Court Opinion

ID: 9566827
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:43:45.319228+00
Date Added: 2024-06-11T09:40:36.342106
License: Public Domain

Judge WYNN
dissenting.
I respectfully dissent from Part I of the majority opinion because I find that there exists a genuine issue of material fact regarding the existence of consideration for the execution of the promissory notes.
*634The majority asserts that consideration for the promissory notes exists because the plaintiffs agreed to release properties from the judgment liens. The agreements regarding the release of those properties, however, specifically state that the properties were released from the judgment lien in consideration of the defendants’ payment against the accrued interest of the judgment. Such an agreement is not uncommon, as it is an accepted practice in the real estate trade for the holder of a judgment to release property to the owner in consideration for the payment of a certain amount toward the judgment.
I acknowledge that the agreements regarding the release of the properties also state that “[i]t is hereby mutually agreed that no other parcel of real property which is presently owned by either of [the defendants] shall be released in any manner by this agreement, which is hereby secured by a promissory note executed by [the defendants] to [the plaintiffs], in the principle sum of the present outstanding balance of said judgment . . . .” However, I do not read this language to indicate that the release of the properties was contingent upon the execution of the promissory notes. Rather, it merely reinforces that only the properties indicated in the agreements are to be released, that the judgments otherwise stand, and that the promissory notes, as incorporated into the agreements, act to reaffirm the existence of the original judgments. In fact, such an interpretation is supported by the promissory notes themselves, which state on their faces that they were “executed for the sole and limited purpose of reaffirming the balance due on the principle and interest of [those] certain outstanding [judgments] against the [defendants]. . . .”
The majority opinion implicitly allows the defendants to be obligated to the plaintiffs twice for one debt. If the promissory notes are enforceable, the original judgment and the subsequent promissory note represent two valid legal obligations arising from a single debt, giving the appearance that the initial debt amount has doubled. Prior to the running of the statute of limitations on the judgments in the present cases, the plaintiffs appear to have had the benefit of either collecting under the promissory note or foreclosing on the judgment lien against the defendants’ properties. I cannot conclude that such a result is intended by the law.
Despite my quarrel with the majority’s conclusion regarding the consideration, I do not find that summary judgment should *635be granted in favor of the defendants. Rather, I conclude that a genuine issue of material fact exists regarding the existence of consideration.
It has long been established in North Carolina that the forbearance to exercise a legal right is sufficient consideration to support the execution of a promissory note. Bumgardner v. Groover, 245 N.C. 17, 22, 95 S.E.2d 101, 105 (1956). The plaintiffs’ affidavits, submitted in support of their motions for summary judgment, stated that the promissory notes were executed in lieu of actions on their respective superior court judgments against the defendants. The defendants contradicted those statements and asserted that they received no consideration for executing the promissory notes because they received no benefit and the plaintiffs suffered no detriment. Moreover, the defendants pointed out that the judgments remained in full force and effect and the plaintiffs had every right to execute on them and attempt to collect them, and that, therefore, the judgments held were not affected in any way by the promissory notes.
Because the conflicting affidavits, together with the language of the promissory notes, create a genuine issue of material fact regarding whether the plaintiffs agreed not to take action on the judgments in consideration for the execution of the promissory notes, I conclude that this case must be remanded to the trial court for a trial on its merits.
The forbearance, if present, effectively renders the judgments unenforceable by the plaintiffs, leaving only the promissory notes as a viable means of realizing the debt owed them. I point out, however, that in the subject case the original judgments remained on record in the Clerk’s office even though subsequent promissory notes had been executed. The fact that the judgments had not been canceled gives the impression to, for example, title attorneys and creditors that an enforceable judgment lien exists against the property. It appears that a more sound practice for members of the bar in this situation would be to cancel the judgment in the Clerk’s office at the time the promissory note is executed. Such a procedure would avoid the appearance that the defendants owed twice for one debt and, moreover, might alleviate questions of whether adequate consideration existed. See Little v. Steele, 214 N.C. 343, 199 S.E. 282 (1938) (cancellation of a judgment is sufficient consideration for notes executed by judgment debtor payable to judgment holder).