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 print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative. NO. COA04-651NORTH CAROLINA COURT OF APPEALSFiled: 18 October 2005HARVEY C. TAYLOR, JR., Plaintiff,v . Burke County No. 98 CVS 187 DON A. ABERNETHY, Individuallyand JACK C. WEIR, AdministratorCTA of the Estate of RomerGray Taylor, Defendants. Appeal by defendant Abernathy from judgment entered 5 January 2004 by Judge James W. Morgan in Burke County Superior Court. Heard in the Court of Appeals 26 January 2005. Wyatt, Early, Harris, Wheeler, LLP, by William E. Wheeler, for plaintiff-appellee. Gorham, Crone, Mace & Green, LLP, by John W. Crone, III, Sigmon, Sigmon & Isenhower, by C. Randall Isenhower, and Kilpatrick Stockton, LLP, by James H. Kelly fordefendant- appellant Abernethy. STEELMAN, Judge. Defendant, Don A. Abernethy, appeals the trial court's entry of judgment following a jury verdict, holding that Romer Gray Taylor (Romer) entered into a valid contract to convey his entire estate to his brother, plaintiff, Harvey C. Taylor, Jr. For the reasons discussed herein, we reverse and remand this matter for a new trial. Romer was a lifelong resident of Burke County, North Carolina. Plaintiff was Romer's older brother. Defendant was Romer andplaintiff's nephew. Romer never married and hadno children. Plaintiff moved to Pennsylvania after World War II and has continued to reside there. In 1978, plaintiff assisted Romer in the acquisition of a backhoe. On 7 October 1997, Romer executed a holographic will, which left his entire estate to defendant. On 22 October 1997, plaintiff filed a document with the Burke County Register of Deeds, which purported to be a contract to make a will between himself andRomer and was dated 10 July 1978. This contract stated that Romer would “immediately make a valid will devising to HARVEY C. TAYLOR and his heirs, assigns, and successors the entire estate of said ROMER GREY TAYLOR.” The contract further provided that Romer agreed not to revoke the will made pursuant to its provisions. The contract was executed in the Commonwealth of Pennsylvania. Romer died on 18 January 1998. Following his death, defendant offered the holographic will for probate. Plaintiff instituted this action on 12 February 1998 seeking specific performance of the contract to make a will. This matter initially came on for trial at the 29 August 2000 session of court. The jury found the signature of Romer on the contract to make a will was not genuine. Based uponthis finding, the trial court dismissed plaintiff's action. Plaintiff appealed. On 19 March 2002, this Court filed an opinion finding error in part and remanded the case for a new trial. Taylor v. Abernethy, 149 N.C. App. 263, 560 S.E.2d 233 (2002), disc. review denied,356 N.C. 695, 579 S.E.2d 102 (2003). We held the trial court erred in excluding plaintiff'sproffered expert testimony concerning thegenuineness of Romer's signature on the contract to make a will. Id. at 274-75, 560 S.E.2d at 240. We further held the trial court did not err in denying defendant's motion to dismiss based on Pennsylvania's six year statute of limitations. Id. at 275, 560 S.E.2d at 240-41. This matter was retried before Judge James W. Morgan at the 1 December 2003 sessionof superior court. The trial judge submitted a single issue to the jury: “Is the signature on the document labeled Plaintiff's Exhibit A and entitled 'Contract to Make a Will' the genuine signature of Romer Gray Taylor?” The trial court entered judgment in favor of plaintiff following the jury's determination that it was indeed Romer's signature on the contract. The trial court directed the administrator CTA to deliver the entire estate to plaintiff. From entry of this judgment, defendant appeals. We first address defendant's second argument in which he contends the trial court erredin permitting plaintiff's wife to testify concerning her conversations with the decedent, as well as permitting her to testify to conversations between plaintiff and Romer, which she overheard, as this violated Rule 601 of the North Carolina Rules of Evidence. We agree. Rule 601, also known as the “dead man's statute,” provides: (c) Disqualification of interested persons. _ Upon the trial of an action, or the hearing upon the merits of a special proceeding, a party or a person interested in the event, or a person from, through or under whom such a party or interested person derives his interest or title by assignment or otherwise, shall not be examined as a witness in his ownbehalf or interest, or in behalf of the party succeeding to his title or interest, against the executor, administrator or survivor of a deceased person, or the committee of a lunatic, or a person deriving his title or interest from, through or under a deceased person or lunatic, by assignment or otherwise, concerning any oral communication between the witness and the deceased person or lunatic. N.C. Gen. Stat. § 8C-1, Rule 601(c) (2005). To be disqualified as a witness interested in the event of the action, the witness must have a “'direct legal or pecuniary interest in the outcome of the litigation.'” Etheridge v. Etheridge, 41 N.C. App. 39, 42, 255 S.E.2d 735, 738 (1979) (quoting Burton v. Styers, 210 N.C. 230, 231, 186 S.E. 248, 249 (1936)). “'The key word in this phrase is 'legal,'” since a pecuniary interest alone is insufficient todisqualify a witness under Rule 601. Rape v. Lyerly, 287 N.C. 601, 622, 215 S.E.2d 737, 750 (1975) (citations omitted). The reason for this rule is that “[individuals] quite often understand and interpret personal transactions and communications differently, at best; and the Legislature, in its wisdom, has declared that an ex parte statement of such mattersshall not be received in evidence. ” Sherrill v. Wilhelm, 182 N.C. 673, 675, 110 S.E. 95, 96 (1921). We hold that plaintiff's wife was an interested party for purposes of Rule 601 . N.C. Gen. Stat. § 29-30 provides: [ T]he surviving spouse of an intestate or the surviving spouse who has petitioned for an
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