Mackay v. Meredith, 202 N.C. 639 (1932)

April 20, 1932 · Supreme Court of North Carolina

202 N.C. 639

CLARENCE H. MACKAY and EDWARD ARMSTRONG, Agent, v. C. O. MEREDITH and SOUTHERN REAL ESTATE COMPANY.

(Filed 20 April, 1932.)

Payment A c — Payment of amount of mortgage debt to clerk is not payment to tbe mortgagee, thei*e being no statutory authority therefor.

Where in a suit to restrain the foreclosure of a mortgage a controversy' arises between the mortgagor and the mortgagee as to the amount due thereunder, and the mortgagor deposits the amount claimed to be due by him with the clerk of the Superior Court and has notice to be served on the mortgagee that the amount -would be paid to him upon surrender and cancellation of the note and mortgage, and the issue as to the amount of the debt is answered in favor of the mortgagor: Held, a judgment ordering the cancellation of the note and mortgage and permanently enjoining the foreclosure of the instrument is erroneous, the payment to the clerk not being payment to the mortgagee, the clerk being the agent of the mortgagor and not the mortgagee and there being no statutory authority for such payment to the clerk.

Appeal by defendant, C. 0. Meredith, from Warliclc, J., at September Term, 1931, of Guilford.

No error in the trial; error in the judgment.

This is an action for a permanent injunction, restraining the defendant, 0. 0. Meredith and his agent, Southern Real Estate Company, from selling the land described in the complaint under the power of sale contained in a mortgage executed by Jesse Cole and wife, under whom plaintiff claims title to said land.

The action arose out of a controversy between the parties as to the amount due on the note secured by the mortgage. The plaintiff contended that the amount due is $1,493.48, with interest from 6 October, 1930; the defendant contended that said amount is $1,531.71, with interest from 15 May, 1930. It is admitted in the pleadings that after the defendant had advertised the land for sale under the power of sale in the mortgage, to wit, on 6 October, 1930, the plaintiff deposited with M. W. Gant; clerk of the Superior Court of Guilford County, the sum of $1,493.45, and caused notice to be served on the defendant by the sheriff of said county that said amount would be paid to the defendant by said clerk of the Superior Court, upon the surrender of the note marked paid and of the mortgage duly canceled. This action was commenced on 9 October, 1930.

The only issue submitted to the jury at the trial of the action was answered as follows:

“What amount is due the defendant, C. 0. Meredith, upon the mortgage deed of Jesse Cole and wife mentioned and described in the complaint? Answer: $1,493.45.”

From judgment ordering and decreeing that the note and mortgage executed by Jesse Cole and wife to the defendant, C. 0.'Meredith, and described in the complaint, be marked satisfied and canceled, and that said defendant be restrained and enjoined permanently from exercising the power of sale contained in said mortgage, the defendant appealed to the Supreme Court.

H. B. Stanley for plaintiffs.

Hoyle & Harrison for defendants.

CoNNOR, J.

There was no error in the trial of this action. On the argument of the defendants’ appeal in this Court, their counsel stated that defendants did not desire a new trial of the- issue involving the amount due on tbe note secured by tbe mortgage, but did contend tbat there was error in tbe judgment. Tbis contention is sustained.

Tbe admission in tbe pleadings tbat prior to tbe commencement of tbis action, plaintiff bad deposited witb M. ~W. Gant, clerk of tbe Superior Court of Guilford County, tbe amount wbicb be contended was due on tbe note, and wbicb tbe jury found was tbe amount due, does not support tbe contention of tbe plaintiffs tbat said amount was thereby paid. There is no statute in tbis State, wbicb authorizes a person who is a party to a controversy as to tbe amount of bis debt to another, to pay tbe amount wbicb be contends is due to a clerk of tbe Superior Court, and thereby discharge bis debt. In tbe instant case, M. W. Gant received tbe amount paid to him by tbe plaintiff, as tbe agent of tbe plaintiff and not of tbe defendant. It is not alleged in tbe complaint nor was there evidence at tbe trial tending to show tbat tbe amount found by tbe jury to be due on tbe note was tendered to tbe defendant by tbe plaintiff or by M. W. Gant, prior to or during tbe pendency of tbe action. There is error in tbe judgment.

Tbe action is remanded to tbe Superior Court of Guilford County, tbat judgment may be entered in said court, fixing tbe amount due on tbe note. It was error to enjoin and restrain tbe defendant, upon tbe admission in tbe pleadings, from selling tbe land described in tbe complaint under tbe power of sale contained in tbe mortgage from Jesse Cole and wife to tbe defendant.

No error in tbe trial.

Error in tbe judgment.