Garris v. Scott ( 1957 )

99 S.E.2d 750 (1957) 246 N.C. 568

Joe GARRIS and wife, Georgianna Garris,
v.
Leo L. SCOTT and wife, Mary T. Scott.

No. 97.

Supreme Court of North Carolina.

September 18, 1957.

Owens & Langley, Kinston, for plaintiffs, appellants.

John W. Beaman and Lee & Hancock, New Bern, for defendants, appellees.

PARKER, Justice.

Plaintiffs have two assignments of error, both relating to the court's charge to the jury.

Their assignment of error Number One is to this part of the charge:

"I don't think they're entitled to but I'll give it. Gentlemen, counsel for the defendants requests the Court to give this instruction which I give now. That the legal effect of the deed from Joe Garris and his wife, Georgianna Garris, to Mark Phillips, dated December 24, 1955, and recorded in the Office of the Register of Deeds of Craven County in Book 528, page 189, and the agreement and option between Mark Phillips and wife, Lorene Osborne Phillips, parties of the first part, and Joe Garris and wife, Georgianna, parties of the second part, dated January 7, 1956, and recorded in the Office of the Register of Deeds of Craven County in Book 528, page 192, would be to place fee simple title to the lands in controversy and the entire tobacco allotment on said land in the said Mark Phillips pending the exercise of said option by Joe Garris and his wife, Georgianna Garris."

The defendant Leo L. Scott testified, "Mr. Bob Wheeler gave me another paper, that deed there from Mark Phillips back to Joe Garris." The case on appeal has this statement immediately after this testimony of Scott: "The deed referred to was marked as defendants' Exhibit A and was read into the record by Mr. Beaman." However, this deed does not appear in the case on appeal. Scott further testified: "I gave Mr. Wheeler a check for the deed. That is the check I gave Mr. Wheeler; it is for $10.00; that was for the deed from Mark Phillips back to Joe Garris." Mark Dunn, a witness for defendants, speaks of the deed from Mark Phillips to Joe Garris.

Robert D. Wheeler, a witness in rebuttal for plaintiffs, testified that he drew a deed dated 20 January 1956 from Mark Phillips to Joe Garris conveying a fee simple title. This deed is not in the case on appeal.

Plaintiffs alleged in paragraph 2 of their complaint "that on or about the 20th day of January 1956, the plaintiffs were the owners in fee simple of a certain farm in Craven County, hereinafter described in paragraph 5, subject to indebtednesses which were encumbrances in the amount of approximately $6,000.00." The defendants in paragraph 2 of their answer say, "that the allegations of paragraph 2 of the complaint are admitted."

It seems clear from defendants' admission in their answer and from the evidence that Mark Phillips and his wife conveyed back to plaintiffs by deed the farm before the plaintiffs executed the challenged deed to the defendants. It is unreasonable to believe that Leo L. Scott represented by Mark Dunn, a lawyer, paid plaintiffs $500 and paid their indebtedness, unless Mark Phillips and his wife had conveyed the farm back to plaintiffs. And yet with the solemn admission in defendants' answer that plaintiffs owned on 20 January 1956 the farm in fee simple, subject to indebtedness, the judge instructed the jury that the legal effect of the deed from plaintiffs to Mark Phillips and of the option to repurchase from Mark Phillips and his wife to plaintiffs placed fee simple title to the farm and the entire tobacco allotment on the farm in Mark Phillips pending the exercise of the option by plaintiffs. This part of the charge was highly prejudicial to plaintiffs, for it was to the effect plaintiffs had nothing to sell, but only an option to repurchase, and if plaintiffs had nothing to sell, no question of inadequacy of consideration could arise.

It is plain from the evidence that a principal reason, if not the main one, for Leo L. Scott's desire to purchase plaintiffs' farm was to get their tobacco allotment thereon. Scott testified, "you couldn't buy the tobacco allotment without the place." One of defendants' witnesses testified a tobacco allotment is worth $750 to $800 per acre. Whether that value is too small or not, the evidence before us does not disclose. However, it is a matter of common and general knowledge that the fair market value of farms in the tobacco section of Eastern North Carolina is dependent to a very large degree upon the size of their tobacco allotments. Plaintiffs have evidence tending to show inadequacy of consideration.

No fiduciary or confidential relationship is alleged. The general rule is that fraud is not presumed, but must be proved by the party alleging it. Poe v. W. F. Smith & Co., 172 N.C. 67, 89 S.E. 1003; 24 Am.Jur., Fraud and Deceit, secs. 256 and 257. This does not mean that fraud in a transaction can only be proved by direct and positive evidence. It is not ordinarily the subject of such proof. Fraud in a transaction may be proved by inferences which may reasonably be drawn from evidence respecting the transaction itself, or circumstances surrounding the transaction. Vail v. Vail, 233 N.C. 109, 63 S.E.2d 202; Halsey v. Minnesota-South Carolina Land & Timber Co., 174 S.C. 97, 177 S.E. 29, 100 A.L.R. 1; 24 Am.Jur., Fraud and Deceit, sec. 257.

Such a circumstance surrounding a transaction is inadequacy of consideration. The controlling principle established by our decisions is that inadequacy of consideration is a circumstance to be considered by the jury in connection with other relevant circumstances on an issue of fraud, but inadequacy of consideration standing alone will not justify setting aside a deed on the ground of fraud. However, if the inadequacy of consideration is so gross that it shows practically nothing was paid, it is sufficient to be submitted to the jury without other evidence. Leonard v. Power Co., 155 N.C. 10, 70 S.E. 1061; Knight v. Vincennes Bridge Co., 172 N.C. 393, 90 S.E. 412; Butler v. Armour Fertilizer Works, 195 N.C. 409, 142 S.E. 483; Hill v. Star Ins. Co., 200 N.C. 502, 157 S.E. 599; Hinton v. West, 207 N.C. 708, 178 S.E. 356. See 24 Am.Jur., Fraud and Deceit, secs. 266 and 284.

It is but fair to the learned trial judge to say that in giving the challenged instruction at the request of defendants' counsel for which a new trial must be ordered, he said he did not think they were entitled to it.

New trial.