Woltz v. Asheville Safe Deposit Co.

CONNOR, J. The questions presented by this appeal, as stated in defendants’ brief filed in this Court, are as follows: “1. Is chapter 275, Public Laws of North Carolina, 1933, entitled 'An act to regulate the sale of real property upon the foreclosure of mortgages or deeds of trust,’ retroactive, and if so, is the statute unconstitutional in that it violates and is contrary to the provisions of Article I, section 10, of the Constitution of the United States of America, and the Fifth Amendment to the Constitution of the United States of America, and section 1 of the Fourteenth Amendment to the Constitution of the United States of America, and Article I, section 17, of the Constitution of the State of North Carolina, and Article I, section 35, of the Constitution of the State of North Carolina, and Article I, section 7, of the Constitution of the State of North Carolina?” “2. Did the court err in refusing the motion of the defendants Ashe-ville Safe Deposit Company, trustee, and J. C. Alexander to vacate and dissolve the temporary restraining order and to dismiss the action, for that plaintiffs have failed to make and file any injunction bond or undertaking ?” Only sections 1 and 2 of chapter 275, Public Laws of North Carolina, 1933, are involved in this appeal. These sections are as follows: *241 “Section 1. Any owner of real estate, or other person, firm or corporation having a legal or equitable interest therein, may apply to a judge of the Superior Court, prior to the confirmation of any sale of such real estate by a mortgagee, trustee, commissioner or other person authorized to sell the same, to enjoin such sale or the confirmation thereof, upon the ground that the amount bid or price offered therefor is inadequate and inequitable and will result in irreparable damage to the owner or other interested person, or upon any other legal or equitable ground which the court may deem sufficient: Provided, that the court or judge enjoining such sale or the confirmation thereof, whether by a temporary restraining order or injunction to the hearing, shall, as a condition precedent, require of the plaintiff or applicant such bond or deposit as may be necessary to indemnify and save harmless the mortgagee, trustee, cestui que trust, or other person enjoined and affected thereby against costs, depreciation, interest and other damages, if any, which may result from the granting of such order or injunction; Provided further, that in other respects the procedure shall be as is now prescribed by law in eases of injunction and receivership, with the right of appeál to the Supreme Court from any such order or injunction.” “Section 2. The court or judge granting such order or injunction, or before whom the same is returnable, shall have the right before, but not after, any sale is confirmed to order a resale by the mortgagee, trustee, commissioner, or other person authorized to make the same in such manner and upon such terms as may be just and equitable: Provided, the rights of all parties in interest, or who may be affected thereby, shall be preserved and protected by bond or indemnity in such form and amount as the court may require, and the court or judge may also appoint a receiver of the property or the rents and proceeds thereof, pending any sale or resale, and may make such order for the payment of taxes or other prior lien as may be necessary, subject to the right of appeal to the Supreme Court in all cases.” It is the well settled policy of the law that no property, real or personal, which has been conveyed by a mortgage or deed of trust to secure the payment of a debt, shall be sold and conveyed by the mortgagee or trustee, or by a commissioner appointed by a court for that purpose, upon the foreclosure of the mortgage or deed of trust, until a bid for the reasonable value of the property has been received from a prospective purchaser. When a sale has been made under a judgment or decree of a court of competent jurisdiction, the sale must ordinarily be reported to and confirmed by the court, before it can be consummated by a conveyance of the property. In that case, the sale will not be confirmed, and a conveyance of the property ordered, unless it is made to appear to the court that the sale was fairly conducted, and the amount bid for the *242 property its reasonable value. When the sale has been made by the mortgagee or tbe trustee, under the power of sale contained in the mortgage or deed of trust, without the supervision of a court, and it is made to appear to a court of competent jurisdiction, in an action instituted by the mortgagor or grantor, that the sale was not fairly conducted, with the result that the amount bid by the prospective purchaser is not the reasonable value of the property, the sale will be set aside, and a resale ordered. In Bolich v. Ins. Co., 202 N. C., 789, 164 S. E., 335, it is said: “The power of a court of equity to restrain sales of real estate made in pursuance of the terms of a mortgage or deed of trust is undoubted, and the decisions of the court disclose that the restraining power of equity in proper cases has been frequently exercised.” In that case, it was held that a proposed sale under the power of sale contained in a deed of trust will not be restrained solely because of apprehension on the part of the grantor in the deed of trust that a bid for the reasonable value of the property conveyed by the deed of trust, will not be received, because of unfavorable business conditions existing at the time of the proposed sale. It was not held, however, that when a sale has been made and the bid received is not the reasonable value of the property, a court of equity has no power to enjoin the consummation of the sale, solely on that ground. Whether or not, prior to the enactment of chapter 275, Public Laws of North Carolina, 1933, a judge of the Superior Court had the power to restrain the consummation of a sale of property made under the power of sale contained in a mortgage or deed of trust, on the sole ground that the bid at the sale was not for the reasonable value of the property, need not be discussed or decided, now. The power is expressly conferred by the statute and was properly exercised in the.instant case, if the statute is valid, and is applicable, notwithstanding it was enacted subsequent to the execution of the deed of trust under which the sale was made. The statute does not violate any provision of the Constitution of the United States or of the State of North Carolina, by which limitations are imposed upon the legislative power of the General Assembly of this State. It does not impair the obligation of the contract entered into by and between the parties to a mortgage or deed of trust; it does not deprive either party of property without due process of law; nor does it confer upon mortgagors or grantors in deeds of trust any exclusive privilege. The statute is remedial only, and is valid for that purpose. It is applicable to a sale made since its enactment, although the sale was made under the power of sale contained in a mortgage or deed of trust executed prior to its enactment. The contention that the action should have been dismissed because the plaintiffs failed to file a bond as required by the statute, cannot be *243 sustained. The record shows that plaintiffs did file a bond. If the bond was not or is not satisfactory to the appellants, they may move in the Superior Court that the plaintiffs be required to increase the penal sum of the bond and to give other or additional sureties. There is no error in the judgment. Affirmed.