Craven County NcArchives Court.....Wm. H. Pearce & Wife Elizabeth, Elizabeth & Winnifred Lee By Their Guardian & Others, Trustees Of The Baptist Church Of Newbern V. 1873
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Source: N C Reports
Written: 1873

Elizabeth & Winnifred Lee by their Guardian & others, Trustees of the Baptist 
Church of Newbern v. Wm. H. Pearce & wife Elizabeth

The innocence of a party who has profited by a fraud will not entitle him to 
retain the fruit of another man's misconduct, or exempt him from the duty of 
restitution.

Our Courts under our present system give relief not merely to the extent and 
in the cases where it was heretofore given by the Courts of Law, but also to 
the extent, and in the cases where it was heretofore given by Courts of 
Equity; thus preserving the principles of both systems, the only change being 
that the principles are applied and acted on in one Court and by one mode of 
procedure.

Certain known and definite fiduciary relations, that for instance, of Trustee 
and Cestui que trust, Attorney and Client, Guardian and Ward, and General 
Agent, having the entire management of the business of the principal, are 
sufficient under our present judiciary system, to raise a presumption of fraud 
as a matter of law, to be laid down by the Judge as decisive of the issue, 
unless rebutted. Other presumptions of fraud are matters of fact to be passed 
upon by a jury.

It is error for a Judge to charge a jury that fraud must be proved by the 
party alleging it, "beyond a reasonable doubt." The rule being, if the 
evidence creates in the minds of the jury a belief that the allegation is 
true, they should so find.

Civil Action tried before Clarke, J., at the Fall Term, 1872, of the Superior 
Court of Craven County.

The plaintiffs claim certain real property in the town of Newbern, under the 
will of Mary A. Lindsay, the aunt of the feme plaintiffs, Elizabeth and 
Winnifred. The will was dated 15th October, 1869, and admitted for probate the 
23d April, 1870. Besides the real estate given to her nieces, and to the 
Trustees of the Baptist Church, of which the testatrix had been a member for a 
number of years, she bequeath to the nieces her personal property.

In their complaint the plaintiffs state, that the property in dispute is in 
possession of the defendants, who claim under a deed purporting to have been 
made by the testratrix to Elizabeth, the wife of the other defendant, October 
1st, 1867. This deed, the plaintiffs allege, is a fraud, and demand judgment, 
that it be so declared, and that the defendants be compelled by a proper order 
of the Court to convey to them. To support the allegation of fraud, the 
complaint alleges that the defendant, Wm. A. Pearce, was the confidential 
agent of the testatrix, and imposed upon her to sign the deed, when she 
thought she was signing a will. That he procured the deed to be written by one 
Wm. G. Bryan, who went to the house of the testatrix with him and witnessed 
her signing it; that it was a voluntary conveyance, without any consideration, 
and kept by the defendants for nearly three years before it was registered. 
And further, that the testatrix (the grantor in the deed) was an ignorant and 
illiterate woman, nearly sixty years of age, easily imposed upon, and spoke 
frequently of the writing she had given Pearce, as her "will;" and asked, when 
she executed the will of the 15th October, 1869, if it did not revoke 
(destroy) the one which she had made to him, she at the time being angry with 
him; that the deed was made to Pearce's wife, for the reason he was in 
embarrassed circumstances, and soon after went into bankruptcy.

The defendants, in their answer, deny the allegations of fraud and improper 
dealing in obtaining the deed made to the wife; alleging that the same was so 
made in consideration of the friendly feelings she entertained towards them, 
for the many acts of kindness and attention rendered on their part. They 
further deny the power of the persons named, to take under the will, as 
Trustees of the Baptist Church, as they are not incorporated; and that Z. 
Slade, one of the witnesses of the will, and a Trustee of the Church, could 
not prove the devise, being interested as such trustee.

It appeared from the evidence, that the defendants were frequently at Mrs. 
Lindsay's, the testatrix, and that Pearce, the husband, acted often as her 
agent, buying wood, &c. That his place of business was close to her dwelling, 
easily accessible from his back door. That the testratix, before she fell out 
with him, spoke of Pearce as being her friend, and that she preferred him to 
her relations. After the disagreement, she wanted to witness Slade to write 
her will, giving her property to the church. This he refused to do, when she 
informed him she would get C. C. Clark to write it for her. This will, witness 
and one Amyett witnessed. She, the testratrix, wanted to know if the will 
would revoke the one made to Pearce; that she always spoke of it as a will, 
and never as a deed.

Bryan testified, that he wrote the deed for Pearce, that he carried it to Mrs. 
Lindsay and read it over to her carefully she signed it and he witnessed it. 
At the time, she said she wanted Pearce to have her property on account of his 
kindness to her. After leaving the room, the witness perceiving the revenue 
stamps were not cancelled on the deed, he carried it back to her, and had them 
cancelled. She again reiterated to witness the obligations she felt under to 
Pearce, when they were alone. There was no money paid.

The plaintiffs asked his Honor to charge the jury, that if they believed that 
W. H. Pearce was the confidential agent and manager of the affairs of Mary A. 
Lindsay at the time the deed was executed, it was void, without other evidence 
of fraud, and that the jury should find for the plaintiffs. This, the Court 
declined to do; and instructed the jury that if they were satisfied that 
Pearce was the confidential adviser and agent of Mrs. Lindsey, that he was 
like a steward in England, and that he stood in the intimate relation of 
attorney and client, so that he was inplicitly trusted, and looked to for 
advice and direction, then it was a strong badge of fraud, if he procured a 
conveyance of property for his own benefit, as in the case of a conveyance to 
his wife, and with other evidence may justify to you in finding fraud; but the 
proof must be clear and satisfactory.

Verdict for the defendants. Plaintiffs moved for judgment non obstante 
veridicto. Motion refused. Plaintiffs again moved for a new trial. Motion 
overruled. Judgment for costs, and appeal.

Green, for appellants
Justice & Houghton, contra

NC Supreme Court Justice Pearson, C. J. - "The innocence of a party who has 
profited by a fraud will not entitle him to retain the fruit of another man's 
misconduct, or exempt him from the duty of restitution." So the case may be 
relieved from complication, by the fact that the deed is made to Mrs. Pearce, 
and may be treated as it had been made to Pearce, to whom the fraud is 
imputed..."In all issues of fact joined in any Court, the parties may waive 
the right to have the same determined by a jury," &c., and in the absence of 
such waiver "all issues of fact" under the new system must be tried by a jury. 
These are constitutional provisions, and the provisions of C. C. P. and all 
other legislative acts must be construed in reference to the Constitution. 
(see court case for judge's full findings)

Error
Per Curiam
Venire de novo

Additional Comments:
In the NC Supreme Court January Term 1873

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