Brown v. Kirkpatrick

• Decision Date: 01 May 1940
• Docket Number: 522.
• Citation: 8 S.E.2d 601,217 N.C. 486
• Parties: BROWN v. KIRKPATRICK et al.
• Court: North Carolina Supreme Court

8 S.E.2d 601

217 N.C. 486

BROWN v. KIRKPATRICK et al.

No. 522.

Supreme Court of North Carolina

May 1, 1940

From judgment for plaintiff on agreed statement of facts defendants appealed.

Stewart & Moore, of Charlotte, for plaintiff-appellee.

W F. Wimberly, of Charlotte, and Cherry & Hollowell, of Gastonia, for defendants-appellants.

DEVIN Justice.

The question here presented is whether the statute prohibiting deficiency judgments (Chap. 36, Public Laws 1933) has the effect of preventing judgment on a note secured by a second mortgage or deed of trust after foreclosure sale of the land under the first deed of trust, for an amount sufficient only to satisfy the first lien.

The case comes to us upon agreed statement of facts, the material portions of which may be stated as follows: Travis T. Brown the plaintiff, the original owner of a lot in Charlotte North Carolina, executed deed of trust thereon to secure money borrowed from the American Trust Co. in sum of $6,500. Thereafter in 1936, plaintiff conveyed the lot to the defendants Kirkpatrick who took subject to this deed of trust, and in addition, at the same time, executed deed of trust to plaintiff Brown for the balance of the purchase price in the sum of $1,579.75. In 1937, defendants Kirkpatrick borrowed $7,800 from the Pilot Life Ins. Co. and executed deed of trust on the lot to secure same. The money borrowed from the Life Insurance Company was used to pay off and cancel the American Trust Company's deed of trust and to pay $1,200 credit on the Brown deed of trust, leaving a balance due Brown of $379.75. The Brown deed of trust was thereupon also cancelled, making the Insurance Company's deed of trust a first lien on the property. As evidence of the balance of $379.75 the defendants executed a note therefor to Brown and at same time executed a second deed of trust on the lot to secure the same. This note was marked "balance purchase money." Thereafter defendants Kirkpatrick conveyed the lot to C. A. Dixon, Jr., who assumed payment of both the outstanding deeds of trust. Upon default on the part of C. A. Dixon, Jr., the Insurance Company's deed of trust was foreclosed in January, 1939, and the property sold for only enough to satisfy that deed of trust, leaving nothing for plaintiff Brown on his second deed of trust. Plaintiff Brown then instituted action on his note for $379.75. The defendants, admitting the execution of the note for the consideration named, pleaded the provisions of the statute and denied plaintiff's right to judgment on...