Case ID: nc_195/html/0255-01.html
Source: Caselaw Access Project
Author: {"author": "BeogdeN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

E. A. EDWARDS et ux. v. W. T. MEADOWS.
    (Filed 29 February, 1928.)
    1. Mortgages — Rights and Liabilities of Parties.
    Where the purchaser of lands assumes prior encumbrances thereon and ’takes under a deed warranting an unencumbered title, and mortgages the land back for the payment of the purchase price, and then conveys to the defendant against whom the plaintiff brings action after the lands had been sold under the first mortgage for wrongfully removing a building from the mortgaged premises without his consent: HeW,, the defendant is not a party to the plaintiff’s deed and he cannot claim the benefit of the warranty therein, or be thus advantaged by his own tort.
    2. Same.
    Where a second mortgagee has been damaged by the act of the mortgagor in removing a dwelling from the mortgaged premises, and the lands have been foreclosed by the first mortgagee, the measure of his damages, in his action to recover them, is the value of the building so removed within the amount due and unpaid upon his note secured by his recorded mortgage.
    Civil actioN, before Townsend, Special Judge, at October Special Term, 1927, of MartiN.
    
      Tbe plaintiffs, being' tbe owners o£ a certain lot in tbe town of Wil-liamston, executed two deeds of trust upon tbe land to A. R. Dunning, trustee, to secure tbe payment of certain notes. These notes, at tbe time of tbe public sale of tbe property, were owned by tbe Martin County Savings and Trust Company. Thereafter tbe plaintiff sold tbe property to L. T. Eowden for $4,000, receiving a cash payment of $1,500. It was agreed between tbe plaintiffs and Eowden that tbe purchaser Eowden should assume and pay off as a part of tbe purchase price tbe aforesaid notes held by tbe Trust Company, amounting to $500, and this $500 was deducted from tbe purchase price. To secure tbe balance then remaining of tbe purchase price, aggregating $2,000, Fowden executed and delivered to tbe plaintiffs five notes of $400 each and secured tbe payment thereof by deed of trust upon said land to A. R. Dunning, trustee. Eowden made certain payments, reducing tbe $2,000 mortgage to tbe sum of $1,093.90. Prior to tbe 26th day of May, 1924, tbe defendant Meadows, without tbe knowledge or consent of plaintiffs, moved off tbe mortgaged premises a dwelling-house. situate thereon, and placed said bouse upon a lot owned by him. Thereafter on tbe 26th day of May, 1924, Dunning, trustee, upon tbe request of tbe Savings and Trust Company, advertised said property and sold it at public auction under the first deed of trust aforesaid. At tbe sale tbe naked lot brought $1,000, and tbe trustee disbursed tbe proceeds of tbe sale by paying off the $500 mortgage which, with accrued interest, amounted to $650.16, tbe taxes due upon tbe premises and the costs of sale, and paid tbe surplus, amounting to $243.49, to tbe plaintiffs. On tbe date of tbe sale tbe balance due plaintiffs on Eowden’s mortgage was $1,093.90, and after crediting tbe $243.49 received by plaintiffs from tbe trustee, there was a balance due on plaintiffs’ mortgage of $850.41. Thereupon tbe plaintiffs instituted this suit against the defendant for tbe value of tbe bouse which be bad unlawfully moved from tbe premises and which bad thus resulted in impairment of tbe security.
    The issues and the answers of the jury thereto were as follows :
    1. Did tbe defendant wrongfully and unlawfully remove tbe bouse from the mortgaged premises as alleged ? Answer: Yes.
    2. What damage, if any, is tbe plaintiff entitled to recover ? Answer: $200.25 and interest.
    3. What was tbe value of tbe bouse at tbe time of removal ? Answer: $600.
    4. What was tbe value of tbe naked lot at tbe time of tbe sale under plaintiffs’ mortgage to C. H. Godwin ? Answer: $1,000.
    Tbe record shows tbe following admission: “It is admitted by tbe plaintiffs that at tbe time of tbe sale of tbe naked lot there was only due on her mortgage tbe sum of $1,093.90, and at tbe time of tbe sale of the naked lot said lot was worth $1,000. It is admitted that the cost of the sale, including taxes due, amounted to $106.35. It is admitted that the naked lot brought $1,000 at the sale, and that the plaintiff had and received all of said amount except the amount due on the two mortgages given by plaintiffs to C. H. Godwin' and the Martin County Savings and Trust Company, which said mortgages were prior, valid and subsisting liens on said property. That said lot was sold by plaintiffs, who warranted same to be free and clear from encumbrances to Eowden, under whom defendant claimed title. It is further admitted that if the amount of prior liens given by plaintiffs should be deducted after giving plaintiff credit for the cost and taxes paid there would only be due on plaintiffs’ mortgage the sum of $200.25.”
    From judgment upon the verdict in favor of plaintiffs for $200.25, they appealed.
    
      Elbert 8. Peel, Wheeler Martin and Rupert Pickens for plaintiffs.
    
    
      A. R. Dunning for defendant.
    
   BeogdeN, J.

The judge charged the jury as follows: “I charge you, upon all the evidence, and the admissions of the plaintiffs, that you cannot answer the second issue more than $200.25 and interest. It is admitted that the naked lot was worth $1,000 when sold, and that at that time there was due on the plaintiff’s mortgage the sum of $1,093.90, and that two prior mortgages given by the plaintiffs were paid out of the proceeds of the sale, and that the cost of the sale and taxes paid amounted to $106.35 were added to the plaintiff’s mortgage, and upon these admissions the court charges you the plaintiffs cannot complain of damages for the amount paid out on account of the two prior mortgages given by them, and you cannot answer the second issue more than $200.25 and interest. The defendant contends that you ought to answer it nothing or some small amount. The measure of damages would be the difference in value of the lot with the house on it and the value of the lot with the house off it, but in no event could she recover more than enough to pay her mortgage. I charge you that if she had given a prior mortgage and afterwards gave a warranty deed, as is admitted, the amount ought to be taken out to pay the prior mortgage, could not be complained of as damages in this case. It is for you to say if she has sustained any damage and how much, bearing in mind the maximum is $200.25 and interest.”

The exception to the foregoing instruction is sustained. The defendant was a wrongdoer or tort-feasor. The jury found that he had wrongfully and unlawfully removed from the mortgaged premises the dwelling-house which, at the time of removal, was worth $600. Nothing else appearing, the defendant was therefore liable to the plaintiffs for the sum of $600, because tbe defendant, by bis wrongful act, bad impaired tbe plaintiff’s security by tbat amount. Of course tbe- plaintiffs cannot recover more than tbe amount due on tbe Eowden mortgage, amounting on tbe day of tbe sale to $1,093.90. Tbe plaintiffs bave received from tbe trustee a part of tbe proceeds of sale in tbe sum of $243.49, wbicb left a balance of $850.41 due plaintiffs on said mortgage. It is obvious tbat $600 does not pay an indebtedness of $850.41.

Tbe defendant contends, however, tbat plaintiffs conveyed tbe property to Eowden by deed containing a covenant against encumbrances, and it further appearing tbat there were mortgages on tbe land at tbe time, securing an indebtedness of $500, there was a breach of said covenant by tbe plaintiffs, and hence tbe sum of $500 with interest and taxes and costs of sale must be credited on plaintiffs’ mortgage before resort can be bad to tbe defendant. If this could be done, then tbe parties agreed tbat tbe balance due plaintiffs was $200.25, and tbe judge so charged tbe jury. But this cannot be done. Tbe defendant was not a party to tbe deed from plaintiffs to Eowden, and therefore be bad no claim against tbe plaintiffs for any breach of any covenant in tbe deed. To adopt tbe theory of tbe defendant would in effect permit him to plead as a counterclaim to bis liability for bis unlawful act, tbe breach of covenant in a deed to wbicb be was not a party and by wbicb be was not injured, or caused to suffer loss.

Upon tbe admissions of tbe parties and tbe findings of tbe jury upon tbe other determinative issues, tbe second issue is immaterial. Tbe plaintiffs are entitled to judgment for six hundred dollars and interest from 1 June, 1924, and costs.

Modified and affirmed.