Snow Hill Livestock Co. v. Holland, 187 N.C. 346 (1924)

March 5, 1924 · Supreme Court of North Carolina

187 N.C. 346

THE SNOW HILL LIVESTOCK COMPANY v. J. W. HOLLAND et al.

(Filed 5 March, 1924.)

Injunction — Mortgages—Liens—Questions for Jury — Appeal and Error.

There was evidence that the intervener, who had acquired from the plaintiff a purchase-money mortgage of defendant on two mules, the subject of claim and delivery, in turn had sold these mules to defendant and took a purchase-money mortgage thereon for the balance of the purchase price, and that thereafter the plaintiff sold defendant another mule, and to secure the balance of the purchase price took a mortgage thereon and on the two mules sold to defendant by the interveners and subject to the latter’s mortgage, but registered subsequent thereto: Held, an instruction directing a verdict upon the evidence in intervener’s favor, in effect that the intervener's mortgage lien was prior to that of plaintiff, was reversible error to the plaintiff’s prejudice, its priority and validity to be determined by the jury upon the evidence.

Appeal by plaintiff from Horton, J., at December Term, 1923, of GREENE.

Civil action in debt, brought by plaintiff against the defendant, J. W. Holland, wherein an ancillary writ of claim and delivery was issued to recover certain personal property described in the “pleadings, and upon which the plaintiff claims to hold a mortgage.

The defendant filed no answer, but J. C. Exum intervened, gave bond and took possession of the property, claiming title to the same by virtue of a superior lien or prior mortgage. Tbe issue, therefore, is one of priority between tbe plaintiff and tbe intervener as to tbe title and right of possession to tbe property in question.

There was a verdict for tbe intervener, and from tbe judgment rendered thereon plaintiff appealed, assigning errors.

Langston, Allen & Taylor and J. Paul Frizzelle for plaintiff.

George M. Lindsay for intervener.

Stacy, J.

Tbe controversy as between tbe plaintiff and tbe inter-vener is over tbe prior claim and superior right to tbe possession of two mulés. Tbe essential facts are as follows :

1. Tbe mules in question were sold by tbe Snow Hill Livestock Company to one J. H. Edwards on or about 10 January, 1914, and a title-reserved contract or mortgage to secure tbe purchase price of said mules was taken from said Edwards and duly registered. On or about 2 May, 1915, for value received, tbe Snow Hill Livestock Company assigned and transferred this purchase-money contract or mortgage to J. C. Exum, intervener herein.

2. Thereafter, on or about 1 September, 1917, tbe defendant, J. W. Holland, purchased said mules from J. 0. Exum, or from J. H. Edwards with Exum’s consent, and executed direct to J. C. Exum a chattel mortgage to secure tbe balance due on tbe purchase price of said mules. This mortgage was not registered until some time between 26 November, 1917, and 18 December, 1917. Exum contends that both mortgages are valid. This is denied by plaintiff.

3. On 24 November, 1917, tbe plaintiff sold to J. W. Holland another mule for $425, and, to secure tbe purchase price of same, took a mortgage on tbe mule sold and tbe two mules in dispute. This mortgage was duly registered on 26 November, 1917, prior to tbe registration of tbe Exum mortgage, mentioned in paragraph 2, above.

4. On 18 December, 1917, tbe defendant carried tbe mule back which be bad purchased on 24 November, and exchanged this mule for another, valued at $400. It is tbe contention of tbe plaintiff that this exchange, by agreement, was not to affect tbe security given on 24 November, and tbe note of $425 was simply to be credited with a payment .of $25. Intervener controverts this contention.

On tbe issue as to whether tbe intervener was tbe owner and entitled to tbe possession of tbe two mules in question, tbe court instructed tbe jury as follows:

“Now, as to tbe first issue, tbe court charges you, if you find from tbe evidence in this case, and by its greater weight, that, at tbe time these mules were seized under claim and delivery in this case, the defendant Holland was indebted to the intervener, J. Q. Exum, on either the first note executed by Edwards to the Snow Hill Livestock Company, and then transferred to Exum, or if indebted to J". C. Exum under the last two notes recorded in December, 1917, you will answer the first issue ‘Yes.’ ”

We think this instruction must be held for error on plaintiff’s exception. His Honor here in effect holds that the plaintiff’s mortgage executed 24 November, 1917, and registered two days thereafter, is of no effect. Its validity and priority must be determined by the facts as found by the jury. To this end, let the cause be remanded for another hearing.

New trial.