Gammon v. . Johnson

35 S.E. 185, 126 N.C. 64

• Court: Supreme Court of North Carolina
• Decided: February 5, 1900
• Status: Published

Opinion

Clark, J.

In general all incumbrancers, whether prior o' subsequent incumbrancers, as well as the mortgagor, should be parties to a proceeding for foreclosure, and judgment creditors as well as mortgagees. Hinson v. Adrian, 86 N. C.,, 61; LeDuc v. Brandt, 110 N. C., 289. This is because the. liens, by the sale, are transferred from the corpus to the fund into which it is converted, with their respective priorities preserved and to be asserted in the decree for distribution. Cannon v. Parker, 81 N. C., 320. “In effect the lien of a docketed judgment is in the nature of a stautory mortgage”' (Gambrill v. Wilcox, 111 N. C., 42), though the judgment conveys no estate in the land. Baruch v. Long, 117 N. C., 509.

The lien of the judgment creditor being transferred to the proceeds of sale subject only to the priority of the plaintiff’s mortgage, the judgment creditor was a proper party as against the defendant to receive the amount due him out of the surplus after the payment of plaintiff, else such surplus would go into the hands of the defendant, to the destruction of the lien of the judgment creditor, who was also a proper party as against the plaintiff that he might assert the credits which should be charged against the plaintiff by reason of timber cut on the land, since by so doing the surplus to be applied to the judgment, as the second lien, will be swollen. This is not bringing a new cause of action, but it is a necessary step in the just and proper distribution of the fund according to the priorities of the liens upon the land, whose sale produced the fund. The petition set out the judgment creditor’s ground for asserting a credit to be charged against the plaintiff, and, if denied, an issue is presented for settlement before the fund is distributed. It is not a debt against the plaintiff, which would be an alien cause of action, but a claim of a larger share in the fund, because of a credit which should be charged against the first lien.

The petition, to be made additional party, does not controvert the cause of action set up' in the plaintiff’s complaint, and hence is not required to be verified. Code, secs. 189 and 273. Indeed, upon the facts being made known to the Court in any satisfactory manner, it could, and should ex mero moiu,, have ordered the judgment creditor made a party that there should be a full and complete settlement of the rights of all parties holding liens upon the fund. Pitt v. Moore, 99 N. C., 85. Kornegay v. Steamboat Co., 107 N. C., 115, and Williams v. Kerr, 113 N. C., 306, relied upon by the plaintiff, bold that subsequent incumbrancers, while proper parties, are not necessary parties in all cases.

The appeal is premature, for the facts as to the alleged credit should have been passed upon, and the party against whom it was found might not hare appealed. The plaintiff should have entered his exception to the interlocutory order, and have brought up his appeal only from the final judgment distributing the fund, if the disputed credit was found against him.

The point involved in this appeal, however, has been passed upon, as has sometimes been done. Milling Co. v. Finlay, 110 N. C., 411; Clark’s Code, (3d Ed.), sec. 548. But it must be entered

Appeal dismissed.