Bank v. Vass. , 130 N.C. 590 ( 1902 )

The defendant by his deed from the trustee did not obtain title to the land conveyed therein, and he is not entitled to the possession of the same. The statute (Code, sec. 1254) declares that "No deed of trust or mortgage for real or personal estate shall be valid at law to pass any property as against creditors or purchasers for a valuable consideration from the donor, bargainor or mortgagor, but from the registration of such deed of trust or mortgage in the county where the land lieth," etc. The mortgage having been registered first, by force of the registration laws, the title to the land vested in the mortgagee, the plaintiff. Hinton v. Leigh, 102 N.C. 28; Brassfield v. Powell, 117 N.C. 140. We are of the opinion, however, that the words of the mortgage, following the description, to wit, "Said 239 3/4 acres is subject to a mortgage or deed of trust for about $1,650, balance of (594) purchase money on same," and the words in the warranty clause, "that the same are free from all encumbrances whatever, except as above stated," constitute more than a bare notice of a former mortgage or deed of trust. We think those words establish a trust in equity in favor of defendant for the security of the debt mentioned in the deed of trust upon the property, or the proceeds which may arise upon a sale of the same by the mortgage. And this benefit, as we have seen, is in no way derived by title acquired through the deed of trust, but it comes by virtue of the charge and trust set out in the mortgage. The amount of the debt is fixed with as much certainty as in Hinton v. Leigh, supra. The creditor referred to in the mortgage, if not actually named, can be certainly identified, because, in the mortgage, the debt is said to be due for the purchase money of the land. The vendor, or his assignee, could certainly be found. And the words, "that the same are free from all encumbrances whatever, except as above stated," clearly demonstrate that the land was conveyed by the mortgage in subordination to a charge in favor of the vendor, to the extent of what was due for the purchase money of the land.

We think, therefore, that there was error in the judgment, and that a judgment should have been rendered that the defendant was not entitled to the possession of the land under the deed of trust, and instructing and requiring J. N. Holding, the plaintiff mortgagee, to sell the land described in the mortgage under the terms and requirements of that instrument, and with the proceeds of the sale to pay, first, the debt due to the defendant, after having paid the expenses of sale, including his commissions, and the balance, if any, should remain to the other plaintiff, the Commercial and Farmers Bank, of Raleigh, North Carolina.

Reversed.

Cited: Piano Co. v. Spruill, 150 N.C. 170; Wooten v. Taylor,159 N.C. 612; Bank v. Redwine, 171 N.C. 569.

(595)