Elliott v. Smith

• Decision Date: 04 April 1917
• Docket Number: (No. 288.)
• Citation: 91 S.E. 954
• Court: North Carolina Supreme Court
• Parties: ELLIOTT v. SMITH.

91 S.E. 954

(173 N.C. 265)

ELLIOTT

v.SMITH.

(No. 288.)

Supreme Court of North Carolina.

April 4, 1917.

Appeal from Superior Court, Cumberland County; Connor, Judge.

Action by S. D. Scudder as receiver of the Fourth National Bank of Fayetteville, against John L. Smith, in which Charles Elliott as successor of the receiver was substituted as party plaintiff. Judgment for defendant, and plaintiff appeals. Affirmed.

This is an action commenced before the recorder's court of Cumberland county, in the name of S. D. Scudder, receiver of the Fourth National Bank, of Fayetteville, N. C, against John L. Smith. Judgment was rendered in the recorder's court in favor of the defendant, and the plaintiff appealed to the superior court. S. D. Scudder having resigned as receiver and Charles Elliott having been duly appointed his successor, he was substituted in the superior court as party plaintiff, and the action was tried at the February term, 1917, of Cumberland superior court. The defendant admitted the execution of the note sued on, amounting to $300, upon which there was a credit of $25, the note being dated January 7, 1913, payable to the Fourth National Bank, and signed O. Wadkins, which note was indorsed by defendant, Smith. It appeared from the evidence that Wadkins applied to the bank through A. W. Peace, cashier and vice president of the bank, for a loan of $300, some time prior to January 7, 1913, offering as security certain real estate. Peace refused to loan the money on this security, and later Wadkins came into the bank with Smith, on the 7th day of January, 1913, and the bank, through Peace, as cashier and active vice president, loaned the money on a note payable to the bank, indorsed by Smith. At the time this transaction was had with the bank, Smith delivered to the bank a note of $300, payable to Smith, and a mortgage securing same, dated January 7, 1913, the mortgage being also made to Smith. Smith testified that he took this mortgage as security for his indorsement, as he wanted some protection; that the mortgage was at that time a first mortgage on the property, worth at least $2,000; that he delivered same to Peace and asked him to have it recorded, and that he (Peace) said he would. The note and mortgage remained in the possession of the bank from January 7, 1913, up to the time of the receivership in February, 1916. It was not registered by the bank until September 14, 1914, prior to which time two other mortgages were registered on the same land, and the mortgage to one W. F. Smith & Co. was registered in May, 1913, and the property foreclosed there-under and sold to one Breece, at the price of $1,000. A. W. Peace testified that he had no understanding or agreement of any kind with Smith about recording the paper, that no registration fees were paid to him to have the same recorded, and that he simply held the note and mortgage payable to Smith at Smith's request. His honor held that if the jury should find that Peace, acting as an officer of the bank, agreed to have the mortgage recorded, and, relying on this promise, Smith delivered the unregistered mortgage to him, and took no further steps toward having it recorded, on account of Peace's promise, then it was the duty of the bank to have it properly recorded within a reasonable time, and if it failed so to do, they should answer the issue in favor of the defendant. Plaintiff excepted. There was a verdict and judgment for the defendant, and the plaintiff appealed.

Rose & Rose, of Fayetteville, for appellant.

Sinclair, Dye & Ray, of Fayetteville, for appellee.

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