Browne v. . Davis

ShKphekd, J.: The trustor conveyed a part 'of the land included in the deed of trust to the defendant for the sum of four hu.ndred and fifty dollars, and at the same time the trustee made the following entry on the margin of the record of the said trust: “For value received I hereby release from the operation of this deed of trust, that portion of the within described tract of land which was sold by W. O. Temple and wife to John T. Davis by deed dated February 7th, 1888. Witness my hand and seal. (Signed) E. F. Lamb, Trustee. Witness, T. P. Wilcox, R. of D.” There was, in fact, no seal attached, and, therefore, the entry could not, under the most liberal construction, be considered as a deed of release divesting the title of the trustee. Linker v. Long, 64 N. C., 296; Wharton v. Moore, 84 N. C., 479. We are also of the opinion that the said entry, under the circumstances, was not warranted by § 1271 of The Code. That statute only authorizes the trustee to “ acknowledge the satisfaction of the provisions of such trust,” etc., in which case the entry operates as a reconveyance. It was never contemplated that the trustee could, by this means, release from an msatisfied trust specific parts of the land, and it is entirely clear that this *27 cannot be done where, as in the present case, the purchaser had actual knowledge that the large indebtedness, secured by trust, had not been satisfied. It is true that the jury found that the trustee was “the agent of the plaintiffs (the cestuis quetrusient) and acting as such at the time he made the entry,” but it is also expressly found that this agency did not authorize him to make such entry; that the land was sold to the defendant without the knowledge or consent of the plaintiffs, and that there w§.s no agreement on their part that any portion of it should be discharged from the indebtedness. What effect is ordinarily to be given, by way of estoppel, to the reception of the purchase-money, in cases like the present, need not be considered at this time, as there is nothing to show (and proof of this is incumbent on the defendant) that the plaintiffs received the money from the trustee with knowledge of the sale and entry of record. On the contrary, it appears that very soon thereafter they caused the trustee to sell the entire tract, which proved insufficient in value to satisfy their demands. The plaintiffs, becoming the purchasers at the said sale, we think that his Honor was correct in holding that they acquired the legal title and were entitled to recover. We also concur in the ruling of the court in' charging the land with the amount paid by the defendant to the plaintiffs through the trustee. There is nothing in the cases cited by the appellants’ counsel which conflicts with the principle so often laid down by this Court, that one cannot repudiate a transaction made in his behalf and at the same time retain the fruits thereof. Walker v. Brooks, 99 N. C., 207; Burns v. McGregor, 90 N. C., 225; Boyd v. Turpin, 94 N. C., 137. The action of his Honor, however, is clearly sustained upon the principle of subrogation, and the cases cited in Sheldon on Subrogation, § 30, et seq., seem directly in point. In respect to the question of improvements, we think *28 there was error. We have seen that the entry made on the record by the trustee did not divest his title; but granting that it had this effect, or that the trustee, without the consent of the cestuis que trustent, had executed a formal deed of release to the defendant, the latter, affected as he was with actual, as well as constructive, notice that the indebtedness was still existing, would have taken subject to the trust; and so far from “holding the premises under a color of title believed by him *• * * to be good ” (§ 473, Code), the law vjould have implied that he had knowledge of the infirmity of his claim. Scott v. Battle, 85 N. C., 192, and the authorities there cited. Moreover, our case is excepted from the provision above mentioned by § 481, and in Wharton v Moore, 84 N. C., 479, it is held that improvements put upon the land by a purchaser from the mortgagor, become additional security for the debt. Our case, we think, very plainly falls within the spirit of both the excepting statute and the decision just referred to. While we are of the opinion that the defendant is not entitled to betterments, still when the jury come to enquire into the plaintiffs’ damages on account of the use and detention of the lands, “they will be at liberty, and, indeed, in duty bound, to make a fair allowance out of the same for improvements of a permanent character, and such as (plaintiffs) will have the actual enjoyment of. That such an allowance could properly be made by the jury was said in Dowd v. Fawcett, 4 Dev., 92; notwithstanding it was at the same time adjudged that the defendant’s claim for improvements, as such, would not be recognized by the Court.” Scott v. Battle, supra. Modified and affirmed.