Gray v. Mewborn, 196 N.C. 770 (1929)

March 20, 1929 · Supreme Court of North Carolina

196 N.C. 770

T. W. GRAY and DORA GRAY, His Wife, v. T. W. MEWBORN et al.

(Filed 20 March, 1929.)

Reformation of Instruments — Grounds Therefor — Mutual Mistakes — Mortgages.

In a suit to reform mortgage on lands upon the mutual mistake that a properly indexed junior mortgage should be subject to a prior insufficiently registered one under agreement between respective parties: Held, reformation of the instrument upon the verdict of the jury is not error.

Appeal by defendant, Mewborn, from Grady, J., at November Term, 1928, of LeNOXk.

No error.

F. E. Wallace, G. W. Pridgen, Jr., and McLean & Stacy for plaintiffs.

Bouse & Bouse for defendant.

Per Curiam.

On 10 February, 1916, tbe plaintiffs, executed a mortgage to J. H. Parbam and others to secure tbe sum of $204. Tbe mortgage was registered on 12 February, 1916, and afterwards transferred to tbe defendant, R. H. Gray. On 25 February, 1919, tbe plaintiffs to secure tbe payment of $1,000 executed to Parbam and others a mortgage which was registered 6 March, 1919. On 21 December, 1920, they executed to R. H. Gray a mortgage for $2,130, which was registered immediately, but was not cross-indexed until February, 1923. On 21 December, 1920, they gave a mortgage to tbe defendant, Mewborn, for $2,800, which was registered and cross-indexed on 6 February, 1921. Tbe following is tbe warranty clause of tbe mortgage to Mewborn: “That tbe same are free from all encumbrances whatsoever except $2,130 to Hadley Gray; $204 to H. C. Wooten; $1,000 to Parbam, Suggs and Herring, on tract No. 1; and $1,800 to George W. Garris on tracts No. 2 and No. 3.”

On 1 March, 1922, tbe plaintiffs executed a deed of trust to R. E. Mewborn, trustee for T. W. Mewborn, to secure tbe debt for which tbe mortgage of 21 December, 1920, was executed. On 12 January, 1924, J. H. Parbam and others brought suit against T. W. Gray to foreclose tbe mortgage for $204, to which judgment creditors and all tbe other mortgagees became parties. Tbe land was sold by a commissioner, and in tbe application of tbe proceeds other claims were given priority over tbe Gray mortgage for tbe reason that this mortgage bad not been properly indexed prior to tbe registration of tbe Mewborn mortgage. This action was instituted to reform tbe Mewborn mortgage and tbe deed of trust. A demurrer was filed and overruled. Gray v. Mewborn, 194 N. C., 348. Thereafter a trial was bad and this verdict was returned :

1. Was it understood and agreed between T. W. Gray and T. "W". Mewborn tbat tbe mortgage deed from Gray and wife to Mewborn, dated 21 December, 1920, should contain a clause or proviso that it should be junior in effect to the mortgage deed made by T. ~W. Gray and wife to E. H. Gray, dated 21 December, 1920, as alleged in the complaint ? Answer: Yes.

2. If so, was such clause or proviso left out of said mortgage deed through the mutual mistake of the parties, as alleged in the complaint ? Answer: Yes.

From a judgment for the plaintiffs the defendant, Mewborn, appealed.

There .are four assignments of error. The first rests on an exception to the admission of negative testimony, the second and third on exceptions to the refusal to dismiss the action as in case of nonsuit; and the fourth on an exception to the judgment. None of these exceptions presents sufficient cause for granting a new trial.

No error.