Ross Realty Co. v. First Citizens Bank & Trust Co.

• Decision Date: 04 January 1979
• Docket Number: No. 93,93
• Citation: 250 S.E.2d 271,296 N.C. 366
• Court: North Carolina Supreme Court
• Parties: ROSS REALTY COMPANY, v. FIRST CITIZENS BANK & TRUST COMPANY, as Trustee of the Profit SharingRetirement Plan and Trust of Thermo Industries, Inc. and Affiliated Companies.

Page 271

250 S.E.2d 271

296 N.C. 366

ROSS REALTY COMPANY, v. FIRST CITIZENS BANK & TRUST COMPANY, as Trustee of the Profit SharingRetirement Plan and Trust of Thermo Industries, Inc. and Affiliated Companies.

No. 93.

Supreme Court of North Carolina.

Jan. 4, 1979.

Miller, Johnston, Taylor & Allison, by John B. Taylor and James W. Allison, Charlotte, for plaintiff appellee.

Weinstein, Sturges, Odom, Bigger, Jonas & Campbell, by Maurice A. Weinstein, T. LaFontine Odom and L. Holmes Eleazer, Jr., Charlotte, amicus curiae brief, for Henderson Belk.

Seay, Rouse, Johnson & Harvey, by James L. Seay and Ronald H. Garber, and Sanford, Adams, McCullough & Beard, by J. Allen Adams, E. D. Gaskins, Jr., and Catharine B. Arrowood, Raleigh, amicus curiae brief, for Lee A. Debnam and Algie Stephens.

BRITT, Justice.

Defendant contends the Court of Appeals erred in affirming the trial court's conclusion of law that the provisions of G.S. 45-21.38 are inapplicable to the subject matter of this action and in entering judgment based on that conclusion. We think the contention has merit.

G.S. 45-21.38 provides in pertinent part as follows:

"Deficiency judgments abolished where mortgage represents part of purchase price. In all sales of real property by mortgagees and/or trustees under powers of sale contained in any mortgage or deed of trust executed after February 6, 1933, or where judgment or decree is given for the foreclosure of any mortgage executed after February 6, 1933, to secure to the seller the payment of the balance of the purchase price of real property, the mortgagee or trustee or holder of the notes secured by such mortgage or deed of trust shall not be entitled to a deficiency judgment on account of such mortgage, deed of trust or obligation secured by the same: Provided, said evidence of indebtedness shows upon the face that it is for balance of purchase money for real estate . . . ."

Decision in this case depends upon the interpretation or construction of the quoted statute. "In the interpretation of statutes, the legislative will is the all-important or controlling factor. Indeed, it is frequently stated in effect that the intention of the legislature constitutes the law. Accordingly, the primary rule of construction of statutes is to ascertain and declare the intention of the legislature, and to carry such intention into effect to the fullest degree. A construction adopted should not be such as to nullify, destroy, or defeat the intention of the legislature." 73 Am.Jur.2d Statutes § 145, p. 351.

Through the years this court has adhered to the principle that the legislative intent is a controlling factor in the construction of statutes. "The object of all interpretation of statutes is to ascertain the meaning and intention of the Legislature . . . ." Kearney v. Vann, 154 N.C. 311, 70 S.E. 747 (1911). Accord: State v. Hart, 287 N.C. 76, 213 S.E.2d 291 (1975); Underwood v. Howland, 274 N.C. 473, 164 S.E.2d 2 (1968); Freeland v. Orange County, 273 N.C. 452, 160 S.E.2d 282 (1968); Buck v. Guaranty Company, 265 N.C. 285, 144 S.E.2d 34 (1965); Canteen Service, Inc. v. Johnson, 256 N.C. 155, 123 S.E.2d 582, 91 A.L.R.2d 1127 (1962); Mullen v. Town of Louisburg, 225 N.C. 53, 33 S.E.2d 484 (1945); In re Steelman, 219 N.C. 306, 13 S.E.2d 544 (1941); Branch Banking and Trust Company v. Hood, 206 N.C. 268, 173 S.E. 601 (1934); Hunt v. Eure, 188 N.C. 716, 125 S.E. 484 (1924); State v. Burnett, 173 N.C. 750, 91 S.E. 597 (1917); Abernethy v. Board of Commissioners, 169 N.C. 631, 86 S.E. 577 (1915); McLeod v. Board of Commissioners, 148 N.C. 77, 61 S.E. 605 (1908); Blair v. Coakley, 136 N.C. 405, 48 S.E. 804 (1904).

In State v. Bell, 184 N.C. 701, 705, 115 S.E. 190 (1922), this court in construing a statute relating to the abandonment of children said: "In our endeavor to ascertain the purpose of the statute, we should also have due regard to the rule that the spirit and reason of the law shall prevail over its letter, especially where a literal construction would work an obvious injustice. (Citations.)"

In Board of Education v. Dickson, 235 N.C. 359, 361, 70 S.E.2d 14 (1952), this court, speaking through Ervin, J., in construing certain statutes relating to the employment of school principals, said: " . . . No good purpose will be served by setting forth verbatim the somewhat awkward language in which these enactments are couched. Their meanings are to be found in what they necessarily imply as much as in what they specifically express. 50 Am.Jur., Statutes, section 242."

While the statute now codified as G.S. 45-21.38 is not artfully drawn, we think the manifest intention of the Legislature was to limit the creditor to the property conveyed when the note and mortgage or deed of trust are executed to the seller of the real estate and the securing instruments state that they are for the purpose of securing the balance of the purchase price.

We have found very helpful an article (cited in the Amicus briefs) by Professors Brainerd Currie and Mark S. Lieberman appearing in the 1960 Duke Law Journal, pages 1 et seq. We quote a portion of the article:

"Nothing in the way of conventional legislative history is available to shed light on the purpose of the legislation. There are no committee reports and no record of the legislative debates; even contemporary editorial comment is lacking. We are not, however, entirely without evidence on which to base a judgment. The year 1933 was one of deep depression, and North Carolina, along with other states, was concerned with the economic distress associated with wholesale mortgage foreclosures. The act which has been quoted chapter thirty- six of the Laws of 1933 was the first in a series of legislative attempts at the same session to deal with the mortgage problem. It was enacted on February 6. On February 9, the legislature approved a joint resolution requesting a voluntary moratorium until November 1, 1934, on all principal payments secured by mortgages on farm lands and homes, so long as interest and taxes were paid. On April 18, chapter 275 was enacted, dealing rather comprehensively with the foreclosure problem. Section one empowered the courts, prior to confirmation of any foreclosure sale of real estate, to enjoin the sale or its confirmation on the ground that the amount bid or price offered was inadequate and inequitable and would result in irreparable damage. Section two authorized the courts, prior to confirmation, to order resale upon such terms as might be just and equitable. Section three provided that in suits for deficiency judgments after the exercise of a power of sale, the mortgagor, if the holder of the obligation was the purchaser at the sale, could defend by showing that the property was fairly worth the amount of the debt secured by it at the time and place of sale. All of these provisions applied to existing mortgages; they included, without being limited to, purchase-money mortgages. On May 15, the time within which actions for deficiencies might be brought was limited to one year from the date of sale." Currie and Lieberman, Purchase-Money Mortgages and State Lines: A Study in Conflict-of-Laws Method, 1960 Duke Law Journal 1, 11-12.

Most of the enactments mentioned now appear in Chapter 45, Article 2B of the General Statutes. The writers of the article concluded, among other things, that the 1933 General Assembly intended to protect vendees from oppression by vendors and mortgagors from oppression by mortgagees. Moreover, the authors examined the specific problem which this court confronts in the case Sub judice.

"(T)he legislature was concerned about the situation in which the vendor finances the sale, and was particularly concerned for the protection of the purchaser in that situation. The question may well be asked: If that was the purpose, why confine the remedial statute to deficiency judgments when the mortgagee could inflict substantially the same injury on the mortgagor simply by suing on the personal obligation. . . . The only answer is simply that legislatures do not always see the whole problem, and are not always astute to close all the loopholes. The evidence is strong that the legislature wanted to furnish protection to the purchaser where the...