Monte Enterprises, Inc. v. Kavanaugh, 823SC535

• Citation: 62 N.C.App. 541,303 S.E.2d 194
• Decision Date: 07 June 1983
• Docket Number: No. 823SC535,823SC535
• Parties: MONTE ENTERPRISES, INC. v. F. Patrick KAVANAUGH, Craven Rendering Company, a Corporation, Al Battle, William Best and N.C. Consolidated Hide Company, a Corporation.
• Court: North Carolina Court of Appeals

Page 194

303 S.E.2d 194

62 N.C.App. 541

MONTE ENTERPRISES, INC. v. F. Patrick KAVANAUGH, Craven Rendering Company, a

Corporation, Al Battle, William Best and N.C.

Consolidated Hide Company, a Corporation.

No. 823SC535.

Court of Appeals of North Carolina.

June 7, 1983.

Ward, Ward, Willey & Ward by Joshua W. Willey, Jr., New Bern, for plaintiff-appellant.

Taylor, Warren, Kerr & Walker by Robert D. Walker, Jr. and John Turner Walston, Goldsboro, for defendants-appellees Al Battle, William Best, and N.C. Consolidated Hide Co. PHILLIPS, Judge.

In suing the defendants for damage done to the real estate involved, the plaintiff, in substance, made the following allegations:

(1) That it was the holder of a purchase money deed of trust on said property.

(2) After said deed of trust and the note it secured was in default and while the foreclosure sale was being advertised, the defendants committed certain wasteful acts which damaged the property and diminished its value in various amounts.

(3) That thereafter the property "which was the plaintiff's sole security for that debt owed by the defendant Kavanaugh" to the plaintiff was sold at foreclosure on the 27th day of February, 1981; that there being no bidders at said foreclosure sale "the property was sold to plaintiff for the indebtedness due on said note together with the cost of the proceeding." [Emphasis supplied].

Manifestly, the plaintiff suffered no legal detriment because of the defendants' wasteful acts against the secured property, and the judgment dismissing its action was correct. The allegations plainly show that plaintiff's only interest in the land--a security interest to enforce collection of the debt due--was still of sufficient value even after the waste to enable the debt due it to be paid in full from the sale, along with the costs and expenses of foreclosure. Since that was all that the law and its security interest entitled it to, the defendants' otherwise tortious acts did no legal harm to the plaintiff and the suit was therefore deficient in that essential respect. That the plaintiff's interest in the property began and ended with the secured debt, and was limited to it, is made plain by the following principles of law long followed by our courts:

When a mortgage or deed of trust secures the payment of a specific debt the determinable estate of the mortgagee or trustee terminates the very instant the debt is paid. Barbee v. Edwards, 238 N.C. 215, 77 S.E.2d 646 (1953).

"The debt secured is the life of the mortgage and gives it vigor and efficacy. The essential effect and consequence of the discharge of the mortgage debt is the discharge of the mortgage itself." Liberty Mfg. Co. v. Malloy, 217 N.C. 666, 668, 9 S.E.2d 403, 404 (1940).

"A mortgagee has no right to possession except to assure payment of the debt or performance of other conditions of the mortgage." Gregg v. Williamson, 246 N.C. 356, 359, 98 S.E.2d 481, 484 (1957).

Upon taking possession the mortgagee must apply any rents and profits received to the debt. Hemphill v. Ross, 66 N.C. 477 (1872).

Nor was the deficiency in the plaintiff's claim remedied by the fact that the property was damaged extensively, which we necessarily assume was the case for the purposes of this appeal. The right to recover for the damage, if it belonged to anybody, belonged, of course, to the owner of the land. But since, according to the complaint, the defendant Kavanaugh both owned and damaged the land, there was no right in anybody to recover for the damage done. In all events, the allegations show that plaintiff's right was to recover only for damage done to its security interest, of which there was none, and no approved doctrine of the law that we are aware of entitles the plaintiff to recover for damage done to the property interest of another, as...