Cauble v. Trexler

Decision Date09 April 1947
Docket Number377
PartiesCAUBLE v. TREXLER et al.
CourtNorth Carolina Supreme Court

Civil action instituted 24 December, 1945, for permanent injunction against foreclosure of mortgage deed and for cancellation thereof and to remove same as cloud upon title.

Plaintiff alleges in his complaint, and on the trial in Superior Court offered evidence tending to show in substance these facts:

1. He, the plaintiff, is seized in fee and in possession of a certain tract of land in Rowan County, North Carolina, on which on 29 July, 1931, he and his wife executed to defendant J. C. Trexler a certain mortgage deed as security for a note in the sum of $3,750.

2. In 1936 Cauble, at request of J. C. Trexler, applied to the Federal Land Bank of Columbia, South Carolina, for a loan with which to pay off the said indebtedness to said Trexler. Pursuant thereto upon appraisal of the farm of Cauble, the Land Bank proposed to lend him the sum of $2,600 (1) on the express condition that Trexler, as mortgagee and holder of Cauble's note, would accept same in full of the indebtedness represented by the note, and (2) upon the further condition that said Trexler would not demand or take or accept from Cauble and his wife any additional note or mortgage or obligation of any kind securing the balance due at time of the loan by the Land Bank to Cauble. And in order to induce the Land Bank to lend said amount to Cauble Trexler signified his willingness to forego any and all amounts due him in excess of the Land Bank loan, and, in connection with the Cauble application for said loan, signed a statement and agreement of creditor (purported copy of which was attached to the complaint, as an exhibit) addressed 'To the Federal Land Bank of Columbia, and/or The Land Bank Commissioner, and The Federal Farm Mortgage Corporation, and to the applicant(s) for a loan therefrom to pay the indebtedness herein described', reading in brief as follows: 'The undersigned, the owner and holder of that certain note and deed of trust * * * dated 29 July, 1931 * * * executed and owing by M. A. Cauble and wife, Lillie Cauble to J. C. Trexler * * * evidencing and securing an indebtedness in the principal sum of $3750, bearing interest at six per centum per annum * * * upon which the present unpaid balance * * * is $3850, has agreed and does hereby agree to accept in full settlement of said indebtedness the sum of $2434.75. Upon receipt of said amount the undersigned will cancel and satisfy the instruments representing, evidencing and securing the said indebtedness or, at the request of the Federal Land Bank of Columbia, will transfer said instruments to it. The cancelled and satisfied or assigned instruments will be forwarded to the person designated by The Federal Land Bank of Columbia upon receipt of a check or draft for the amount the undersigned has agreed to accept. The undersigned has no understanding or agreement with the applicant(s) or anyone acting for him or them that the undersigned is to be paid an additional amount upon said indebtedness, directly or indirectly, in cash or otherwise, or that the undersigned will be given any security or evidence of indebtedness therefor; and the undersigned will not demand or accept payment or any evidence of indebtedness or security for the difference, or any part thereof, between the total amount of said indebtedness and the amount herein stated and agreed to be accepted in full settlement thereof. The indebtedness above described is the only indebtedness owed by the applicant(s) to the undersigned. This statement and agreement is made to assist the above named applicant(s) to obtain a loan(s).'

M. A. Cauble and his wife, as applicants, and in writing, acknowledged that the above statement is correct, and that they consent to the provisions thereof. (Here it may be noted that the date of the exhibit as shown in the record on the appeal '25th day of June, 1946', being manifestly erroneous, the original as introduced in evidence on trial below was certified by the Clerk of Superior Court of Rowan County, upon writ of certiorari issued exmero motu, and it is seen that the correct date is the '25th day of June, 1936').

3. After the agreement with the Land Bank and with Cauble, and after the said loan had been consummated, J. C. Trexler demanded of Cauble a note for the difference between the amount due on the original note and the amount of the loan from the Land Bank, $2,434.75, and a second mortgage on the same land securing the same,--and 'plaintiff, under the circumstances, not knowing what to do, executed a note and mortgage for $1785.87.'

4. Thereafter, during more than nine years demands by J. C. Trexler, and A. R. Trexler as assignee for payment of said note, last signed, were made upon Cauble, and he has consistently refused to pay anything on the principal or interest thereof, claiming at all times that the note and mortgage are null and void and uncollectible. And on 28 November, 1945, J. C. Trexler and A. R. Trexler, acting under the alleged second mortgage, so signed by Cauble, advertised the land for sale, on certain date at the courthouse door in Salisbury.

The plaintiff Cauble testified in detail as to circumstances under which he and his wife, after the Land Bank loan had been consummated and the checks signed over by them to J. C. Trexler, had signed the note and second mortgage. When Trexler said he had to have a second mortgage, he, Cauble, protested--but, quoting him, 'I got to where I couldn't talk any more. I sat down and I said 'Go ahead and make it $2200 or $22,000'. I told him it wouldn't be worth a cuss after he had signed up what he had with the Bank * * *. ' And then on cross-examination, this question was asked plaintiff: 'I ask you if you don't know that you and Trexler talked this matter over and that it was thoroughly understood that you were to give a mortgage for the balance?' to which plaintiff answered: 'I never knowed a thing about the second mortgage, and he never mentioned it until he got me in town at the last pinch. If he had mentioned second mortgage to me, I never would have done it.'

Plaintiff further alleges in substance (1) that said note and mortgage deed are without consideration, illegal and unenforceable, and afford defendants no legal right or authority to proceed under the mortgage to advertise and sell at public auction plaintiff's lands, and that the unlawful and wrongful conduct of defendants in the purported advertisement and sale will work irreparable damage to plaintiff, for which there is no adequate remedy at law; and (2) that the note and the mortgage deed purporting to secure the note are a cloud upon plaintiff's title to the land to which it relates.

Thereupon plaintiff prays (1) that defendants be permanently restrained and enjoined from selling said land, under said mortgage deed, (2) that said mortgage deed be removed as a cloud upon plaintiff's title, (3) that said note and mortgage deed be cancelled; and (4) that he have such further relief in the action as he may be entitled to in law and equity.

Defendant, answering the complaint, pleads (1) that plaintiff and his wife in signing the note and second mortgage acted voluntarily, and with knowledge of all the facts and cirumstances existing at the time, and plaintiff, his wife now being dead, is estopped, and barred of right to maintain this action, (2) that plaintiff ratified the note and second mortgage by part payment of interest accrued on the note, and (3) that plaintiff's right to maintain this action is barred by the three year statute of limitations.

At the close of plaintiff's evidence, motion of defendants for judgment as of nonsuit was allowed. From judgment in accordance therewith, plaintiff appeals to Supreme Court and assigns error.

Woodson & Woodson, of Salisbury, for plaintiff-appellant.

R. Lee Wright, of Salisbury, for defendants-appellees.


The evidence shown in the record on this appeal, considered in the light most favorable to plaintiff and under applicable principles of law, is sufficient, in our opinion, to take the case to the jury. Hence, appellant's exception to the judgment from which this appeal comes to this Court is well founded, and is sustained.

It is a general rule of law that agreements against public policy are illegal and void. Burbage v. Windley, 108 N.C. 357, 12 S.E. 839, 12 L.R.A. 409; Seminole Phosphate Co. v. Johnson, 188 N.C. 419, 124 S.E. 859.

Agreements are against public policy when they tend clearly, among other things, to injure 'the public confidence in the purity of the administration of the law '. And where the law-making power speaks on a particular subject over which it has power to legislate, public policy in such cases is what the law enacts. 12 Am.Jur. pp. 662, 664, 668. Hence an agreement which...

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