Kennedy v. Atlantic Trust & Banking Co.

• Decision Date: 20 October 1920
• Docket Number: 282.
• Citation: 104 S.E. 464,180 N.C. 225
• Parties: KENNEDY v. ATLANTIC TRUST & BANKING CO.
• Court: North Carolina Supreme Court

104 S.E. 464

180 N.C. 225

KENNEDY v. ATLANTIC TRUST & BANKING CO.

No. 282.

Supreme Court of North Carolina

October 20, 1920

Appeal from Superior Court, Hanover County; Allen, Judge.

Action by Rosa S. Kennedy against the Atlantic Trust & Banking Company. From a judgment for plaintiff, defendant appeals. No error.

An exception to the admission of evidence must be good as to all the evidence embraced by the objection.

The assignments of error follow:

First assignment of error: "That the court erred in allowing the question, 'Did your wife borrow any money from the Atlantic Trust & Banking Company?' and answer 'No,' after objection on the part of the defendant and exception made thereto, as set forth in the first exception, and makes this its first assignment of error."

Second assignment of error: "That the court erred in refusing to nonsuit the plaintiff at the close of the plaintiff's testimony, as set forth in the fourth exception, and makes this its second assignment of error."

Third assignment of error: "That the court erred in permitting the plaintiff's witness, T. A. Sheppard, to testify as to a conversation and statements made between the Hanover Realty Company and witness, in the absence of the defendant, as set forth in the fifth exception, and makes this its third assignment of error."

Fourth assignment of error: "That the court erred in permitting plaintiff's witness C. T. McKeithan to testify, after objection, as to what effects and furniture was removed from the restaurant by the Hanover Realty Company after the transfer by Kennedy to said company, as set forth in the sixth exception, and defendant assigns this as its fourth assignment of error."

Fifth assignment of error: "That the court erred in permitting the witness Ricaud to testify as to a conversation had between him and the former president, Evans, of the defendant company after the transfer of the restaurant to the Hanover Realty Company, as set forth in the seventh and eighth exceptions, and defendant makes this its fifth assignment of error."

Sixth assignment of error: "That the court erred in failing to nonsuit the plaintiff, upon the renewal of the motion by the defendant, at the close of the testimony, as set forth in the ninth exception, and defendant makes this its sixth assignment of error."

Seventh assignment of error: "That the court erred in holding as a matter of law that he would charge the jury that the debt has been satisfied by operation of law, and in failing to submit the same to the jury, as set forth in the tenth exception, and defendant makes this its seventh assignment of error."

Eighth assignment of error: "That the court erred in rendering the judgment set forth in the eleventh exception, and defendant makes this its eighth assignment of error."

This is an action brought by plaintiff to restrain defendant from foreclosing a mortgage made by her to defendant. The mortgage was made on October 31, 1911, to secure two notes, under seal, of $750 each, one payable one year after date and the other two years after date, both signed by plaintiff and her husband on the 31st day of October, 1911. After the maturity of the two notes, the defendant, on the 29th day of October 1915, under the power in the mortgage, advertised the property for sale on the 29th day of November, 1915, when the plaintiffs sued out an injunction, which was continued to the hearing. The plaintiffs claimed in their complaint:

(1) That the plaintiff mortgaged her interest in the land with her husband, which was an estate by entirety, with the understanding and agreement between her and defendant that defendant would exhaust the mortgage on the personalty before selling the realty; and

(2) That there was an agreement between plaintiff's husband and the defendant bank that $1,500 of the purchase money of the restaurant, which was sold, should be applied to the discharge of the indebtedness of plaintiff to the bank.

This was denied in the answer, and thereon issues of fact and law arose. Defendant's second assignment of error is the failure of the court to nonsuit the plaintiff at the close of plaintiff's testimony; the motion having been renewed at the close of all the testimony.

The following facts appear to be practically undisputed, though they may not be admitted by the pleadings:

On October 31, 1911, J. R. Kennedy, the husband of the plaintiff, owned and was conducting a restaurant in the city of Wilmington, and for reasons satisfactory to Kennedy he applied to the defendant for a loan, offering the restaurant business and its fixtures as security therefor by way of mortgage on the restaurant furniture and fixtures, and certain real property described in the mortgage. At that time J. R. Kennedy and his wife owned, as tenants by entireties, the real estate covered by the mortgage afterwards executed and attempted to be foreclosed under the power of sale, which foreclosure was restrained by the court.

At the time of J. R. Kennedy's application for the loan from the bank, the real estate owned by him and his wife was mortgaged to the People's Savings Bank for $500, as Kennedy wanted money to purchase improvements and equipment for his restaurant. The result was that the bank required the payment of the People's Bank's prior mortgage for $500, and loaned Kennedy $1,500. Five hundred dollars were to pay the People's Bank's mortgage, and $1,000 for the use of the restaurant. Kennedy desired only to mortgage the restaurant but the bank insisted upon a mortgage on the restaurant and on the real estate, and the bank took the two mortgages to secure the loan. A chattel mortgage on the restaurant and a mortgage on the real estate, both securing the same two notes, which the bank required to be signed by both Kennedy and his wife, covering the $1,500 loaned, and with the money so loaned $500 was paid to the People's Bank in cancellation of its mortgage, and the residue was given to the borrower, J. R. Kennedy, to use in his restaurant. While the notes were signed by both husband and wife, the wife did not borrow the money, nor ask for it, and the loan was in truth and in fact to J. R. Kennedy, and the bank knew this fact, and dealt with J. R. Kennedy personally, and Kennedy personally for a while paid the interest on this debt.

Mr. Henry Heyer, an attorney of the Wilmington bar, was selected to draw, and did draw, the papers and examine the title to the real estate for the bank, and with part of the funds loaned by the bank paid the People's Bank mortgage, though he claimed he was J. R. Kennedy's attorney in the matter, and was paid by Kennedy. Mr. Levi Carter, of the Hanover Realty Company, went with Kennedy to make arrangements with the bank for this loan.

Some time afterwards Carter, for himself, the Hanover Realty Company, and one Max Meyers, made a trade with Kennedy for the purchase of the restaurant mortgaged to the bank, whereby Kennedy claims they were to pay him for the restaurant $2,500, $1,500 of which was paid to the bank in satisfaction of the notes secured by the chattel mortgage and the real estate mortgage, and the residue, $1,000, was to go and be applied as a credit toward the payment for the Lloyd place that Kennedy was to buy from the purchasers of the restaurant, and Kennedy was to give a second mortgage to the purchasers of the restaurant on the Lloyd place for an additional $1,000 of the purchase price of the Lloyd place; Kennedy to take the Lloyd place, subject to a mortgage which was then on it, and which had been given by Carter and Meyers and the Hanover Realty Company. The second mortgage was to be due seven years after its date.

The terms of the two trades being agreed upon, Mr. Henry Heyer was called in by the parties to prepare the papers for the consummation of them, and in preparing the papers, he asked, "Who is to pay the mortgage on the restaurant?" and was informed that Carter was to pay it. Heyer went to the defendant bank and asked them if they would cancel the mortgage upon the restaurant (certainly informing them why he asked the question), and upon being informed by the bank that it would not cancel the mortgage on the restaurant, he informed the bank that the restaurant was being sold, and told the bank that he would collect the money for the bank. Thereupon the bank agreed to cancel the mortgage and let Heyer collect it.

The restaurant was sold in accordance with the agreement that Carter was to pay the mortgage and Heyer to collect it, and the bank gave to Heyer the mortgage, marked "Canceled," and Kennedy signed the bill of sale conveying the restaurant, and delivered it to the purchasers but before that part of the trade could be completed, and the title to the Lloyd place examined, Kennedy was called from the city to the bedside of his sick father, and the mortgages to be given by Kennedy for the balance of the purchase price for the Lloyd place were never executed and delivered--Kennedy...