Patterson v. Bryant, 216 N.C. 550 (1939)

Dec. 13, 1939 · Supreme Court of North Carolina

216 N.C. 550

C. H. PATTERSON v. J. N. BRYANT, JUNIUS D. GRIMES, C. A. TURNAGE, F. S. WORTHY and S. B. ETHRIDGE, Trading as WORTHY & ETHRIDGE; S. B. ETHRIDGE, Individually; J. S. HUMPHRY and R. F. HUMPHRY, Trading as HUMPHRY BROTHERS, and J. S. HUMPHRY and R. S. HUMPHRY, Individually.

(Filed 13 December, 1939.)

1. Vendor and Purchaser § 25—

The purchaser’s right of action against the vendor for failure of title is not predicated upon any warranty, but the purchaser is entitled to recover upon a proper showing, even when there are no warranties in the deed, upon the broad principle that the vendor is under duty to refrain from deliberately selling the same property a second time with knowledge that he is jeopardizing the right of his purchasers.

2. Deeds § 9—

O. S., 3309, provides, for reasons of public policy, that the rights of successive grantees of the same property shall be determined by registration, and that even actual knowledge on the part of the grantee in a registered instrument of the execution of a prior unregistered deed will not defeat his title as purchaser for a valuable consideration in the absence of fraud or matters creating an estoppel.

3. Deeds § 10a—

An unregistered deed is good as between the parties and the fact that it is not registered does not affect the equities between the parties, the sole purpose of the statute being to determine and make certain the question of title.

4. Same: Equity § 2: Vendor and Purchaser § 25—

The registration laws are not for the protection of the grantor, and therefore laches on the part of his first grantee in failing to promptly record his deed is not available as an equitable defense in such grantee’s action for damages for failure of title by reason of the execution by the grantor of a second deed to the same property which is first recorded.

5. Vendor and Purchaser § 25 — Evidence that defendant deliberately executed two deeds to same property entitles grantee in deed secondly recorded to recovery.

Defendant conveyed certain timber by deed to plaintiff and thereafter executed deed to a third person, which deed included in its conveyance the same timber rights conveyed in prior deed. There was evidence that defendant hesitated before executing tbe second deed and sought to justify his action by raising a question as to the fairness and validity of the former transaction. The second deed was first recorded. Plaintiff instituted this action for damages for failure of title. Held: The evidence is sufficient to sustain an inference that defendant was aware that he was twice selling the same property and receiving the purchase price from each of his grantees, and equity will not permit him to be unjustly enriched by retaining both purchase prices but will force him to make restitution to plaintiff as upon a quasi contract as the party injured by defendant’s breach of duty in jeopardizing the rights of his grantees by executing two deeds to the same property.

Appeal by defendant, J. N. Bryant, from Harris, Jat March Term, 1939, of PeNDEr.

Affirmed.

Tbe plaintiff complained, and tbe evidence tended to show, that tbe defendant conveyed to him tbe timber located on a certain tract of land in Pender County, described in tbe complaint, and received tbe purchase price therefor. Tbe plaintiff did not immediately cause bis deed to be registered. Meantime, tbe defendant, for a valuable consideration, included tbe same timber in a deed made to other parties, who promptly registered their deed. Tbe last mentioned deed was recorded on 7 September, 1937; ten days later tbe plaintiff’s deed was recorded. Tbe time given tbe plaintiff to cut tbe timber bad not expired.

In tbe course of tbe trial a judgment of nonsuit was entered as to tbe grantees under tbe deed last executed, from which order tbe plaintiff did not appeal, and tbe suit proceeded against Bryant.

In tbe evidence supporting tbe contentions of tbe plaintiff it was developed that tbe defendant at tbe time of tbe execution of tbe second deed hesitated about making it, recalled and spoke of tbe transaction be bad bad with the plaintiff about tbe timber, and raised some question as to whether tbe deed made to tbe plaintiff ought to have included certain timber which be was then about to convey under tbe second deed, and appealed to tbe recollection of persons standing by to verify bis impression of tbe transaction theretofore bad with Patterson.

In bis answer to tbe complaint tbe defendant Bryant alleged that be bad been defrauded by tbe plaintiff in tbe inclusion in tbe first deed to plaintiff of tbe timber in dispute, and in bis testimony reviewed tbe transaction with Patterson leading to tbe execution of tbe deed, claimed that be bad been deceived as to tbe conditions on tbe land as being unfavorable to tbe cutting of tbe timber, and as to tbe quantity of timber in tbe swamp, and claimed that be only intended to give tbe plaintiff tbe right to cut not exceeding fifteen trees upon tbe area afterward included in tbe deed made to Grimes, Worthy, and others. He claimed that at tbe time of tbe execution of tbe deed to Patterson be was sick in bed and signed tbe deed only at tbe insistence of Patterson.

Iii apt time the defendant moved for judgment as of nonsuit, both at the conclusion of the plaintiff’s evidence and at the conclusion of all the evidence, which motion was declined.

Upon the issues submitted to the jury a judgment was entered awarding $350.00 damages to the plaintiff in compensation for the injuries done him through the alleged wrongful acts of the defendant, from which judgment defendant appealed, assigning errors.

J ohn J. Best for defendant, appellant.

Hadder ■& Allen and Q. B. McGullen, Jr., for plaintiff, appellee.

Seawell, J.

The only question argued by the defendant in this Court relates to the refusal of the trial judge to allow his motion for judgment as of nonsuit made at the conclusion of the plaintiff’s evidence and renewed at the conclusion of all the evidence.

Defendant’s counsel contends that the motion for judgment as of nonsuit should have been allowed (I) because there was no allegation or evidence of the breach of any covenant in the deed from defendant to plaintiff; (2) that there was no allegation or evidence of any unjust enrichment of the defendant; and (3) that there was no allegation or evidence of fraud or guilty knowledge or intentional unfair dealings on the part of the defendant. It is further pointed out that the plaintiff was negligent or guilty of laches in recording his deed, and that his loss or injury, if any, was due to that cause.

The deed does not, in fact, contain any covenants or warranties, but the rights of the plaintiff in this suit are not predicated upon a breach of any warranty in the deed, but upon a broader principle: the breach of duty which he conceives the defendant owed him of refraining from the deliberate selling of the land a second time, with the knowledge that he was jeopardizing the rights of plaintiff, and thus setting in motion a chain of events that defeated the title of the jilaintiff, while it left the defendant enriched by the purchase ■ price paid to him by the plaintiff, as well as that paid to him by his subsequent grantees of the same property.

The single question before us is whether in equity the defendant may be allowed to retain the money received as a purchase price from both of these parties, and, if not, to whom restitution should be made.

It is true in a general sense that the plaintiff lost the title to his land by his failure to record his deed promptly. For reasons of public policy, C. S., 3309, in cases coming within its purview, undertakes to determine the question of title upon the fact of registration, making the unregistered title ineffective as against a subsequent holder from the same grantor for a valuable consideration except from registration. For the same reasons of public policy, actual knowledge on the part of the holder of the registered title of the execution of the prior deed, in the absence of fraud or matters creating an estoppel, will not avail to defeat his title as a purchaser for a valuable consideration.

The statute is intended to render titles certain and secure and to prevent confusion, mistake, and fraud growing out of the existence of unregistered and unknown titles which might defeat a subsequent purchaser for value. Warren v. Williford, 148 N. C., 474, 62 S. E., 697; Weston v. Lumber Co., 160 N. C., 263, 75 S. E., 800. It is objective in its character and does not attempt to settle any equities which might exist between a grantor and those to whom he has sold his land, and those to whom he has resold it either mistakenly or deliberately and fraudulently. The deed made by him in the first instance is good inter partes. Hargrove v. Adcock, 111 N. C., 166, 16 S. E., 16; Warren v. Williford, supra; Weston v. Lumber Co., supra. Whether it is registered at all is of no consequence to the grantor, and the statute requiring conveyances to be registered is not for his protection, but, as stated, for protection of a subsequent purchaser with whom he has seen fit to deal; therefore, laches on the part of his first grantee in recording his deed is not available to defendant as an equitable defense. The first grantee is not bound to anticipate that the grantor would sell the property again and rush off to the registry office to forestall such a breach of faith. As between the parties, any loss sustained by the plaintiff in the transaction complained of must be regarded as the result of the defendant’s conduct in dealing doubly with the plaintiff and with subsequent grantees to whom he successfully transferred the timber.

It cannot be said that the defendant was unaware of the fact that he was selling his timber a second time and a second time receiving pay for it. According to witnesses present when the deed to Grimes and others was signed, the defendant there sought to justify his action by raising a question as to the fairness and validity of the former transaction between himself and this plaintiff — hesitating to sign the deed until he could receive assurances that witnesses might remember phases of the former transaction agreeable to his present purpose. The evidence was sufficient to sustain an inference that the act was deliberate and that the defendant might at the time have known that he was violating a duty either to the plaintiff or to the persons who were then about to receive title to the land. That was a violation of duty, the consequences of which will be referred to the act of the defendant himself, without whose wrongful act the plaintiff would not have sustained his loss.

But to sustain this action it is not necessary for the plaintiff to maintain it as one of tort. If we wish to be technical about the forms of action, wbicb we consider wholly unnecessary in tbis case, it may be regarded as an action of assumpsit, involving tbe principles of quasi contract,- wbicb are broad enough to include practically every instance where a defendant has received money wbicb be is “obliged by tbe ties of natural justice and equity to refund.” 41 C. J., p. 29, note 7 (c). “A person who has been unjustly enriched at tbe expense of another is required to make restitution to tbe other.” Restatement of tbe law; Restitution. Am. Law Inst. 1937, p. 27.

According to tbe facts found by tbe jury, tbe plaintiff has paid to tbe defendant a sum of money for wbicb be received no value. Tbe defendant has in bis bands tbis money, as well as tbe price paid to him for tbe same thing by bis subsequent grantees. Equity will not permit him to retain both. Restitution must be made to tbe plaintiff, whose present condition is, in part at least, due to tbe conduct of tbe defendant. In tbis case tbe amount of restitution was properly left to tbe jury, upon tbe evidence.

Tbe judgment is

Affirmed.