Threlkeld v. Malcragson Land Co.

ClaeksoN, J. It goes without saying that there could be no Us pendens on the entire 194 acres. The record discloses that the land that the controversy is about is approximately 5 acres and was first conveyed by plaintiffs to Maleragson Land Co., Inc., and by it with other land and Governor Heights, Inc., certain land, to Beverly Hills, Inc., totaling some 194 acres. The Beverly Hills, Inc., conveyed the 194 acres to the Central Bank & Trust Co., trustee, to secure-an indebtedness of $825,000, due various bondholders. The deed of trust from the Maleragson Land Co., Inc., to Robert S. Brown, trustee for plaintiffs to secure $2,600 balance purchase money on the 5 acres, dated 15 April, 1925, was not recorded until 27 April, 1929, years after the land was deeded to others, and the deed of trust made to Central Bank & Trust Co., trustee. “If a deed is registered, a subsequent purchaser has notice; but if a deed is not registered, and a subsequent conveyance is taken with actual knowledge of the former deed, and is registered first, it will have priority over the former deed, since it is held that no notice, however direct, will take the place of registration.” North Carolina Practice and Procedure *189 (McIntosh), part sec. 344. C. S., 3309, 3311. Roberts v. Massey, 185 N. C., 164; Bank v. Smith, 186 N. C., at p. 641; Ellington v. Supply Co., 196 N. C., at p. 789. It appears of record tbat tbe 194 acres, in wbicb the 5 acres in controversy is included, was conveyed to the Central Bank & Trust Co., trustee, to secure an indebtedness of $325,000. Plaintiff’s deed of trust is subject to this lien. Upon the foreclosure of plaintiff’s deed of trust they would have certain rights not necessary to discuss, if plaintiffs could set aside the deed from Malcragson Land Co., Inc., to Beverly Hills, Inc. The Central Bank & Trust Co., trustee, is not made a party to the action, but if it was and it took in good faith for value and without notice, its lien would still be prior to plaintiffs’ deed of trust as it was registered before. “Under C. S., 1009, a purchaser for value and without notice of any fraud gets good title by conveyance or transfer from fraudulent vendor. See Cox v. Wall, 132 N. C., 730.” Bank v. Mackorell, 195 N. C., at p. 745. See Arrington v. Arrington, 114 N. C., at p. 166; Brown v. Sheets, 197 N. C., 268; 63 A. L. R., 1357. ■ There is no allegation in the complaint that the Central Bank & Trust Co., trustee, to secure the indebtedness of $325,000 is not a purchaser for value in good faith and that it had notice of the alleged fraud of Malcragson Land Co., Inc., and Beverly Hills, Inc., without such an allegation if the action was to foreclose the deed in trust of plaintiffs, plaintiffs’ prayer could not be granted, that “the note and deed of trust owned by the plaintiffs and described herein be declared a first lien ” etc. C. S., 500, is as follows: “In action affecting the title to real property, the plaintiff, at or any time after the time of filing the complaint or when or any time after a warrant of attachment is issued, or a defendant when he sets up an affirmative cause of action in his answer and demands substantive relief at or any time after the time of filing his answer, if it is intended to affect real estate, may file with the clerk of each county in which the property is situated a notice of the pendency of the action, containing the names of the parties, the object of the action, and the description of the property in that county affected thereby.” C. S., 504, provides how the lis pendens notice can be canceled. In Arrington v. Arrington, 114 N. C., at p. 159, it is said: “Without entering into a general discussion of the subject, it is sufficient to say that where the suit has been prosecuted with proper diligence the lis pendens continues until the final judgment (1 Beach Mod. Eq. Jur., 440, and Benn. Lis Pend., sec. 78), or until it has been canceled under the directions of the court. The Code, sec. 229 (C. S., 504, supra).” *190 In Horney v. Price, 189 N. C., at p. 824, it is said: “This lis pendens statute applies to ‘an action affecting the title to real property.’ ” Tbe subject is discussed in that case, citing authorities. It is not applicable to one seeking to recover a money judgment. Pierce v. Mallard, 197 N. C., 679; See Brinson v. Lacy, 195 N. C., 394. In Askew v. Hotel Co., 195 N. C., p. 456, we find the following principle : An existing corporation, when retaining its corporate identity and retaining assets sufficient to pay its creditors, does not effect a merger by exchanging its Stock with another and similar corporation, so as to make the latter liable for its. debts under the doctrine of implied assumpsit or substitution of debtors, in the absence of fraud. C. S., 1005. Helsabeck v. Vass, 196 N. C., 603. The present action is not to foreclose the deed of trust made by Malcragson Land Co., Inc., to Brown, trustee, for plaintiffs, to secure the $2,600 note. On account of plaintiffs’ neglect and misfortune to register their deed of trust before the $325,000 lien to the Central Bank & Trust Co., trustee, for various bondholders, plaintiffs’ deed of trust became subject to the Central Bank & Trust Co., trustee, deed of trust. The action is to recover on the $2,600 note from the maker Malcragson Land Co., and certain officers of the corporations and to set aside the deed made by Malcragson Land Co., Inc., to Beverly Hills, Inc. This action is not one “effecting the title to real property.” The judgment below is Affirmed.