Opinion
(Decided 29 May, 1900.)
Specific Performance — Evidence, Fact Found by the Court, Section 590, of The Code — Written Obligation to Pay in a Sale of Land — Counterclaim on Contract, Express or Implied.
1. Specific performance of contract for sale of land will not be enforced unless there was a written obligation on the part of the defendant to pay for the same. Hall v. Fisher, ante, 205.
2. A preliminary finding of fact by the judge, of which there is evidence, is not subject to review.
3. Section 590 of The Code does not exclude where the door has been opened to the objecting party.
4. A counterclaim is available if arising upon contract, express or implied. The law will presume a contract to pay where a party receives money and wrongfully refuses to pay it over to the rightful owner.
ACTION for special performance of an alleged contract on part (705) of defendant to purchase land, known as "the Johnson land" near Oxford, tried before Bryan, J., at April Term, 1899, of GRANVILLE.
The cause was heretofore tried and reported in 121 N.C. 146.
The issues were found adversely to the plaintiffs, who appealed from the judgment rendered against them.
The case is fully stated in the opinion.
W. A. Devin and A. J. Field for plaintiffs.
A. W. Graham, Hicks Minor and J. W. Graham for defendants.
The plaintiffs claim that as trustees under an assignment of W. A. Davis and N. A. Gregory, for the benefit of creditors of the assignors, they are the owners of a small tract of land lying in and near the town of Oxford, known as the "Johnson land." The "West Oxford Land Co.," is a corporation, and is insolvent. F. W. Carpenter has been appointed its receiver. W. A. Davis, D.C. Hunt, N. A. Gregory and R. W. Lassiter were directors in said corporation.
The plaintiffs allege that they sold to defendant corporation the "Johnson land" at the price of $6,000; that this trade was negotiated with W. A. Davis and R. W. Lassiter representing the defendant corporation; and that said corporation paid $1,028 thereon, evidenced by two drafts as follows: "D.C. Hunt, Treasurer West Oxford Land Co., will pay to John Johnson the sum of ($528) five hundred and twenty-eight dollars on the Johnson land purchased by us. This 13 December, 1890."
(Signed) W. A. Davis, R. W. Lassiter, Executive Committee.
"$500. At ten days sight, pay to order of G. W. Davison and (706) E. C. Baker, trustee, five hundred dollars in part payment Johnson land. Value received and charge same to account of
"W. A. DAVIS, "R. W. LASSITER, "Executive Committee."
"To D.C. HUNT, Treasurer West Oxford Land Co., Oxford, N.C."
"Accepted — Payable at Bank of Oxford.
"WEST OXFORD LAND Co., "D.C. HUNT, Treasurer.
"22 June, 1890."
"Paid 10 July, 1891 — Bank of Oxford."
To which there is attached the following: "Oxford, N.C. 16 June, 1891. Received of West Oxford Land Co., a draft for $500 in part payment of Johnson land, leaving a balance due of fifty-five hundred dollars to be arranged as follows: Forty-five hundred to be settled for within thirty days after 18 August, 1891, and for the remainder one thousand dollars we agree to accept the note of the company, ninety days after 18 August, 1891, for one thousand dollars, with not less than ten shares of stock as collateral security, and in the event that said security, at or after the distribution, shall equal more than the sum of one thousand dollars, then any excess to be paid over to the directors of said West Oxford Land Company.
"G. W. DAVISON, "E. C. BAKER, "Trustees."
These two drafts and the receipt attached to the last draft is what the plaintiffs allege contain the contract of sale and the obligation of the defendants to pay. Upon this alleged contract, and the other evidence in the case, these issues were submitted to the jury:
1. "Did defendant company contract with plaintiffs for the purchase of the Johnson land described in the complaint, at the (707) net price of $6,000?" Answer, "No."
4. "Is defendant company indebted to plaintiffs, if so, in what amount?" Answer. "None."
5. "Are the defendants R. W. Lassiter and D.C. Hunt, or either of them, indebted in their individual capacity to the plaintiffs?" Answer. "No."
6. "Are the plaintiffs indebted to defendant company, if so, in what amount?" Answer. "Yes, $1,028, and interest on the same."
Therefore, there are two propositions contained in this appeal: Did the plaintiffs sell the Johnson land to the defendant corporation, and did the defendant obligate itself to pay for the same and, secondly, are the plaintiffs liable to the defendant corporation for the amount of the two drafts — one to Johnson for $528, and the other to the plaintiffs for $500?
The jury have found by the first issue that the defendant corporation did not buy the "Johnson land." This is an end to plaintiffs' right to recover against the defendant company, and also as against Lassiter and Hunt, because they could not be bound if the plaintiffs did not sell the land.
Besides the allegation of the defendants that these drafts did not amount to a written contract to sell land, they deny that Lassiter and Davis had any authority from the defendant "corporation" to make and enter into such a contract, and that said corporation did not know that such a contract had been attempted for many months after, and that the same was never approved or ratified by the corporation.
The plaintiffs offer pages 9, 11, 13, and 15 of the minute book of the corporation, which they allege show the approval of this transaction and purchase by the defendant corporation. The defendants object to this evidence upon the ground that it is no part of the minutes (708) of any meeting of the corporation; that there was no meeting when they were made; that they were in the handwriting of W. A. Davis, who was the agent of the plaintiffs in trying to effect a sale of this land, and were not a part of its minutes. The objection was sustained and the plaintiffs excepted.
We think there was evidence from which the facts, stated in the defendant's objection, might have been found to be true; and, as the court sustained the objection, we must suppose that the court found these statements of defendants to be true. And whether they were in fact true or not, we have no right to review the court upon a finding of fact in the trial of a cause. If the allegations of the defendants were true, as we must take them to be from the ruling of the court, it is clear this evidence was incompetent, and should not have been received.
There is another exception to the evidence of the defendant Lassiter by the plaintiffs. This evidence does not seem to bear upon the issues now under consideration. But we do not think it can be sustained, if it does. This objection is with regard to a conversation between Lassiter and W. A. Davis, who was one of the original defendants, but dead at the time of the trial; and this evidence is objected to under section 590 of The Code. If Davis was represented in this case after his death, the record fails to show it; and there seems to be no one claiming through or under him except the plaintiffs. But more than this, the plaintiffs had before this introduced similar evidence of conversations with Davis and the defendant Lassiter, and in this way opened the door, if there had been anything in the plaintiffs' objection. This disposes of the plaintiffs' right to specifically enforce the contract of sale, as there was no contract to enforce.
But it seems to us that there is another clear reason why the (709) plaintiffs could not succeed, admitting that the drafts contained a contract for the sale of the Johnson land which might have been enforced. They contained no written obligation on the defendant corporation to pay, as was necessary in a sale of land. Hall v. Fisher, ante, 205, and authorities there cited.
As we have seen that the plaintiffs can not recover, it remains to be seen whether the defendant corporation can recover of the plaintiffs the amount paid by it on the two drafts, one to Johnson and the other to plaintiffs, amounting to $1,028 and interest.
The defendant corporation makes this by way of counterclaim. We are of the opinion that it can not.
When this case was before the Court at September Term, 1897 ( 121 N.C. 146), it was held that the money paid on the two drafts did not constitute a counterclaim growing out of the sale of land, as there had been no sale. And as it is held now, as it was then, that there was no sale, the proposition then stated by the court is true now if it was then. And we see no error in this statement and no reason for reversing what was then said.
But while this is true, the defendants may set up and maintain a counterclaim that does not grow out of the contract sued on, if the counterclaim be a cause of action arising upon contract. And where one party has received money to which another is entitled, the law presumes a contract if it is necessary to do so to enable the party entitled to recover the same. Board of Education v. Henderson, ante, 700. This entitles the party having the right to the money to an action of debt, indebitatus assumpsit, which though an action at law was equitable in its nature. It has been styled "an equitable action on the law side of the docket." But it arises only where the money was received and held under such circumstances that the law will imply the (710) contract — where it would be inequitable and unconscionable for the party receiving the money to hold it, amounting to a moral fraud to do so, it will usually be so held. Where one person receives money belonging to another and wrongfully refuses to pay it over, the action will lie. But to make him liable, he must receive the money and wrongfully refuse to pay it over to the party to whom it belongs.
The plaintiffs never received the money on the $528 draft. The draft was made payable to John Johnson, and the money paid to him. Whether he could be held liable for it or not is not a question before us. But we fail to see how the plaintiffs can be held liable for the money paid on this draft to Johnson.
The $500 draft was drawn payable to the plaintiffs and collected by them. This distinguishes it from the $528 draft drawn payable to Johnson and collected by him. And the plaintiffs' liability depends upon the fact as to whether it is unconscionable for them to refuse to pay the defendant corporation this money or not. Whether it is wrongful for them not to do so; if it is, the law will presume the contract — presume that they agreed to do so, and will not allow them to disprove this presumption. The fact that the plaintiffs received this draft ($500) and received the money on it is not disputed. But how did they receive it, and for what purpose? Not wrongfully, nor as their money. They received it as the assignees of Davis Gregory, for the benefit of the creditors of Davis Gregory; and it must be presumed that it has long since been paid over to such creditors. This is the presumption, and no evidence has been offered to rebut it. While, on the contrary, it appears from the evidence (the correspondence between Davis and plaintiffs) that Davis was urging the sale of this land in order that (711) the long deferred third-class creditors might be paid."
Then, if the plaintiffs received this money as assignees — trustees — for the benefit of the creditors named in the deed of assignment to them and have paid it over, as we must presume they have, can it be inequitable and unconscionable in them not to take their own money and give it to the defendant corporation, which has at least been guilty of culpable negligence in paying $500 on land that it had never bought? We do not think Bahnsen v. Clemmons, 79 N.C. 556, cited by the learned counsel of defendants, sustains the defendants' right to recover back this money. The argument in that case we think tends to sustain the views we have expressed.
There are some other exceptions taken by the plaintiffs, which have been examined and can not be sustained, or do not apply to the matters involved in this appeal.
We are therefore of the opinion that the plaintiffs can not recover, and that there is no error in the judgment as to the plaintiffs' right of action.
We are also of the opinion that the defendant is not entitled to recover on its counterclaim, and there is error in the judgment of the court as to that.
The judgment is, therefore, affirmed as to the plaintiffs' cause of action, and reversed so far as it gives the defendants judgment on the counterclaim. Let this be certified to the court below that proceedings may be there had in accordance with this opinion.
The costs of this Court will be divided between the parties.
Cited: Commissioners v. Fry, 127 N.C. 262; Monds v. Lumber Co., 131 N.C. 25.
(712)