Childers v. Parker's, Inc., 448

• Citation: 274 N.C. 256,162 S.E.2d 481
• Decision Date: 23 August 1968
• Docket Number: No. 448,448
• Parties: Ray A. CHILDERS and wife Dorothy B. Childers, v. PARKER'S, INC.
• Court: North Carolina Supreme Court

Page 481

162 S.E.2d 481

274 N.C. 256

Ray A. CHILDERS and wife Dorothy B. Childers, v. PARKER'S, INC.

No. 448.

Supreme Court of North Carolina.

Aug. 23, 1968.

Roberts, Frye & Booth, Winston-Salem, for plaintiff appellants.

Jenkins & Lucas and W. Scott Buck, Winston-Salem, for defendant appellee.

SHARP, Justice.

This is the second suit which plaintiffs have instituted against defendant on account of Parker's failure to insert in plaintiffs' note a recital that it was given for the balance of purchase money of real estate. It is also plaintiffs' second appeal from a judgment of nonsuit. The first action, instituted prior to the time plaintiffs' liability to Lucas had been established, was dismissed because prematurely brought. Childers v. Parker's, Inc., 259 N.C. 237, 130 S.E.2d 323. Plaintiffs' liability to Lucas now having been established and discharged, their exception to the judgment of nonsuit from which they presently appeal presents this question: Did G.S. § 45--21.38, as it was worded on 23 March 1959, apply to a note and deed of trust securing a third party who lent the vendee (his debtor) the purchase price of the land described in the deed of trust? At that time, exclusive of the words in parenthesis, G.S. § 45--21.38 provided in pertinent part:

'In all sales of real property by mortgagees and/or trustees under powers of sale contained in any mortgage or deed of trust executed after February 6, 1933, or where judgment or decree is given for the foreclosure of any mortgage executed after February 6, 1933, to secure to the seller the payment of the balance of the purchase price of real property, the mortgagee or trustee or holder of the notes secured by such mortgage or deed of trust shall not be entitled to a deficiency judgment on account of such mortgage, deed of trust or obligation secured by the same: Provided, said evidence of indebtedness shows upon the face that it is for balance of purchase money for real estate: Provided, further, that when said note or notes are prepared under the direction and supervision of the seller or sellers, he, it, or they shall cause a provision to be inserted in said note disclosing that it is for purchase money of real estate; in defallt of which the seller or sellers shall be liable to purchaser for any loss which he might sustain by reason of the failure to insert said provisions as herein set out.'

The Legislature, by Session Laws 1961, Ch. 604, effective 2 June 1961, amended G.S. § 45--21.38 by inserting the words in parenthesis. Thus, the section now applies Ipsissimis verbis only to mortgages and deeds of trust given 'to secure To the seller the payment of the balance of the purchase price of real property.' (Italics ours.)

Plaintiffs' contentions are that prior to the 1961 amendment, G.S. § 45--21.38 applied to All 'purchase money deeds of trust'--not only those given to a vendor but also to a lender who provided the purchase price if the note showed on its face that it represented the 'balance of the purchase price of real property' described in the instrument securing the debt; that the failure of Parker, who prepared the note and deed of trust for defendant-vendor, to insert this information in the note and deed of trust caused the loss for which plaintiffs seek to recover, and imposes liability upon defendant. Defendant's contention is that plaintiffs' note was not for purchase money but money borrowed.

In construing a statute with reference to an amendment it is presumed that the legislature intended either (a) to change the substance of the original act, or (b) to clarify the meaning of it. 82 C.J.S. Statutes § 384, p. 897 (1953). The presumption is that the legislature 'intended to change the original act by creating a new right or withdrawing any existing one.' 1 Sutherland, Statutory Construction § 1930 (Horack, 3d ed. 1943). Plaintiffs argue that the 1961 amendment limiting the application of G.S. § 45--21.38 to the Vendors of real estate substantiates their contention that prior thereto the section applied to all 'purchase money' notes and deeds of trust. Although the conclusion is that every amendment to an existing statute had a purpose, the presumption that a departure from the old law was intended is merely an aid to interpretation--not an absolute rule. 'In some cases, the purpose of the variation may be to improve the diction, or to clarify that which was previously doubtful.' 50 Am.Jur. Statutes § 275, p. 263 (1944). Whereas it is logical to conclude that an amendment to an unambiguous statute indicates the intent to change the law, no such inference arises when the legislature amends an ambiguous provision. 1 Sutherland, Statutory Construction § 1930 (1968 Cum.Supp. to Horack's 3d ed., 1943). Even 'the action of the legislature in amending a statute so as to make it directly applicable to a particular case is not a conclusive admission that it did not originally cover such a case.' Black, Interpretation of Laws § 167, p. 578 (2d ed. 1911).

To sustain their contention that the security instrument in suit was a purchasemoney deed of trust within the meaning of G.S. § 45--21.38 prior to 1961, plaintiffs rely upon Dobias v. White, 239 N.C. 409, 80 S.E.2d 23 (1954). In Dobias, it was held that a deed of trust given by a vendee to his vendor to secure the purchase price of land other than those described in the security instrument, could not qualify as a purchasemoney deed of trust under G.S. § 45--21.38. The Court said, 'This is true because a deed of trust is a purchase money deed of trust only if it is made as a part of the same transaction in which the debtor purchases the land, embraces the land so purchased, and secures all or part of its purchase price.' Id. at 412, 80 S.E.2d at 26. Plaintiffs point out that in listing the indicia of a purchasemoney deed of trust, the Court omitted a requirement that it be given by the vendee to the vendor. Plaintiffs argue, therefore, that the note and deed of trust which they gave to Parker, as guardian of Schimmeck, was a purchase-money deed of trust within the meaning of the statute even though it secured money borrowed from a third person to pay the vendor for the land. The definition in Dobias, however, cannot be used as a slide rule to solve the problem here. The credit transaction there involved was between vendor and vendee, not between vendee and a third-party lender. The sole basis of decision was that the deed of trust covered 'land other than that purchased from the plaintiffs by the defendants.' Furthermore, the Court did not say that a deed of trust having the listed requisites was necessarily a purchase-money security; it said that a deed of trust lacking them was not. It made no attempt to define the circumstances in which a deed of trust on land 'secures all or a part of its purchase price.'

Plaintiffs also argue that Smith Builders Supply Co. v. Rivenbark, 231 N.C. 213, 56 S.E.2d 431; Virginia-Carolina Chemical Co. v. Walsson, 187 N.C. 817, 123 S.E. 196, and like cases bolster their position that Lucas would not have been entitled to a deficiency judgment had Parker noted in the 'evidence of indebtedness' that it was 'for the balance of purchase money of real estate.' These cases hold that when a deed to the vendee and his mortgage to the vendor for the unpaid purchase price--or to a third party for money loaned to pay the vendee the purchase price--are delivered and recorded as a part of the same transaction, no lien against the vendee can take precedence over 'the purchase money mortgage.' Virginia-Carolina Chemical Co. v. Walston, supra at 825, 123 S.E. at 200. The theory is that '(t)he title does not rest in the vendee but merely passes through his hands, and during such instantaneous passage no lien against the vendee can attach to the title superior to the right of the holder of the purchase-money mortgage.' Smith Builders Supply Co. v. Rivenbark, supra, 231 N.C. at 214, 56 S.E.2d at 432. These cases apply to the general rule. They are, however, of no more...