Harris v. Cheshire
| Decision Date | 04 March 1925 |
| Docket Number | 60. |
| Citation | 126 S.E. 593,189 N.C. 219 |
| Parties | HARRIS ET AL. v. CHESHIRE ET AL. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Edgecombe County; Devin, Judge.
Action by Joe E. Harris and others against John Cheshire and others. From the judgment rendered, plaintiff W. M. Wiggins and certain defendants appeal. Affirmed.
As between themselves, debtor and creditor may waive rights and liabilities arising out of instrument by which debtor secured creditor.
This action, begun on July 17, 1922, was referred to Mr. F. E Winslow. The referee, having heard the same, filed his report, setting out in full his findings of fact and conclusions of law. Exceptions were filed to the report by both plaintiffs and defendants. The action was then heard upon the report and these exceptions. From the judgment rendered, plaintiff W. M. Wiggins and defendants Farmers' Banking & Trust Company, George A. Holderness, and John Cheshire, upon exceptions thereto duly noted, appealed to the Supreme Court. The essential facts involved in these appeals are as follows:
1. On January 7, 1920, a paper writing, in form an agricultural lien and deed of trust, executed by John Cheshire and wife parties of the first part, to Farmers' Banking & Trust Company, party of the second part, and George A. Holderness party of the third part, was duly recorded in Edgecombe county.
2. By virtue of this paper, Farmers' Banking & Trust Company acquired a lien for advancements, not to exceed $7,500, upon all the crops to be made by John Cheshire on the "Ballyhack farm" in Edgecombe county, during the year 1920; the indebtedness for said advancements was evidenced by a note for $7,500, executed by John Cheshire, payable to Farmers' Banking & Trust Company and due on November 1, 1920. For the purpose of further securing the payment of said note, parties of the first part conveyed to George A. Holderness, party of the third part, the following described real and personal property, to wit: (1) All crops of every kind grown by John Cheshire on said farm during the year 1920; (2) all mules and horses, one cotton gin and equipment, and all farming implements on said farm and used in the cultivation of the same; (3) the "Ballyhack farm," containing 824 acres; and (4) one vacant lot in the town of Tarboro, known as the "home place" of John Cheshire. The said paper writing provided that, "if John Cheshire shall fail or neglect to pay the note for $7,500, when due, and payable, it shall be lawful for and the duty of the said party of the third part," after advertisement, to sell the said property, real and personal, to the highest bidder for cash, and to convey the same to the purchaser; and out of the proceeds of the sale, he shall pay said note for $7,500 and interest, and the costs and expenses of the sale, "first retaining out of the proceeds of the sale the usual commission of 5 per cent. for making said sale" and the surplus, if any, he shall pay to John Cheshire.
The following clause appears in said paper writing:
"In making the aforesaid sale, it is distinctly understood and agreed by and between all the parties thereto that the said George A. Holderness, trustee, shall first offer for sale all crops then on hand and unsold; he shall next sell all team and all personal property on said farm; he shall next sell the lot of the said John Cheshire in the town of Tarboro; he shall next sell the undivided one-half interest of John Cheshire in and to the farm, hereinbefore fully described."
3. In the spring of 1920, after the registration of the said paper writing, John Cheshire began the erection of a residence on the vacant lot in the town of Tarboro, known as the "home place," at an expense, approximately, of $20,000. The claims and liens of the plaintiffs, involved in this action, are for labor done, and material furnished in the erection and construction of the said residence upon this lot.
4. The several plaintiffs herein acquired liens for labor done or material furnished, on said residence and lot, upon claims filed, as of the dates and for the amounts as follows:
| Name. | Claim Filed. | Date of Lien. | Amount. |
| ------------------- | -------------- | -------------------- | ----------------- |
| 1. Joe E. Harris ............ | Feb. 16, 1921 | April 6, 1920 $ | 355.06 |
| 2. Pender Hardware Company .. | Feb. 16, 1921 | May 31, 1920 | 264.81 |
| 3. F. G. Davis .............. | Feb. 16, 1921 | Aug. 5, 1920 | 340.19 |
| 4. Johnson & Wiggins ........ | Feb. 16, 1921 | Aug. 16, 1920 | 438.62 |
| 5. W. M. Wiggins ............ | Mar. 30, 1921 | Aug. 21, 1920 | 1,961.95 |
| W. M. Wiggins ............ | Mar. 30, 1921 | Mar. 30, 1921 | 112.41 |
| W. M. Wiggins ............ | Mar. 30, 1921 | Mar. 30, 1921 | 19.26 |
Each of the liens of plaintiffs, as aforesaid, was duly and regularly recorded by the clerk of the superior court of Edgecombe county, on the lien docket in his office, and judgments, thereafter obtained on each claim, declaring the same a lien on said residence and lot, in favor of each plaintiff, respectively, and against the defendant John Cheshire were duly and regularly docketed in said office.
5. On June 8, 1920, there was recorded in the office of the register of deeds of Edgecombe county a mortgage deed, executed by John Cheshire and wife, conveying to Edgecombe Homestead & Loan Association, to secure the sum of $7,000, for money borrowed, the lot known as the "home place." On December 8, 1920, a mortgage deed from John Cheshire and wife, conveying the said lot to said Edgecombe Homestead & Loan Association, to secure an additional loan of $3,000, was recorded in the office of the register of deeds of Edgecombe county.
6. On October 19, 1920, there was recorded in the office of the register of deeds of Edgecombe county a paper writing, in form an agricultural lien and deed of trust, executed by John Cheshire and wife, conveying to George A. Holderness, trustee, to secure payment of note for $2,500 to Farmers' Banking & Trust Company, the same real and personal property as that described in the paper writing recorded on January 7, 1920. This paper writing contains the same provisions with respect to the sale of said property, upon default in payment of indebtedness secured thereby, as are contained in said paper writing recorded January 7, 1920. The indebtedness secured therein, together with the paper writing, was thereafter for value, but after maturity transferred and assigned to T. P. Cheshire, who is now and has at all times since been the owner thereof, by virtue of such transfer and assignment.
7. Prior to April 15, 1922, the farm conveyed by John Cheshire and wife to George A. Holderness, trustee, in the paper writing recorded on January 7, 1920, was sold under a mortgage, executed and recorded prior to January 7, 1920, and out of the proceeds of said sale, the sum of $5,782.22 was paid by the mortgagee in said mortgage to Farmers' Banking & Trust Company and credited on the note for $7,500, secured in the paper writing recorded on January 7, 1920. Said mortgage was prior to the claims of all parties to this action, either plaintiffs or defendants, upon said farm.
8. On April 15, 1922, George A. Holderness, trustee, under the power of sale contained in the paper writing recorded on January 7, 1920, sold the personal property, conveyed to him by said paper writing, for $800, and also, on said date, sold and conveyed the "home place," upon which the residence had been erected, for $10,975. After paying the costs and expenses of the sale, and taxes and assessments upon the said "home place," and retaining commissions of 5 per cent. on the gross amount of the sale, the said Geo. A. Holderness, trustee, paid the balance due on the note to Farmers' Banking & Trust Company, to wit, $2,435.63; and the surplus, to wit, $7,538.53, he paid to Edgecombe Homestead & Loan Association, upon the indebtedness of John Cheshire to said association, secured in the mortgages recorded on June 8, 1920, and on December 8, 1920.
9. The purchaser, at said sale of the personal property sold by the trustee, was T. P. Cheshire, who was the last and highest bidder in sum of $800. At date of sale, the said T. P. Cheshire was the owner of the indebtedness and paper securing same, executed by John Cheshire and recorded October 19, 1920. The trustee did not collect from said T. P. Cheshire the amount of his bid, but, upon demand of said T. P. Cheshire, consented that same should be credited upon the indebtedness secured by the junior mortgage.
10. The cotton, tobacco, and peanuts made on the "Ballyhack farm" during the year 1920, upon which Farmers' Banking & Trust Company had lien, and which were conveyed to George A. Holderness, trustee, by the paper writing recorded on January 7, 1920, were sold by John Cheshire, and proceeds deposited to the credit of John Cheshire, subject to his check, in the Farmers' Banking & Trust Company. Neither the Farmers' Banking & Trust Company nor George A.
Holderness trustee, took or demanded possession of said crops, or the proceeds of the sale of the same. Geo. A. Holderness on January 7, 1920, and at all times since was and is now chairman of the board of directors of Farmers' Banking & Trust Company, and both he and said company had actual knowledge of the erection of said residence upon the lot known as the "home place," of the sale of the said crops by John Cheshire, and of the deposit by him of the proceeds of said sale with said company. Said John Cheshire withdrew by checks the amounts so deposited by him, and no part of the proceeds of the sale of said crops was applied to the payment of or as credit upon the note held by the said Farmers' Banking &...
To continue reading
Request your trial