Shenandoah Life Insurance v. Sandridge

Clarkson, J. At tbe close of plaintiff’s evidence and at tbe conclusion of all tbe evidence, tbe defendants made motions in tbe court below for judgment as in case of nonsuit. N. C. Code, 1935 (Michie), sec. 567. Tbe court below refused these motions, and in this we can see no error. Tbe judge of tbe Forsyth County Court charged tbe jury that “If you believe tbe evidence in this case and find from that evidence and by its greater weight,” setting forth certain evidence, and finally charged: “Tbe effect of my instructions to you, which you will remember and take in connection with what I am now saying was, in effect, that if you believed tbe evidence and found the facts to be true as testified to and as shown by the record evidence, and found therefrom, from that evidence and by its greater weight, certain facts which I outlined to you in my charge, that then you would answer that issue ‘Yes.’ My further instruction was that if you did not believe tbe evidence and tbe records introduced and tbe admissions of tbe parties, or if you failed to find tbe facts to be true and failed to find certain facts from tbe evidence and by its greater weight, that then you would answer that issue ‘No.’ ” Tbe issue was answered “Yes.” A nonsuit was taken in tbe suit of George W. Edwards against Engle-wood, Inc. Shenandoah Life Insurance -Company, Inc., was made a party defendant at tbe instance of tbe Millers and Burkes, but not at tbe instance of George ~W. Edwards. George W. Edwards never mentioned to C. A. Burke, husband of Doris M. Burke (deceased) and administrator and guardian of her children, that be held tbe $10,000 bond in controversy until some time prior to 1934. He never did mention it to Mrs. Vinson, Mrs. Rose, of Maude Miller. He was induced *773 to take a nonsuit to foreclose part of Lot No. 291 only after be received from Maude Miller $4,345.47 for the $10,000 Englewood, Inc., bond held by Mm as collateral to Bolich’s note witb tbe other collateral — viz., one hundred shares of the preferred stock in Carolina Building, Inc., of the par value of one hundred ($100.00) dollars; fifty shares of common stock in Carolina Building, Inc., of no- par value. This bond and the collateral put up by Bolich were all sold to Maude Miller after the paper writing, dated 27 August, 1930, was signed by Maude Miller. Bolich and wife sold the property in controversy (the L-shaped Bowling Alley lot) with other property on 20 November, 1930, to Bolich Holding Corporation, and it assumed the payment of the $60,000 loan made by plaintiff and other indebtedness. At the time Edwards was secretary and treasurer of the Bolich Holding Corporation. On 18 March, 1930, he purchased «$43,500 preferred stock in the corporation. Bolich was president. Edwards, as secretary and treasurer/ made disbursements for the corporation and signed all the checks and-received rents, etc. He discussed the business plans with Bolich, the president. The offices of the Bolich Holding Corporation were directly across the street from the Bowling Alley Building (L-shaped lot), which plaintiff had taken a lien on for $60,000, to help pay for building same. It was in evidence that his dealings with Bolich were many and important over a series of years. All this time the $10,000 bond was never mentioned. Bolich testified: “In my opinion, the fair market value of the Carolina Building, Inc., stock pledged with Mr. George W. Edwards at the time of its pledge was fifty Cents on the dollar.” ... “I simply overlook the $10,000 obligation of Englewood, Inc., payable to Doris M. Burke, which was pledged with Mr. Edwards as security for my loan. I considered this note paid and apparently forgot about it.” Maude Miller taught school for about thirty years. On 11 February, 1937, she purchased from George W. Edwards the note of J. A. Bolich, Jr., dated 12 April, 1928, and paid him $4,345.47 for that note, and the collaterals before mentioned — viz., the note of Englewood, Inc., dated 16 April, 1926, payable to Doris M. Burke, or order, maturing two years after date, in the sum of $10,000. When Maude Miller purchased the note and collateral above named, on 11 February, 1937, for $4,345.47, she had theretofore, when plaintiff was lending the $60,000, received $19,595.85 of the loan. So that plaintiff could obtain a first lien on the L-shaped Bowling Alley lot, she was the first to sign the paper writing reading, in part: “To Have and to Hold, the above-released premises, unto it said Englewood, Inc., its successors and assigns, to its and their only proper use and behoof forever; so that neither we, nor either of us, nor any other person, in our name and behalf, shall or will hereafter claim or demand any right or title to the premises, or any part thereof; *774 but they and every one of them shall, by these presents, be excluded and forever barred.” W. E. Franklin, trustee in the deed of trust, also under seal signed the paper writing. Maude Miller testified, in part: “We divided this sum between us. When I got a check for $19,595.85, I knew that it was part of the proceeds of a loan made on the L-shaped Bowling Alley lot. I knew at the time of executing the quitclaim deed or instrument recorded in Book 330, at page 15, that the reason for executing it was in order that the company lending the money should get a first lien on the L-shaped Bowling Alley lot.” In the very teeth of this solemn agreement, under seal, which plaintiff relied and acted upon, dated 27 August, 1930, she purchased this bond in controversy, dated 16 April, 1926, due at 2 years, on 11 February, 1937- — nearly 11 years thereafter — for $4,345.47, and is now making claim against plaintiff for some $11,000, contrary to her solemn agreement under seal, which she signed and which plaintiff relied and acted on. “So that neither we, nor either of us, nor any other person, in our name and behalf, shall or will hereafter claim or demand any right or title to the premises, or any part thereof.” See Edwards v. Buena Vista Annex, Inc., ante, 706. The defendant, Maude Miller, in her brief makes the following important admission in this respect: “In the case at bar it was undoubtedly the purpose of the grantors to release the described property from their claims under this purchase money deed of trust, and the grantors undoubtedly thought that they held all of the notes (bonds) which were secured by that deed of trust.” In defendants’ brief is the following: “Why did Maude Miller buy this note? Miss Maude Miller did not buy this note voluntarily as a business transaction. She bought it as a matter of self-preservation. (1) Mr. Edwards was seeking to foreclose all the security left for the notes she and her sisters, as heirs of Gaston Miller, and her nieces, as the infant heirs of Doris Miller Burke had; and she was compelled to buy this note to protect the little security which they had left. (2) Mr. Edwards, a well-to-do man, could have bought up this 60 by 100 foot lot. As he was claiming the face of his note ($10,000) with interest for over nine years — -a total of more than $15,000 — his note alone approximated the value of the 60 by 100 foot lot. (3) There was no market for this lot when Mr. Edwards instituted his suit to foreclose and at the foreclosure it would have brought an inadequate price. (4) Miss Maude Miller bought the note for less than Mr. Edwards was claiming and for less than he would have recovered. Mr. Edwards claimed more than $15,000, and Miss Maude Miller bought it for $4,345.47.” We think that Maude Miller is estopped by her conduct and solemn covenant under seal, to make the contention she now makes. The language and *775 intentions are clear and unequivocal in tbe paper writing,. undeK seal. She was an intelligent woman sui juris when she' signed the paper writing. In Seawell v. Hall, 185 N. C., 80 (82-3), it is written: “Discussing the question in Gudger v. White, 141 N. C., 513, Walker, J., pertinently said: ‘It is not difficult by reading the deed to reach a satisfactory conclusion as to what the parties meant, and we are required by the settled canon of construction so to interpret it as to ascertain and effectuate the intention of the parties. Their meaning, it is true, must be expressed in the instrument;.but it is proper to seek for a rational purpose in the language and provisions of the deed and to construe it consistently with reason and common sense. If there is any doubt entertained as to the real intention, we should reject that interpretation which plainly leads to injustice and adopt that one which conforms more to the presumed meaning, because it does not produce unusual and unjust results. All this is subject, however, to the inflexible rule that the intention must be gathered from the entire instrument “after looking,” as the phrase is, “at the four corners of it,” ’ ” citing a wealth of authorities. In Woody v. Cates, 213 N. C., 792 (794), is the following: “In Williams v. R. R., 200 N. C., 771, 158 S. E., 473, Adams, J., speaking for the Court, states the principle as follows: ‘Where a grantor executes a deed in proper form intending to convey his right, title and interest in land, and the grantee expects to become vested with such estate, the deed, although it may not contain technical covenants of title, is binding on the grantor and those claiming under him, and they will be estopped to deny that the grantee became seized of the estate the deed purports to convey.’ To the same effect is Crawley v. Stearns, 194 N. C., 15, 138 S. E., 403.” Hallyburton v. Slagle, 132 N. C., 947 (952); Weeks v. Wilkins, 139 N. C., 215. In 19 Amer. Jurisprudence, sec. 18, p. 617, it is written: “Most courts in the United States have acceded to the position adopted by the Supreme Court that if the intention of the parties to a conveyance is to convey a fee or some other estate of a particular interest or quality, such intention will be given preeminent consideration and the grantor will be estopped to assert an after-acquired title, in spite of the absence of a covenant of warranty. Only a few courts cling to the position that a warranty, express or implied by statute, is essential to effect an estoppel. It is considered unnecessary that there be a formal covenant of warranty to estop the grantor in a deed from setting up against his grantee an after-acquired title and that a deed be given that effect if it sets forth by way of recital or averment that it is to operate as an absolute deed in fee,” etc. Van Rensselaer v. Kearney, 11 Howard U. S., 297, 13 Law Ed., 703. We have set forth the conduct of George W. Edwards in relation to *776 this $10,000 bond. For years, fts secretary and treasurer of the Bolich Holding Corporation, of which Bolich was president, he had dealings with Bolieh. He purchased $43,500 preferred stock in said corporation. The Bolich Holding Corporation, of which he was secretary and treasurer, was liable for the payment of the indebtedness of $60,000, which it had assumed. No mention was made by him for years of this bond of Doris M. .Burke, assigned without recourse to Bolich and which he held with other collateral to secure Bolich’s $10,000 bond to him. No evidence that any attempt was made to collect the bond from Bolich or to sell any of the other collateral to pay the bond, which at the time was valuable. Bolich said, “I considered this note (bond) paid and apparently forgot about it.” J. H. McKeithan, a practicing attorney in North Carolina, associated with Parrish & Deal, Attorneys, testified, in part: “I investigated the title to the L-shaped Bowling Alley lot on which the Shenandoah Life Insurance Company, Inc., deed of trust was given. ... I reported that upon the discharge of the release of the L-shaped Bowling Alley lot from the operation of the deed of trust held by the Millers and Burkes, and the payment of taxes and assessments that the deed of trust to the Shenandoah Life Insurance Company, Inc., would constitute a first lien on the property described in it. . . . At the time of looking up this title and making the certificate I had no knowledge of a transaction occurring in April, 1930, between Mr. Bolich and Mr. Edwards and Mrs. Burke, whereby Mrs. Burke’s bond was assigned by Mr. Bolich to Mr. Edwards.” The attorney relied on the agreement under seal and also on an affidavit made by J. A. Bolich, Jr., as to the balance due which did not include this $10,000. J. P. Saul, Jr., vice president and general counsel of the Shenandoah Life Insurance Company, Inc., testified, in part: “This check represents the loan of $60,000 made by the Shenandoah Life Insurance Company, Inc., to Mr. Bolich, evidenced by the deed of trust recorded in Deed of Trust Book 211, at page 53, in the office of the register of deeds of Forsyth County. At the time this loan was made the Shenandoah Life Insurance Company, Inc., caused an examination to be made of the title to the property covered by the deed of trust recorded in Deed of Trust Book 211, at page 53. The Shenandoah Life Insurance Company, Inc., made this loan upon the belief that this deed of trust constituted a first lien. The officials of the Shenandoah Life Insurance Company, Inc., had knowledge of the quitclaim deed recorded in Deed Book 330, at page 15, before making this loan. We relied upon this quitclaim deed in making the loan. We were furnished, by counsel investigating the title for us, with an affidavit or certificate executed by J. A. Bolich, Jr. . . . Tract 1 in the deed of trust to *777 E. Lee Trinkle, J. A. Andrews and J. P. Paul, Jr., trustees, is the L-shaped Bowling Alley lot. The lien of this deed of trust was presumably a first lien upon Tract 1, which is the L-shaped Bowling Alley lot, and a second lien upon the other two tracts mentioned in that deed of trust. Tracts 2 and 3 have been foreclosed under prior liens. It is my understanding that Mr. Bolieh turned oyer to our local attorneys the sum of $60,000 to be disbursed and that those attorneys disbursed the sum of $60,000 representing this loan. As one of the surviving trustees in this deed of trust, I conducted a foreclosure sale. At this sale the Shenandoah Life Insurance Company, Inc., became the purchaser of the L-shaped Bowling Alley lot. ... At the time the Shenandoah Life Insurance Company, Inc., foreclosed its deed of trust on the L-shaped Bowling Alley lot, there was something in excess of $80,000 due on the mortgage. The payments made on the note (or bond) had not been sufficient to keep up interest and taxes and insurance. This property was bid in in January, 1938, by the Shenandoah Life Insurance Company, Inc., for $40,000. The Shenandoah Life Insurance Company, Inc., has no other security for this debt. When this loan was made we were furnished by Parrish & Deal, attorneys at law of Winston-Salem, with an abstract of title. In that abstract of title the deed recorded in Deed Book 330, at page 15, was referred to.” The defendants in their brief say: “The plaintiff had actual notice through its attorneys that the note (or bond) was outstanding. The argument about to be made is not regarded by the authors of this brief as essential to the determination of this case. The argument is advanced as an additional reason why the defendants should prevail.” From the facts in this case, we do not think that plaintiff had such actual notice that would affect plaintiff's rights. Arrington v. Arrington, 114 N. C., 151; Wood v. Trust Co., 200 N. C., 105. Under all the facts of the record, written and in pais, it would be inequitable, unjust and unconscionable for Maude Miller to recover from plaintiff the bond in controversy. She is estopped and the charge of the judge of Forsyth County Court was correct — there was no error in the judgment of the Superior Court. For the reasons given, the judgment is Affirmed.