Wayne Nat. Bank v. National Bank of La Grange

• Decision Date: 17 April 1929
• Docket Number: 216.
• Citation: 147 S.E. 691,197 N.C. 68
• Parties: WAYNE NAT. BANK v. NATIONAL BANK OF LA GRANGE.
• Court: North Carolina Supreme Court

147 S.E. 691

197 N.C. 68

WAYNE NAT. BANK v. NATIONAL BANK OF LA GRANGE.

No. 216.

Supreme Court of North Carolina

April 17, 1929

Appeal from Superior Court, Lenoir County; Henry A. Grady, Judge.

Controversy without action upon an agreed statement of facts by the Wayne National Bank against the National Bank of La Grange. From the judgment, both parties appeal. Error.

Controversy without action upon an agreed statement of facts. (1) The plaintiff is a national banking association with its principal office in the city of Goldsboro, and the defendant is a national banking association with its principal place of business in the town of La Grange. (2) At the dates herein set forth, J. E. Jones of La Grange was the owner of three lots of land on which were situated two storage warehouses which also he owned. (3) On December 4, 1920, J. E. Jones and his wife executed and delivered to M. T. Dickinson a deed of trust conveying the property above described to secure the payment of a note for $15,000, due 60 days from date executed by said Jones, and made payable to the order of himself, and by him negotiated to the plaintiff bank. The deed of trust was recorded December 14, 1920. (4) On May 11 1925, J. E. Jones and wife executed and delivered to the defendant a mortgage on the property above described as security for the payment of a note for $5,000 due October 1 1925, executed by said Jones and his wife to said bank. The mortgage, which was duly registered, contains the following clause: "The parties further covenant and agree that they will effectuate and maintain a policy of fire insurance on the buildings situate on said property in the amount of $5,000, for the benefit of the party of the second part, the policy to carry the New York standard loss payable clause duly attached thereto in favor of the party of the second part, with the understanding and agreement that if the party of the first part shall fail to maintain such insurance, then the party of the second part may do so and the premium paid therefor shall be secured by this mortgage, the amount of such premium in that event to be deemed part of the principal indebtedness hereby secured." (5) The plaintiff required said Jones to take out and carry the fire insurance hereinafter mentioned, and had in its possession said fire insurance policies. (6) The said J. E. Jones, on the 21st day of December, 1927, effected fire insurance in his name on the storage warehouses on said lands above described in the Globe & Rutgers Fire Insurance Company, to which was attached a New York standard mortgage clause with full contribution, in which, among other things, it is provided "loss or damage," if any, under this policy, shall be payable to Wayne National Bank of Goldsboro, N. C., and the National Bank of La Grange, as mortgagee (or trustee), "as interest may appear." On other dates, but after the execution of said mortgages and prior to the destruction of the buildings by fire as hereinafter set forth, the said J. E. Jones effected fire insurance in his name on the said storage warehouses on said lands above described, in five other fire insurance policies issued by four insurance companies, to each of which was attached the New York standard mortgage clause, payable in the identical manner as in the clause attached to the Globe & Rutgers Fire Insurance policy mentioned hereinbefore in this paragraph; that is, "loss or damage, if any, under this policy, shall be payable to Wayne National Bank of Goldsboro, N. C., and the National Bank of La Grange, as mortgagee (or trustee) as interest may appear"; the aggregate amount of the fire insurance in all six of said policies being $20,000. (7) On January 15, 1928, the buildings on the lots above described which were covered by the insurance policies were injured by fire, and the loss was adjusted by all the parties claiming an interest therein, and there was paid by the insurance companies for the damage to said buildings amounts aggregating $11,250, represented by checks of said company payable to J. E. Jones, the Wayne National Bank, and the National Bank of La Grange. (8) At the time of the fire, there was due the plaintiff the sum of $12,760, with interest from October 1, 1927, and there was due the defendant the sum of $5,000, with interest from January 15, 1926.

The plaintiff contends that it is entitled to the entire amount of the moneys paid under said insurance policies; the amount due the plaintiff being in excess of the total amount of the fire insurance collected. It is contended by the defendant that it is entitled to one-half of said moneys if the indebtedness secured to it equals one-half of the said fire insurance fund so collected and now on deposit in the plaintiff bank, but that, since the entire indebtedness to the defendant is $5,000, with interest from January 15, 1926 until paid, which is less than one-half of the fire insurance fund, the defendant is entitled to $5,000, with interest from January 15, 1926, and that the plaintiff is entitled to the excess of said insurance fund over the amount of $5,000 and interest. It was adjudged at the hearing that the plaintiff pay to the defendant the sum of $5,000 out of the moneys now in hand, and that it retain the balance, to be applied by it on the indebtedness due it by said Jones, both sums to be credited on...