Lowdermilk v. Butler

• Decision Date: 23 November 1921
• Docket Number: 416.
• Parties: LOWDERMILK v. BUTLER.
• Court: North Carolina Supreme Court

109 S.E. 571

182 N.C. 502

LOWDERMILK v. BUTLER.

No. 416.

Supreme Court of North Carolina

November 23, 1921

Appeal from Superior Court, Moore County; Ray, Judge.

Action by Kenneth F. Lowdermilk against Benjamin F. Butler to settle title to land. Judgment for the plaintiff, and defendant appeals. No error.

A corporation holding a purchase-money mortgage with power of sale has an interest therein because of the power after assignment of the mortgage, so that such assignment does not defeat the priority of the mortgage over the lien of a judgment rendered before the property was conveyed to the mortgagor.

This is an action to settle the title to land, described in the pleadings, the plaintiff and defendant each claiming under the Piedmont Plantation Company, as the origin of title.

The Piedmont Plantation Company conveyed the land to A. Legler April 20, 1912, and on the same day A. Legler, to secure the purchase money, made a mortgage to it. The mortgage was recorded June 4, 1912, and the deed thereafter on August 27 1912.

On May 28, 1913, the Piedmont Plantation Company and R. W. Pempelly (who claimed in the deed to be the assignee of the mortgage) after sale under the power contained in the mortgage conveyed the land to the plaintiff by deed, which is copied in the record.

To establish title in himself, and disprove title in plaintiff the defendant relied on the following records and deeds introduced in evidence by him:

(1) A judgment in favor of C. S. Fry and against Alexander Legler, rendered before a justice of the peace on September 25, 1909, and docketed in the superior court of Moore county on July 21, 1911, on a transcript of said judgment from the justice of the peace. The transcript itself was issued by the justice of the peace on the same date as the rendition of the judgment, and was docketed in the superior court more than 12 months from said date, but prior to the date of the original deed from Piedmont Plantation Company to Alexander Legler, and some time before the mortgage from Legler to Piedmont Plantation Company, upon which plaintiff relies to make out his title, was recorded.

(2) Deed from D. Al. Blue, sheriff of Moore county, to George H. Humber, dated August 21, 1913, and recorded August 23, 1913, in Book of Deeds No. 57, at page 244. This deed is set out in the record in full, from which it will appear that it was made pursuant to a sale of the land in controversy under an execution issued on the judgment of C. S. Fry against Alexander Legler aforesaid, at which sale George H. Humber became the purchaser.

(3) The evidence of M. M. Stutts, shown in the record, that Alexander Legler was a nonresident of the state during the year 1913, the date of the sale of the land by the sheriff of Moore county under the execution to George H. Humber.

(4) Several successive deeds, beginning with that of George H. Humber and wife, conveying ultimately such title as Humber received under the sheriff's deed to the defendant.

(5) The record of the dissolution of Piedmont Plantation Company, a corporation, as contained in Record Book of Incorporations No. 2, at page 32, in the office of the clerk of the superior court of Moore county. This record is fully set out in the case on appeal, from which it will appear that by voluntary proceedings as provided by law Piedmont Plantation Company was dissolved as a corporation by the Secretary of State, on the 5th day of July, 1912, prior to the execution of its deed to plaintiff, on which he relies for title, which is dated May 28, 1913.

The following is section 1194 of the Consolidated Statutes, relating to conveyances of property belonging to dissolved corporations:

"Directors to be Trustees; Powers and Duties.--On the dissolution in any manner of a corporation, unless otherwise directed by an order of the court, the directors are trustees thereof, with full power to settle the affairs, collect the outstanding debts, sell and convey the property, and, after paying its debts, divide any surplus money and other property among the stockholders. The trustees have power to meet and act under the by-laws of the corporation, and, under regulations to be made by a majority, to prescribe the terms and conditions of the sale of such property, and they may sell all or any part for cash, or partly on credit, or take mortgages or bonds for part of the purchase price for all or any part of the property. They have power to sue for and recover the said debts and property in the name of the corporation, and are suable in the same name for the debts owing by it, and are jointly and severally responsible for such debts only to the amount of property of the corporation which comes into their possession as trustees."

There was a verdict for the plaintiff, and from the judgment thereon the defendant appealed.

U. L. Spence, of Carthage, for appellant.

H. F. Seawell, of Carthage, for appellee.

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

We will consider the questions raised by this appeal in the order of their statement in the assignments of error, briefs, and argument before us.

First. The plaintiff attacks the last deed on the ground that on July 5, 1912, the Secretary of State certified to the clerk of the superior court of Moore county, that the Piedmont Plantation Company on that date had filed its consent in writing to the dissolution of the corporation, executed by the requisite number of stockholders, Raphael W. Pempelly being the agent therein named and in charge thereof, and that the corporation could not thereafter convey its property. This contention, as we think, is based upon a misconception of the statute. The corporation did not cease to exist at the date of the filing of the certificate of dissolution, as contended by appellant, but continued three years from that date as a body corporate, by express provision of Consol. Statutes, § 1193, which is that all corporations whose charters expire by their own limitation or are annulled by forfeiture or otherwise shall continue to be bodies corporate for three years after the time when they would have been dissolved, "for the purpose of prosecuting and defending actions by or against them, and of enabling them gradually to settle and close their concerns, to dispose of their property, and to divide their assets," etc. But the defendant relies upon the provisions of the next section (1194), which is above set out in our statement of the case. It appears therefrom that the "directors, as trustees, may sell and convey the corporate property upon such terms as they may prescribe," but this does not exclude the idea that, in conveying the property, they may not do so in the name of the corporation in whom the legal title was originally vested. It may be conveyed in the name of the corporation by their order or direction, or perhaps they may convey it in their own names as directors and trustees. It appears in this record, and in the certificate of probate, as a fact judicially found by the clerk of the superior court, that the deed was made in the name of the corporation by order of the directors, who, under the statute, were the trustees. So that the statute was fully complied with.

By reason of his appointment as agent in the dissolution proceedings of the corporation, it is probable that R. W. Pempelly concluded he was thereby made the assignee of the mortgage, and, out of abundance of caution, joined the corporation in the sale of the land and in the execution of the deed to the plaintiff. If he was not such assignee, his joining in the sale and in the execution of the deed were harmless acts.

Second. The defendant, through his counsel, further contends that on September 25, 1909, C. S. Frye recovered a judgment for $26.89 against A. Legler before a justice of the peace of Moore county, which was filed and docketed in the superior court on July 21, 1911, more than a year after its rendition, and that execution issued on it from the superior court, and the land in controversy was levied on as the property of A. Legler and sold and conveyed by the sheriff to G. H. Humber, from whom, by mesne conveyances, the defendant claims title.

It is well to observe, in passing, that the judgment roll introduced in evidence by defendant shows that all of the executions issued to the sheriff on this judgment were returned by him without action, even down to May 6, 1918, and the clerk was still issuing executions thereon so late as April 1, 1921.

In order to sustain the claim of title by the defendant under the sheriff's sale and deed, the appellant's counsel frankly admitted that it is necessary for this court to overrule several of its well-considered decisions heretofore rendered and to upset a doctrine which has existed and been recognized as a rule of property for well-nigh half a century. Williams v. Williams, 85 N.C. 383; Woodard v. Paxton, 101 N.C. 26, 7 S.E. 469; Cowen v. Withrow, 114 N.C. 558, 19 S.E. 645. No good reason has been advanced for such action on our part. What this court would decide if the question were res nova or presented now on its legal merits for the first time it is futile to declare, as we are satisfied that those cases should stand unmolested after such repeated adjudications, as it is to the interest of the state that there should at some time and somewhere be an end of controversy. Some questions may fairly and justly be considered as closed by the former decisions of this court, and especially where rights of property are involved, and even those of contracts in some cases, in order that it may be known how to deal safely in our daily transactions. We should impart firmness and stableness to them, so that what we have declared to be the law in the past may not be easily assailed and...