First Carolinas Joint Stock Land Bank v. Page

• Decision Date: 28 February 1934
• Docket Number: No. 439.,439.
• Citation: 173 S.E. 312,206 N.C. 18
• Parties: FIRST CAROLINAS JOINT STOCK LAND BANK. v. PAGE et al.
• Court: North Carolina Supreme Court

173 S.E. 312

206 N.C. 18

FIRST CAROLINAS JOINT STOCK LAND BANK.

v.PAGE et al.

No. 439.

Supreme Court of North Carolina.

Feb. 28, 1934.

Appeal from Superior Court, Richmond County; Harding, Judge.

Action by the First Carolinas Joint Stock Land Bank against H. A. Page, Jr., and others. Judgment in favor of the plaintiff, and the defendant Salvation Army appeals.

Error, and cause remanded in accordance with opinion.

Civil action to recover balance due on three promissory notes executed by H. A. Page, Jr., Frank Page, and J. R. Page, payable to plaintiff, and secured by deeds of trust on three separate tracts of land, immediately thereafter conveyed to Broad-acres Orchard Company, Inc., and subsequently conveyed to the Salvation Army, a Georgia corporation, with assumption of liability and agreement to pay said outstanding indebtedness on the part of the said last-named grantee.

The facts upon which the case turns are as follows:

(1) On April 14, 1927, in consideration of three several loans, H. A. Page, Jr., executed and delivered to the plaintiff his note in the sum of $45,000, with J. R. Page and Frank Page sureties thereon, and secured by deed of trust on 1, 906 acres of land; Frank Page executed and delivered to plaintiff his note in the sum of $47,000, with H. A. Page, Jr., and J. R. Page sureties thereon, and secured by deed of trust on 1, 500 acres of land; and J. R. Page executed and delivered to plaintiff his note in the sum of $33,000, with H. A. Page, Jr., and Frank Page sureties thereon, and secured by deed of trust on 1,-564 acres of land. These three tracts of land adjoin and make a total of 5, 030 acres, more or less, known as "Broadacres, " and are situate in Richmond and Scotland counties, N. C.

(2) The said loans were negotiated pursuant to agreement and on behalf of Broad-acres Orchard Company, a corporation owned principally by the Pages and controlled by. H. A. Page, Jr.; and immediately thereafter, April 28, 1927, the said three tracts of land were conveyed to said corporation, subject to the several deeds of trust above mentioned, but without agreement on the part of said grantee to assume and pay the mortgage debts. The aggregate balance of these loans was approximately $114,000 at the beginning of the year 1931.

(3) At the same time the Salvation Army was the owner of a business piece of property situate in Norfolk, Va., and subject to a deed of trust securing a note in the sum of $125,-000 held by the Massachusetts Mutual Life Insurance Company. It is suggested that neither Broadacres nor the Norfolk property was worth the indebtedness outstanding against it.

(4) On March 7, 1931, H. A. Page, Jr., and the Salvation Army, "for and in consideration of the mutual promises, agreements and benefits hereinafter mentioned, " entered into a written contract by the terms of which:

A. Page agreed to convey or cause to be conveyed to the Salvation Army "Broadacres" subject only to the indebtedness held by the plaintiff and secured by the three deeds of trust above mentioned, "which said three deeds of trust the party of the second part (Salvation Army) obligates and agrees to assume and discharge in accordance with the terms and maturity dates set forth and provided in said amortization notes thereby secured, and save the party of the first part harmless from any claim or demand by reason thereof."

B. The Salvation Army agreed to convey the Norfolk property to Page subject only to the indebtedness held by the Massachusetts Mutual Life Insurance Company, "which said encumbrance the said H. A. Page, Jr., agrees to take and hereby assumes the full payment and discharge of the indebtedness thereby secured * * * further agrees to save harmless the said Salvation Army from any and all further claims or demands which may be made thereunder."

(5) The agreement of the Salvation Army to assume and to pay the indebtedness held by the plaintiff on Broadacres was dependent upon the agreement of H. A. Page, Jr., to assume and to pay the indebtedness held by the insurance company on the Norfolk property.

(6) Pursuant to the agreement of March 7, between H. A. Page, Jr., and the Salvation Army, an exchange of the properties was effected by the simultaneous execution and delivery of deeds dated March 14, 1931, the Army conveying its Norfolk property to H. A. Page, Jr., with assumption clause inserted therein, and Page causing the Broadacres Orchard Company to execute and deliver to the Army deed for Broadacres in which it is stipulated that "the party of the second part by the acceptance of this deed hereby obligates and agrees to pay off and discharge in accordance with the terms, tenor, and conditions of the said three deeds of trust, and the three amortization notes thereby respectively secured, and thereby save the party of the first part, its successors, or the grantors of said deeds of trust and the makers ofsaid amortization notes, or the endorsers thereon, their executors, administrators or representatives, harmless, released and fully discharged from any claim or demand of any kind or nature, by reason of said deeds of trust or notes, the same having been assumed and taken over by the party of the second part as a part of the consideration for the execution and delivery of this deed."

(7) On March 14, 1931, pursuant to contract between H. A. Page, Jr.. and J. Rush Shull et ux., Eula Haynes Shull, the Army conveyed Broadacres to the Shulls, with assumption agreement on their part to assume and pay plaintiff's debt, but the Shulls were later adjudged bankrupts and their obligation thus discharged.

(8) Soon thereafter H. A. Page, Jr., at the instance of the plaintiff, sent to the Army three assumption agreement forms, in accordance with the practice of plaintiff bank, which were returned unexecuted, counsel for the Army stating: "This document appears to be an original undertaking or agreement with the First Carolinas Joint Stock Land Bank of Columbia, S. C, with whom the Salvation Army has no contract. * * * It is my view that each contracting party is bound to the other only if the other duly performs the conditions of his contract"

(9) At no time when performance was due on his part has H. A. Page, Jr., been able and willing to discharge his obligations to the Army, but, on the contrary, he has abandoned the same and treated them as terminated.

(10) Nothing has been paid to the plaintiff by the Army, nor has it recognized any direct obligation to the plaintiff, but, on the contrary, it has insisted that the failure and wrongful refusal of H. A. Page, Jr., to carry out his dependent promises released the Army from any liability to the plaintiff, if any ever vested or attached.

(11) There are many other adminicular facts appearing of record, but the foregoing will suffice for a proper understanding and disposition of the case.

Upon the issues joined between plaintiff and the Army, the other defendants conceding their liability but contending...