Tull v. Harvey & Son Co., 197 N.C. 329 (1929)

June 12, 1929 · Supreme Court of North Carolina

197 N.C. 329

OLLIE H. TULL v. HARVEY & SON COMPANY.

(Filed 12 June, 1929.)

1. Cancellation of Instruments A b — Fraud not presumed from deed from mortgagor to mortgagee when property conveyed not embraced in mortgage.

In order for fraud to be presumed from the mortgagee’s obtaining a deed from the mortgagor the deed must be a conveyance of the mortgaged premises, and the presumption does not apply when the mortgage is upon a distinct and separate tract owned by the husband of the mortgagor.

3. Same — Where fraud is not presumed in an action for cancellation of deed it must be particularly alleged.

Where the presumption of fraud does not apply' to a deed given by a mortgagor to the mortgagee on lands not.embraced in the mortgage, the mortgagor in her action to set aside the deed must allege in her complaint facts with such particularity as to show the fraud upon which the action is based, and in the absence • of sufficient allegations in this respect a demurrer thereto is properly sustained.

3. Pleadings D a — Where demurrer is good as to one cause of action and bad to the other, retention of good cause for trial is proper.

Where allegations in a complaint are insufficient to state a cause of action to set aside a deed for fraud, but sufficient to state a cause of action against the grantee therein for failing to account for the purchase price, a demurrer to the complaint is properly sustained on the first cause of action, and overruled as to the second, and the trial court properly retains the second cause for trial, and may permit the plaintiff to amend her complaint as to the second cause in proper instances.

Civil actioN, before Grady, J., at Chambers, 21 November, 1928.

The plaintiff alleged that she was the owner of a tract of land in Lenoir County, containing 125 acres and known as the Highway tract, and that her husband was the owner of a tract of land in said county known as the Tower Hill tract; that on 18 January, 1919, the plaintiff and her husband executed and delivered to R. C. Strong, trustee for Henry Strong, a deed of trust on the Highway tract to secure an indebtedness of $5,000, and thereafter on 18 April, 1922, plaintiff and her husband executed and delivered to F. E. Wallace, trustee, for the National Bank of Kinston, a mortgage on said Highway tract to secure an indebtedness of $1,750.

Plaintiff further alleged that the following deeds of trust were executed by her and her husband on the Tower Hill tract, to wit:

(a) 24 July, 1919, to secure an indebtedness of $10,000 to the Farm Loan Bank of Columbia, South Carolina.

(b) 29 January, 1920, to secure an indebtedness of $2,000 to the National Bank of Kinston.

(c) 15 April, 1921, to secure an indebtedness of $5,259 due the defendant. . .

(d) 24 November, 1922, to secure an indebtedness of $1,846 due the defendant.

Thereafter, on 2 February, 1923, the plaintiff and her husband executed and delivered to the defendant a deed for the said Highway tract belonging to the plaintiff for the sum of $12,000.

Plaintiff further alleged that the defendant secured a deed for her said “Highway tract” by means of fraud and coercion, for that “the defendant took undue advantage of the fact that the lands of both the plaintiff and her husband were encumbered by deeds of trust and mortgages as hereinbefore recited, unlawfully to induce, impel and coerce the plaintiff to execute to the defendant the said paper-writing, in form a deed, for her said Highway tract of land. And further, that during the fall of 1922 the defendant began to threaten and did threaten plaintiff and her husband with the foreclosure of the deed of trust' on the Tower Hill tract,” and “moved by such threats . . . the plaintiff and her husband decided, to surrender Tower Hill farm to the defendant.” "Whereupon the “defendant dissuaded the husband of plaintiff from so surrendering said Tower Hill farm, and by fraudulent inducements and promises which deceived the plaintiff, caused a change of purpose of her said husband and the plaintiff to surrender Tower Hill and' secure from the plaintiff and her husband by representations and assurances, which, as plaintiff believes and alleges, were fraudulent and never intended to be performed, the execution to the defendant of the paper-writing, in form a deed, for the Highway farm.”

Plaintiff further alleged that the defendant had failed to account for the purchase price of said property and that said defendant had wrongfully and unlawfully misapplied said purchase price.

Upon these allegations the plaintiff asks:

(a) That the deed for the Highway tract be set aside and that she be permitted to redeem said land upon payment of the amount of the indebtedness thereon.

(b) And for such other relief as she might be entitled to.

The defendant filed a demurrer upon the ground that the complaint contained no allegation of fraud sufficient to constitute a cause of action.

Tbe trial judge entered tbe following judgment:

“Tbe defendant demurred to tbe complaint upon tbe ground tbat tbe complaint does not state facts sufficient to constitute a cause of action based upon fraud and misrepresentation; and, upon an inspection of tbe complaint, tbe court is of tbe opinion tbat no cause of action is alleged in respect to tbe charge of fraud, and tbe demurrer is sustained in tbat respect; but tbe court is of tbe opinion tbat a cause of action is sufficiently stated for money bad and received, and in tbat respect tbe demurrer is overruled.

“Wherefore, it is now adjudged tbat tbe cause of action declared upon in respect to fraud and false representations be and the Same is hereby dismissed, and tbe plaintiff is declared to be not entitled to recover in tbat respect. ., .

“It is further adjudged tbat tbe plaintiff be permitted to amend tbe complaint so as to definitely set forth tbe facts in respect to tbe moneys bad by tbe defendant from tbe purchase of tbe lands described in tbe complaint and known as tbe Highway tract; and 'the defendant' will be permitted to answer said amended complaint' witbin"twenty days after service of a copy thereof on counsel.”

From tbe foregoing judgment the plaintifE appealed.

Rouse & Rouse for plaintiff.

F. E. Wallace and Cowper, Whitaker & Allen for defendant.

Brogden, J.

Tbe record discloses that the defendant held no mortgage upon the Highway tract owned by the plaintiff. Therefore the relationship of mortgagor and mortgagee does not apply. The fact that the grantee in a deed bolds a mortgage, executed by the grantor on other property does not raise the presumption of fraud. Hart v. Cannon, 133 N. C., 10, 45 S. E., 351. Therefore, as there was no presumption of fraud arising from the relationship of the parties, it was necessary for the plaintiff to allege the specific facts, circumstances and acts constituting the fraud complained of. The principle of law is tersely expressed in Colt v. Kimball, 190 N. C., 169, 129 S. E., 406, as follows: “It is accepted in this jurisdiction that the facts relied, upon to constitute fraud, as well as the fraudulent intent, must be clearly alleged.” Foy v. Stephens, 168 N. C., 438, 84 S. E., 758; Nash v. Hospital, 180 N. C., 59, 104 S. E., 33. Tbe complaint in the case at bar does not comply with the principle of law so announced.

Tbe plaintiff, however, alleges that the defendant has not accounted to' her for the purchase price of her tract of land, and she is entitled to be beard on this cause of action.'

Affirmed.