Price Real Estate & Insurance Co. v. Jones

• Decision Date: 17 February 1926
• Docket Number: 460.
• Citation: 131 S.E. 587,191 N.C. 176
• Parties: PRICE REAL ESTATE & INS. CO. v. JONES ET AL.
• Court: North Carolina Supreme Court

131 S.E. 587

191 N.C. 176

PRICE REAL ESTATE & INS. CO. v. JONES ET AL.

No. 460.

Supreme Court of North Carolina

February 17, 1926

Appeal from Superior Court, Gaston County; Francis D. Winston Judge.

Civil action by the Price Real Estate & Insurance Company against A. C. Jones, trustee, and J. C. M. Vann, administrator of the estate of C. N. Simpson, in which A. E. Woltz intervened. Judgment for defendants, and plaintiff and intervener appeal. New trial.

This was a civil action brought by plaintiff to restrain and enjoin A. C. Jones, trustee, from selling certain land under deed in trust. A. E. Woltz was an intervener in the action.

The facts from the record are:

(1) Deed in trust from J. L. Price to A. C. Jones, trustee for R F. Price, to secure a bond of $2,600, dated September 5, 1914, due November 1 1915, interest from date, balance purchase money on certain land in Gastonia, N.C. Deed in trust duly recorded in the register of deeds office for Gaston county, Book 111, p. 339.

The note and indorsements are as follows:

"$2,600.00. Gastonia, N. C., Sept. 5, 1914.

On or before November 1, 1915, after date I promise to pay to the order of R. F. Price, two thousand and six hundred dollars, with interest at 6 per cent. per annum from date payable annually. Value received. This bond secured by mortgage on real estate in Gaston county, N.C. Being part of purchase price of property described in attached deed of trust.

Protest, presentment, and notice of dishonor waived by all parties to this note.

J. L. Price [Seal.]

Witness: R. C. Patrick."

Indorsements on the back:

"Pay to C. N. Simpson, September 15, 1914, R. F. Price.

Interest on this note paid to September 5, 1915.

$156.00 paid one hundred and fifty-six dollars by J. L. Price October 4, 1916.

$156.00 rec'd one hundred and fifty-six dollars Aug. 16, 1917, bal. due $2,597.58. Bal. due 1--1--20 $2,983.11."

The same property was conveyed thereafter as follows:

(2) J. L. Price and wife, Dora E. Price, to A. E. Woltz November 9, 1915, with full covenants of seizin and warranty. Deed recorded in the office of register of deeds, Gaston county, Book 114, p. 139; consideration, $4,000.

(3) A. E. Woltz and wife, Daisy C. Woltz, to D. W. Mitchem April 14, 1917, with full covenants of seizin and warranty. Deed recorded in office of register of deeds of Gaston county, Book 124, p. 135; consideration, $5,750.

(4) D. W. Mitchem and wife, M. A. Mitchem, to plaintiff April 22, 1918, with full covenant of seizin and warranty, deed recorded in office of register of deeds, Book ______, p. ______; consideration, $5,750.

The plaintiff and A. E. Woltz, the intervener, alleged that the $2,600 note was paid, and also set up the defense--

"that, as the plaintiff is informed and believes, if the said note was negotiated to the said C. N. Simpson, he had notice of the infirmity in the instrument of defect in the title of the person negotiating it, and the title to said judgment was defective, and the same was obtained by fraud and unlawful means, and was negotiated to said C. N. Simpson in breach of faith and under circumstances amounting to fraud, of which the said C. N. Simpson had actual knowledge, or knowledge of such facts that his action in taking the instrument amounted to bad faith for the reasons hereinbefore set out, and for the reason that as the plaintiff is informed and believes, the said R. F. Price obtained possession of such note by fraud and without the knowledge of the maker or holder thereof, and at the time the said C. N. Simpson got possession thereof, or at the subsequent date thereto such note was fully paid and satisfied, or there was no consideration for the execution of the same by the said R. F. Price, or such consideration was illegal, all of which both the said R. F. Price and C. N. Simpson knew, or had reasonable grounds to believe, and such note is null and void in the hands of the administrator of the said C. N. Simpson."

C. N. Simpson, the alleged owner of the note, is dead, and J. C. M. Vann was duly appointed administrator of his estate and the defendant in this suit. The administrator denied the allegations of plaintiff and intervener, and set up ownership of the note in his intestate, C. N. Simpson. In 1919 J. L. Price was adjudged a bankrupt. R. F. Price, the payee in the note, is dead.

The issues submitted and the answers thereto were as follows:

"(1) What is the amount of the debt now due the estate of C. N. Simpson and J. C. M. Vann, administrator on account of the note for $2,600 set out in the pleadings? Answer: $2,600, with interest since November 1, 1917.

(2) Is the interpleader, A. E. Woltz, entitled to a prior lien on said lands by reason of the note introduced in evidence and assigned to the said A. E. Woltz by E. H. Adams or his agent? If so, in what amount, and from what date does said lien attach? Answer: Yes; $915 interest from November 20, 1915, and the lien attaches since June 14, 1914."

At the close of the interpleader's evidence, the defendant J. C. M. Vann, administrator of C. N. Simpson, moved for judgment as of nonsuit. At the close of all the evidence the defendant J. C. M. Vann, administrator, moved for judgment as of nonsuit. Motion was allowed as to plaintiff and overruled as to interpleader, A. E. Woltz.

The charge of the court below was as follows:

"The court directs you to find as a matter of law this $2,600, with interest from November 1, 1917, and you will so find under the charge of the court."

Under the charge of the court, the jury rendered the verdict above set forth. Judgment was rendered on the verdict. Numerous exceptions and assignments of error were made by plaintiff and intervener to the admission and exclusion of evidence, judgment as in case of nonsuit, and the charge of the court. The main ones and other necessary facts will be considered in the opinion.

S. J. Durham and Mangum & Denny, all of Gastonia, for appellants.

Gilliam Craig and J. F. Milliken, both of Monroe, for appellees.

CLARKSON J.

The verdict on the second issue was not appealed from by defendants.

The matters for our decision are in regard to the judgment as of nonsuit, the instructions of the court below on the first issue, and the admission and exclusion of certain evidence offered on the trial.

The deed in trust on the land in controversy from J. L. Price to A. C. Jones, trustee for R. F. Price, to secure bond for $2,600, was dated September 5, 1914, and due November 1, 1915, and duly recorded.

M. L. Flow testified in part:

"I live in Monroe. I knew the late R. F. Price. I knew the late C. N. Simpson. I am familiar with their handwriting. I have seen R. F. Price write. I saw J. L. Price sign his name a few times. I have seen 'Squire' C. N. Simpson write very often. I am thoroughly familiar with his handwriting. I have been connected with the administration of justice for about fifty years as former deputy clerk of court, notary public, United States commissioner, and justice of the peace."

He testified to the handwriting of J. L. Price, the maker of the note and deed in trust in controversy, and R. F. Price, the payee in the note and assignor of the note. He also testified that "pay to C. N. Simpson" and the notation of interest on the back of the note, etc., was in the handwriting of C. N. Simpson. J. C. M. Vann, administrator of C. N. Simpson, after testimony of Flow, stated the note and deed in trust came into his possession as administrator with other papers considered as assets of the estate of C. N. Simpson.

The exceptions and assignments of error to the above testimony of M. L. Flow (5, 6, 7, 8) were abandoned by plaintiff and intervener. The note sued on was a negotiable instrument. C. S. §§ 2982, 2987.

C. S. § 3040, defines who is deemed a holder in due course:

"Every holder is deemed prima facie to be a holder in due course, but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course. But the last-mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title."

A note payable to a specific...