Harris v. Carolina Distributing Co., 172 N.C. 14 (1916)

Sept. 13, 1916 · Supreme Court of North Carolina

172 N.C. 14

L. P. HARRIS et al. v. CAROLINA DISTRIBUTING COMPANY et als.

(Filed 13 September, 1916.)

1. Equity — Judgments—Levy—Cloud on Title.

Tlie sale of lands under an execution upon a judgment will be restrained if tbe deed to be made by tbe officer selling tbe land will not pass title, and will only throw a cloud upon the title of tbe plaintiff.

2. Estates — Entireties—Husband and Wife — Execution.

Where an estate is held by a husband and wife by entireties, it is not subject to execution for tbe debts of either of them as long as they both shall live.

3. Same — Trusts—Power of Appointment.

Tbe owner of lands conveyed them to his wife, and thereafter they both conveyed to a trustee to hold the same for their only use and benefit during their natural lives and, upon tbe death of either, for the sole benefit of the other during his or her life, unless the husband disposed thereof by will; and at the request of both grantors the trustee should convey to another person designated by them. Held, the lands in the hands of the trustee were held by entireties, and not subject to levy under a judgment against the husband; and his power of appointment did not enlarge his estate or alter the result.

Civil actioN tried before Bond, J., at April Term, 1916, of Beaueoet.

This is an action to restrain tbe sale óf certain land under execution, upon tbe ground tbat tbe sale and tbe deed made pursuant thereto will be a cloud on tbe title of tbe plaintiff.

Prior to 7 March, 1912, tbe plaintiff L. P. Harris was tbe owner of tbe land in controversy, and on tbat day be conveyed tbe same to bis wife, Nellie J. Harris, who is also a plaintiff. Thereafter tbe said L. P. Harris and bis wife conveyed said lands to tbe plaintiff Wiley C. Rodman, in trust, as follows:

“1. To bold tbe same for and during tbe natural life of L. P. Harris and Nellie J. Harris, for their only use and benefit.

“2. Upon tbe death of tbe said Nellie J. Harris, for the sole use and benefit of tbe said L. P. Harris.

“3. Upon tbe death of tbe said L. P. Harris, for tbe sole use and benefit during her natural life of tbe said Nellie J. Harris, subject to tbe right of tbe said L. P. Harris to make such disposition thereof by will as to him may seem proper, in which event and upon its proper probate this said trust shall cease and determine.

“4. That tbe said Wiley 0. Eodman, trustee, bis heirs or successors, shall at any time, upon tbe request of tbe said L. P. Harris and Nellie J. Harris, convey said land to any person or persons as may be by them therein designated.

“5. That tbe said parties of the-first part shall bold, enjoy, and possess tbe land during their lifetime, and that upon tbe death of both, if no disposition shall have been previously made as provided for in this trust, then tbe said trust shall cease and determine, and tbe said land shall vest in tbe heirs of L. P. Harris, either in accordance with tbe laws of descent or as be may determine by will.”

Tbe defendant obtained a judgment against tbe plaintiff L. P. Harris in 1915 upon a debt contracted after tbe execution and registration of tbe deeds to Nellie J. Harris and Wiley C. Eodman, and it is this judgment which tbe defendant is seeking to enforce by a sale under execution of tbe interest of L. P. Harris in said lands, tbe plaintiff contending that tbe said Harris acquired no interest under tbe trust deed to Eodman which is tbe subject of sale.

A temporary restraining order was issued, but upon tbe bearing it was dissolved, and tbe plaintiffs excepted and appealed.

W. G. Rodman for plaintiffs.

Small, MacLean, Bragaw & Rodman for defendant.

AlleN, J.

It has been held in this State that an action cannot be maintained to restrain the sale of land under execution upon tbe ground that tbe sale and tbe deed made pursuant thereto will be a cloud on tbe title of tbe plaintiff (McLean v. Shaw, 125 N. C., 431), but this has been changed by statute (Crockett v. Bray, 151 N. C., 618), and a plaintiff can, under tbe law as it now exists, restrain a sale under execution if tbe deed of tbe officer who sells will not pass title and will only throw a cloud upon tbe title of tbe plaintiff.

Tbe determination of tbe appeal, therefore, depends on tbe estate acquired by L. P. Harris under tbe deed to Eodman, trustee, and whether, it is such an estate as is subject to tbe lien of a judgment and a sale under execution issued thereon.

Tbe deed conveys the land to Eodman, trustee, for tbe benefit of L. P. Harris and his wife, Nellie J. Harris, for and during their natural lives, with a general power of disposition in L. P. Harris.

Tbe estate of L. P. Harris and bis wife is an estate by entireties (Motley v. Whitemore, 19 N. C., 537; Bruce v. Nicholson, 109 N. C., 204), and such an estate is not the subject of sale under execution. Hood v. Mercer, 150 N. C., 699.

In tbe last case cited tbe Court says, in speaking of estates by entire-ties, tbat “While, to some extent, former decisions of tbis Court in respect to tbis estate bave been modified, we bave beld, in recent years, tbat under a conveyance of land in fee to husband and wife they take by entireties, with, right of survivorship, and tbat tbe interest of neither during their joint lives becomes subject to tbe lien of a docketed judgment. During tbe wife’s life the busband has no sucb interest as is subject to levy and sale to satisfy a judgment against him. Bruce v. Nicholson, 109 N. C., 202; West v. R. R., 140 N. C., 620.”

It is also well settled tbat a general power of appointment conferred upon a life tenant does not enlarge bis estate.

In Patrick v. Morehead, Ashe, J., speaking for tbe Court, says: “It has been settled upon unquestionable authority -that if an estate be given by will to' a person generally, with a power of disposition or appointment, it carries tbe fee; but if it be given to one for life only, and there is annexed to it sucb a power, it does not enlarge bis estate, but gives him only an estate for life.”

"We are therefore of opinion tbat tbe plaintiff L. P. Harris has no estate under tbe deed executed to Rodman, trustee, which is subject to sale under execution, and as tbe sale and tbe deed made to carry it into effect would be a cloud upon tbe title of tbe plaintiffs, tbat they are entitled to bave tbe restraining order continued to tbe bearing.

Tbe defendant is not in a position to avail himself of tbe contention tbat tbe deed from L. P. Harris to bis wife and tbe deed to Rodman, trustee, are fraudulent as to creditors, because its debt was contracted after tbe execution and registration of those deeds, and it does not appear tbat there is any debt owing by either of tbe plaintiffs which was in existence at tbe time of their execution.

Reversed.