Wall v. Colvard, Inc.

Annotate this Case

149 S.E.2d 559 (1966)

268 N.C. 43

L. H. WALL v. COLVARD, INC.

No. 357.

Supreme Court of North Carolina.

August 26, 1966.

*563 Seila, Wilson & Palmer, by W. C. Palmer, Lenoir, for plaintiff appellee.

Ted G. West, Lenoir, Ferree & Brewer, by Joe Brewer, Wilkesboro, for defendant appellant.

SHARP, Justice.

Defendant assigns as error only the findings of fact and conclusions of law contained in the judgment. Assignments of error 1 through 6 are based upon findings of fact 2 through 7. Assignment of error No. 4 to finding of fact No. 5 is not brought forward in the brief and is, therefore, deemed abandoned. Henderson Cotton Mills v. Local Union No. 584, 251 N.C. 234, 111 S.E.2d 476. Assignments of error 1, 2, 3, 5, and 6 challenge only the sufficiency of the evidence to support those findings. Since there were no objections or exceptions to the admission or exclusion of evidence, if the evidence supports the findings of fact, they must be sustained. 1 Strong, N. C. Index, Appeal and Error § 22 (1957). As the statement of facts clearly reveals, findings 2, 3, 4, 6, and 7 (those which defendant now assigns as error) are fully supported by the evidence, and they, together with findings 1 and 5, clearly support the conclusions of law.

Defendant, whose chattel mortgage was recorded about three months after plaintiff's, is the junior mortgagee. The description of the property listed in the chattel mortgage, when considered in connection with the evidence that Wall & Nelson, Inc., owned only one Ford truck, one cigarette machine, two cold drink machines, one cigarette vending machine, one coffee vending machine, one cash register, one show case, and the further evidence that all the property was on the service station premises at a specified location, meets identification requirements of the law. Peek v. Wachovia Bank & Trust Co., 242 N.C. 1, 86 S.E.2d 745. Cf. Forehand v. Edenton Farmers' Co., 206 N.C. 827, 175 *564 S.E. 183. The quantity is the entire stock, and there was only one business and stock in trade owned by the mortgagor located at the intersection of East Harper Street and the South By-Pass in Caldwell County. "The slightest inquiry would have enabled a third party to identify the property intended to be mortgaged." In re Coleman & Brown, 2 F.2d 254, 255 (5th Cir.) Plaintiff, the senior mortgagee whose mortgage was in default, was entitled to the possession of the property. Rea v. Universal C. I. T. Credit Corp., 257 N.C. 639, 127 S.E.2d 225.

A junior mortgagee who seizes the mortgaged property and holds it against the senior mortgagee is liable in an action by the senior mortgagee for the conversion of the property. Four County Agricultural Credit Corp. v. Satterfield, 218 N.C. 298, 10 S.E.2d 914; Foy & Shemwell v. Hurley, 172 N.C. 575, 90 S.E. 582; Grainger v. Lindsay, 123 N.C. 216, 31 S.E. 473; 15 Am. Jur.2d, Chattel Mortgages § 183 (1964); 14 C.J.S. Chattel Mortgages §§ 229, 248 (1939); Annot., Chattel MortgagesJunior Mortgagee, 43 A.L.R. 395 (1926). Conversion is "`an unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of their condition or the exclusion of an owner's rights.'" Peed v. Burleson's, Inc., 244 N. C. 437, 439, 94 S.E.2d 351, 353. "Witholding the possession from the plaintiff, under a claim of title inconsistent with his own" is a conversion. Trustees of the University of North Carolina v. State Nat. Bank, 96 N.C. 280, 3 S.E. 359. Plaintiff, having alleged and shown his title to the property seized by the sheriff at defendant's instance, Vinson v. Knight, 137 N.C. 408, 49 S.E. 891, is entitled to recover the value of the property at the time and place of its conversion, with interest.

After an act of conversion has become complete, an offer to return or restore the property by the wrongdoer will not bar the cause of action for conversion. Stephens v. Koonce, 103 N.C. 266, 9 S.E. 315; 89 C.J.S. Trover and Conversion § 86 (1955).

The arguments in defendant's brief are directed to the sufficiency of plaintiff's chattel mortgage and the authority of Nelson to execute it. Although the assignments of error do not present these questions, it is noted that at the time Nelson, as vice-president of Wall & Nelson, Inc., executed and delivered to plaintiff the chattel mortgage in question, Nelson was the sole stockholder, director, and officer of the corporation. The existence of the corporation was not imperiled by Nelson's acquisition of all its stock. G.S. § 55-3.1. It might be argued, with logic, that his act was the corporation's act. See Latty, A Conceptualistic Tangle and the One-or Two-Man Corporation, 34 N.C.Law Rev. 471 (1956). See also G.S. § 55-36(b). In a number of jurisdictions "the sole stockholder or the stockholders by unanimous action may do as they choose with the corporation's assets provided the interest of its creditors are not affected." 18 Am. Jur.2d, Corporations § 487 (1965) and cases therein cited. So far as the record discloses, except for the conditional vendors of the cash register and truck, plaintiff was the corporation's only creditor at the time the mortgage in suit was given.

The judgment of the court below is

Affirmed.