{
  "id": 8520589,
  "name": "J. LEE PEELER & CO., INC. v. HAROLD T. MAKEPEACE and HELEN S. MAKEPEACE",
  "name_abbreviation": "J. Lee Peeler & Co. v. Makepeace",
  "decision_date": "1989-10-17",
  "docket_number": "No. 8814SC1415",
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  "last_updated": "2023-07-14T18:28:35.242103+00:00",
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  "casebody": {
    "judges": [
      "Judges Arnold and Cozort concur."
    ],
    "parties": [
      "J. LEE PEELER & CO., INC. v. HAROLD T. MAKEPEACE and HELEN S. MAKEPEACE"
    ],
    "opinions": [
      {
        "text": "BECTON, Judge.\nIn this civil action plaintiff, J. Lee Peeler & Co., Inc., a stock brokerage firm, seeks to fasten a constructive trust on proceeds received by defendants from the sale of common stock and on 125 shares of common stock retained by defendants, the Makepeaces. The trial court allowed the Makepeaces\u2019 motion under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure and dismissed the action with prejudice because plaintiff\u2019s claims were barred by the applicable statute of limitations of N.C. Gen. Stat. Sec. 1-52(9). Plaintiff appeals, contending that the action to impose a construetive trust is governed by the ten-year period in N.C. Gen. Stat. Sec. 1-56. We disagree with plaintiff and affirm the trial court.\nI\nOn 30 May 1978, the defendant husband placed an order to sell 1,000 shares of United Guaranty Corporation stock (United Guaranty), with Peeler as broker. Peeler, executed the order. A stock dividend of one-share-for-four had been declared and paid earlier by United Guaranty. As a result of that dividend, every four shares traded through 30 May 1978 had to include an additional share. Peeler alleges that defendant husband knew or had reason to know that this requirement meant that he was obligated to tender 1,250 shares of United Guaranty stock in order to sell 1,000 shares.\nDefendant husband tendered 1,125 shares of United Guaranty stock with an order to transfer title to 125 of those shares to his wife. Peeler\u2019s staff was unaware of defendant husband\u2019s obligation to tender 1,250 shares and made the transfer of title that defendant husband requested. Peeler alleges that defendant husband defrauded him of the 125 shares and $4,280 in proceeds of sales attributable to shares which he did not deliver. In the alternative, Peeler alleges that defendant husband mistakenly thought that his order to sell 1,000 shares of United Guaranty stock only obligated him to deliver 1,000 shares. On 27 May 1988,. Peeler brought suit to have a constructive trust fastened to the proceeds and the 125 shares. Defendant\u2019s subsequent motion to dismiss was granted on the ground that the statute of limitations barred the action.\nII\nSection 1-56 states, \u201cAn action for relief not otherwise limited by this subchapter may not be commenced more than 10 years after the cause of action has accrued.\u201d (Emphasis added.) However, Section 1-52(9) states that an action \u201c[f]or relief on the ground of fraud or mistake\u201d must be brought within three years.\nPeeler contends that his claim is timely and relies on Jarrett v. Green, 230 N.C. 104, 52 S.E.2d 223 (1949). In Jarrett, the beneficiaries of certain stock sued the trustee for selling the stock. They sought to recover the property and sought an accounting. The action did not sound in fraud or mistake, nor did a specific statute of limitations apply to it. Thus, the court applied the umbrella provisions of Section 1-56.\nThis case is distinguishable from Jarrett. Peeler specifically alleges fraud, or, alternatively, mistake as the basis for imposing a constructive trust. Thus, Peeler\u2019s ability to obtain the remedy of a constructive trust will depend upon his ability to bring an action to prove fraud or mistake. See Little v. Bank of Wadesboro, 187 N.C. 1, 121 S.E. 185 (1924). As Judge Haynsworth of the Fourth Circuit stated, \u201cThere is no suggestion of classification on the basis of remedies which might be available for enforcement of the substantive right. The right asserted is determinative, not the relief sought.\" New Amsterdam Casualty Company v. Waller, 301 F.2d 839, 844 (4th Cir. 1962). The case at bar is premised on a claim of the defendants\u2019 unjust enrichment as the result of their fraud or mistake. Thus, Peeler\u2019s action is \u201cotherwise limited,\u201d Sec. 1-56, and the three-year limitation set forth in Sec. 1-52 applies.\nAffirmed.\nJudges Arnold and Cozort concur.",
        "type": "majority",
        "author": "BECTON, Judge."
      }
    ],
    "attorneys": [
      "William V. McPherson, Jr. for plaintiff-appellant.",
      "Manning, Fulton & Skinner, by Michael T. Medford, for defendant-appellees."
    ],
    "corrections": "",
    "head_matter": "J. LEE PEELER & CO., INC. v. HAROLD T. MAKEPEACE and HELEN S. MAKEPEACE\nNo. 8814SC1415\n(Filed 17 October 1989)\nLimitation of Actions \u00a7 7 (NCI3d)\u2014 action to establish constructive trust \u2014 fraud or mistake alleged \u2014three-year statute of limitations applicable\nThe three-year statute of limitations of N.C.G.S. \u00a7 1-52 rather than the ten-year limitation of N.C.G.S. \u00a7 1-56 applied to bar plaintiff\u2019s action to establish a constructive trust based on a claim of defendants\u2019 unjust enrichment as a result of their fraud or mistake in the sale of common stock.\nAm Jur 2d, Limitation of Actions \u00a7 101.\nAppeal by plaintiff from order entered 17 November 1988 in DURHAM County Superior Court by Judge Henry W. Hight, Jr. Heard in the Court of Appeals 24 August 1989.\nWilliam V. McPherson, Jr. for plaintiff-appellant.\nManning, Fulton & Skinner, by Michael T. Medford, for defendant-appellees."
  },
  "file_name": "0118-01",
  "first_page_order": 150,
  "last_page_order": 152
}