey the lands to the plaintiff, while made after the delivery of the deed, were nevertheless probative of his original intent and purpose. Early v. Eley, 243 N.C. 695, 91 S.E.2d 919 (1956).

It is clear that an oral agreement to acquire legal title to land and thereafter reconvey to the grantor upon specified terms and conditions is within the statute of frauds (G.S. § 22-2), and is unenforceable in the absence of fraud, mistake or undue influence. A parol trust in favor of a grantor cannot be engrafted upon such a deed. Conner v. Ridley, 248 N.C. 714, 104 S.E.2d 845 (1958).

But in proper cases an equitable estoppel based upon grounds of fraud may override the statute of frauds. McKinley v. Hinnant, supra. In McNinch v. Trust Co., 183 N.C. 33, 38, 110 S.E. 663, 666 (1922), an action based on breach of a constructive trust to hold land and obtain the best price therefor, the Court said, "[i]t is not necessary that actual fraud be shown, but the establishment of such conduct and bad faith. . . as would shock the conscience of a chancellor will suffice to invoke the aid of a court of equity." See also 73 Am.Jur.2d, Statute of Frauds, § 567 (1974).

We do not find a case in this State where the relief sought is the specific performance of a contract to reconvey lands based on equitable estoppel because of fraud. There are numerous cases where the grantor sought to have a transaction of this nature declared a mortgage. Ferguson v. Blanchard, 220 N.C. 1, 16 S.E.2d 414 (1941); Ricks v. Batchelor, 225 N.C. 8, 33 S.E.2d 68 (1945); McKinley v. Hinnant, supra; Hardy v. Neville, 261 N.C. 454, 135 S.E.2d 48 (1964). Our Supreme Court has recognized the doctrine of equitable estoppel and there is some indication in McNinch v. Trust Co., supra, that in an appropriate case of estoppel based on fraud, it would uphold the specific performance of such a contract to reconvey.

In other jurisdictions it has been held that the conveyance of land by the plaintiff *410 to the defendant, under an oral agreement by the latter to reconvey to the plaintiff, has been held to constitute a sufficient part performance to entitle the plaintiff to a specific performance of the contract to reconvey. See Annot. 101 A.L.R. 923 at 1108 (1936). In Cloniger v. Cloniger, 261 S.C. 603, 193 S.E.2d 647 (1973), the court upheld the right of the plaintiff to the specific performance of defendant's oral promise to reconvey land to the plaintiff when he was able to repay costs incurred by defendant, together with interest.

There is no evidence that the plaintiff made a tender to the defendant of the sum of $10,000, the agreed consideration for repurchase; but here the evidence is clear that the defendant disavowed the contract, and this relieved the plaintiff of any necessity of thereafter tendering repayment. Bateman v. Hopkins, 157 N.C. 470, 73 S.E. 133 (1911); 7 Strong, N.C. Index 2d, Tender (1968).

The defendant assigns as error the three issues submitted to the jury. Upon our review we find that the issues of contract, fraud and agency were sufficient as to all determinative facts. Since the charge of the court was omitted from the record on appeal, it is presumed that the jury was properly instructed on the law of equitable estoppel based on fraud. We also find that the issues submitted support the judgment.

Under the circumstances in this case, we believe that the defendants are equitably estopped to plead the statute of frauds in defense of the plaintiffs' action and that the verdict of the jury was fully supported by the evidence.

Defendants' other assignments of error relate to questions of evidence, and upon review we find no prejudicial error.

It is noted that the judgment provides that defendants execute a fee simple deed to the lands described. Obviously, the judgment should be corrected to provide that the defendants execute a deed to the plaintiffs conveying a one-half undivided interest in the lands described upon tender of the option price of $10,000. And, except as remanded for this correction in the judgment, we find

No error.

BROCK, C.J., and BRITT, J., concur.