Springs v. Cole, 171 N.C. 418 (1916)

May 3, 1916 · Supreme Court of North Carolina

171 N.C. 418

THOMAS W. SPRINGS v. J. W. COLE.

(Filed 3 May, 1916.)

1. Conversion — Evidence—Mortgages—Registration—Notice.

In an action upon a note and for wrongful conversion of a cow, it appeared that H. bought the cow from the defendant, giving the note with the plaintiff as indorser and a mortgage to the plaintiff to secure him therein, the mortgage not having been registered. H. returned the cow to defendant upon condition that he pay the note and deliver it to him. Held, upon redelivery of the cow, the defendant was a purchaser for value, unaffected with notice of the mortgage lien, and the action for conversion of the cow cannot be maintained against him.

2. Principal and Surety — Statute of Frauds — Original Promise — Mortgages— Registration — Notice.

The defendant received from H. a note for the purchase price of a. cow whereon the plaintiff was an indorser secured by an unrecorded mortgage, of which the defendant had actual knowledge. The defendant received the cow from H. upon condition that he pay off the note then held by a bank. Held, the defendant’s promise was an original one not falling within the statute of frauds, inuring to the exoneration of the plaintiff as surety, though not made to him, the consideration of the transaction moving to the defendant being the value of the cow, represented by the amount of the note. Nicholson v. Dover, 145 N. C., 145.

3. Principal and Surety — Evidence—Statute of Frauds — Questions for Jury.

It is held in this case that, under the conflicting evidence, the question as to whether the defendant’s promise was an original one inuring to the benefit of an indorser on a note given for the purchase of a cow should be submitted to the jury upon appropriate issues.

Appeal by plaintiff from Justice, J., at December Term, 1915, of GASTON.

Civil action. At tbe conclusion of tbe evidence tbe court sustained tbe motion to nonsuit, from wbicb tbe plaintiff appealed.

Mangum, & Wolbz for plaintiff.

Carpenter & Carpenter for defendant.

BeowN, J.

Tbe plaintiff sues to recover tbe sum of $36.80 from tbe defendant Cole for tbe wrongful and unlawful conversion of a certaiñ red cow. For a second cause of action plaintiff seeks to recover of said defendant for fraudulently obtaining possession of tbe said cow by promising to pay a certain note wbicb tbe defendant afterwards refused to pay.

Tbe testimony tends to prove that one Henley purchased from tbe defendant Cole a cow and gave bis note for $35, dated 28 February, 1914, due 18 November, 1914, bearing 6 per cent interest from date, and tbat tbe plaintiff became surety or indorser on tbe said note for Henley. Henley executed a mortgage on tbe cow to tbe plaintiff to secure plaintiff for indorsing tbe note. Afterwards Henley traded tbe cow back to tbe defendant Cole upon tbe condition and promise upon tbe part of tbe defendant Cole tbat be was to pay tbe said note and return it to tbe plaintiff, and tbat Cole paid nothing else for tbe cow. Tbis is substantially tbe testimony of Henley, and it is corroborated by tbe testimony of tbe plaintiff.

1. It is plain tbat tbe plaintiff cannot recover of Cole by virtue of tbe mortgage on tbe cow for wrongful conversion, for tbe reason tbat tbe mortgage was not recorded, and while tbe mortgage was good between tbe plaintiff and Henley, when Henley traded tbe cow back to Cole, tbe mortgage, not being on record, would not continue to be a lien upon tbe property. Tbe plaintiff upon bis own showing cannot recover tbe cow from tbe defendant Cole, who is in law a purchaser, and consequently be cannot recover for its conversion. Herring v. Tilghman, 35 N. C., 392. Although Cole bad notice of tbe outstanding mortgage, tbat will not supply tbe place of registration. Blalock v. Strain, 122 N. C., 283; Piano Co. v. Spruill, 150 N. C., 168.

2. Notwithstanding tbe plaintiff cannot recover for tbe wrongful conversion of tbe cow, we are of opinion tbat there is evidence upon which be may recover tbe amount of tbe note from Cole upon an express promise upon tbe part of Cole to pay tbe said note, which promise, although made to Henley, was made, also, for tbe plaintiff’s benefit, as well as Henley’s. There is evidence tbat tbe plaintiff held an unregistered mortgage on tbe cow; tbat tbe defendant Cole knew it; tbat tbe note for tbe purchase money of tbe cow was given to Cole and be bad transferred it to tbe Mount Holly Bank. When tbe defendant Cole took tbe cow from Henley, according to Henley’s evidence, tbe price to be paid for her was tbe amount of tbe note, and tbat was to be applied not only in exoneration of Henley, but necessarily, also, in exoneration of Henley’s surety. Tbis was not a promise upon tbe part of defendant Cole to pay Henley’s debt, and, therefore, required to be in writing, but was practically an original promise upon tbe part of defendant Cole to apply tbe purchase money which be was to pay for tbe cow to tbe note on which tbe plaintiff was surety and in satisfaction of tbe mortgage on tbe cow. Tbis promise was made as well for tbe plaintiff’s benefit as for Henley’s, and, we think, can be enforced by tbe plaintiff under tbe principles laid down in Nicholson v. Dover, 145 N. C., 18.

We think these inferences may be drawn from tbe testimony of Henley; but there is evidence, also, tending to prove tbat Cole agreed to take another mortgage on tbe cow and a bog and wait until tbe fall for the money to be paid by Henley, and that Henley failed to give the mortgage on the cow and hog. If those are the facts, and Cole’s promise to pay the debt was based on that condition, which was not complied with, then Cole would not be liable for the debt. The evidence is by no means plain, and we think, under the circumstances, the case should be submitted to the jury upon proper issues.

New trial.