Underwood v. Otwell

153 S.E.2d 40 (1967) 269 N.C. 571

Lewis B. UNDERWOOD
v.
B. M. OTWELL and wife, Mary Bell Otwell, and daughter Lucille Lillian Otwell Underwood.

No. 606.

Supreme Court of North Carolina.

March 1, 1967.

Ottway Burton and John Randolph Ingram, Asheboro, for plaintiff.

L. T. Hammond, Sr., Asheboro, for defendants.

SHARP, Justice.

In his complaint, plaintiff has stated a cause of action for a judgment on the note which defendants Otwell executed to him and to defendant Underwood, and he has attempted to state a cause for the foreclosure of the deed of trust securing the note. "A creditor whose debt is secured by way of mortgage or trust has two remedies—one, in personam for his debt; the other, in rem to subject the mortgaged property to its payment,—and a resort to one is no waiver of the other." Silvey v. Axley, 118 N.C. 959, 963, 23 S.E. 933, 934. The creditor may combine the two remedies in one civil action. G.S. § 1-123; Credle v. Ayers, 126 N.C. 11, 35 S.E. 128, 48 L.R.A. 751; 1 McIntosh, North Carolina Practice and Procedure § 1166 (2d Ed. 1956). In the present state of the pleadings, however, plaintiff may not have foreclosure of the deed of trust in this action, because he has not made the trustee a party. His allegations with reference to the refusal of the trustee to act and his prayer that a commissioner be substituted for the trustee are surplusage. This Court has frequently held that the mortgagee or trustee in a deed of trust is a necessary and indispensable party to an action for foreclosure. Grady v. Parker, 228 N.C. 54, 44 S.E.2d 449; Alexander v. Virginia-Carolina Joint Stock Land Bank, 201 N.C. 449, 160 S.E. 460. See East Carolina Lumber Co. v. Pamlico County, 250 N.C. 681, 684, 110 S.E.2d 278, 280. A decree of foreclosure entered in an action to which the trustee is not a party is void. Grady v. Parker, supra. See also First Nat. Bank of Durham v. Thomas, 204 N.C. 599, 169 S.E. 189.

Defendant Underwood is a necessary party to this action, because she is one of the two joint payees in the note upon which plaintiff sues. In such case the rule is as stated in Fishell v. Evans, 193 N.C. 660, 662, 137 S.E. 865, 866: "Neither of them can, therefore, recover on said note in an action in which he or she alone is plaintiff. ``Where a bill or note is made payable to several persons or is endorsed or assigned to several, they are joint holders and must sue jointly as such.' 8 C.J., 846." Accord, Sneed v. Mitchell, 2 N.C. 289, 292. See also First Nat. Bank of Durham v. Thomas, supra.

Accepting the truth of the factual averments in the complaint, as we do in passing upon a demurrer, 3 Strong, N.C. Index, Pleadings § 12 (1960), it is patent that Lucille Otwell Underwood would not consent to be joined as a plaintiff. Plaintiff, therefore, had no choice other than to make her a party-defendant. The case which plaintiff has alleged illustrates the necessity for G.S. § 1-70, which says, in part: "Of the parties to the action, those who are united in interest must be joined as plaintiffs or defendants; but if the consent of any one who should have been joined as plaintiff cannot be obtained, he may be made a defendant, the reason thereof being stated in the complaint."

Although plaintiff has alleged that defendant Underwood has no interest in the note in which she is a joint payee, he has not attempted to allege a cause of action for reformation of the note and deed of trust securing it. He has alleged no mistake of the parties or of the draftsman who prepared the papers, and he does not seek to correct or to reform them. It is established law in this State that when a husband purchases land and causes it to be conveyed to his wife, the law presumes that the land is a gift to the wife, and no resulting trust arises. Shue v. Shue, 241 N.C. 65, 84 S.E.2d 302; Williams v. Williams, 231 N.C. 33, 56 S.E.2d 20; Bass v. Bass, 229 N.C. 171, 48 S.E.2d 48; Pitt v. Speight, 222 N.C. 585, 24 S.E.2d 350; Carter v. Oxendine, 193 N.C. 478, 137 S.E. 424; 26 Am.Jur., Husband and Wife §§ 100-101 (1940). Similarly, a gift is presumed when the husband pays for personalty and procures title either in the wife's name or in their joint names. In Shoe v. Hood, 251 N.C. 719, 112 S.E.2d 543, the husband purchased an automobile and registered the title in the name of his wife. This Court said: "The wife was the owner. It is presumed that the husband intended the automobile as a gift to her." Id. at 725, 112 S.E.2d at 548. See 41 C.J.S. Husband and Wife § 150, p. 623 (1944). In Abegg v. Hirst, 144 Iowa 196, 122 N.W. 838, 138 Am. St. Rep. 285, a husband who purchased a note and mortgage had it assigned to himself and to his wife. He was held to have given a one-half interest in the note and mortgage to his wife even though he retained possession of the instrument and she knew nothing of the transaction. Accord, In Re Loesch's Estate, 322 Pa. 105, 185 A. 191.

Plaintiff has alleged no facts which would rebut the presumption of a gift of a one-half interest in the note in suit to his wife. Perkins v. Perkins, 249 N.C. 152, 105 S.E.2d 663; 4 Strong, N.C.Index, Trusts § 16 (1961). Neither has plaintiff stated a cause of action against defendant Underwood for the possession of the note. His superfluous announcement, by way of the prayer for relief, that he intended to apply to the court for a subpoena duces tecum requiring defendant Underwood to bring the note and deed of trust to the trial does not state a cause of action for possession of the instruments. "One tenant in common or joint owner of personal property cannot maintain an action against the other tenant or owner to recover the exclusive possession of the property." Thompson v. Silverthorne, 142 N.C. 12, 13, 54 S.E. 782. His remedy is partition. Coulbourn v. Armstrong, 243 N.C. 663, 91 S.E.2d 912; Dubose v. Harpe, 239 N.C. 672, 80 S.E.2d 454.

We do not commend plaintiff's complaint as a model pleading—on the contrary. Yet, we are constrained to hold that it does not contain a misjoinder of parties and causes of action. If he intended to state and combine causes which would have resulted in a misjoinder, he failed. The complaint alleges a single cause of action against defendants Otwell, one to collect the debt evidenced by their note, and it explains why it is necessary to make Lucille Otwell Underwood a party-defendant. G.S. § 1-70.

The record does not disclose in what respects plaintiff asked to be allowed to amend his complaint after the judge sustained defendants' demurrer. Apparently, he merely made an oral motion "to amend." If plaintiff desires to amend in order to make the trustee a party and to allege a cause of action for the foreclosure of the deed of trust securing the note, as provided by G.S. § 1-123, he is at liberty to do so. In the absence of a motion to amend the complaint by making the trustee a party to the action, the court should strike from the pleadings all reference to the deed of trust. The allegations of the complaint do not suggest that the trustee would refuse to act if it be established that defendants Otwell have not paid the note which it secures.

The judgment sustaining the demurrer is

Reversed.