N.C. Gen. Stat. There we held that summary judgment was improper because a factual issue existed as to whether or not the note had been paid. However, plaintiff does not dispute that it did not have possession of the Note after sending it to defendants. Defendants argue that both the Note and the Deed of Trust are null and void as a result of plaintiff's mistaken cancellation. Because the Note and Deed of Trust represent differing rights and obligations, each instrument will be analyzed separately.
Defendants maintain that the underlying obligation was discharged, thereby extinguishing the Note.
Discharge of instruments is controlled by N.C. Gen. Stat. N.C. Gen. Stat. Our courts have not yet had occasion to construe this subsection in the context of mistakenly canceled notes. We now join the overwhelming majority of those jurisdictions and hold that cancellation and surrender of a promissory note due to clerical error or mistake alone does not provide the requisite intent to effectively discharge the debt represented by that note. As a preliminary consideration, we note that most courts considering this issue have been construing statutory provisions mirroring the pre-1990 version of Article 3.