Avery County Bank v. Smith

QlaRKSON, J. The fourth exception by interveners, the appellants, is as follows: “The interveners, A. S. Abernathy & Son, in due time requested the following special instructions to the jury: 'If you shall find from the evidence that the property taken from the plaintiffs by interveners was properly covered by defendant’s mortgage to ' inter-veners, dated 7 December, 1920, and that the mortgage given plaintiffs by defendant, dated 23 December, 1920, was made subject to the .prior mortgage given interveners by the defendant, then you shall find that the interveners are the owners and entitled to possession of said property.’ ” . The court declined to give this prayer for instruction, assigning as a reason therefor that it was not signed by counsel. This was in the sound discretion of the court below. “Counsel praying of the judge instructions to the jury must put their requests in writing entitled of the cause, and sign them; otherwise the judge may disregard them. They must be filed with the clerk as a part of the record.” C. S., 565; Pritchett v. R. R., 157 N. C., 88. *640 The fourth, exception is deemed abandoned. “Tbe brief of appellant shall set forth a succinct statement of the facts necessary for understanding the exceptions, except as to an exception that there was no evidence, it shall be sufficient to refer to pages of printed transcript containing the evidence. Such brief shall contain, properly numbered, the several grounds of exception and assignments of error, with reference to printed pages of transcript, and the authorities relied on classified under each assignment; and if statutes are material, the same shall be cited by the book, chapter, and section. Exceptions in the record not set out in appellant’s brief, or in support of which- no reason or argument is stated or authority cited, will be taken as abandoned by him. Such briefs when filed shall be noted by the clerk on the docket,, and a copy thereof furnished by him to opposite counsel on application.” Rules of Practice in Supreme Court, part of Rule 28 (185 N. C. 798). The contention is considered later under the eighth assignment of error, exception 14 of the record. The plaintiffs in their brief succinctly state the real contentions in the case. “As the mortgage held by plaintiff was registered in Avery County, where the mortgagor resided, and the interveners’ mortgage was registered in Burke County, where the mortgagor, C. W. Smith, was temporarily engaged on a logging contract, there are only two points involved in the case: (1) whether the plaintiffs are protected by the registration of their mortgage in the county where the mortgagor resided and had his home; (2) whether this clause in the mprt-gage executed by the mortgagor to plaintiff at a later date, “This mortgage is made subject to a prior mortgage on same property .to secure the payment of $448 due A. S. Abernathy,” created a lien in favor of the interveners, “A. S. Abernathy & Son.” The first contention need not be considered, in view of the position taken by the court in this case. The second contention is to the charge of the court as to the legal effect of the clause in the mortgage to S. Gr. Smith and O. L. Tuttle, which reads as follows: “This mortgage is made subject to a prior mortgage on same property to secure the payment of $448 due A. S. Abernathy.” The interveners, under their eighth assignment of error in their brief, to the fourteenth exception in the record, is entitled to have this matter passed on, as the court below charged the jury as a matter of law: “So it comes down to this question, there is no dispute, and the court charges you that this reservation in the second mortgage is not notice to the plaintiff of the prior conveyance to Abernathy.” We think the court below erred in the charge. *641 Tbe mortgage given to S. G. Smith and 0. L. Tuttle, which was assigned to Avery County Bank, was made “subject to a prior mortgage,” etc. "Webster defines the word “subject” to mean “to bring under control, power or dominion; to make subject; to subordinate; to subdue.” This means more than a mere notice to protect the mortgagor (C. W. Smith) of conveying mortgaged property or incurring liability by giving a mortgage to plaintiffs S. G. Smith and 0. L. Tuttle, when there was an existing lien on the property. The language means what it says, that the Smith and Tuttle chattel mortgage is subject to, brought under control of, subordinate to, a prior mortgage on the same property to secure the payment of $448 due A. S. Abernathy. It is contended by plaintiffs that the mortgage would give notice that only A. S. Abernathy held a mortgage, whereas there was a prior mortgage to A. S. Abernathy & Son. We think this immaterial from the facts in this case. Without objection, the defendant C. W. Smith testified: “When I gave the mortgage that the Avery County Bank is suing on I told them that I had given a mortgage to Mr. Abernathy.” The plaintiffs were not misled. In fact, S. L. Shell, witness for inter-veners, testified, without objection, “He is indebted to A. S. Abernathy & Son according to the notes”; without objection he stated the ownership of the notes and amount due on same. If the ownership and amount were material, the plaintiffs should have objected to Shell’s 'testimony as varying or "adding to a written matter. It will be noted that the mortgage which plaintiffs claim under states, in the description, “1 pair of bay mares, 5 years old, known as the Abernathy mares.” The clear intention of the parties, from all the evidence, is that the plaintiffs S. G. Smith and C. L. Tuttle took the second mortgage from C. W. Smith subject to the Abernathy mortgage. Where the registration of an instrument is required, no notice to purchaser, however full and formal, will supply the place of- registration. “No deed of trust or mortgage for real or personal estate shall be valid at law to pass any property as against creditors or purchasers for a valuable consideration from the donor, bargainor or mortgagor, but from the registration of such deed of trust or mortgage in the county where the land lies; or in case of personal estate, where the donor, bargainor or mortgagor resides; or in case the donor, bargainor, or mortgagor resides out of the State, then in the county where the said personal estate, or some part of the same, is situated; or in case of choses in action, where the donee, bargainee or mortgagee resides. For the purposes mentioned in this section the principal place of business of a domestic corporation is its residence.” C. S., 3311. See Door Co. v. Joyner, 182 N. C., 521; Fertilizer Co. v. Lane, 113 N. C., 184; Tremaine v. Williams, 144 N. C., 116, and cases cited. *642 'In the instant case this language was more than actual notice. It was an agreement between C. W. Smith, the maker of the chattel mortgage, and S. G. Smith and .0- L. Tuttle, the plaintiffs, that what right and title they obtained to the personal property mortgaged to them was subject to the Abernathy mortgage. “This mortgage is made subject to a prior mortgage on same property to secure the payment of $448 due A. S. Abernathy.” The present -case is in all respects similar to Banh v. Voss, 130 N. C., 592. In that case, following the description in the mortgage, was this clause: “Said 289% acres is subject to a mortgage or deed in trust for about $1,650, balance of purchase-money on land.” (Italics ours.) Montgomery, J., said: “We think those words establish a trust in equity in favor of defendant for the security of the debt mentioned in the deed of trust upon the property, or the proceeds which may arise upon a sale of the same by the mortgage. And this benefit, as we have seen, is in no way derived by title acquired through the deed of trust, but it comes by virtue of the charge and trust set out in the mortgage.” Hinton v. Leigh, 102 N. C., 28; Brassfield v. Powell, 117 N. C., 141; Bank v. Redwine, 171 N. C., 569. We do not think that the facts in the case of Piano Go.' v. Spruill, 150 N. C., 168, applicable to this case. In that case the words (in the mortgage to Spruill & Bro.) was “clear of all encumbrances except $115 due the piano company.” This language was held merely notice to avoid any charge against the mortgagor of conveying mortgaged property or incurring liability to the grantees for removal by them of the encumbrances. We think that in Blacknall v. Hancock, 182 N. C., 373, Hoke, J., draws the right distinction. He says there: “Again, it is insisted that plaintiff’s claim to the extent of the purchase-money debt paid to the Edwards heirs should be held superior because the deed of trust under which defendant claims is in recognition of the Edwards lien, and under the principle approved in Hinton v. Leigh, 102 N. C., 28, but on the facts presented, this exception also must be overruled. In Hinton v. Leigh, supra, the Court held that the claim under a later registered mortgage should be preferred to claims secured by a subsequent deed of trust, but which had been first registered, but this was on the ground that by correct interpretation the deed of trust fully recognized the validity of the mortgage and conveyed the land to the trustee only as subject to the mortgage lien. But the position does not prevail from the fact that in the instant case the deed of trust to defendant in the covenant against encumbrances merely excepts the claim then existent in favor of the Edwards heirs. The present case comes clearly within Piano Co. v. Spruill, 150 N. C., 168, and that class of cases which hold *643 that a mere reference to the existence of a prior encumbrance does not recognize its validity as a superior lien except as it may comply with requirements of our registration laws.” For the reasons given, there was error in the court’s charge. The eleventh assignment of error, nineteenth exception in the record, was to the court signing the judgment. From the view taken of this cause, there was error in the judgment as rendered so far as it applied to the interveners. For the reasons pointed out, there must be a New trial.