Davison v. Gregory

• Decision Date: 21 April 1903
• Court: North Carolina Supreme Court
• Parties: DAVISON et al. v. GREGORY et al.

43 S.E. 916
132 N.C. 389

DAVISON et al.
v.
GREGORY et al.

Supreme Court of North Carolina.

April 21, 1903.

DEMURRER — TRUST DEEDS — PAYMENT OF NOTE BY ANOTHER CREDITOR—ACTION FOR SALE—PARTIES.

1. A demurrer will not lie to a complaint because of matter not appearing therein, but in a note which plaintiff therein refers to and offers to produce.

2. Where creditors secured by a third trust deed furnish their trustee the money with which to pay off or take up the note secured by the first trust deed, they are entitled to be substituted to the rights of the payee thereunder, though the form of the indorsement on the note is to their trustee, as trustee for the debtor.

3. The trustees in a third deed of trust, to whom the note secured by the first deed of trust was assigned, on their taking it up with money furnished by the creditors secured by such third deed, may maintain a suit for sale of the land covered by the trust deeds, and to have the proceeds first applied for the benefit of the creditors who furnished the money for taking up the note, all parties in interest being made parties, especially where there was a mistake in the first trust deed in the name of the trustee, and it is claimed by the one secured by the second trust deed that the first trust deed and the power to sell of the trustee therein were canceled and destroyed by the proceedings in regard to the note secured thereby.

Appeal from Superior Court, Granville County; McNeill, Judge.

Action by G. W. Davison and another against N. A. Gregory and others. Prom the Judgment, defendant Mrs. Pattie Mc-Crary appeals. Affirmed.

John W. Graham and A. W. Graham, for appellant.

T. T. Hicks and A. A. Hicks, for appellees.

CONNOR, J. This was an action brought by the plaintiffs, Geo. W. Davison and Chas. E. Baker, trustees, against N. A. Gregory, Laura N. Gregory, his wife, and Pattie M. McCrary. The plaintiffs allege that on the 30th day of January, 1885, Nathaniel A. Gregory borrowed of John Y. Gholson $1,000, for which he gave his bond, to be due January 30, 1886, with interest at 8 per cent. and to secure its payment he and his wife, Laura N. Gregory, executed a deed of trust to Robert T. Winston, of the same date, conveying the tract of land, containing 100 acres, situate in Granville county, and fully described therein. Said deed was duly recorded. On December 7, 1880, said Gregory and wife executed to Mrs. Pattie McCrary his bond for the sum of $1,500, and executed to John A. Williams, trustee, a deed in trust to secure said note, conveying the equity of redemption of said Gregory in the said 100 acres of land, and also another tract of 260 1/2 acres, which deeds were duly recorded. On September 15, 1887, W. A. Davis and N. A. Gregory, being partners, became embarrassed, and they and their wives conveyed certain of their property, including any remaining interest of N. A. Gregory in that above referred to, to plaintiffs, G. W. Davison and Chas. E. Baker, trustees, to secure the payment of certain debts therein set out, payable to 20 different persons. Said conveyance was duly recorded. Thereafter the assignee of the said Gholson demanded payment of the note executed to him as aforesaid, and threatened to collect the same by foreclosure of the first trust deed, and the sale of the 100 acres therein conveyed. That said Davis & Gregory stated to the plaintiffs, Davison & Baker, that a sale of the said 100 acres at that time would greatly prejudice their creditors; the land would not bring a fair price; and that it was worth far more than the amount of the said incumbrances. That thereupon the plaintiffs solicited the creditors of said Davis & Gregory, secured in the deed of trust to them, to raise the money to take up and purchase said Gholson note; and these plaintiffs did take up said Gholson note on March 17, 1890, as trustees for themselves and said other last-named creditors, who furnished the money for said purpose. That 10 of said creditors agreed to furnish the money for the purpose stated, and they signed an agreement in the following words: "We the undersigned creditors of Davis & Gregory, of Oxford, N. C, hereby agree to pay Geo. W. Davison and Chas.

[43 S.E. 917]

E Baker 10 per cent of our claims due us by said firm of Davis & Gregory, and which claims are secured by deed in trust dated September 15, 1887, for the purpose of protecting 100 acres of land, which is about to be sold under mortgage, and the said G. W. Davison and Charles E. Baker are authorized to purchase said mortgage note or do whatever is considered best in their judgment for all parties concerned." And they at once...