Summary
In Taylor v. Smith, 116 N.C. 531, 21 S.E. 202 (1895) two sisters agreed with each other that a certain note in which both were named as payees should go to the survivor of them under certain conditions.
Summary of this case from Erickson v. EricksonOpinion
(February Term, 1895).
Contract — Agreement Between Joint Owners of Note — Survivorship — Gift — Conflicting Findings of Jury — "Living Heir."
1. In a contract between two owners of a note providing that, should either of them die before the other without "a living heir," the survivor should become sole owner of the note, the words "living heir" should be construed to mean "issue."
2. A verbal agreement between two parties owning a note, payable to them jointly, that upon the death of either without issue it shall belong to the survivor is valid.
3. The Statute, sec. 1326 of The Code, abolishing survivorship in estates held in joint tenancy, does not prohibit contracts making the rights of the parties dependent on survivorship.
4. Where in response to one issue a jury found that a contract existed between two sisters, whereby the survivor should have the whole of a certain note belonging to them jointly, a finding in response to another issue that one of its parties at a later date made a gift of her share in such note, is not inconsistent with the first finding.
ACTION, tried at February Term, 1894, of GREENE, before Brown, J.,
(534) J. B. Batchelor for plaintiff.
Geo. M. Lindsay for defendant.
Two sisters, the plaintiff's intestate and the defendant, "agreed with each other that should either of them die before the other without a living heir, the survivor should have" a note in which both were payees and each had an equal undivided interest, "and that during the life of both of them, they should collect the interest together in equal shares." About twelve months afterwards one of the sisters married and subsequently died leaving the defendant, her unmarried sister, surviving her, but no issue. In the connection in which they appear, the words "living heir" were manifestly intended to mean issue and we will so interpret hem in construing the agreement. Howell v. Knight, 100 N.C. 254; Patrick v. Morehead, 85 N.C. 62. To say that one sister died "without a living heir" and at the same time leaving a surviving sister, would be palpably absurd, unless we construe "heir" to mean "issue."
The first question suggested upon the argument was whether the agreement was a contract upon mutual considerations, or a nudum pactum. Counsel contended that it could not be enforced because it was a gambling agreement and therefore void, as in contravention of public policy. It is settled law in North Carolina that a bona fide assignment of a contingent interest in land for a valuable consideration will be enforced as an equity. Bodenhamer v. Welch, 89 N.C. 78; McDonald v. McDonald, 58 N.C. 211; Watson v. Smith, 110 N.C. 6; Foster v. Hackett, 112 N.C. 546. If the equitable right to such contingent interest can be assigned for money or anything of value, it follows of course that the equitable right to two such interests could be lawfully exchanged, the one in consideration of the other, like all other assignable interests in land. Upon the same principle, one of two joint owners of a fund may sell bona fide for a (535) valuable consideration the contingent equitable right to the whole fund, where it is so limited as to depend upon survivorship. When the two sisters agreed with each other to hold the note, in which each had an individual moiety as joint tenants subject to the right of survivorship, these mutual rights of survivorship, when once created, were assignable equities, constituting mutual considerations sufficient to support the agreement. The Act of 1784 (Code, sec. 1326) abolishes survivorship, where the joint tenancy would otherwise have been created by the law, but does not operate to prohibit persons from entering into written contracts as to land, or verbal agreements as to personalty, such as to make the future rights of the parties depend upon the fact of survivorship. It would seem needless to cite authority in support of the proposition that mutual prospective benefits are sufficient to support mutual stipulations between parties. The right to the fund in case of survivorship was a valuable assignable interest, and the two sisters therefore entered into a valid contract, which secured to each the benefit, like that provided often by an insurance policy, of the ownership of the whole fund in case she should survive the other. The jury have found that such was the contract entered into by the defendant and her deceased sister, the plaintiff's intestate and former wife.
The mother of the two sisters, Mrs. Smith, deposed further that at the time of making the contract the plaintiff's intestate handed the note to the defendant, saying, "Keep it until I call on you for it, if I ever do, and if I never do, you keep it." Upon her testimony, together with that of another witness (who was obligor in the note) to the effect that he paid the whole of the interest to the defendant after her sister's marriage and eventually all of the principal, the court, submitted (536) two other issues, in response to which the jury found the plaintiff's intestate, about twelve months before her marriage with the plaintiff and prior to her engagement of marriage with him, made a gift of her interest in the note to her sister. It is insisted for the plaintiff that the finding that a gift was subsequently made, is inconsistent with the contract as to the right of each in case of survival. We do not think so. Plaintiff's intestate might, after making the contracts, have made the gift, but if she did not subsequently give her interest in the note to her sister, the contract of course remained in full force. So that if it be conceded, as was contended by plaintiff's counsel, that the testimony was insufficient in its most favorable aspect to show a valid gift, the only result would be to leave the contract in full force. Nothing but a subsequent valid gift by the intestate of her interest to the defendant would have altered or impaired the validity of the contract, and either the contract or such gift would warrant the rendition of the judgment. If the court erred in telling the jury that the testimony of Mrs. Zeletha Smith, if believed by them, was sufficient to justify them in responding to the second issue in the affirmative, it was not erroneous to tell them that hers was the only evidence relied on by the defendant, and, if believed, was sufficient to show the mutual agreement. As the jury found separately on the specific issues and they are in no wise dependent on each other, we think that any error in defining indirect terms, or inferentially what constituted in law a gift, was harmless. The evidence of the mutual agreement, which was entered into before the alleged gift, was to be considered distinct from that relating to the gift, and the finding upon it, having established the contract will support the judgment of the court even if the other findings should be set aside for error. The specific reference to the testimony of (537) Zeletha Smith as the only evidence upon which the defendant did or could contend for a verdict in her favor, bears no analogy to the cases where the judges have erred in selecting, among several witnesses to the same transaction, one whose testimony was more unfavorable to a party than that of the others, and making the response to an issue or issues dependent upon the creditability of such witness.
For the reasons given we thing that the judgment below should be
Affirmed.
Cited: Brown v. Dail, 117 N.C. 43; Hunter v. Sherron, 176 N.C. 228.