Jones v. Casstevens

• Decision Date: 16 December 1942
• Docket Number: 666.
• Citation: 23 S.E.2d 303,222 N.C. 411
• Parties: JONES v. CASSTEVENS et al.
• Court: North Carolina Supreme Court

23 S.E.2d 303

222 N.C. 411

JONES v. CASSTEVENS et al.

No. 666.

Supreme Court of North Carolina

December 16, 1942

Herbert S. Falk, of Greensboro, for plaintiff-appellant.

Frazier & Frazier, of Greensboro, for defendants-appellees.

STACY Chief Justice.

Was it the intention of the parties that in case of a sale of the encumbered premises under foreclosure, either of the first or second deed of trust, payment of the defendants' note should be made exclusively out of funds derived from such foreclosure? The trial court answered in the affirmative, and we approve.

There are four principal reasons inducing the conclusion:

First. It is axiomatic in the law of contracts that "as a man consents to bind himself, so shall he be bound." Elliott on Contracts (Vol. 3) Sec. 1891; Nash v. Royster, 189 N.C. 408, 127 S.E. 356. Here, upon the face of the note it is stipulated that the defendants are "not to be liable for any deficiency judgment." That is to say, in case of default and sale of the property under foreclosure if it fail to bring enough to satisfy in whole any part (either the first or second installment) of the note held by the plaintiff, the defendants are not to be sued for any deficiency. The stipulation was inserted with a view to a possible foreclosure and the attendant sacrifice or loss of defendants' house and lot, in which event, the defendants were to be relieved of any further liability on the note in suit. Such is the agreement.

Second. It is permissible for the parties to agree at the time of the execution of a note, that it shall be paid only in a certain manner, i.e., out of a particular fund, by the foreclosure of collateral, or the collection of rents, etc Wilson v. Allsbrook, 203 N.C. 498, 166 S.E. 313, and cases there assembled. The stipulation in the instant note is, that in the case of default and a sale of the collateral security under foreclosure, the makers are to be relieved from any deficiency liability.

While this provision is in writing--having been inserted in the

note--it is the holding with us that "parol evidence is admissible to show an agreed mode of payment and discharge other than that specified in the bond." Brown on Parol Evidence, Sec. 117, National Bank v. Winslow, 193 N.C. 470, 137 S.E. 320.

In Evans v. Freeman, 142 N.C. 61, 54 S.E. 847, the alleged agreement was, that the note "should be paid out of the proceeds of the sales of the stock-feeder". The court held that this part of the agreement, though resting in parol, could be shown as it did not conflict with what had been written. To like effect is the holding in National Bank v. Winslow, 193 N.C. 470, 137 S.E. 320, 321, where the alleged agreement was, that the note "was to be paid from the sale of peanuts then in the possession of [the payee]". See, also, Wilson v. Allsbrook, supra [203 N.C. 498, 166 S.E. 314], where the alleged agreement was, that the note "was to be paid from rents collected by the defendant." Speaking to the subject in Kindler v. Trust Co., 204 N.C. 198, 167 S.E. 811, 812, it was said: "In proper cases it may be shown by parol evidence that an obligation was to be assumed only upon a certain contingency, or that payment should be made out of a particular fund or otherwise discharged in a certain way, or that specified credits should be allowed."

Third. When a written instrument is presented for construction, the question for decision is, What did the parties intend by their agreement? Lewis v. May, 173 N.C. 100, 91 S.E. 691. If there be no dispute as to the terms, and they are plain and unambiguous, there is no room for construction. The contract is to be interpreted as written. American Potato Co. v. Jenette Bros., 172 N.C. 1, 89 S.E. 791; Patton v. Lumber Co., 179 N.C. 103, 101 S.E. 613; Cole v. Fibre Co., 200 N.C. 484, 157 S.E. 857; Whitley v. Arenson, 219 N.C. 121, 12 S.E.2d 906. "If the words employed are capable of more than one meaning, the meaning to be given is that which it is apparent the parties intended them to have". King v. Davis, 190 N.C. 737, 130 S.E. 707, 709.

The law is stated with accuracy and clarity by Hoke, J., in Simmons v. Groom, 167 N.C. 271, 83 S.E. 471, 473, as follows "In [Atlantic & N.C.] R. Co. v. [ Atlantic & N.C.] Co., 147 N.C. [ 368], 382,...