Avery County Bank v. Smith

• Decision Date: 12 December 1923
• Docket Number: 512.
• Citation: 120 S.E. 215,186 N.C. 635
• Parties: AVERY COUNTY BANK ET AL. v. SMITH ET AL.
• Court: North Carolina Supreme Court

120 S.E. 215

186 N.C. 635

AVERY COUNTY BANK ET AL. v. SMITH ET AL.

No. 512.

Supreme Court of North Carolina

December 12, 1923

Appeal from Superior Court, Avery County; Ray, Judge.

Action by the Avery County Bank and others against C. W. Smith, in which A. S. Abernathy and another, trading as A. S. Abernathy & Son, intervened. Judgment for plaintiffs, and interveners appeal. New trial. This was a civil action commenced by the plaintiffs against C. W. Smith, for the recovery of $353.75, note dated December 23, 1920, and due March 23, 1921, with interest, the note payable to plaintiffs S. G. Smith and C. L. Tuttle, and by them transferred to the Avery County Bank. The note was secured by a chattel mortgage of even date, recorded in Avery county in Book No. 3, p. 232, on the following personal property, viz:

"One pair of bay mares, 5 years old, known as the Abernathy mares; 1 brown horse, 8 years old; 1 black horse, 8 years old; 1 bay horse, 9 years old; and 1 sorrel horse, 10 years old."

The plaintiffs sued out the ancillary remedy of claim and delivery, gave bond, and took possession of the above-described property. The defendants A. S. Abernathy & Son filed in the suit an interpleader, gave bond, and the property was turned over to the interveners; J. D. Braswell sheriff of Avery county, making the following return:

"The said E. C. Guy (agent of Avery County Bank) delivered to me the said horses, and they were turned over to the said A S. Abernathy & Son."

In the interpleader of A. S. Abernathy & Son, they allege that they claim a superior right to that of the plaintiffs to the following personal property:

"One pair of bay mares, known as the Abernathy mares, now about 6 1/2 and 7 1/2 years of age, and 1 black horse, now about 8 1/2 years old, by virtue of a chattel mortgage executed to them by the said C. W. Smith on the 7th day of December and registered on the 9th day of December, 1920, in Burke county, N.C. Said mortgage was given to secure the purchase of a part of said property (with other described in said mortgage), which said property was sold to the said C. W. Smith by your petitioners; and that there is now due and owing to your petitioners by the said C. W. Smith, as the balance of the said purchase price thereof, the sum of $562.50, with interest from the 7th day of December, 1920."

The interpleader further alleged:

"That at the time of the sale of the said property to the said C. W. Smith, as aforesaid, and the execution and registration of said mortgage to secure said purchase price as aforesaid, the said C. W. Smith was residing and working in Burke county, N. C., and kept said property there."

On the trial of the cause in the court below there was a dispute as to which county C. W. Smith was a "resident" of, bearing on the question as to which county the chattel mortgage should be registered in. Evidence was introduced by plaintiffs and interveners to show which county he lived in. The contentions, taken from the court's charge, are as follows: The plaintiffs contend:

"That the mortgagor, Smith, was a resident of this (Avery) county, that he lived in Avery for a number of years, lived in what is called the 'Lost Cove' section, owning considerable property," etc.

The interveners contend:

"He declared that he was a citizen of Burke county, and argues to you extensively that, as a moral matter, it would not be right to allow the plaintiff to prevail in this action, for that, in the mortgage made by the defendant, Smith, to the plaintiff bank, it was recited in said mortgage that the mortgage made to it was subject to a prior mortgage on the same property, to secure the payment of a certain amount due A. S. Abernathy & Son, and contends this was notice to the plaintiff that there was a mortgage made prior to the conveyance of the property to the bank, to secure the debt."

Both chattel mortgages were introduced in evidence. The chattel mortgage given by C. W. Smith to S. G. Smith and C. L. Tuttle, plaintiffs, and transferred by them to plaintiff bank, which conveyed the property in controversy, has after the description of the property this provision:

"This mortgage is made subject to a prior mortgage on same property to secure the payment of $448 due A. S. Abernathy." (Italics ours.)

The chattel mortgage given by C. W. Smith to defendants A. S. Abernathy & Son has this provision:

"I, C. W. Smith, of the county of Burke, in the state of North Carolina, am indebted to A. S. Abernathy & Son of Catawba county, in said state, in the sum of five hundred and sixty-two and 50/100 dollars, for which they hold my notes to be due on the 7th day of June, 1921, and the 1st day of November, 1921; and to secure the payment of the same I do hereby convey to him these articles of personal property, to wit: One pr. bay mares, 5 and 6 years old, weighing about 1,250 lbs. each; one 2,500 lbs. Spach wagon, two sets double harness with collars, lines and bridles, all this day bought of them; one brown horse, eight years old, one black horse, 7 years old, weighing 1,230 lbs. and 1,240 lbs. It is agreed that if I pay $281.25 June 7, 1921, I am to pay balance November 1, 1921."

Without objection, the defendant C. W. Smith testified:

"When I gave the mortgage that the Avery County Bank is suing on, I told them I had given a mortgage to Mr. Abernathy."

Without objection, S. L. Shell, a witness for interveners, testified:

"I live at Hickory, am employed by A. S. Abernathy & Son, a partnership consisting of A. S. and F. A. Abernathy. I trade in horses and mules and cattle for them. I know C. W.

Smith. He is indebted to A. S. Abernathy & Son, according to the notes, in the sum of four hundred and some odd dollars, I think about $80, something along there. These instruments are the notes secured by the mortgage, each one being for $281.25, and there is unpaid on the two notes four hundred and eighty some dollars. The credits on here appear, it looks like, for the sale of some of this stock, I can't say from my own knowledge. The property taken by the interveners under the bond filed herein are not at the barn; they have been sold, and the amounts realized from the sale of that stock have been credited on those notes."

The interveners, A. S. Abernathy & Son, in due time requested the following special instructions to the jury:

"If you shall find from the evidence that the property taken from the plaintiffs by interveners was property covered by defendant's mortgage to interveners, dated December 7, 1920, and that the mortgage given plaintiffs by defendant, dated December 23, 1920, was made subject to the prior mortgage given interveners by the defendant, then you shall find that the interveners are the owners and entitled to possession of said property."

This the court refused to give, assigning as a reason therefor that it was not signed by counsel. To the refusal to give the above instruction, the interveners, A. S. Abernathy & Son, excepted. This was the interveners' fourth exception.

The court below charged the jury as follows:

"So it comes down to this question, there is no dispute, and the court charges you that this reservation in this second mortgage is not notice to the plaintiff of the prior conveyance to Abernathy--so it comes down to this question of fact: Was Smith a resident of Burke county at the time of making the mortgage to Abernathy & Son? If he was, the mortgage was properly registered there, and the property can be held under that mortgage anywhere in the state it may be found, but if he was not a resident of Burke county, and the plaintiff contends he was not, and the interveners contend that he was, if he was not such resident, then the registration there would be a nullity, and the registration here would prevail, and the plaintiff would have the right to have the issue answered, 'Yes,' that he was a resident of Avery county."

The interveners, A. S. Abernathy & Son, excepted to the above charge, which was their fourteenth exception.

The issues submitted to the jury were as follows:

"(1) What amount, if any, is the defendant, C. W. Smith, indebted to plaintiff? Ans. $353.75, with interest from March 23, 1921.

(2) Was the defendant, Smith, a resident of Avery county at the time of making the mortgage to Abernathy & Son, and has he continued such residence? Ans. Yes.

(3) Is the intervener the owner of the property described in the mortgage from C. W. Smith to Abernathy & Son? No answer."

The court below gave judgment on the verdict against the defendant C. W. Smith & Son for $353.75 and interest from March 23, 1921, and judgment against the interveners, A. S. Abernathy & Son, as follows:

"And it further appearing to the court that, at the date of the execution of the promissory note offered in evidence by the plaintiff, that the defendant C. W. Smith, in order to secure the prompt and faithful payment of said note, executed to the plaintiff's assignors a certain chattel mortgage on the property described in the plaintiff's affidavit filed in its action of Claim and Delivery, and that said plaintiff, in order to enforce the payment of said note, had advertised the said property for sale under the power of sale contained in said chattel mortgage and has caused claim and delivery proceedings to be instituted against the defendant, C. W. Smith, and delivered to the plaintiff for the purpose of sale; and it further appearing to the court that prior to the day of sale of said property the interveners, A. S. Abernathy & Son, intervened in said action and set up claim of title to said property and upon giving the bond required by law in the sum of $1,200, signed by A. S. Abernathy & Son, F. A. Abernathy, S. L. Shell, and J. F. Abernathy, as sureties; and it

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