Smith v. Davis

• Decision Date: 19 November 1947
• Docket Number: No. 378.,378.
• Citation: 45 S.E.2d 51,228 N.C. 172
• Court: North Carolina Supreme Court
• Parties: SMITH et al. v. DAVIS et al.

45 S.E.2d 51

228 N.C. 172

SMITH et al.

v.DAVIS et al.

No. 378.

Supreme Court of North Carolina.

Nov. 19, 1947.

Appeal from Superior Court, Rowan County; Alley, Judge.

Action by Mrs. Troy Smith, one and the same person as Elizabeth Davis Smith, and others, against Henry W. Davis and others, to recover on two promissory notes and foreclose a deed of trust given as security for the payment thereof. From a judgment in favor of plaintiffs, defendants R. C Boyce and First National Bank of Salisbury, N. C, appeal.

Judgment affirmed.

Civil action to recover against defendant Henry W. Davis on two certain promissory notes of hand and under seal dated 15 March, 1927, due one year after date, allegedly executed by him to plaintiff Mrs. Troy Smith and to James M. Davis, respectively--the latter now being deceased, and testator of plaintiffs Wachovia Bank and Trust Company and Rebecca W. Davis, Executors--and to foreclose on first deed of trust executed co-temporaneously therewith to John L. Rendleman, Sr., Trustee, conveying as security therefor an undivided one-third interest in certain land in city of Salisbury, North Carolina.

Defendant R. C. Boyce and First National Bank of Salisbury answering the complaint of plaintiffs, deny that any indebtedness is now secured by the deed of trust, for that plaintiffs having failed to comply with the provisions of G.S. § 45-37(5), payment is conclusively presumed, and they plead payment and conclusive presumption of payment, and the ten year statute of limitation in bar of plaintiffs' right to recover in this action.

When the case came on for hearing in Superior Court a jury trial was waived, and the parties agreed in open court that the Judge presiding should find the facts from evidence introduced by the parties, and thereupon enter judgment. In accordance therewith the Judge found facts, in summary pertinent to this appeal, as follows:

I. On 15 March, 1927, Henry W. Davis borrowed the sum of $10,000 each from plaintiff, Mrs. Troy Smith, and from James M. Davis--who died testate 16 November, 1943, naming Wachovia Bank and Trust Company, executor and trustee, and Rebecca W. Davis, executrix--and delivered to each his promissory note in said amount bearing interest, and due one year after date, and co-temporaneously therewith he, Henry W. Davis, and his wife, Louise W. Davis, executed and delivered to John L. Rendleman, Sr., a deed of trust conveying as security therefor an undivided one-third interest in and to certain land in the city of Salisbury, N.C, which deed of trust was duly registered on 29 March, 1927, in the mortgage deed records for Rowan County, N. C.

II. Henry W. Davis paid the interest on the note to Mrs. Troy Smith to 1 April, 1928, and on the note to James M. Davis to 1 July, 1929, but made no further payment on principal of or interest on either of said notes until the year 1945, when on 20 January, of that year, he paid to plaintiff Mrs. Troy Smith the sum of $186.50, and when on 19 January, of that year, he paid to the executors of the estate of James M. Davis the sum of $186.51, upon the principal indebtedness represented by said notes respectively, at which times defendant, Henry W. Davis, acknowledged his indebtedness upon each of said notes and expressed his desire to pay the same in full as and when his income permitted, and by virtue of said notes, respectively, he is indebted (1) to plaintiff Mrs. Troy Smith in the sum of $10,000, with interest from 1 April, 1928, at rate of 6% per annum, computed semiannually, subject to a credit upon the principal of said indebtedness of $186.50, with interest thereon from 20 January, 1945, and (2) to plaintiffs, Wachovia Bank and Trust Company, and Rebecca W. Davis, executors under the will of James M. Davis, in the sum of $10,000 with interest from 1 July, 1929, at rate of 6% per annum, computed semi-annually, subject to a credit upon the principal of said indebtedness in the sum of $186.51 with interest thereon from 19 January, 1945.

III. The plaintiff, Mrs. Troy Smith, and James M. Davis, he then being alive, failed, within the period of fifteen years after the maturity of the last installment of debt or interest secured by the terms of the deed of trust executed and delivered to John L. Rendleman, Sr., trustee, that is, within fifteen years after 15 March, 1928, to file an affidavit with the register of deeds of Rowan County, North Carolina, where said deed of trust is registered, specifically stating the amount of debt unpaid secured thereby, or in what respect any other condition of said instrument had not been complied with, and also failed in lieu of such affidavit to enter on the margin of the record of said deed of trust any payments made on the indebtedness secured by it, and the amount still due thereunder--and no such affidavit or marginal reference has ever been filed or entered in the office of the register of deeds for Rowan County, N. C.

IV. On 7 November, 1933, at time when the deed of trust executed by defendants, Henry W. Davis and his wife, Louise W. Davis, to John L. Rendleman, Sr., trustee, referred to above, was duly registered, and in full force and effect, the defendant First National Bank of Salisbury, N. C, loaned to defendants Henry W. Davis and wife, Louise W. Davis, the sum of $8,225, for which they executed their promissory note in said sum to the Bank, and, upon default in payment of the note, the Bank obtained a judgment against Henry W. Davis and wife, Louise W. Davis, on 21 October, 1935, for the full amount of the note with interest thereon from 1 August, 1935, which judgment was duly docketed in office of clerk of Superior Court of Rowan County, N. C.

V. Thereafter, on 15 June, 1945, defendant First National Bank of Salisbury procured the issuance of a writ of execution upon the said judgment against Henry W. Davis and wife, Louise W. Davis, directed to the sheriff of Rowan County, and commanding the sale of lands and property of Henry W. Davis--being the same property described in the deed of trust executed to John L. Rendleman, Sr., trustee, securing the payment of the notes originally executed and delivered to plaintiff, Mrs. Troy Smith, and to James M. Davis. Pursuant thereto the sheriff exposed the interest of Henry W. Davis and wife, Louise W. Davis, in said lands to public sale at the courthouse door in Salisbury, N. C, on 6 September, 1945, when and where C. A. Mayfield became the last and highest bidder at the price of $7500. (At the sale and prior to the bidding, and in the presence of C. A. Mayfield, and other bidders then and there present, and at the instance of plaintiffs, the sheriff read a notice from plaintiffs that the interest of Henry W. Davis and wife, Louise W. Davis, in the land proposed to be sold under said execution is subject to the prior lien of the deed of trust executed by them to John L. Rendleman, Sr., trustee, as aforesaid, securing the payment of the two notes therein described, the aggregate of principal and interest thereon due as of that date, in the sum of $39,755.-90, and that the purchaser at such salewould take title to said premises subject to the lien of the said deed of trust and the notes thereby secured.)

VI. Subsequently C. A. Mayfield transferred and assigned his bid to R. C. Boyce, who, having knowledge of the claim of the plaintiffs that the lien of said deed of trust was still valid and in effect, declined to comply with the terms of the bid, until defendant First National Bank of Salisbury, through its board of directors, adopted a resolution in which it was agreed that in consideration of R. C. Boyce going through with the sale, and paying the purchase price, and taking legal action to clear the title to the property, the Bank would indemnify him in the event he failed to have the deed of trust "declared void and barred by the statute of limitations, or the title affected." Pursuant thereto, R. C. Boyce paid the purchase price and obtained a deed from the sheriff to him dated 18 September, 1945, conveying "all right, title, interest and estate of the said Henry W. Davis and Louise W. Davis, judgment debtors" in the said lands--which deed was fded for registration on 21 September, 1945, and registered in record of deeds in office of register of deeds for Rowan County, N. C.

VII. And thereafter the net balance of the proceeds from the execution sale were delivered to the Bank, and converted by it on 26 September, 1945, into its cashier's check, which has not been cashed and is now held by the Bank subject to the result of this action.

Upon the foregoing findings of fact, the court being of opinion as matters of law (1) that the plaintiffs are entitled to recover against defendant Henry W. Davis, the amounts due upon the notes executed by him to them, as afore-stated, (2) that the lien of the deed of trust executed by defendants, Henry W. Davis and wife, Louise W. Davis, to John L. Rendleman, Sr., trustee, is valid and subsisting for the purpose of securing said indebtedness, (3) that each and all of the terms and conditions of the deed of trust have been broken by defendants, Henry W. Davis and wife, Louise W. Davis, and (4) that plaintiffs are entitled to have said deeds of trust enforced and foreclosed and the lands described sold, and the proceeds arising from the sale applied to and upon the payment of the sums due plaintiffs, entered judgment in accordance therewith (a) for the sale of the lands and the application of proceeds of sale to payment of costs and expenses of sale, including an allowance to the commissioner, and all ad valorem taxes upon the premises due the county of Rowan and the city of Salisbury, N. C, and balance into office of clerk of Superior Court of Rowan County to be applied on this judgment, and any "overplus to be paid to the defendant, R. C. Boyce"; and (b) barring defendants and all persons having liens subsequent to the date of deed of trust, etc.

Defendants R. C. Boyce and First National Bank of...