Perry v. Jolly

Higgins, J.

This proceeding seems to have changed direction twice as it meandered through the Superior Court. In order that the true course may be more easily followed, we have included in the statement of facts the full text of certain pertinent documents which show the guardian first objected to the proposed sale, both for lack of need and for inadequacy of price. However, with court approval, the guardian substituted an amended answer, omitting the objection and admitting the need. He recommended a private sale to Hilda P. Pearce and husband, Marshall E. Pearce, at $45,000.00, however, retaining for Mr. and Mrs. Perry a life estate in the house and a lot.

*313 The qlerk ordered the private sale to Hilda P. Pearce and husband,, appointed commissioners to make it, and directed them to make report for the court’s further order. The commissioners complied with the order by making the sale as directed, and recommended that it be confirmed in the absence of an advance bid within ten days. Thirteen days after the sale and report thereof the clerk entered an order of confirmation, directed the commissioners to execute and to deliver deed to the purchasers. Judge Hobgood, on that same day, approved, confirmed, and ratified the sale. Judge Hobgood signed the approval order in Alamance County by written consent of the attorneys of record for both the petitioner and the guardian.

Two days after the entry and approval of the confirmatory decree, W. H. Perry, attorney in fact for the petitioner, gave notice that he appealed for these errors: (1) The power of the court is limited to the execution of mortgages, etc., by G.S. 35-15. (2) The sale destroyed the tenancy by the entireties. (3) Paragraph three of the original answer raised issues of fact not determined by the court. (4) Judge Hobgood approved the confirmatory decree outside Franklin County. (5) The court failed to find that $45,000.00 was a fair price for the lands.

Judge Hobgood entered an order finding “that the parties have agreed that the said confirmatory decree be set aside and that the land involved be sold at public auction to the highest bidder.” The order vacating the confirmation was based solely upon the consent o.f W. H. Perry, the attorney in fact for the petitioner, the guardian, and the two commissioners. Mr. and Mrs. Pearce were not parties to the agreement to set the sale aside.

By virtue of the sale, the Pearces had become the equitable owners of the land. This Court said in Page v. Miller, 252 N.C. 23, 113 S.E. 2d 52: “After confirmation, the power of the court is much more restricted. The purchaser is then regarded as the equitable owner, and the sale . . . can only be set aside for ‘mistake, fraud, or collusion’ established on petitions regularly filed in the cause,” citing Upchurch v. Upchurch, 173 N.C. 88, 91 S.E. 702; Beaufort County v. Bishop, 216 N.C. 211, 4 S.E. 2d 525; Joyner v. Futrell, 136 N.C. 301, 48 S.E. 649; McLaurin v. McLaurin, 106 N.C. 331, 10 S.E. 1056; Evans v. Singletary, 63 N.C. 205. “ ... (A) 11 motions . . . other than those grantable as a matter of course . . .must be on notice.” Collins v. Highway Commission, 237 N.C. 277, 74 S.E. 2d 709; Boone v. Sparrow, 235 N.C. 396, 70 S.E. 2d 204. The court was powerless to take away the vested interest of Mr. and Mrs. Pearce without notice and opportunity to be heard. G.S. 1-581; Collins v. Highway Commission, supra; In Re *314 Woodell, 253 N.C. 420, 117 S.E. 2d 4. The sale may be set aside only after proper notice and for valid reasons. Page v. Miller, supra.

The five assigned grounds upon which the petitioner seeks to set aside the private sale are not in and of themselves sufficient in law to invalidate the sale. (1) G.S. 35-15 does not limit the court’s power to authorize a mortgage. The court may authorize a sale. (2) The sale does ¡not destroy or separate the interests of the tenants by en-tireties if one of the parties ds incompetent. The right of survivorship is transferred to the fund. A divorce will convert tenancy by entireties into a tenancy in common. A voluntary sale will work a conversion of the land into personalty to be held as other personalty. Wilson v. Ervin, 227 N.C. 396, 42 S.E. 2d 468. However to be voluntary, the sale must be made by both husband and wife. Both must be sui juris. If one is incompetent, a sale cannot be the voluntary act of both. When the court finds it necessary for the good of the parties to require a sale, it is necessary that a good title pass to the purchaser. However, the right of survivorship is transferred to the fund to be held in the manner hereinafter discussed. (3) Paragraph (3) of the original answer was omitted from the amended answer, thus eliminating the third objection. (4) The Judge of the Ninth Judicial District was a proper officer to approve the confirmation. He could do so outside the district by consent. Counsel of record for both parties presented the order and consented to it in writing. Dellinger v. Clark, 234 N.C. 419, 67 S.E. 2d 448; Jeffreys v. Jeffreys, 213 N.C. 531, 197 S.E. 8; Pate v. Pate, 201 N.C. 402, 160 S.E. 450. (5) The court found the sale for $45,000.00 was for the best interest of the ward. The petitioner had obtained an offer for the private purchase for $45,000.00 which he had asked the court to authorize and to approve. He is not in a position to complain.

Ordinarily discussion respecting the disposition of the purchase price received for the property would not be required. However, in this instance one of the interested parties is incompetent. She is under guardianship — a ward of the court. That part of the court’s order with respect to the division of the fund does not seem to' be authorized. Having held the involuntary sale of the lands does not destroy the tenancy by the entireties, but merely transfers the rights of the tenants from the land to the fund, we call the Superior Court’s attention to these legal principles: The husband is under the legal duty to support his wife. Ritchie v. White, 225 N.C. 450, 35 S.E. 2d 414. During marriage he is entitled to control and to receive the rents and profits from property held by entireties. In Re Estate of Perry, 256 N.C. 65, 123 S.E. 2d 99; Nesbitt v. Fairview Farms, 239 N.C. 481, *315 80 S.E. 2d 472. The law applicable to the fund in this instance, therefore, gives the husband the right to control. The income from it is his, but he must support himself and his wife. He may not invade the corpus of the fund except to the extent his income from all sources is insufficient for his wife’s and his own needs. Otherwise he holds the corpus of the fund as trustee for the survivor unless the wife be restored to competency, in which event the parties, acting together, may make a legal disposition. The discretion given the court by G.S. 35-17 is limited to the protection of the incompetent’s interests. The power to dissolve the rights of survivorship incident to the entireties estate is not within the court’s discretion. The wisdom of an estate by entireties may be debatable. Nevertheless the principle is firmly in-bedded in our decisions, and a wife’s right to take all if she survives was vested in her by the original conveyance. Woolard v. Smith, 244 N.C. 489, 94 S.E. 2d 466.

The order entered on November 3, 1962, is vacated. Unless the sale is set aside for mistake, fraud, or collusion, the purchasers, Hilda P. Pearce and husband Marshall E. Pearce, upon the payment of the purchase price, are entitled to a deed from the commissioners. The Superior Court still holds the fund. Disposition of it will be in accordance with applicable law.

Error and remanded.