67 N.C. 340 | N.C. | 1872
The parties agree upon the facts as follows:
M. A. Smith was the owner in fee of a house and lot in Salisbury, and on 10 October, 1868, contracted to convey the same in fee to the defendant for $2,400; $800 was paid in cash, and defendant (341) executed two notes of $800 each, one payable in 12 months, and the other in 24 months, from 15 January, 1869, to secure the purchase money, and was let into possession. At Spring Term, 1869, plaintiff obtained judgment against Smith and had the same docketed 15 October, 1869; execution was issued and Smith's interest in the house and lot was sold, and plaintiff became the purchaser, and took a sheriff's deed; that thereafter, and before the docketing of the judgment, M. L. Holmes became the purchaser of the two outstanding notes of $800 for full value and before maturity. Holmes had no actual knowledge of the existence of the judgment, and he bought before the sheriff's sale. He demanded payment of the notes from the defendant, who paid off the same about the — — day of January, 1870, and defendant took a deed from Smith for the premises. After the rendition of the judgment plaintiff notified the defendant thereof, and notified him to pay the balance of the purchase money to him, and not to pay any part thereof to Smith. The defendant stated that he certainly would not pay any more of the purchase money to Smith, unless he would make him a sure title, and did not pay to Smith, but the whole to Holmes, as aforesaid. Holmes took a mortgage from the defendant on the premises 6 January, 1870, to secure payment of a loan, and, at the time, knew of the existence of said judgment.
The plaintiff asked for judgment against the defendant "for the sum of sixteen hundred dollars, with interest thereon from 15 January, 1869, being the amount due the said Smith at the time of filing the judgment roll aforesaid, to be paid by a day to be named, when plaintiff will execute a title to defendant for the premises, and in default thereof, that said house and lot be sold for the payment of said sum of money, and interest with costs, etc., etc."
Upon this state of facts his Honor was of opinion that plaintiff could not recover, and gave judgment for defendant. On the case agreed, the plaintiff insists that he is entitled to judgment; that the defendant pay to him the amount of the *248 two notes, given by defendant to Smith, for balance of the purchase money, or else that the house and lot be sold to satisfy the same.
On the contrary, the defendant insists, that as he has paid the amount of the two notes to Holmes, who was a bona fide holder, for full value and without notice, by endorsement of the notes before maturity, he has performed the condition of the contract of sale on his part, and is entitled to judgment that the plaintiff convey to him the legal estate in the house and lot.
The two notes given by the defendant to Smith, for the balance of the purchase money, were negotiable, and we see no principle on which it can be contended that a bona fide holder, by endorsement before maturity, had not a right to receive payment of the same. The balance of the purchase money being thus paid, we can see no principle on which it can be contended that Phillips is not entitled to have a conveyance of the legal estate, according to the title bond executed to him by Smith.
It was urged by the plaintiff's counsel, that the effect of the sheriff's deed was not only to vest in Blackmer the legal title to the house and lot, but also to vest in him the ownership of the two notes, as an incident to the land, so that an endorsement by Smith, after his title in the notes was thus divested, is void and can have no legal effect.
The two notes were negotiable, and according to the law merchant, abona fide endorsee, before maturity, took them free from all equities or drawbacks, except endorsed payments. This settles the question. We are not to be understood as conceding the position that the (343) plaintiff, by the sale and sheriff's deed for the house and lot, acquired not only the legal estate in the house and lot, but also became the owner of the two notes, as "incident" thereto. We look upon it, in the view, of considering the two notes, as the principal or primary matter, to secure the payment of which the legal estate was retained by Smith, the vendor. So the legal title in the house and lot was retained as an incident to secure the payment of the two notes given for the balance of the purchase money.
The effect of the contract of sale — payment of a part of the purchase money — the two notes for the balance, and bond to make title, was to vest in the vendee (the defendant) an equitable estate in the land; in other words, in equity, Phillips thereby became the owner of the house and lot, subject to the incumbrance of paying the balance of the purchase money before he could call for a conveyance of the legal estate. So that Smith held the legal estate as a trustee, in the first place, to secure payment of the two notes, and then in trust to convey to Phillips.
As Smith held the legal estate, assuming that it was liable to sale under *249
execution; what did the purchaser acquire by the sale and sheriff's deed? The sheriff was only authorized to sell the lands and tenements of the defendant in the execution, that of course passed by his deed; but how could the sale of the house and lot have the effect of passing the title to the two notes? To this interrogatory, the learned counsel could only reply "it passed as an incident to the land," and the land was bound from the time of the "judgment docketed"; admit that the land was bound, how does it follow that the two notes passed by the sheriff's deed? The two notes were not the subject of exception. The sheriff did not sell them, and had no power to do so. According to Giles v. Palmer,
PER CURIAM. Affirmed.
Cited: Stith v. Lookabill,
