Mrs. Irene L. VINSON
v.
Anne Lee SMITH.
No. 257.
Supreme Court of North Carolina.
March 20, 1963.*47 Plumides & Plumides, by Warren D. Blair, Charlotte, for defendant appellant.
James J. Caldwell, Charlotte, for plaintiff appellee.
PARKER, Justice.
The case was tried below on the theory of a resulting trust. Plaintiff's evidence tends to show that Dr. Ralph Reid and his wife executed a deed to these lots to plaintiff, but there is no evidence in the record that this deed was ever delivered. No such deed is recorded. "Delivery is essential to the validity of a deed of conveyance. Both the delivery of the instrument and the intention to deliver it are necessary to a transmutation of title." Elliott v. Goss, 250 N.C. 185, 108 S.E.2d 475.
Plaintiff alleges in paragraph four of her complaint: "4. That although the purchase price for said lots of land was fully paid, as aforesaid, no deed or other conveyance of said lots was ever made to the plaintiff." In replying to this paragraph of the complaint defendant states in paragraph four of her answer: "4. That it is admitted that no deed or other conveyance of said lots was ever made to the plaintiff but it is denied that the purchase price for said lots of land was paid for by the plaintiff." "It is an elementary rule that issues arise upon the pleadings, and, if a fact is alleged by one party and admitted by the other, no issue arises therefrom, but both parties are bound by the allegation so made, and evidence offered in relation thereto is irrelevant." State ex rel. R. H. Lee v. Martin, 191 N.C. 401, 132 S.E. 14.
This Court said in Creech v. Creech, 222 N.C. 656, 24 S.E.2d 642:
"The overwhelming weight of authority recognizes the general rule that in the absence of circumstances indicating a contrary intent, where the purchase price of property is paid with the money of one person and the title is taken in the name of another, for whom he is under no duty to provide, a trust in favor of the payor arises by operation of law and attaches to the subject of the purchase. Harris v. Harris, 178 N.C. 7, 8, 100 S.E. 125; Avery v. Stewart, 136 N.C. 426, 48 S.E. 775, 68 L.R.A. 776; Summers v. Moore, 113 N.C. 394, 18 S.E. 712; 26 R.C.L. 1219 § 64, note 1; 65 C.J. p. 382 § 154(5), note 14. The presumption *48 is regarded as so powerful that the payment of the purchase price under such circumstances draws the equitable title to the payor `as if by irresistible magnetic attraction.' Ricks v. Wilson, 154 N.C. 282, 286, 70 S.E. 476, 477. And a resulting trust in favor of the party paying the consideration will arise, although the conveyance is made to another with the knowledge and consent of the payor. Summers v. Moore, supra."
To the same effect see Waddell v. Carson, 245 N.C. 669, 97 S.E.2d 222; Bowen v. Darden, 241 N.C. 11, 84 S.E.2d 289; 89 C.J.S. Trusts § 116.
In Rhodes v. Raxter, 242 N.C. 206, 87 S.E.2d 265, it is said:
"It is elemental that a resulting trust arises, if at all, in the same transaction in which the legal title passes, and by virtue of consideration advanced before or at the time the legal title passes, and not from consideration thereafter paid."
A resulting trust arises, if at all here, from the payment of the purchase money, and accordingly it is essential to the creation of such a trust that the money or assets furnished by or for the person claiming the benefit of the trust should enter into the purchase price of the property at or before the time of purchase. Hodges v. Hodges, 256 N.C. 536, 124 S.E.2d 524; s. c., 257 N.C. 774, 127 S.E.2d 567; Hoffman v. Mozeley, 247 N.C. 121, 100 S.E.2d 243; Rhodes v. Raxter, supra; Wilson v. Williams, 215 N.C. 407, 2 S.E.2d 19; Summers v. Moore, 113 N.C. 394, 18 S.E. 712; Young v. Greer, 250 Ala. 641, 35 So. 2d 619; Elliott v. Wood, 95 Cal. App. 2d 314, 212 P.2d 906; Davis v. Roberts, 365 Mo. 1195, 295 S.W.2d 152; Patrick v. McGaha, Tex. Civ.App., 164 S.W.2d 236; 89 C.J.S. Trusts § 121, page 975.
On the first issue, "Did the plaintiff pay to said Dr. Ralph C. Reid the purchase price for the land conveyed to the defendant, as alleged in the complaint?", the burden of proof was on plaintiff to satisfy the jury by clear, strong, and convincing evidence of her contentions in respect thereto, and if she did not, the jury should answer that issue, No. A mere preponderance of the evidence does not suffice. Hodges v. Hodges, 256 N.C. 536, 124 S.E.2d 524; Bowen v. Darden, supra; McCorkle v. Beatty, 226 N.C. 338, 38 S.E.2d 102; Carlisle v. Carlisle, 225 N.C. 462, 35 S.E.2d 418; Summers v. Moore, supra; Stansbury, North Carolina Evidence, section 213.
Prior to the beginning of the judge's charge to the jury, defendant's counsel gave to the court the following prayers for special instructions:
"1. The burden of proof was on the plaintiff and the law gives a peculiar force and solemnity to deeds and will not allow them to be overthrown by mere words, but only by facts and that these facts must be strong, convincing and unequivocal. (Summers v. Moore, 113 N.C., at bottom 403 [18 S.E. 712]).
"2. A deed absolute upon its face, cannot be corrected so as to convert it into a trust, upon a mere preponderance of evidence or without some facts dehors the deed inconsistent with the idea of absolute ownership, but only upon such proof as is clear, strong and convincing and not by merely a preponderance and weight of the evidence. (Hemphill v. Hemphill, 99 N.C. 436, [6 S.E. 201])."
The court in its charge to the jury read to them the first issue, and then charged, "Now, the burden of proving that issues (sic) is on the plaintiff, ladies and gentlemen, by the rule that I have heretofore given you: By the evidence and by its greater weight."
Defendant assigns this part of the charge as error. For the reasons stated above, the assignment of error is good. It was highly prejudicial to defendant, and entitles her to a new trial, because which person paid *49 the purchase price for these lots was the most crucial question in the case, with each party testifying that she paid it.
The record states the judge understood "that the request for instructions was applicable to the second issue." However, there is nothing in the record to indicate that defendant or her counsel caused the judge to form such an opinion, so as to bring the case within the principle of invited error.
For error in the charge there must be a
New trial.