Avery v. Haddock

EAGLES, Judge.

In their first argument, defendants contend that the plaintiffs failed to carry their burden of proving, by clear, cogent and convincing evidence, that the deed executed on 20 April 1978 did not represent the intention of the parties to the conveyance. We disagree.

Both parties refer us to the recent case of Hice v. Hi-Mil, 301 N.C. 647, 273 S.E. 2d 268 (1981), which was also an action to reform a deed on grounds of mutual mistake. In that case, our Supreme Court noted that there is a “ ‘strong presumption in favor of the correctness of the instrument as written and executed,’ ” Id. at 650, 273 S.E. 2d at 270, quoting Clements v. Insurance Co., 155 N.C. 57, 61, 70 S.E. 1076, 1077 (1911), because it must be assumed that the parties to the instrument knew what they were doing. The Court further noted that this presumption was strictly applied where deeds were involved. Because of this presumption, a party seeking to reform a written instrument on the grounds of mutual mistake must establish the alleged mistake by strong and persuasive evidence.

With these principles in mind, we turn to the record before us and find that plaintiffs clearly carried their burden of establishing the mutual mistake alleged. The 20 January 1978 option contract, signed by defendants and notarized, recites in its terms that the property with respect to which the option was purchased was the same property described in the deed to defendants from their grantors. That deed conveys to defendants all 62.24 acres, including the remainder in the Mayo life estate. No deed or other instrument was referred to in the contract.

The deed that was prepared allegedly in accordance with the option contract describes the same 62.24 acre tract and purports to convey all of defendants’ interest in that land to the Averys. The deed notes the existence of the Mayo life estate and recites a metes and bounds description of it but is silent regarding the intent of the parties with respect to it. This is the deed that was executed by the parties.

Neither defendant W. G. Haddock nor plaintiff Richard Avery, who principally conducted the transaction, possesses much formal education and neither reads well. There is conflicting evidence as to whether the deed was read to the parties at the closing. The option contract set the full price of the land described therein at $56,000: $2,000 for the option to purchase and the $54,000 balance to be paid upon the exercise of the option. The option was effective until 30 April 1978. Mr. Haddock nevertheless testified that he did not think that the Averys were exercising their option when they paid him $54,000 at the closing.

It is well established that the owner in fee of a parcel of land that is subject to a life estate, nothing else appearing, is vested with the remainder interest in the life estate. Upon the death of the life tenant, the life estate terminates by operation of law and the interest of the remainderman becomes possessory. See G.S. 29-2; e.g., Brown v. Brown, 168 N.C. 4, 84 S.E. 25 (1915). See generally, 28 Am. Jur. 2d Estates § 57 (1966); 31 C.J.S. Estates §§ 30-33 (1964); 5 N.C. Index 3d Estates §§ 3-4 (1977); 4A Thompson on Real Property, §§ 1984-87 (Replacement 1981); Webster’s Real Estate Law in North Carolina, §§ 46-47 (Hetrick Rev. 1981).

With this in mind, we note that the deed in question is sufficient to convey the entire interest in the 62.24 acres, including the remainder in the life estate, to the grantees. The paragraph indicating that the intent of the deed was to transfer also the grantor’s remainder interest in the life estate is not necessary to achieve that result.

We hold that the uncontradicted documentary evidence — the option contract and the executed deed — is clear, cogent and convincing evidence that the parties intended to convey all interests in the entire 62.24 acres, subject to the Mayo’s life estate in the one-half acre. To the extent that the deed does not reflect this clear intent, there was a mutual mistake by the parties that the plaintiffs are entitled to have corrected by the court. Hice v. Hi-Mil, supra.

Defendants next argue that the evidence does not support the findings and that the findings do not support the conclusions of law. In view of the foregoing discussion, we find this argument to be without merit.

The judgment of the District Court is

Affirmed.

Judges Hedrick and Hill concur.