Title: Ross Realty Co. v. First Citizens Bank & Trust Co.
Citation: 250 S.E.2d 271, 296 N.C. 366
Docket Number: 93
State: north-carolina
Issuer: north-carolina Supreme Court
Date: January 4, 1979

250 S.E.2d 271 (1979) 296 N.C. 366 ROSS REALTY COMPANY v. FIRST CITIZENS BANK &amp; TRUST COMPANY, as Trustee of the Profit Sharing Retirement Plan and Trust of Thermo Industries, Inc. and Affiliated Companies. No. 93. Supreme Court of North Carolina. January 4, 1979. *272 Ragsdale &amp; Kirschbaum, by William L. Ragsdale, Raleigh, for defendant appellant. Miller, Johnston, Taylor &amp; Allison, by John B. Taylor and James W. Allison, Charlotte, for plaintiff appellee. Weinstein, Sturges, Odom, Bigger, Jonas &amp; Campbell, by Maurice A. Weinstein, T. LaFontine Odom and L. Holmes Eleazer, Jr., Charlotte, amicus curiae brief, for Henderson Belk. Seay, Rouse, Johnson &amp; Harvey, by James L. Seay and Ronald H. Garber, and Sanford, Adams, McCullough &amp; Beard, by J. Allen Adams, E. D. Gaskins, Jr., and Catharine B. Arrowood, Raleigh, amicus curiae brief, for Lee A. Debnam and Algie Stephens. BRITT, Justice. Defendant contends the Court of Appeals erred in affirming the trial court's conclusion of law that the provisions of G.S. 45-21.38 are inapplicable to the subject matter of this action and in entering judgment based on that conclusion. We think the contention has merit. G.S. 45-21.38 provides in pertinent part as follows: Decision in this case depends upon the interpretation or construction of the quoted statute. "In the interpretation of statutes, the legislative will is the all-important or controlling factor. Indeed, it is frequently stated in effect that the intention of the legislature constitutes the law. Accordingly, the primary rule of construction of statutes is to ascertain and declare the intention of the legislature, and to carry such intention into effect to the fullest degree. A construction adopted should not be such as to nullify, destroy, or defeat the intention of the legislature." 73 Am.Jur.2d Statutes § 145, p. 351. Through the years this court has adhered to the principle that the legislative intent is a controlling factor in the construction of statutes. "The object of all interpretation of statutes is to ascertain the meaning and intention of the Legislature . . . ." Kearney v. Vann, 154 N.C. 311, 70 S.E. 747 (1911). Accord: State v. Hart, 287 N.C. 76, 213 S.E.2d 291 (1975); Underwood v. Howland, 274 N.C. 473, 164 S.E.2d 2 (1968); Freeland v. Orange County, 273 N.C. 452, 160 S.E.2d 282 (1968); Buck v. Guaranty Company, 265 N.C. 285, 144 S.E.2d 34 (1965); Canteen Service, Inc. v. Johnson, 256 N.C. 155, 123 S.E.2d 582, 91 A.L.R.2d 1127 (1962); Mullen v. Town of Louisburg, 225 N.C. 53, 33 S.E.2d 484 (1945); In re Steelman, 219 N.C. 306, 13 S.E.2d 544 (1941); Branch Banking and Trust Company v. Hood, 206 N.C. 268, 173 S.E. 601 (1934); Hunt v. Eure, 188 N.C. 716, 125 S.E. 484 (1924); State v. Burnett, 173 N.C. 750, 91 S.E. 597 (1917); Abernethy v. Board of Commissioners, 169 N.C. 631, 86 S.E. 577 (1915); McLeod v. Board of Commissioners, 148 N.C. 77, 61 S.E. 605 (1908); Blair v. Coakley, 136 N.C. 405, 48 S.E. 804 (1904). In State v. Bell, 184 N.C. 701, 705, 115 S.E. 190 (1922), this court in construing a statute relating to the abandonment of children said: "In our endeavor to ascertain the purpose of the statute, we should also have due regard to the rule that the spirit and reason of the law shall prevail over its letter, especially where a literal construction would work an obvious injustice. (Citations.)" In Board of Education v. Dickson, 235 N.C. 359, 361, 70 S.E.2d 14 (1952), this court, speaking through Ervin, J., in construing certain statutes relating to the employment of school principals, said: ". . . No good purpose will be served by setting forth verbatim the somewhat awkward language in which these enactments are couched. Their meanings are to be found in what they necessarily imply as much as in what they specifically express. 50 Am.Jur., Statutes, section 242." While the statute now codified as G.S. 45-21.38 is not artfully drawn, we think the manifest intention of the Legislature was to limit the creditor to the property conveyed when the note and mortgage or deed of trust are executed to the seller of the real estate and the securing instruments state that they are for the purpose of securing the balance of the purchase price. We have found very helpful an article (cited in the Amicus briefs) by Professors Brainerd Currie and Mark S. Lieberman appearing in the 1960 Duke Law Journal, pages 1 et seq. We quote a portion of the article: Most of the enactments mentioned now appear in Chapter 45, Article 2B of the General Statutes. The writers of the article concluded, among other things, that the 1933 General Assembly intended to protect vendees from oppression by vendors and mortgagors from oppression by mortgagees. Moreover, the authors examined the specific problem which this court confronts in the case sub judice. Where the Legislature has enacted a statute to achieve a specific aim, it is incumbent upon the court to construe the statute in a manner which effectuates that legislative purpose. In Underwood v. Howland, supra 274 N.C. at 478, 164 S.E.2d 2, 6 in an opinion by Huskins, J., this court said: Plaintiff relies very heavily on the opinion in Page v. Ford, 65 Or. 450, 131 P. 1013 (1913). Plaintiff correctly states that the Oregon court, construing an anti-deficiency statute similar if not identical to ours, held that their statuteliterally construeddid not prevent the holder of a note given for the purchase price of the land, and secured *275 by a mortgage, from disregarding the mortgage and bringing an action for personal judgment on the note. Plaintiff has urged us to construe G.S. 45-21.38 similarly, but this we refuse to do. We do not attempt to distinguish our statute from that of Oregon, nor the facts in this case from those before the court in Page. We note only that the Oregon court, using the same approach to statutory construction employed by the Court of Appeals in its consideration of this case, mechanically construed the language of the statute while failing to attempt to determine the purpose which the Legislature sought to accomplish. We feel compelled to follow the long tradition of this court which is to ascertain, if possible, the intent of our Legislature in interpreting statutes and to respect the rule "that the spirit and reason of the law shall prevail over its letter." Our conclusion that the Legislature did not intend to allow suit upon the note in purchase-money mortgage situations is also buttressed by what appears to have been the only contemporary commentary on the statute. In an article written by members of the faculty of the U.N.C. Law School a brief summary of the statute is followed by this observation: "The effect of this (the statute) is to limit the creditor to the property conveyed, when for the purchase money, changing in that respect the present statute. This applies only to such contracts as are made after the ratification of the Act, Feb. 6, 1933." A Survey of Statutory Changes in North Carolina in 1933, 11 N.C. Law Rev. 191, 219 (1933). Furthermore, the procedure attempted by plaintiff in the case at hand would circumvent the spirit and purpose of the statute in question. The Court of Appeals acknowledges in its opinion that its literal construction of the statute creates an "anomalous situation" which enables a creditor to easily evade the effect of the statute. After obtaining judgment on a note, a plaintiff could foreclose the deed of trust, apply the proceeds from the sale to the judgment, and then proceed with execution against the judgment debtor's general assets. Or, a plaintiff could ignore the deed of trust and proceed with execution against the judgment debtor's assets including the real estate covered by the deed of trust. Clearly, the General Assembly did not intend to allow such circumvention. In the recent case of State v. Shook, 293 N.C. 315, 317, 237 S.E.2d 843, 845 (1977), this court, in an opinion by Exum, J., construing G.S. 15A-943(b), said: Having in mind the purpose for which G.S. 45-21.38 was adopted, the perceived problem which the statute seeks to remedy, and the effect which a literal construction of the statute produces, we are compelled to construe the statute more broadly and to conclude that the Legislature intended to take away from creditors the option of suing upon the note in a purchase-money mortgage transaction. This construction of the statute not only prevents its evasion, but also gives effect to the Legislature's intent. Finally, plaintiff argues that a ruling against it in this case would place sellers of real estate at a serious disadvantage in the present-day market place. This argument is not persuasive. The seller still has the prerogative of determining the amount of the down payment as well as the amounts and due dates of the future payments; in case of default the seller gets the land back while the purchaser loses his down payment and any other payments made on the purchase price. For the reasons stated, the decision of the Court of Appeals is reversed and this cause is remanded to that court who will order *276 the judgment appealed from reversed and vacated. Reversed. BROCK, J., did not participate in this decision.