Davis v. . Doggett

Barnhill, J. Plaintiffs’ exception to tbe refusal of tbe court to sign judgment allowing interest upon tbeir recovery cannot be sustained. It was witbin tbe province of tbe jury to allow interest. Tbe jury having failed to do so, tbe court bad no power to enlarge tbe verdict. Parrish v. Hartman, ante, 248. G-. O. Doggett, tbe trustee, testified tbat be did not attend tbe foreclosure sale and tbat Mr. Blakeney took bis place at tbe trustee’s sale and sold it as bis agent. Tbe record discloses tbe following admission: Tbe defendants admit tbat W. S. Blakeney, attorney for tbe defendants in tbis case, bid in tbe land at tbe foreclosure sale on 5 September, 1932, as agent for tbe Doggett Lumber Company. In tbis connection, Lee Grier, witness for tbe defendants, testified: “If somebody else bad put in a bid for $1,050 at tbe foreclosure sale, we would bave possibly raised it as bigb as $1,237.” Tbus, it appears tbat Elkes v. Trustee Corp., 209 N. C., 832, is not in point. In tbat case tbe vendor did not act as agent for tbe purchaser. Tbe attorney for tbe trustee merely received a bid by telephone from tbe bolder of tbe note and announced tbe bid at tbe sale. He was not tbe agent of tbe cestui que trust and did not purport to act as such. Here, it is admitted tbat W. S. Blakeney was agent both for tbe seller and for tbe buyer. There are a number of decisions of tbis Court bolding consistently tbat where tbe trustee or mortgagee, or bis agent, purchases property at a foreclosure sale under tbe terms of tbe trust deed or mortgage, either for himself or another, tbe trustor may elect to treat tbe sale as a nullity and demand a resale as against tbe trustee or mortgagee, or bis agent, or purchasers from them witb notice, even though competitive bidding at tbe sale was not discouraged and tbe purchase price represented tbe fair market value of tbe property at tbe time of tbe sale, and tbe trustor was present at tbe sale and made no objection thereto. Lockridge v. Smith, 206 N. C., 174; Gibson v. Barbour, 100 N. C., 191; Owens v. Mfg. Co., 168 N. C., 397; Roberson v. Matthews, 200 N. C., 241; Mor *593 ris v. Carroll, 171 N. C., 761; Brothers v. Brothers, 42 N. C., 149; Boyd v. Hawkins, 37 N. C., 303. This rule is adhered to, not because there is, but because they may be, fraud. It is the duty of the trustee in making a sale to obtain the high dollar. It is the duty of a person representing a purchaser to acquire the land at as reasonable a price as possible. "When the same person is both the seller and the buyer there is a conflicting, antagonistic, interest and duty which the law condemns. This practice has been engaged in by many good men whose characters are above reproach. Even so, the practice cannot be approved for the reason that it opens the door for fraud and oppression. At all times the trustee selling under the power of sale contained in the trust deed should be and remain at arm’s length to the buyer. In this case the defendant had just invested more than $500.00 in purchasing a first mortgage upon the premises. The individual defendant, who was trustee, is the president and treasurer of the corporate defendant. The corporate defendant held a second mortgage upon the premises for $1,237.55 and interest for more than twelve months. The property was bid in for the corporate defendant by the agent of the trustee for $1,000, which is about 60 per cent of the indebtedness then due thereon. Even before the trustee’s deed to the corporate defendant had been filed for recordation it had given an option on the property to another for $2,225. While there is no evidence of actual fraud, and the Court does not mean to suggest any, these circumstances indicate that the foreclosure sale was not had under ■ circumstances which meet the approval of a court of equity under the former decisions of this Court. The defendant Doggett Lumber Company, through the foreclosure deed from the trustee, became the apparent owner in fee of the premises in controversy. This being true, the plaintiffs, through the conduct of the defendants in conveying the property to a third party are precluded from a recovery of their land. The only other remedy left to them is the one they now seek to pursue, that is, to recover damages for the wrongful alienation of their lands by the defendants. In their brief the defendants contend that it was error for the court below to submit the fifth issue to the jury. This issue was raised upon the pleadings and there was sufficient evidence to justify its submission to the jury. Such contention on the part of the defendants would seem to be an attack upon the deed executed by the Doggett Lumber Company to the purchaser. It would not seem to help the position of the defendant to assume that, having acquired the title in the manner disclosed by the record, such title was thereafter conveyed to a third party under circumstances which would subject the vendee to a suit for its *594 recovery. The evidence, which was apparently accepted by the jury, though contradicted by other testimony, tends to show that the plaintiffs sought to redeem their property after the option was given by the defendant, but before the execution of the deed, and that the defendants then, and at all times thereafter, refused to permit a redemption upon the plea that they were already bound by an option to convey the property to James R. Davis. The agent for the trustee in making the sale, having acted as agent for the cestui que trust in purchasing the property, the relationship of mortgagor and mortgagee existing between the plaintiffs and the defendants was not destroyed. Owens v. Mfg. Co., 168 N. C., 397; Gibson v. Barber, 100 N. C., 192; Lockridge v. Smith, supra. It follows that the plaintiffs’ cause of action arose at the time the corporate defendant, acting under the trustee’s deed, which purported to convey a fee simple title to it, alienated said title and conveyed said property to a third party. Plaintiffs’ action was instituted within three years thereafter and is not barred by the statute of limitations. There is some evidence in the record to the effect that the plaintiffs admitted to the defendants after the sale that they were unable to pay the debt or to redeem the property, and acquiesced in the sale. This testimony is sharply contradicted by that of the plaintiffs, which tends to show that they had actually made arrangements to redeem the property, but that the defendants sold the same before they were permitted to do so. It does not appear that waiver or estoppel is adequately pleaded by the defendants. In any event, the facts have been determined adversely to the defendants by the jury’s answer to the sixth issue. The contract alleged by the plaintiffs that the defendants agreed to give them actual notice of the date of sale was without consideration and unenforceable. The submission of an issue thereon, however, could not be held for prejudicial error. On plaintiffs’ appeal, the refusal of the court to sign judgment allowing the plaintiffs interest upon their recovery was in accord with the decisions of this Court. Parrish v. Hartman, ante, 248. Upon an examination of all the exceptions contained in the record we find On plaintiffs’ appeal, no error. On defendants’ appeal, no error.