Morisey v. . Swinson , 104 N.C. 555 ( 1889 )

The action was brought to foreclose a mortgage of land executed (556) by the defendant to the plaintiff on 29 November, 1867, to secure the payment by the former to the latter of "seven hundred dollars, due by bond or note, with interest from some time in 1857, as on reference to said bonds will more fully appear," etc., as recited therein. Among other things, the plaintiff alleges in his complaint that the recital in the mortgage as to the "bond or note" "was inserted therein by mistake and inadvertence of both parties" thereto; and he demanded judgment that the mortgage be corrected so as to recite simply an indebtedness in the amount specified, no such bond or note having been executed or intended; that the mortgage as corrected be foreclosed, the land sold, etc., and he asked for general relief, etc. The purpose of this action is to correct the deed of mortgage in question in certain respects on account of mutual mistake, to foreclose the same, and to that end, to have an account taken, etc. The cause of action is wholly equitable in its nature, and hence the court must exercise its authority and jurisdictional functions as a court of equity, applying such statutory provisions as may be applicable. Indeed, the jurisdiction is so extensive that the court may administer the rights of the parties as to the matter in litigation to the extent they come properly within the scope of the action, whether the same be legal or equitable, or both. There exists directness and thoroughness in the prevailing method of civil procedure. One of its distinctive and leading features is to avoid circuity of action and method, and to administer the rights of parties, whether legal or equitable, or both, or mixed, in their nature as to the matter in litigation, in one action.

The statute (Code, secs. 404-423) provides three methods of trial — trial by jury, trial by the court, and trial by referees. Any party may insist upon the trial by jury of the issues of fact properly raised by the pleadings. Trial by the court may be had in the cases and as prescribed by the statute (sections 416-419). Trial by referees of the issues arising in the action, whether of fact or law, or both, may be had by consent of the parties in writing. The statute (sec. 420), in this respect, provides that "all or any of the issues in the action, whether of fact or of law, or both, may be referred, upon the written consent of the parties, except in actions to annul a marriage or for divorce and separation." Such (561) trial does not, cannot, have the effect to withdraw the action or the cause of action from the jurisdiction of the court. The referee, by consent of the parties, becomes a mere adjunct, and acts in the place of the court, and, in appropriate cases, in the place of the court and jury, in respect to the trial. The referee must make report of his action, and the proceedings before him, to the court, and, for cause, the judge may "review such report and set it aside, modify or confirm the same, in whole or in part, and no judgment shall be entered on any reference except by order of the judge." Code, sec. 423; McNeill v. Lawton,97 N.C. 16.

When for cause such a report is set aside, the order of reference is not thereby revoked; it continues, and a second trial may be had before the same referee, although a party may not consent to such a second trial. The order of reference having been entered by consent, this could not be withdrawn, except by common consent, and consent entered of record is a sufficient consent in writing. Fleming v. Roberts, 77 N.C. 415; Barrettv. Henry, 85 N.C. 321; White v. Utley, 86 N.C. 415.

The findings of fact by such referee are in the nature of a special verdict, subject to review by the judge, and subject to the right of a party to move to set the same aside and to have a new trial before the same referee. And the findings of fact as settled by the judge are conclusive and not reviewable in this Court. If the judge does not formally find the facts, it is presumed that he accepts the facts as found by the referee. This applies to cases equitable in their nature, as well as to cases at law, because the parties chose such method of trial, as they might do under the statute. Barrett v. Henry, supra; Barcroft v. Roberts, 91 N.C. 363;Usry v. Suit, ib., 406; Mining Co. v. Smelting Co., 99 N.C. 445; Wessellv. Rathjohn, 89 N.C. 377.

The parties to this action, by common consent entered of (562) record, referred the same to a referee, named and selected by themselves. The order of reference is broad and comprehensive in its terms. It clearly embraced all the issues of fact and law raised by the pleadings. The "action" was referred. This order is not appropriate in its terms; it ought to have in terms referred the issues of fact and of law, etc., but the purpose is obvious, as it is said that the reference is "under the Code." The referee and the parties seem to have so treated the reference as to its scope, and it must be so treated now.

In the exercise of such powers conferred by the statute, as well as in the application of general principles of procedure of courts of equity, the court had authority to make the order modifying the first report of the referee and recommitting to him the matter referred, with appropriate directions. The court had complete jurisdiction of the report when filed, and it was not bound to pass in detail upon the several exceptions to it. Indeed, upon seeing the report, for cause appearing upon its face, it might set it aside, or modify it, or direct the referee to take further action in certain respects specified. The statute contemplates the free exercise of such broad authority in appropriate cases. The power to do so is essential in the application of principles of equity and the effective administration of equitable rights; and, when need be, in the absence of statutory regulations, the court may and will adopt methods usual in courts of equity under the former method of procedure in this State. The Constitution has not abolished the principles of equity; indeed, it could not; on the contrary, it fully recognizes them, and they must be applied as far as may be under the existing statutory method of procedure; but when it is silent or inadequate, by the methods and practices of the late court of equity in this State. Grant v. Reese, 82 N.C. 72; Barrett v. Henry, supra; Grant v.Bell, 90 N.C. 558; Trimble v. Hunter, 104 N.C. 129.

It is therefore unnecessary to advert to the numerous exceptions (563) of the plaintiff to the order above referred to, filed at the time it was entered, especially as the substance of them is made the grounds of exception to the last report of the referee.

The plaintiff's principal ground of objection and exception is stated as follows:

"1. For that the referee fails to find as a fact that at the time said mortgage was executed the exact amount due from the defendant to the plaintiff could have been ascertained from papers in the possession of the parties, and from the judgment docket of the county in which said mortgage was executed. J. E. Swinson testified that the balance due was the balance upon said judgment, and D. G. Morisey testified that he had in his possession a paper from which the amount could have been ascertained. There was no evidence to the contrary.

"5. For that the referee, in his first conclusion of law, holds that the recital in said mortgage of an indebtedness of $700 should be corrected; whereas he should have held that, as the parties had full opportunity to learn the exact amount due at the time the mortgage was given, the defendant has shown no facts entitling him to this equitable relief."

To say the least, this exception was ungracious. The plaintiff himself asked to have the mortgage deed corrected in his own favor, because it falsely recited that the mortgage debt was due by "bond or note," whereas in fact there was no such bond or debt, and the recital was inserted by mistake, but he was not content to allow a similar mistake to be corrected in favor of the defendant! It is not surprising that the just judge declared, in the order above referred to, that "he who asks equity must do equity." But there was evidence that warranted the finding of the referee that the mortgage debt was much less than that recited, and that the recital was made by the mutual mistake of the parties. There was evidence, facts, circumstances, and reasonable inferences, tending to prove that the mortgage deed was carelessly and inartificially drawn by an unskilled hand of a third party, in the absence of proper data, part of which was several miles distant, and that the negligence in failing to have such data was due to the carelessness of the plaintiff as much as that of the defendant. Shall the former be allowed to have technical advantage and benefit of his own laches in such case, to the injury of the defendant? Surely not. There was evidence from which the referee and the court might find distinctly that there was mutual mistake, and we cannot, as we have seen, review their findings of the facts.

Upon the findings of fact the court properly corrected the deed in favor of the defendant as to the amount of the mortgage debt. The jurisdiction of courts of equity to correct mutual mistakes in deeds and like instruments, where such mistake is admitted or distinctly proven, is clear and unquestionable. Newsom v. Bufferlow, 16 N.C. 379; Brady v. Packer,39 N.C. 430; Stamper v. Hawkins, 41 N.C. 7; Kornegay v. Everett,99 N.C. 30; Ad. Eq., 170 et seq.

The plaintiff likewise complains that the referee charged him too much for rents of the land mentioned in the report. The charges in this respect were based upon the findings of fact, and these we cannot review or disturb.

The plaintiff further complains that the referee charged him with rents up to the time he finally took his account after the action began. This objection is unfounded. Under the present method of civil procedure, the rents are treated as growing out of and incident to the land, and are recoverable up to the time of the trial. Moreover, this is allowed in order to avoid circuity of action, as contemplated by the spirit and purpose of the Code of Civil Procedure. Whissenhunt v. Jones, (565)78 N.C. 361; Burnett v. Nicholson, 86 N.C. 99; Grant v.Edwards, 88 N.C. 246.

We advert now to the defendant's appeal. His principal ground of complaint is that the referee found as a fact that the fair rental value of the land mentioned in the report was seventy-five dollars, but failed to charge the plaintiff with that sum annually for the time he had possession and control of it. It seems that the referee meant by the finding that such rent would be fair and reasonable if the premises could be readily and regularly let, but he found further that the plaintiff took possession of the land at the request of the defendant, and agreed that he "would do the best he could with it," the property not being desirable or much in demand by responsible tenants. He finds as a fact that, "considering all the circumstances and surroundings," the sum charged is "a fair rent." We cannot review this finding of fact. The defendant's other exceptions are based upon alleged erroneous findings of fact in respect to numerous and various items of charge. They involve no question of law.

The referee, it seems to us, has faithfully examined and passed upon the merits of an old and defective mortgage and numerous stale transactions incident to and growing out of it. As far as we can see, his conclusions are reasonable and just; he has done the parties substantial justice. If in any respect he has failed to do so, it is because of the laches of the parties themselves in allowing their mutual dealings, very indefinite and uncertain in their character, to remain unsettled and in a very confused condition for a long period of time.

What we have said disposes of both appeals.

Affirmed.

Cited: S. c., 106 N.C. 221; Smith v. Hicks, 108 N.C. 251; McDanielv. Scurlock, 115 N.C. 298; Warehouse Co. v. Ozment, 132 N.C. 847; Jungev. MacKnight, 135 N.C. 113; S. c., 137 N.C. 286; Cuthbertson v. Morgan,149 N.C. 78; Rogers v. Lumber Co., 154 N.C. 109; Dunn v. Patrick,156 N.C. 250; S. v. Bailey, 162 N.C. 585; Hardware Co. v. Lewis,173 N.C. 300.

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