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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the
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NO. COA01-541
NORTH CAROLINA COURT OF APPEALS
Filed: 16 April 2002
THOMAS J. GRAHAM and wife, MARY FRANCES GRAHAM,
Plaintiffs
v
.
CHARLES MARTIN and wife, EVELYN MARTIN,
Defendants
Appeal by defendants from judgment entered 18 December 2000 by
Judge Lillian B. Jordan in Moore County District Court. Heard in
the Court of Appeals 13 February 2002.
Thigpen & Jenkins, by Arthur A. Donadio, for plaintiff-
appellees.
Gill & Tobias, LLP, by Douglas R. Gill, for defendant-
appellants.
HUNTER, Judge.
Charles Martin and wife, Evelyn Martin (defendants) appeal
from a judgment imposing a constructive trust and ordering
defendants to execute a deed to Thomas J. Graham and wife, Mary
Frances Graham (plaintiffs) for the 10.51 acres of land upon
which plaintiffs live and which is currently titled in the names of
defendants. This transfer is to take place upon payment by
plaintiffs to defendants of the sum of $28,474.00. For the reasons
stated herein we reverse the trial court's ruling and remand the
case for a retrial on the issue of damages for unjust enrichment.
Defendants entered into an oral agreement to sell a parcel of
land to plaintiffs in July, 1993. At defendants' request,
plaintiffs had the parcel surveyed where it was determined toconsist of 10.51 acres. While the parties agree that the price was
to be $500.00 per acre, there is disagreement over the interest
rate that was to be charged and there was no discussion of the
length of time over which the payments were to be made. In
addition, defendants purchased a mobile home for $34,550.00 and had
the title placed in the names of plaintiffs pursuant to an oral
agreement to repay defendants. There was no discussion of the
applicable interest rate or other payment terms for the mobile
home.
Plaintiff Mary Graham worked for defendant Charles Martin for
eight years, starting in 1992. She was fired after filing the
lawsuit in question. Rather than require plaintiffs to make
regular monthly payments, Mr. Martin kept Ms. Graham's paychecks as
payment for the land and the mobile home.
Plaintiffs repeatedly requested that the oral agreement for
the land be put into writing, but defendants kept delaying. In
1998, plaintiffs refused to continue to make payments until the
agreement was put into writing. To date, plaintiffs have paid a
total of $17,626.00 towards the land and mobile home. In addition
to making payments, plaintiffs improved the tract by installing a
well, septic system, landscaping, erecting outbuildings and
underpinnings, and permanently attaching the mobile home to the
property based upon defendants' promise that they would convey the
land to them. There is disagreement over who paid for all of these
improvements, and how much was paid. In May 1998, plaintiffs' attorney drafted a letter to
defendants requesting that they provide a warranty deed to
plaintiffs in exchange for a deed of trust. Mr. Martin noted on
the letter that when the appropriate time comes for papers to be
drawn up my lawyer will take care of the matter. On 11 August
1999, plaintiffs filed this action against defendants, attempting
to have the oral agreement for the purchase of the land enforced,
and title transferred to them. On 7 February 2000, defendants
filed a summary ejectment proceeding against plaintiffs.
The case was tried without a jury on 27 November 2000. The
trial court found that the oral agreement for the purchase of the
land was not enforceable because it was in violation of the Statute
of Frauds. However, the trial court also found that due to the
improvements to the land and other monies paid by plaintiffs,
defendants would be unjustly enriched if defendants were allowed to
simply put the plaintiffs off the land.
The trial court ruled that the plaintiffs are to have a
constructive trust in the 10.51 acres of land and that the
defendants are to execute a deed to the plaintiffs for that land
upon payment by plaintiffs of $28,474.00, which was the remaining
balance, plus interest, owed for the land and mobile home.
Finally, the trial court declared the summary ejectment proceeding
moot and ordered any funds held by the Clerk of Superior Court of
Moore County returned to plaintiffs. Defendants appeal.
Defendants bring forth six assignments of error on appeal:
(1) the trial court's finding that Ms. Graham's salary was kept aspayment for the land and mobile home; (2) the trial court's finding
that plaintiffs improved the property based on defendant's promise
that the land would be theirs; (3) the trial court's finding that
defendants would be unjustly enriched if they were able to simply
put plaintiffs off the land; (4) the trial court's imposition of a
constructive trust on the land in question; (5) the trial court's
order that defendants must execute a deed to plaintiffs upon
payment by plaintiffs of $28,474.00; and (6) the trial court's
order declaring the summary ejectment proceeding moot.
Defendants do not argue assignments of error (1) and (2) in
their brief, therefore these assignments of error are deemed
abandoned. See N.C.R. App. P. 28(a).
I.
Defendants first argue that the trial court could not properly
conclude that defendants would be unjustly enriched if they were
simply allowed to put the plaintiffs off the land. Defendants base
their argument on the lack of a specific finding as to the
difference between the value of what plaintiffs have provided
defendants and the value defendants have provided plaintiffs.
Defendants point out the conflicting testimony about who actually
paid for the improvements, and the lack of a determination of the
cost of the improvements. The trial court found that the
plaintiffs had improved the acreage considerably and that
defendants would be unjustly enriched as a result if plaintiffs
were simply put off of the land. When a trial is held without a jury, the trial court's
findings of fact are equivalent to a verdict by a jury and are
conclusive on appeal unless there is no evidence to support them.
Williams v. Insurance Co., 288 N.C. 338, 342, 218 S.E.2d 368, 371
(1975). This is true even though the evidence may also sustain
findings to the contrary. Id.
In this case, there was sufficient evidence for the trial
court to find that defendants would be unjustly enriched as a
result of plaintiffs ejection from the land. The trial court found
that the plaintiffs have already paid defendants $17,626.00 for the
land and mobile home, and that [t]he plaintiffs have improved the
acreage considerably by installing a well and septic system,
landscaping, erecting out buildings [sic], and underpinning and
permanently attaching the double wide mobile home to the property.
However, for the reasons stated in II below, the trial court's
remedy was improper. As this assignment of error only relates to
the finding of unjust enrichment, and not the remedy, this
assignment of error is overruled.
II.
Defendants next argue that the remedy imposed by the trial
court, a constructive trust and ordering the transfer of title upon
payment of $28,474.00, is not appropriate. We agree.
Plaintiffs presented two exhibits to the trial court as
evidence of a written contract sufficient to satisfy the Statute of
Frauds. At the hearing on defendants' N.C.R. Civ. P. 12(b)(6)
Motion to Dismiss plaintiffs' claims, the trial court concludedthat these exhibits were not sufficient and [a]ny alleged
agreement to convey the property to the Plaintiffs is unenforceable
and void under the Statute of Frauds. The trial court allowed the
cause of action to proceed on the other claims. After the trial,
the trial court again found:
Although the parties have an agreement for the
plaintiffs to purchase the 10.51 acres of
land, said agreement is not enforceable since
it is not in writing and to enforce it would
be in violation of the Statute of Frauds.
However, even though the trial court acknowledges that enforcement
would be in violation of the Statute of Frauds, a constructive
trust was imposed requiring defendants to convey the property upon
plaintiffs' payment of the remaining monies due under the oral
agreement, calculated at $28,474.00. In justifying this remedy,
the trial court found:
Due to all the monies paid and improvements
made by the plaintiffs, the defendants would
be unjustly enriched if they were allowed to
simply put the plaintiffs off the land.
While a constructive trust can be the proper remedy to prevent
unjust enrichment, absent more it cannot be used to bypass the
Statute of Frauds. See Roper v. Edwards, 323 N.C. 461, 373 S.E.2d
423 (1988); Walker v. Walker, 231 N.C. 54, 55 S.E.2d 801 (1949).
Generally a constructive trust is
. . . imposed by courts of equity to prevent
the unjust enrichment of the holder of title
to, or of an interest in, property which such
holder acquired through fraud, breach of duty
or some other circumstance making it
inequitable for him to retain it against the
claim of the beneficiary of the constructive
trust. . . .
Roper, 323 N.C. at 464, 373 S.E.2d at 424-25 (emphasis added)
(citation omitted). In the current case, there is no allegation of
impropriety in defendants' acquisition of the parcel they are
refusing to sell. We can find no reported cases in North Carolina,
and plaintiffs concede that they believe there to be none, in which
a constructive trust has been imposed absent some fraudulent or
improper acquisition of property.
Even if we were to allow a constructive trust absent improper
acquisition of property, our Supreme Court's decision in Walker
makes it clear that a constructive trust cannot be based upon an
unenforceable oral agreement. See Walker, 231 N.C. at 56, 55
S.E.2d at 802. In Walker, the defendant and his father had an oral
agreement for the defendant to transfer title of land back to the
father for $300.00. The defendant was to destroy the unrecorded
deed executed previously transferring the land from his father to
the defendant. The father paid the money and retook possession of
the land. However, upon the father's death, the defendant refused
to complete the transaction and recorded the deed for registration.
Id. at 56, 55 S.E.2d at 802. In an action by the heirs to have the
transaction completed by a constructive trust, the Supreme Court
held:
In disavowing the contract and refusing
to abide by its terms, defendant was
exercising a legal right and his exercise of a
legal right in a lawful manner cannot be made
the basis of a charge of fraud such as would
impress a trust upon his title to the
property.
Even if we accept plaintiffs' version of
the transaction, defendant's promissoryrepresentations created no right in equity and
cannot serve to vest in plaintiffs any
interest in the land in the form of any type
of trust known to equity jurisprudence.
Certainly they are insufficient to constitute
a conveyance recognized in law. Real estate
is not conveyed in that manner.
Id. Here, the contract was unenforceable under the Statute of
Frauds and defendants were merely exercising their legal right in
disavowing the contract.
Our Supreme Court in Roper did recognize that there can be an
equitable duty to convey property even if there is no legal duty to
convey the property. Roper, 323 N.C. at 465-66, 373 S.E.2d at 425-
26. However, Roper is distinguishable. In Roper, the plaintiff's
grandmother had a dispute with the defendants over entitlement to
136 acres of land. Pursuant to a settlement agreement, plaintiff's
grandmother conveyed the 136 acres of land to defendants in fee
simple absolute, with the exception of one acre which was not to be
sold or encumbered by the defendants prior to the grandmother's
death and was to be conveyed as the grandmother specified in her
will. The plaintiff's grandmother directed the one acre to be
conveyed to plaintiff. After the grandmother died, the defendants
refused to convey the one acre to plaintiff. Id. at 462-63, 373
S.E.2d at 423-24. Our Supreme Court noted that the defendants had
no legal duty to convey the land because it represented a
prohibited restraint on alienation. Id. at 464, 373 S.E.2d at 424.
However, the Court recognized that there was an equitable duty to
convey because the defendants acquired the land pursuant to a
settlement agreement and that it would be inequitable for thedefendants to continue to retain the land against the claim of the
beneficiary of the constructive trust. Id.
The key in Roper was the manner in which the defendants
acquired the property subject to the constructive trust. Again,
there is no allegation of impropriety in defendants' acquisition of
the property in question; they merely refused to sell it pursuant
to an unenforceable oral agreement.
The facts of Fulp v. Fulp, 264 N.C. 20, 140 S.E.2d 708 (1965),
are similar to those in this case as well. In Fulp, the defendant
had orally promised to convey a one-half interest in land to
plaintiff in exchange for money. The Court ruled that the contract
was unenforceable under the Statute of Frauds and further that
plaintiff had no equitable title to the land necessary for a
constructive trust because plaintiff's money was not used to
acquire title to the land. Id. at 23, 140 S.E.2d at 711. However,
when defendant refused to fulfill the contract, he became liable to
plaintiff for the monies received under it. Id.
In this case, a constructive trust is improper because
defendants had no legal duty to convey the 10.51 acres to
plaintiffs and there was no fraud or other improper conduct
associated with defendants' acquisition of the 10.51 acres. If
defendants would be unjustly enriched by plaintiffs' eviction due
to payments and improvements made under the oral agreement,
defendants are liable to plaintiffs for that unjust enrichment.
This case is remanded for the trial court to make appropriate
findings on the issue of unjust enrichment and conclusions as towhat amount plaintiffs are entitled to recover, that is, the
reasonable value of the goods and services plaintiffs rendered to
defendants. See Booe v. Shadrick, 322 N.C. 567, 570, 369 S.E.2d
554, 556 (measure of damages for unjust enrichment is the
reasonable value of goods and services rendered), reh'g denied, 323
N.C. 370, 373 S.E.2d 540 (1988).
III.
Defendants' final argument is that the trial court had no
authority to declare the separate summary ejection proceeding moot.
Whether the separate action would have been moot or not, the trial
court has no authority to render a decision in a case not before
it. Both plaintiffs and defendants concede that this separate
action could have been consolidated with the current case under
N.C.R. Civ. P. 42; however, that was not done. If a trial court
wishes to rule in a parallel case it must first consolidate the
cases following the provisions of Rule 42.
See N.C.R. Civ. P.
42(a). This assignment of error is sustained and the order
declaring the separate action moot is reversed.
Reversed and remanded.
Judges WALKER and BRYANT concur.
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