Cooper v. Middleton

Ashe, J. (after stating the facts). The avowed object of this action, was to subrogate the plaintiffs to the rights of the sureties in a certain mortgage deed made by W. B. Middleton to his sureties on his guardian bond. The cause was referred to Frank A. Daniels, both parties assenting, for trial upon all the issues of law and fact arising on the pleading. The referee made his report, accompanied by the evidence taken in the cause, distinctly stating in his report the facts found upon the evidence, and his conclusions of the law arising from the facts so found. In this respect the referee has strictly complied with the practice as prescribed by this Court. Klutts v. McKenzie, 65 N. C., 102; Green v. Castleberry, 70 N. C., 20; Earp v. Richardson, 75 N. C., 84. The evidence in the case was very voluminous, and as will be seen by reference to the statement of the case, the facts found and the conclusions of law, were numerous; but the only exception relied upon in the argument before us was, that “the conclusions of law numbered 2, 3, 4, 6 and 8, are erroneous and contrary to the facts and the law governing the case.” All the other exceptions were abandoned in this Court. The exception cannot be sustained. It is too vague and uncertain. It points out no faults, either in the facts found nor error in the conclusions of law upon them. The law requires that an exception to the report of a referee, should discriminate and point out specifically the faults complained of. An excep [94] tion that a referee ought to have found as a conclusion of law that the plaintiff recover nothing, is not sufficient. Suit v. Suit, 78 N. C., 272. The meaning and purport of the defendants’ exception is, that upon the whole case the plaintiff is not entitled to the relief he seeks. The facts in the case were found by the referee, and are presumed to have been approved by the Court, and when that is so, they are not the subject of review in this Court. Hyman v. Devereux, 65 N. C., 588. The exception to this is, where there is no evidence to support the finding, but even then the error must be made the ground of exception, otherwise the finding will be presumed to be right. Green v. Jones, 78 N. C., 265. But to give the defendant the full benefit of his exceptions as taken, and zealously urged in this Court (and what does it amount to?), he contended that the mortgage was given to indemnify the sureties of Middleton against liability on his guardian bond, and that the right of the creditor did not attach to such a security, until the principal and sureties should all become insolvent, and as it did not appear from the finding of the referee, that either Middleton or his .sureties were insolvent, the plaintiff, as creditor, had no right to be subrogated to the rights of the sureties in the mortgage. If this were a mortgage simply to indemnify the sureties, there would be some force in the position taken by the learned counsel, for the same doctrine with some qualifications i was announced by this Court in the recent case of Ijames v. Gaither, 93 N. C., 358. But that case is distinguishable from this. There the mortgage was given exclusively for the indemnification of th.e sureties, but here it is given, avowedly for the purpose of indemnifying the sureties, but at the same time expressly providing, not only, that if the debt should be paid by the grantor the deed should be void, but in the event the debt should not be paid by him, that the property should be held by the sureties, in trust to sell the same and pay off and discharge the said debt, so that the property conveyed in the deed, was, by its express terms, appropriated to the payment of the debts mentioned therein. [95] The entire deed, in all its parts, must be considered in ascertaining the scope, meaning and intention of the parties, and we think its proper construction is, that it reposes trust in the sureties to hold and sell the property conveyed, and apply the proceeds to the payment of the debts specified therein, if the trustor should fail to pay the same, by which means the sureties are to be indemnified. So that there was, in fact, no necessity for resorting to the equitable doctrine of subrogation, as the creditors mentioned in the deed were the persons for whose benefit the deed was intended to enure. But as the effect will be the same, whether there is a judgment for subrogation or a direct judgment that the sureties shall proceed to sell the property and apply the proceeds to payment of the debts, there is no error in the judgment of the Superior Court. In either case, the sureties obtain their indemnification to the amount realized from the sale, which is all they have a right to claim. The judgment of the Superior Court is affirmed, except as to the time when the sale of the property conveyed in the mortgage shall be made, and that must be subject to the further directions of the Court below, and the case is remanded to the Superior Court, to the end that an account may be taken of the assets in the hands of B. F. Middleton, as administrator of W. B. Middleton, to ascertain what amount thereof may be applicable to the debts secured in the mortgage, and that the said Court may make all such further orders and judgments in the cause as shall be deemed necessary to effectuate the judgment of the Superior Court as affirmed by this decision. No error. Affirmed.