Court Opinion

ID: 9849692
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:44:26.989573+00
Date Added: 2024-06-11T09:20:24.726115
License: Public Domain

EAGLES, Chief Judge.
We first consider whether the trial court erred in refusing to grant defendants’ motion to dismiss and in granting plaintiffs motion for summary judgment. The defendants argue that the trial court erred in finding that the promissory note held by plaintiff was secured by a deed of trust which constituted a valid first lien against the property. Defendants argue that “ ‘[a] mortgage which purports to secure the payment of a debt has no validity if the debt has no existence.’ ” Walston v. Twiford, 248 N.C. 691, 105 S.E.2d 62 (1958) (quoting Bradham v. Robinson, 236 N.C. 589, 594, 73 S.E.2d 555, 558 (1952)) (citations omitted). Defendants further argue that “since by definition a mortgage is a conveyance of property to secure the obligation of the mortgagor, it is necessary for the mortgage to identify the obligation secured.” Walston, 248 N.C. at 693, 105 S.E.2d. at 64. Defendants state that according to the deed of trust, there should be a promissory note from Greg Ferguson, Trustee, to Mildred Putnam, dated 3 May 1990. However, the 3 May 1990 promissory note to plaintiff is signed by Leslie D. and Marilyn M. Ferguson. In this record, there is no promissory note signed by Greg Ferguson, Trustee, and therefore Greg Ferguson was not indebted to plaintiff as recited in the deed of trust. Defendants also contend that where the deed of trust incorrectly states that the grantor in the deed of trust owed the debt and there is no reference in the deed of trust to show it was security for a debt of another person, the obligation secured is not properly identified and the deed of trust is invalid. In re Foreclosure of Enderle, 110 N.C. App. 773, 775, 431 S.E.2d 549, 550 (1993). Accordingly, since there was no reference to the Leslie and Marilyn Ferguson note in the deed of trust and there is no evidence that Greg Ferguson as trustee was indebted to plaintiff, defendants argue that plaintiff cannot prevail in her claim that she has a valid lien and her complaint should have been dismissed.
*98Plaintiff argues that a deed of trust should not be invalid as to third persons because of the uncertainty in the description of the debt intended to be secured, where the debt can be identified through extrinsic evidence. See Allen v. Stanback, 186 N.C. 75, 118 S.E. 903 (1923). Here, plaintiff argues that it is clear that the debt existed and Leslie Ferguson was the beneficiary of the deed conveyed to Greg Ferguson, Trustee. Accordingly, plaintiff argues that she did have an enforceable deed of trust and a valid lien.
In Enderle, this court stated that “[s]imply put, because the deed of trust did not properly ‘identify the obligation secured,’ it is invalid.” Id. at 775, 431 S.E.2d at 550 (quoting Walston, 248 N.C. at 693, 105 S.E.2d at 64). Here, the deed of trust identifies Greg Ferguson as the debtor, while the promissory note is from Leslie and Marilyn Ferguson. As in Enderle, the deed of trust “did not properly ‘identify the obligation secured.’ ” Id. Accordingly, the deed of trust is invalid. Since the deed of trust is invalid, plaintiff does not have a valid lien. Accordingly, we hold that the grant of partial summary judgment is reversed and the action is remanded for entry of dismissal pursuant to Rule 12(b)(6) in favor of defendants.
Reversed and remanded.
Judge HORTON concurs.
Judge WALKER dissents with a separate opinion.