Lula WILSON, Executrix of the Estate of Damus B. Wilson
v.
CRAB ORCHARD DEVELOPMENT COMPANY, Inc., Leon Olive, Lewis B. Frost, and Fred Denson.
No. 6926SC257.
Court of Appeals of North Carolina.
August 13, 1969. Certiorari Allowed September 18, 1969.*52 Newitt & Newitt, by John G. Newitt, Sr., Charlotte, for plaintiff appellant.
Barnes & Dekle, by W. Faison Barnes, Charlotte, for defendant appellees.
BRITT, Judge.
The case of Estridge v. Denson and Paving Co. v. Denson and Wilson v. Denson, 270 N.C. 556, 155 S.E.2d 190, held that at the time the plaintiffs therein (including plaintiff herein) sought to levy upon the certificates of deposit involved here to pay off judgments obtained against Denson, Denson did not own the certificates of deposit. The court ruled that the certificates were the property of Crab Orchard as the result of a valid transfer for a valuable consideration. The court specifically declined to discuss whether the transaction amounted to an assignment for benefit of creditors or whether the plaintiffs had any rights against the recipients of shares of stock from Denson.
G.S. § 23-1 provides:
"Upon the execution of any voluntary deed of trust or deed of assignment for the benefit of creditors, all debts of the maker thereof shall become due and payable at once, and no such deed of trust or deed of assignment shall contain any preferences of one creditor over another, except as hereinafter stated." (Emphasis added.)
"Voluntary" has been defined as "without consideration." L. & M. Gas Co. v. Leggett, 273 N.C. 547, 161 S.E.2d 23. Here, the transfer to Crab Orchard was for a valuable consideration. Estridge v. Denson and Paving Co. v. Denson and Wilson v. Denson, supra. Therefore, the transfer of the savings and loan certificates from Denson to Crab Orchard was not an assignment for the benefit of creditors as envisioned by G.S. § 23-1 et seq. Although there are cases where transfers of property which were not clearly voluntary were treated as assignments for benefit of creditors, those cases involved transfers to creditors of the transferror for preexisting debts; such is not the case here, Crab Orchard being the transferee of Denson but not a creditor of Denson. Farmers Banking & Trust Co. v. Tarboro Leaf Tobacco Co., 188 N.C. 177, 124 S.E. 158. We hold that the facts alleged in the complaint do not constitute an assignment for the benefit of creditors.
Assuming, arguendo, that the facts alleged did constitute an assignment for the benefit of creditors, the relief afforded by G.S. § 23-1 et seq., is relief afforded by statute and does not arise out of common law. United States Rubber Co. v. American Oak Leather Co., 181 U.S. 434, 21 S. Ct. 670, 45 L. Ed. 938. Consequently, G.S. § 1-52(2) would apply, creating a three-year limitations on the time for bringing suit.
Plaintiff alleged complete lack of knowledge of the transactions until "sometime in 1966"; however, the cause of action, *53 had there been one, accrued at the time of the assignments and the statutory period began to run at that time. 5 Strong, N.C.Index 2d, Limitation of Actions, § 7, p. 239.
The decision of the superior court dismissing the action was correct, unless the ultimate facts alleged in the complaint, liberally construed, could support a finding that the defendants hold the certificates of deposit under a constructive trust for the benefit of creditors of Denson, however ascertained.
"A constructive trust arises where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it." Lee, North Carolina Law of Trusts, § 13a, p. 76. As otherwise defined, "[c]onstructive trusts include all those instances in which a trust is raised by the doctrines of equity for the purpose of working out justice in the most efficient manner, where there is no intention of the parties to create such a relation, and in most cases contrary to the intention of the one holding the legal title, and where there is no express or implied, written or verbal, declaration of the trust. They arise when the legal title to property is obtained by a person in violation, express or implied, of some duty owed to the one who is equitably entitled, and when the property thus obtained is held in hostility to his beneficial rights of ownership." Quoted from Pomeroy on Equity Jurisprudence, § 1044, in Speight v. Branch Banking Trust Co., 209 N.C. 563, 183 S.E. 734.
The complaint does not allege that the defendants obtained the deposits in violation of an equitable duty to anyone; this conclusion is supported by the holding in Estridge v. Denson and Paving Co. v. Denson and Wilson v. Denson, supra. Facts sufficient to constitute a constructive trust are not alleged.
We hold that the superior court properly granted defendants' motion for judgment on the pleadings dismissing the action.
Affirmed.
MALLARD, C. J., and PARKER, J., concur.