H. Weill & Bros. v. Davis

• Decision Date: 03 March 1915
• Docket Number: 145.
• Parties: H. WEILL & BROS. v. DAVIS.
• Court: North Carolina Supreme Court

84 S.E. 395

168 N.C. 298

H. WEILL & BROS. v. DAVIS.

No. 145.

Supreme Court of North Carolina

March 3, 1915

Appeal from Superior Court, Wayne County; Bond, Judge.

Action by H. Weill & Brothers against D. G. Davis. Judgment for defendant, and plaintiffs appeal. Reversed.

The facts of the case are these: W. H. Davis conveyed certain land to D. G. Davis, who alleged that the deed did not include all of the land contracted to be sold and conveyed to him. He executed a mortgage to W. H. Davis to secure the purchase money, or a part thereof, consisting of three notes amounting, in all, to $500. These notes and the mortgage were assigned by W. H. Davis and wife to James M. McGee, trustee who sold the land, after due advertisement under the power contained in the mortgage, and executed a deed for the same to the plaintiffs, who were the purchasers. The following verdict was returned by the jury:

Where the land itself was sufficiently referred to in the assignment of a mortgage thereon, the assignee took a legal title thereto sufficient to support a power of sale in him.

Language used in assignment of mortgage held to indicate intention of assignors to convey the land itself, as well as the security so as to authorize the assignee to execute the power of sale.

"(1) What sum is due by defendant, D. G. Davis, on notes referred to in complaint? Answer: $500 and interest from October 30 1906. (2) Did W. H. Davis agree to convey to defendant, D. G Davis, land which was not included within the boundaries of deed made in pursuance of said contract? Answer: Yes. (3) If so, what damage, if any, did the defendant, D. G. Davis, sustain thereby? Answer: $550. (4) What was the rental value of land described in complaint that defendant kept possession of during year 1914? Answer: $75. (5) Are plaintiffs the owners and entitled to the possession of lands described in the complaint? Answer: No."

The court adjudged that the assignment of W. H. Davis and wife and the deed of James M. McGee, trustee, to the plaintiffs, were void and of no effect, and that the mortgage by D. G. Davis to W. H. Davis and wife be canceled as having been satisfied, as appeared from the verdict; the judge holding that the assignment did not confer any power on James M. McGee to sell under the mortgage, and that plaintiff acquired no right superior to that of the defendant, D. G. Davis. The agreement of the parties as to the question involved and the assignment of W. H. Davis and wife to James M. McGee are as follows:

"Plaintiffs claim title under an assignment of a mortgage from one W. H. Davis to James McGee, trustee, and a deed from McGee, assignee, to the plaintiffs in foreclosure of the mortgage. It is agreed that if the assignment is sufficient to authorize the said McGee, trustee, to make the sale and pass the title of the land to the plaintiffs, they are the owners of the land; if the assignment was not sufficient to authorize McGee, trustee, to make the sale and pass the title, the plaintiffs are not the owners of the land.

The assignment was duly registered in the office of the register of deeds in said Wayne county on the 20th day of June, 1913, Book 115, page 359, and is in these words and figures: "North Carolina, Wayne County.

This indenture, made this 20th day of June, 1913, by and between W. H. Davis and wife, Louvenie E. Davis, of the county of Wayne, state of North Carolina, parties of the first part, and James M. McGee, trustee, of said county and state of North Carolina, party of the second part witnesseth: That, whereas, the said parties of the first part are the holders of two certain notes amounting to $500 and secured by first mortgage on real estate to secure the payment of the same, which mortgage deed is duly recorded in the registry of Wayne county, in Book 91, at page 262. Said parties of the first part for and in consideration of the premises therein conveyed and the sum of $10.00, have bargained and sold and by these presents doth bargain and sell said notes and securities thereto belonging to the said W. H. Davis and wife, Louvenie E. Davis, their heirs and assigns. And the said parties of the first part covenant to and with the said party of the first part, that they are seised of said premises in fee, and have right to convey the same in fee simple, and that the same is free from any incumbrances whatever, and that they will warrant the title to the same against the lawful claims of all persons whatsoever. Granting to the said parties of the first part, their heirs, executors and assigns, full power and authority to advertise said lands agreeable to the terms of said mortgage and apply the proceeds of the said sale to the discharge of said debt and interest on the same, and any surplus pay to the said D. G. Davis and wife, agreeably to the terms thereof. In testimony of which the said parties of the first part have hereunto set their hands and seals the day and year first above written.

W. H. Davis. [Seal.]

Louvenie Davis. [Seal.]"

"Probate in regular form."

"His honor, being of opinion that the assignment was insufficient to authorize the assignee to make the sale and pass the title of the land, answered the issue as a matter of law as follows: Are plaintiffs the owners and entitled to the possession of the land described in complaint? Answer: No."

Plaintiffs excepted and assigned as error that:

'His honor erred in holding as a matter of law that the assignment was insufficient to authorize McGee to make the sale and pass the title to the plaintiff, and in answering the issue as above set out."

Dortch & Barham, of Goldsboro, for appellants.

D. H. Bland and H. B. Parker, both of Goldsboro, for appellee.

WALKER, J. (after stating the facts as above).

The contention of the defendant, and the court held in accordance therewith, is that the assignment of W. H. Davis and wife to James M. McGee operated only upon the mortgage as a security for the debt, and not upon the land itself, which is necessary to be conveyed in order that the power of sale, which is appendant, or appurtenant, to the legal title, may pass to the assignee. This statement of the law is abstractly correct, but it does not apply to this case, as we hold that there is a sufficient reference to the land in this assignment to pass the legal title thereto, and consequently the power of sale to James M. McGee. Speaking to this question, in Williams v. Teachey, 85 N.C. 402, Chief Justice Smith said:

"It is just as necessary to the operation of a conveyance that its subject-matter should be specified, as the names of the parties between whom it operates. The assignment of a note secured by mortgage carries with it the mortgage security, the mortgagee being then a trustee for the owner of the note, the trusts of which may be enforced, and we are not prepared to say that an assignment of the mortgage deed is more than an expression in terms of what is implied in law from the act of assigning the debt secured. Hyman v. Devereux, 63 N.C. 624; 1 Jones Mortg. § 805. We are aware that in many of the states the strict legal relations of the parties resulting from the making of a mortgage have been changed, 'for the most part by statute,' remarks a recent author, 'so that a mortgage is regarded as a mere pledge, and the rights and remedies under it are wholly equitable, so that a second system has grown out of the first.' 1 Jones, Mortg. § 17. It is held that the mortgage, though conveying land, passes but a chattel interest, incidental to, and partaking of, the nature of the debt intended to be protected, and hence upon the death of the mortgagee it may be assigned by his personal representative. * * * Such is not the law in this state, and the distinction is maintained between the legal estate in the mortgagee and the equitable estate in the mortgagor created by the execution of the mortgage deed, while the latter is subject to dower and to sale under execution. Hemphill v. Ross, 66 N.C. 477; Ellis v. Hussey, 66 N.C. 501; Isler v. Koonce, 81 N.C. 378."

The court then decides that an assignment which does not in terms profess to act upon the land, the subject-matter of the deed of mortgage, nor upon the estate or interest which the assignor may have therein, but only upon the mortgage itself is not sufficient to pass the land, or the legal title thereto, and...