Court Opinion

ID: 8909490
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:28:16.725547+00
Date Added: 2024-06-11T17:08:25.126636
License: Public Domain

Judge Greene
dissenting.
The trial judge conducted a hearing, without a jury, as required by N.C.G.S. Sec. 45-21.16(d) (1984). Pursuant to N.C.G.S. Sec. 1A-1, Rule 52(a)(1) (1983), the trial court entered findings of fact entirely consistent with the stipulated findings submitted to *104the court. Based on those findings, the court entered the following conclusion:
1. That the receipt and endorsement by Charles Billings of the two (2) official Mid-South checks in the amounts of $90,000.00 and $79,300.00 respectively, constituted payment in full of the debts evidenced by the Notes secured by the Deeds of Trust referenced hereinabove, which Petitioners have sought to foreclose by this proceeding.
As the findings of fact are based on stipulated facts, they are supported by competent evidence in the record and are therefore conclusive on appeal. See Heating & Air Conditioning Assoc., Inc. v. Myerly, 29 N.C. App. 85, 89, 223 S.E. 2d 545, 548, disc. rev. denied, 290 N.C. 94, 225 S.E. 2d 323 (1976). However, as the court’s conclusion involved legal questions, this court must determine de novo whether the undisputed facts are legally sufficient to support the conclusion. Jones v. Andy Griffith Products, Inc., 35 N.C. App. 170, 174, 241 S.E. 2d 140, 142, disc. rev. denied, 295 N.C. 90, 244 S.E. 2d 258 (1978) (appellate court must determine if facts are “legally sufficient to support the conclusion”); Davison v. Duke University, 282 N.C. 676, 712, 194 S.E. 2d 761, 783 (1973) (conclusion involving interpretation of contract relating to intention of parties is a question of law, “subject to review on appeal”); see Eaton v. Courtaulds of North America, Inc., 578 F. 2d 87, 90 (5th Cir. 1978) (conclusion of trial court as to contract interpretation is to be “considered afresh by [the appellate court] as a matter of law”).
Without question, pursuant to the Uniform Commercial Code, the checks issued by the bank were negotiable instruments, Billings was the holder of those checks and liability on the checks was discharged upon payment of those checks by the issuing bank. That, however, does not resolve the question of whether the checks were “taken” as full payment for the underlying obligation on the notes and deed of trust. N.C.G.S. Sec. 25-3-802(1)(a) (1986) (where an instrument is taken for an underlying obligation, the obligation is pro tanto discharged). That question is not answered by the Uniform Commercial Code and can only be resolved by resort to traditional contract law. Under contract law, payment occurs where there is a delivery of money or its equivalent and acceptance “with intent in whole or in part” to pay the debt. Wilkerson v. Metropolitan Life Ins. Co., 206 N.C. 882, 887, 175 S.E. 172, 174 (1934). On this issue, the debtor, First Resort Properties, had the burden of proof. *10570 C.J.S. Payment Sec. 69, p. 57 (1987) (“burden of proving payment is on the party who alleges it”).
In reviewing the undisputed facts, Billings’ endorsement of the checks, with their notations, does not in my opinion rebut the presumption of nonpayment arising from Billings’ possession of the uncanceled notes and deed of trust. See 70 C.J.S. Payment Sec. 73, p. 62 (1987) (presumption of nonpayment created by creditor’s possession of the uncanceled note and deed of trust). Furthermore, the facts reveal Billings only received $64,300.00 of the $169,300.00 owed on the notes. Accordingly, I am of the opinion that the undisputed facts support a conclusion that full payment was not made and accepted and I would reverse the order of the trial court and allow the foreclosure proceeding to proceed. See Continental Casualty Co. v. Funderburg, 264 N.C. 131, 134, 140 S.E. 2d 750, 753 (1965) (Supreme Court rejected conclusion of trial court relating to intention of parties and entered different conclusion).