Gahagan v. Whitehurst, 211 N.C. 280 (1937)

Feb. 24, 1937 · Supreme Court of North Carolina

211 N.C. 280

MELLIE GAHAGAN v. A. W. WHITEHURST.

(Filed 24 February, 1937.)

Mortgages § 37 — Cestui may maintain action against trustee for accounting without introducing the note and deed of trust in evidence.

Plaintiff, the cestui que trust, instituted this action against the trustee, contending that the trustee had foreclosed the deed of trust and had failed to apply the proceeds of the sale to the satisfaction of the note secured by the instrument. Held: Plaintiff’s action is for an accounting of the proceeds of sale, and not an action on the note, and defendant’s contention that plaintiff could not maintain the action without introducing the note and deed of trust in evidence is untenable.

Appeal by plaintiff from Phillips, J., at September Term, 1986, of MadisoN.

Reversed.

This was an action for an accounting, the complaint alleging that the defendant as the trustee in a deed of trust had sold land under foreclosure and had failed to account to the plaintiff, the cesiui que trust, for the proceeds.

A compulsory reference was ordered, and, upon the coming in of the report of the referee, the plaintiff filed exceptions and asked for jury trial upon certain issues. When the action was heard in the Superior Court, at the conclusion of the evidence offered by plaintiff, defendant’s motion for judgment of nonsuit was allowed.

From judgment dismissing the action plaintiff appealed.

Galvin R. Edney and James E. Rector for plaintiff.

J ones & Ward, J. G. Ramsey, and J. II. McElroy for defendant.

DeviN, J.

The plaintiff offered, without objection, evidence tending to show that she held a note in the sum of $12,600, given in 1925, for the purchase of 1,300 acres of land, and that this note was secured by a deed of trust on the land to the defendant Whitehurst as trustee. The plaintiff testified that she assigned, by endorsement on the note, certain proportionate interests in said note to two other persons; that thereafter, in 1932, following a conference between her and the defendant, it was decided that the land be sold to the United States Government for $3.50 per acre, or $4,550, the defendant agreeing to see that this amount was realized from the sale, and the defendant was requested to foreclose the deed of trust. Thereupon the Citizens Bank, of which defendant was cashier, bid in the land at the sale and conveyed title to the United States in accordance with the agreement. Since then, the plaintiff testified, the defendant trustee has failed, after demand, to 'account to her for her proportionate part of tbe amount realized from tbe sale of tbe land. Sbe says tbis would be $3,198.76.

Plaintiff further testified that sbe delivered tbe note to tbe defendant, and tbat it bad been in tbe Citizens Bank and sbe bad never gotten tbe paper back. Sbe did not offer in evidence tbe note and deed of trust, tbougb available.

Tbe court below was of opinion tbat it was incumbent upon tbe plaintiff, in order to make out ber case, to offer tbe note and deed of trust in support of ber claim, and based bis ruling in sustaining tbe motion for nonsuit upon tbat ground. However, in tbe view we take of tbe case, it was not necessary tbat tbis be done. Tbe plaintiff was not suing on tbe note, but instituted this action against tbe trustee who foreclosed tbe deed of trust for an accounting of the proceeds of the sale. Garden v. McConnell, 116 N. C., 875; Belding v. Archer, 131 N. C., 287; Ledford v. Emerson, 138 N. C., 502; Miles v. Walker, 179 N. C., 479; Hall v. Giessell, 179 N. C., 657. Her evidence, therefore, was sufficient to have entitled ber to go to tbe jury upon tbe issues raised, and there was error in sustaining tbe motion to nonsuit.

Reversed.