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Bank of North Carolina, N.A. v. Investors Title Insurance Co.

Filed: August 21, 1979.

BANK OF NORTH CAROLINA, N.A.
v.
INVESTORS TITLE INSURANCE COMPANY V. B. R. DORSETT AND WIFE, ESTHER C. DORSETT AND B. R. DORSETT CONSTRUCTION COMPANY



Appeal by defendant from Tillery, Judge. Judgment entered 10 April 1978 in Superior Court, New Hanover County. Heard in the Court of Appeals 30 May 1979.

Erwin, Judge. Judges Martin (Robert M.) and Arnold concur.

Erwin

The defendant presents five questions for our determination: (1) Did the trial court err in failing to find facts and concluding as a matter of law that the release of a deed of trust recorded subsequent to an option, where the property is purchased by the optionee, is not sufficient consideration to support the alleged Substitution of Collateral Agreement? (2) Did the trial court err in denying defendant's motions to dismiss at the close of plaintiff's evidence and at the close of all the evidence and in finding as fact and concluding as a matter of law that plaintiff was damaged in the sum of $29,951.23, where there was not competent evidence of damages in that amount? (3) Did the trial court err in finding as fact that plaintiff heretofore obtained judgment against B. R. Dorsett and wife, and there was a judgment against the Dorsetts in the amount of $126,522.35 after credit for foreclosure, Findings of Fact Nos. 8 and 9, where there was no evidence to support said Findings of Fact? (4) Did the trial court err in failing to find as fact and concluding as a matter of law that plaintiff's damages had been mitigated to the extent of $17,386.25? (5) Did the trial court err in entering judgment against defendant Investors Title Insurance Company? We have considered each question presented and answer each of them, "No," and affirm the judgment entered by the trial court for the reasons that follow.

Defendant contends: that the Agreement for Substitution of Collateral is not supported by consideration; that Tract 5 was the subject of an option recorded prior to the plaintiff's deed of trust; and that upon the exercise of the option, plaintiff had no interest or rights in Tract 5 to release.

Defendant further contends that upon payment of the net proceeds of the sale from James Hall to plaintiff, the plaintiff had a duty to release Tract 5 without the substitution of additional collateral.

The court found the following facts:

"That on or about the 21st day of July, 1975, the defendant, Investors Title Insurance Company, agreed to the terms and conditions of a document entitled 'Agreement for Substitution of Collateral' recorded in Book 1054 at Page 130 of the New Hanover County Register of Deeds, one of the

terms and conditions being that after resolution of the lawsuit between Resort Properties and B. R. Dorsett Construction Company, one of the third-party defendants, the remaining funds in escrow would be made payable jointly by check or draft to the Bank of North Carolina, N.A., Wilmington, North Carolina, and B. R. Dorsett Construction Company."

The court concluded as a matter of law as follows:

"1. That on July 21, 1975 the plaintiff, the defendant Investors Title Company and the third-party defendants entered into a valid contract supported by consideration, with no condition precedents.

Exception NO. 8."

Plaintiff contends that these facts were found by the trial court after a jury trial had been waived and that such facts are based upon competent evidence and may not be disturbed on appeal. Plaintiff further contends that there was sufficient consideration to support the Agreement for Substitution of Collateral, because plaintiff was not legally bound ...


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