Duncan v. . Gulley

ClaeksoN, J. The North Carolina Joint Stock Land Bank, at the close of plaintiff’s evidence, and at the close of all the evidence, made motions in the court below for judgment as in ease of nonsuit. C. S., *556 567. The court below overruled these motions, and in this we think there was error.. The creditor, the Bank of Wendell, obtained a judgment of $4,000 and interest from 6 November, 1928, against all the partners, including plaintiff’s intestate. The plaintiff’s contention is that as administratrix of her husband, A. R. Duncan’s estate, she is entitled to a first lien on the “John Ellington Farm,” of 597 acres, as his estate is liable as one of the partners on the $4,000 judgment of the Bank of Wendell. From the entire record we cannot so hold. There is no language in the deed from plaintiff’s intestate and others of 4 May, 1926, for one-half interest in the land conveyed to E. R. Gulley, that gives a lien on the land for the partnership debts. Plaintiff’s intestate and the others conveyed the one.-half interest in the land to E. R. Gulley, who assumed and agreed to pay off the encumbrances put on the property by C. W. Pender and J. M. Turley, which plaintiff’s intestate and all the parties had assumed* amounting to $30,000 and taxes. To carry out this agreement, he borrowed $29,000 from the defendant, North Carolina Joint Stock Land Bank, and made a deed of trust to the First National Trust Company, trustee, on the land to secure same. The money loaned Gulley by the North Carolina Joint Stock Land Bank and more was paid on the $30,000 encumbrance on the land and taxes. The North Carolina Joint Stock Land Bank loaned the $29,000, and there is no allegations in the pleadings that there was any fraud or mutual mistake in the conveyance from plaintiff’s intestate and others to E. R. Gulley of which the North Carolina Joint Stock Land Bank had notice. In Phillips v. Buchanan Lumber Co., 151 N. C., at 521, this Court, speaking to the subject, said: “Besides, a purchaser for value from one whose deed was procured by fraud gets a good title if he has no notice of the fraud. Odom v. Riddick, 104 N. C., 515, and cases there cited. Even a purchaser with notice of the fraud from an innocent purchaser without notice gets good title. Glenn v. Bank, 70 N. C., 205; Fowler v. Poor, 93 N. C., 466.” Brown v. Sheets, 197 N. C., at p. 273, 63 A. L. R., 1357. We think the recital in the deed means what it says: That Gulley assumed and agreed to pay the encumbrances already on the land and all other partnership debts — “assumes and contracts and agrees to pay and to fully indemnify and save harmless,” etc. There is no language that can be construed or any strained construction can be put on the language in the deed that the partnership debts were a lien on the land which was conveyed by plaintiff’s intestate and others to E. R. Gulley. Of course the. encumbrance was already on the land which Gulley assumed and has paid through a new loan of $29,000. Whatever rights and equities plaintiff has in reference to being a partner of Gulley, *557 need not be discussed on this record. We think plaintiff is estopped to claim a first lien on the property. Plaintiff’s intestate and others made a deed to Gulley in fee simple; it was duly recorded. The North Carolina Joint Stock Land Bank when it loaned the $29,000 on examination of the record found the $30,000 lien and taxes on the land. These were paid off and canceled with the $29,000 loan and additional funds of Gulley. Belying on the record, the North Carolina Joint Stock Land Bank loaned the $29,000. In the deed made to Gulley there was no agreement that the partnership debts should be a lien on the land; there was only a personal obligation to pay them by Gulley. He has paid all except the $4,000. In the controversy, and on the entire record he appears to have acted in absolute good faith in the entire transaction. Under our registration act, C. S., 3311, the North Carolina Joint Stock Land Bank acquired a first lien. on.the land. In Door Co. v. Joyner, 182 N. C., at p. 521, it is said: “In the construction of our registration laws, this Court has very insistently held that no notice, however full and formal, will supply the place of registration.” In Best v. Utley, 189 N. C., at p. 364-5, it is said: “The public policy, upon which our registration laws are founded, favors an interpretation and construction of statutes relative to probates and registration, which will encourage confidence in records affecting titles,- rather than suspicion, doubt and uncertainty.” For the reasons given there must be a New trial.