Saleeby v. Brown

• Decision Date: 23 September 1925
• Docket Number: 29.
• Citation: 129 S.E. 424,190 N.C. 138
• Parties: SALEEBY v. BROWN ET AL.
• Court: North Carolina Supreme Court

129 S.E. 424

190 N.C. 138

SALEEBY v. BROWN ET AL.

No. 29.

Supreme Court of North Carolina

September 23, 1925

Appeal from Superior Court, Beaufort County; Cranmer, Judge.

Action by N.E. Saleeby against C. M. Brown and others, wherein the Bank of Washington and others interplead. From the judgment plaintiff appeals. No error.

Trial court may grant or refuse amendment to complaint.

This is a civil action brought by plaintiff against the defendants to recover certain funds in the hands of Stephen C. Bragaw trustee, also a defendant. Facts material for decision of the case:

(1) On or about June 24, 1919, the defendants, C. M. Brown and wife, Helen D. Brown, executed a note for $12,500 secured by mortgage on certain land to the Washington Building & Loan Association. Mortgage recorded in register of deeds office for Beaufort county, Book 227, p. 538.

(2) On or about May 15, 1920, the same parties executed notes for $15,000 secured by deed in trust to Stephen C. Bragaw trustee, on the same property described in the building and loan mortgage. This deed in trust was recorded in the register of deeds office for Beaufort county, Book 223, p 548. This deed in trust, although of later date, was recorded prior to the building and loan mortgage and constituted a first lien on the property.

The plaintiff alleges that--

He "is the owner and holder of the mortgage from the defendants, C. M. Brown and wife, Helen D. Brown, to the Washington Building & Loan Association, and holds the same as security for the sum of $5,000, evidenced by two notes of the said C. M. Brown, one in the sum of $2,000, with interest from June 23, 1922, and the other in the sum of $2,000 bearing interest at 6 per cent. from the 12th day of July, 1922; said mortgage having been duly assigned to the plaintiff as security for said indebtedness, and the said mortgage is a lien upon the property described in the same subject only to the deed of trust to Stephen C. Bragaw, Trustee."

The defendants, Bank of Washington, Savings & Trust Company, and W. Gray Willis, are interveners. The Bank of Washington says that it "is now the owner and holder of the notes secured by deed in trust" to Stephen C. Bragaw and all the interveners in substance, allege and aver:

"That the true facts in connection with the mortgage or paper writing recorded in Book 227, p. 538, are that on or about June 24, 1919, C. M. Brown and wife, Helen D. Brown, borrowed from the Washington Building & Loan Association a sum of money not exceeding $12,500, being the indebtedness recited in the said paper writing, recorded in Book 227, p. 538; that the said paper writing or mortgage was not filed for record until January 27, 1921; that on or about December 13, 1921, the defendants, C. M. Brown and wife, Helen Brown, executed a mortgage to the Washington Building & Loan Association on that lot, tract, or parcel of land situate on the south side of Main street in the city of Washington, and being bounded on the east by F. C. Kugler and wife, and on the west by B. L. Susman, which mortgage or deed of trust secured the sum of $12,500, and which is of record in the office of the register of deeds of Beaufort county in Book 233, p. 268; that the said mortgage was filed for record on December 20, 1921; that the said mortgage or deed of trust was by agreement between the said Washington Building & Loan Association and the said C. M. Brown and wife, Helen D. Brown, executed by the said Brown and received by the said Washington Building & Loan Association in satisfaction and payment of the indebtedness due by the said Brown and wife to the Building & Loan Association and secured by the paper writing recorded in Book 227, p. 538, and that upon the execution and delivery and recordation of the said mortgage from Brown and wife to the Washington Building & Loan Association, dated December 13, 1921, and recorded on December 20, 1921, in Book 233, p. 268, the said Washington Building & Loan Association paid, marked paid and discharged, or satisfied and discharged the note and mortgage given by the said Brown and wife to the Washington Building & Loan Association on or about June 24, 1919, and recorded in Book 227, p. 538; and that by agreement between the parties thereto the indebtedness secured by the said mortgage or paper writing was fully paid and discharged by the execution of the mortgage and note, dated on or about December 13, 1921; that, as it is advised, believes, and so alleges, after said mortgage and note from Brown and wife to the building and loan association, dated June 24, 1919, had been marked paid and canceled by the said Building & Loan Association, and after the rendition and docketing of the judgment hereinafter referred to, or some of them, the said C. M. Brown delivered to the said N.E. Saleeby the canceled and paid note and mortgage given by the said Brown and wife to Washington Building & Loan Association on or about June 24, 1919."

The Bank of Washington also sets up ownership to numerous judgments assigned to it against C. M. Brown, duly docketed in the office of the clerk of the superior court of Beaufort county. Savings & Trust Company sets up ownership to a judgment against C. M. Brown duly docketed, etc. W. Gray Willis sets up ownership to a judgment against C. M. Brown, duly docketed, etc.

Stephen C. Bragaw, trustee, sold the property under the trust deed and it brought $27,000, and all the money has been distribued according to priorities of liens except $6,200, to be held by him until the final determination of this action and another smaller sum for the determination of another action.

The interveners pray that the funds from the sale of the property in the hands of Stephen C. Bragaw, trustee, he declared prior liens to any claim or lien of the plaintiff, N.E. Saleeby.

The plaintiff, in answer to the Bank of Washington, Intervener, says:

"That at the time the said mortgagors, after substituting said other mortgage, intended to reserve the lien of the original mortgage and to keep same alive. That this plaintiff is a native of Assyria and was unable, at the time he became the owner of the mortgage referred to in the complaint, to read and write the English language. That for several years prior to December 20, 1921, this plaintiff and the said C. M. Brown had been friends, and this plaintiff had had and reposed great confidence in the said C. M. Brown. That at the time of exchanging said mortgages the said C. M. Brown requested this plaintiff to make him a loan thereon of $5,000, and stated to this plaintiff that the said mortgage was a valid and subsisting lien, that the same was not in any way discharged upon the records of Beaufort county or elsewhere, and that the same constituted a first and paramount lien upon the property therein described, and plaintiff, believing and relying upon said statements of said C. M. Brown, and being well acquainted with the property therein described, loaned the said C. M. Brown the sum of $5,000 in cash, and the said C. M. Brown transferred in writing the said mortgage to the plaintiff as security for the said debt. That at the time of said transaction the said C. M. Brown was the owner in fee simple of the property described in the said mortgage, and none of the judgments held by the Bank of Washington, referred to in their interplea, had been rendered, and the indebtedness thereby represented had not been incurred by the said C. M. Brown."

In the trial of the cause, the following was in evidence:

C. M. Brown, on cross-examination, said:

"The mortgage was given by me on June 24, 1919, and I borrowed from the building and loan association at that time $12,500. Subsequent to that time the building and loan association stated to me that they wanted another and first mortgage to secure their indebtedness, and, in response to their demand, Mrs. Brown and I executed another mortgage dated December 13, 1921, for $12,500, recorded in Book 233, p. 268, and, when the mortgage of December 13, 1921, had been given and recorded, Mr. Webb returned to me the mortgage of June 24, 1919. Mr. Webb is secretary of the building and loan association. I know his handwriting. He wrote on the mortgage of June 24, 1919: 'Paid and Satisfied, Washington Building & Loan Association, John D. Webb, Secretary, December 21, 1921,' and delivered the mortgage to me. I was vice president of the building and loan association. The mortgage of June 24, 1919, is on business property, and the mortgage of December 13, 1921, is on my home, a different tract of land. Not all of the indebtedness to the building and loan association has been paid."

Copy of cover sheet:

"C. M. Brown and Wife to Washington B. & L. Ass'n.

Mortgage.

Filed for registration at 2 o'clock p. m. Jan. 27th, 1921, and registered in the office of the register of deeds of Beaufort county in Book 227, page 538.

$2.00. G. Rumley, Register of Deeds.

W. L. Vaughan, Attorney at Law, Washington, N. C.

Paid and satisfied. Washington Building & Loan Ass'n, John D. Webb, Secretary. December 22, 1921.

Placed and transfered to N.E. Saleeby, as security for loan of $3,000 and $2,000, for which he holds my note of this date. December 23rd, 1921."

"C. M. Brown, Box 166, Washington, N. C.

I have placed with N.E. Saleeby, as collateral to secure loan, mtg. executed to Washington B. & L. Association, which is duly recorded in Book 227, page 538, in the register's office of Beaufort county. He is to hold same to secure payment of certain notes, one for $3,000, one for $2,000, one for $216.00. The Washington B. & L. Association has been duly satisfied as to this mtg., and the note executed to them in connection with same has been canceled and destroyed.

Aug. 1, 1922. C. M. Brown."

N. E....