#### FANNIE CARTER v. SAM C. CARTER et al.

(Filed 19 October, 1921.)

1. Statute of Frauds — Vendor and Purchaser — Contracts—Parol Agreements — Payment of Purchase Price — Betterments.

A purchaser under a parol contract to convey lands, who has entered into possession thereof after paying the purchase price, and put valuable improvements thereon, may recover the purchase price from the vendor and the enhanced value of the lands by reason of the improvements, upon the vendor’s refusal to convey the lands under the plea of the statute of frauds.

2. Same — Specific Performance.

A vendor of lands under a parol agreement may not keep the purchase price thereof, and retain the improvements placed thereon by the purchaser in possession, and repudiate the agreement under the plea of the statute of frauds, though the purchaser’s suit for specific performance may not be successfully maintained. The legal and equitable remedies discussed by Walker, J.

*187S. Pleadings — Dismissal of Action — Questions for Jury — Statute of Frauds.

Where the complaint in the suit is sufficient for the plaintiff to recover of the defendant the purchase price of lands that he has paid under a parol contract of purchase, and for the improvements he has placed thereon to the extent they have enhanced its value, it is error for the trial judge to dismiss the action upon the pleadings; and the matters controverted by the answer are for the determination of the jury.

Appeal by plaintiff from Granmer, J., at February Term, 1921, of Columbus.

This action was brought to recover the purchase money paid by plaintiff to the defendants upon a parol contract for the purchase of land which the latter have repudiated, and refused to convey to the plaintiff, and also to recover the amount by which the land was enhanced in value by certain improvements and betterments placed by the plaintiff upon the tract of land so sold to her, as will appear from the complaint, which is as follows:

“1. That the defendants were prior to .... October, 1919, the owners in fee simple of the following described tract of land:

“In Columbus County, State of North Carolina, adjoining the lands of . and others, and bounded as follows, viz.: Beginning at a stake, the second, corner of lot No. 7, and runs north 45 degrees east, the line of lot No. 8, to the corner of Dunn Swamp the fork of it and alley bay; thence up said bay to a black gum bay by the public road, Marma-duke Powell’s corner; thence with the road to lot No. 7; thence with it south 70 degrees east to the beginning, containing 43 acres, more or less, and being lot No. 9 of the division of the land of James Dyson, deceased, excepting two acres already conveyed, and for a more perfect description reference is hereby made to said division and deed made by Priscilla Dyson, on 7 June, 1888, to Samuel Merritt, and recorded 13 July, 1888, in book N-N of deeds, at page 247, records of Columbus County, in the office of register of deeds, and which is hereby referred to and made a part of this deed, which see for further description of this land.

“2. That the plaintiff, in October, 1919, purchased from the defendants above named the tract of land described in paragraph one of this complaint at the price of $1,730, and paid to the defendants the whole amount of said purchase price, the defendants at the time they received said purchase price promised, agreed and contracted to execute to the plaintiff a deed for said tract of land.

“3. That this plaintiff immediately after she had purchased said tract of land and paid the whole amount of the purchase price therefor, erected a dwelling house on the land, which cost her $925, and also *188erected one tobacco bam thereon at the cost of $350, making a total of $1,275 which the plaintiff has spent in making improvements on said tract of land, making a total, including the purchase price, of $3,025, which the plaintiff has expended on the tract of land.

“4. That the plaintiff took possession of said tract of land .... January, 1920, and has been living on the same, occupying the house she erected thereon as a dwelling.

“5 That on 5 March, 1920, the plaintiff had a deed in fee simple prepared from Sam 0. Carter and wife, Lillian Carter, to the plaintiff, conveying to her the tract of land described in paragraph one of this complaint, and presented the same to Sam C. Carter and wife, Lillian Carter, and requested them to execute it in due form and according to law.

“6. That Sam C. Carter and wife, Lillian Carter, defendants above named, failed and refused to execute the deed, and both still refuse to execute the same to the plaintiff, in violation of their promise and agreement to convey the same.

“7. That the defendants are now cutting and removing timber from the tract of land, and are threatening to continue to cut and remove timber therefrom, to the plaintiff’s great damage of $300.

“8. That the plaintiff has caused a summons to issue from the Superior Court of Columbus County in an action entitled as above.

“9. That the defendants are insolvent, as this plaintiff is informed, • believes and so alleges.

“Wherefore, the plaintiff prays the court that an order be made restraining the defendants, their agents, servants and employees from cutting and removing any timber from said tract of land, or in any manner committing acts of trespass thereon or from going upon said tract of land, and for such other and further relief as to the court may seem proper.”

Donald McBackan and 8. Brown Shepherd for plaintiff.

No brief for ■defendant.

Walker, J.,

after stating the case: We are of the opinion that there was error in the judge’s ruling. The plaintiff had entered into a parol contract with the defendant by which it was stipulated that the defendant should convey to her a certain tract of land, containing 43 acres, more or less, and particularly described in the complaint, upon the payment by the plaintiff of the purchase money, which was $1,750, and which was duly paid by the plaintiff, believing that defendants would comply with their promise and convey the land, and that, relying upon *189tbe defendant’s promise, tbe plaintiff entered into tbe possession of tbe land and erected valuable improvements tbereon wbicb reasonably cost $1,275. Tbe plaintiff caused a proper deed to berself for tbe premises to be prepared, wbicb was sufficient in form and substance to convey tbe estate promised by parol to be conveyed by tbe defendants to ber, and defendants refused to execute tbe same, and now deny tbat tbe contract was ever made, pleads tbe statute of frauds and claims ownership of tbe land, and all tbis notwithstanding they have tbe purchase money in their pocket. We must be governed in our decision by tbe allegations of tbe complaint, on wbicb our statement of tbe facts is based, tbe court having dismissed tbe action upon tbe pleadings, and certain alleged admissions wbicb do not, in our opinion, affect tbe question, at tbis stage of tbe case, and when so controlled, we must bold tbat such a transaction does not look well for tbe defendants, and upon it tbe judgment of tbe lower court is not sustained by tbe law, and certainly not by equity.

We have solemnly adjudged in tbis Court, more than once, tbat where there is a parol contract to convey land, tbe full amount of tbe purchase money is paid, tbe vendee enters into possession and tbe vendor after-wards repudiates tbe contract by refusing to make a deed for tbe land, tbe purchaser may recover tbe price of tbe land so paid by him (Improvement Co. v. Guthrie, 116 N. C., 381), and further tbat where tbe vendor elects so to repudiate bis parol contract by refusing to convey and sets up tbe Statute of Frauds, tbe purchaser may recover tbe amount paid by him for tbe land under bis prayer for general relief, although tbe action be for specific performance. Wilkie v. Womble, 90 N. C., 254 (cited in note, 19 L. R. A., 879); Murdock v. Anderson, 57 N. C., 77; Ellis v. Ellis, 16 N. C., 398. Under tbe old system, when tbe courts of law and equity were separate, it was held that, tbe purchaser could not proceed in equity to recover tbe purchase price wbicb bad been paid by him, as be bad a full and adequate remedy at law, tbat is, by an action for money bad and received to bis use by tbe vendor or for money paid under a contract, tbe consideration having failed by tbe conduct of tbe adverse party, but now tbe two systems are blended, and since 1868 tbat rule has -become obsolete. Murdock v. Anderson, supra; Wilkie v. Womble, supra. But even under tbe former system, if from peculiar circumstances tbe remedy at law would be inadequate, tbe equity court would have interfered and given redress. Ellis v. Ellis, supra.

Tbe general right of tbe purchaser to recover what be has paid on tbe purchase money, and tbe obligation of tbe vendor to restore what has been unjustly received by him on bis repudiated promise results (says Smith, C. J., in Wilkie v. Womble, supra) from tbe annulling of the *190executory agreement for the sale of tbe land and will be enforced against the party so avoiding it. This was also held in Beaman v. Simmons, 76 N. C., 43, which was an action to recover back the purchase money paid on a repudiated or cancelled contract. And when the purchaser has entered into possession of the land, paid the purchase money and made improvements, on the faith of the vendor’s parol promise to convey to him, which he refuses to do, and repudiates the contract by pleading the Statute of Frauds, the seller may recover not only the purchase money paid by him, but compensation for his improvements to the extent that they have enhanced the value of the land. Ford v. Stroud, 150 N. C., 362; Pass v. Brooks, 125 N. C., 129 (modified, but not on this point, in 127 N. C., 119); Albea v. Griffin, 22 N. C., 9; Hedgepeth v. Rose, 95 N. C., 41; R. R. v. Battle, 66 N. C., 541; Tucker v. Markland, 101 N. C., 422. The Court said in Pass v. Brooks, supra, 131: “The law will not allow the plaintiff to take possession of the lot without repaying the purchase money so paid to him, and without also paying for the valuable improvements put on the lot, by reason of said parol contract; this would be unjust and inequitable.” We said in Jones v. Sandlin, 160 N. C., 150, at p. 154: “The general rule is that if one is induced to improve land under a promise to convey the same to him, which promise is void or voidable, and after the improvements are made he refuses to convey, the party thus disappointed shall have the benefit of the improvements to the extent that they increased the value of the land,” citing Kelly v. Johnson, 135 N. C., 647; Reed v. Exum, 84 N. C., 430; Luton v. Badham, 127 N. C., 96; Albea v. Griffin, 22 N. C., 9; Hedgepeth v. Rose, 95 N. C., 41; Pitt v. Moore, 99 N. C., 85. This Court, in Joyner v. Joyner, 151 N. C., 181, at p. 182, refers to Albea v. Griffin, supra; Baker v. Carson, 21 N. C., 381, and Pitt v. Moore, 99 N. C., 85, and says: “An examination of these cases, as well as Luton v. Badham, 127 N. C., 96, in which case many of the previous decisions of this Court are reviewed, will disclose that the basis of the relief granted in each of these cases was a parol agreement to convey certain land, or an interest therein, which induced an expenditure of money, in good faith, in its improvement and the enrichment of the land, the repudiation of the agreement to convey, and the attempt thereby to perpetrate a fraud.” Albea v. Griffin, supra, decided that, “Although payment of the purchase money, taking possession, and making improvements, will not entitle the vendee to the specific performance of a parol agreement for the sale of land, yet he has, in equity, a right to an account of the purchase money advanced, and the value of his improvements, deducting therefrom the annual value during his possession,” *191and tbe ease of Baker v. Carson, supra, was approved. See, also, Wharton v. Moore, 84 N. C., 479; Barker v. Owen, 93 N. C., 198 at 203.

We wisb to be exactly just to tbe defendants, and tbis induces us to state tbat in tbe answer it is denied tbat defendants contracted witb tbe plaintiff, as tbe latter alleges, but tbat tbey did contract to sell ber, and did afterwards convey to ber, a smaller tract of land on wbicb tbe improvements were made, but we do not. agree witb tbe judge tbat no issues of fact or law were raised by tbe pleadings, or tbat tbe pleadings were in sucb a state tbat be could dismiss tbe action, without giving proper consideration to tbe plaintiff’s equity, or even to bis remedy at law.

Tbe fact tbat plaintiff bas received a deed for tbe land on tbe northwest side of tbe drain, and bas no other deed, or other writing for any other part of tbe land, did not authorize a nonsuit, or dismissal of tbe action, because plaintiff does not allege tbat she bad any other writing, but tbat by parol defendants agreed to convey the land in question, and tbat she paid tbe purchase money and was let into possession of tbe said land, under tbe agreement, and then made tbe improvements. If it turns out tbat plaintiff bas received some land for tbe purchase money paid by ber, she would only be entitled to recover tbe fair balance due, to be ascertained in tbe proper way.

It is not now required tbat we should consider tbe question relating to tbe injunction wbicb was refused, as it is not relevant to tbe controversy. We do not, however, see why plaintiff should be entitled to an injunction against tbe cutting of timber when it appears she is not tbe legal or equitable owner of tbe land.

We may add tbat when tbe allegations in tbe case are threshed out it may finally appear tbat plaintiff’s.allegations are not sustained, and tbat she is really not entitled to any return, either legal or equitable. But as there was a peremptory dismissal of tbe case, we are not dealing witb tbe actual facts, but witb plaintiff’s allegations in ber complaint.

Tbe judgment will be set aside and tbe case submitted to a jury upon proper issues, unless a reference or other method of trial is agreed upon by tbe parties, and tbe case is accordingly remanded witb directions for further proceedings therein not inconsistent witb tbis opinion, and in other respects according to tbe course and practice of tbe courts.

Error.