Whitaker v. . Chase

Clarkson, J. The exceptions and assignments of error of defendants, are as follows: “(1) For that the findings of fact by the court, upon which the judgment is hypothecated, are not supported by the evidence in the case: (a) As to the adequacy of the price bid for the property, (b) as to the amount of the indebtedness due to the cestui que trust, Virginia-Carolina Power Company. (2) For that the statute, upon which the remedy of injunction is sought, to wit: Chapter 275 of the Public Acts of 1933, is violative of the Constitution of the United States, to wit: Section 10, Article I.” We do not think these exceptions and assignments of error made by defendants, can be sustained. In this jurisdiction, it is settled that: “A junior mortgagee may maintain an action to restrain the foreclosure of a senior mortgage and to ascertain the amount due thereon.” Wiltsie on Mortgage Foreclosure, 4th ed., citing Broadhurst v. Brooks, 184 N. C., 123. Wilson v. Trust Co., 200 N. C., 788 (791); 59 A. L. R., 346, note. The facts found by the court below and the conclusions of law were to the effect that: On 21 November, 1927, the Roanoke Rapids Properties, Incorporated, gave its note for $87,341 to the Virginia-Carolina Power Company, payable 1 November, 1934, for the purchase price of 873 acres of land, and executed a deed of trust on the land to J. T. Chase and the Weldon Bank and Trust Company (now Gurney P. Hood, Commissioner of Banks of North Carolina, receiver of Weldon Bank and Trust Company). Later, on 13 February, 1928, it gave a second deed of trust to George C. Green on the same land to secure a note to the Weldon Bank and Trust Company for $10,438.30, and thereafter on 15 April, 1929, gave a third deed of trust to George C. Green, trustee, to secure a debt of $17,500 due the plaintiff, T. Lee Whitaker, for money borrowed. The 873 acres of land lie in and adjacent to the town of Roanoke Rapids, and was bought for the purpose of being divided into building lots and sold; the deed of trust providing for this. Accordingly, the Roanoke Rapids Properties, Incorporated, sold *340 off lots and made payments on tbe first mortgage debt until it was reduced from $87,341 down to $17,233.42 as claimed by tbe defendants. This amount represents principal $8,942.28 and interest $8,291.14. Tbe plaintiff contends that tbe balance due is less tban $15,000. Tbe acreage was also reduced from 873 to about 538 acres. Tbe Roanoke Rapids Properties, Incorporated, bad no revenue producing property whatsoever, and was entirely dependent on tbe sale of lots for operating expenses. Taxes bave accumulated on tbe property amounting to $8,879.23. Tbe note was not due by its terms until November, 1934, tbe bolder, by virtue of a provision in tbe deed of trust, declared it in default for nonpayment of taxes. Notbing bas been paid on tbe debts secured by tbe second and third deeds of trust. Tbe defendants, J. T. Chase and Gurney P. Hood, Commissioner of Banks, trustees, sold tbe land under tbe deed of trust on 4 December, 1933, at public auction for cash. It was bid in by Virginia-Carolina Power Company, bolder of tbe note, for $27,680, which is tbe amount tbe defendants claim was due on tbe note, plus tbe taxes, trustee’s commissions and expense of sale. There was no other bid on it. Before tbe statutory time for making a deed arrived, tbe plaintiff brought this action to enjoin tbe trustees from making tbe deed, and alleged that tbe balance due on tbe first deed of trust was not over $15,000, and that tbe price bid for tbe land was inadequate and inequitable. It was in evidence that on tbe part of plaintiff, that tbe sum bid at tbe sale, $27,680 was “grossly inadequate” and tbe sum of $150.00 per acre, “a fair and normal value for such lands.” Tbe evidence in regard to plaintiff’s contention that tbe note of defendant Virginia-Carolina Power Company, is not in excess of $15,000 is not very strong. Tbe court below found as “a fact” that there is a dispute in respect to tbe “amount of tbe indebtedness” and further found, “that a serious issue of fact bas been raised by tbe evidence offered in said case, in respect to tbe value of said land and as to whether it brought a price that was fair, just and adequate or a price that was grossly inequitable.” Tbe court further found, “that tbe dissolution of this injunction may cause great injury to plaintiff if it is dissolved; that serious questions bave been raised. . . . That tbe rights of tbe answering defendants can be fully and amply protected by an injunction bond in this case.” Tbe plaintiff was required to give a $20,000 bond with surety to be approved by tbe clerk of tbe Superior Court which bas been done. Tbe court below, “states that if tbe answering - defendants desire it, upon proper motion, it will sign an order appointing a receiver for said property during said litigation.” In Wentz v. Land Co., 193 N. C., 32 (34), is tbe following: “Tbe rights of tbe parties to tbe controversy are complicated. Certain prin *341 ciples of law are applicable, when the facts are ascertained. On the record, as to material facts, there is serious conflict. In injunction proceedings, this Court has the power to find and review the findings of fact on appeal, but the burden is on the appellant to assign and show error, and there is a presumption that the judgment and proceedings in the court below are correct.” Realty Co. v. Barnes, 197 N. C., 6; Land Co. v. Cole, 197 N. C., 452 (455); Roebuck v. Carson, 197 N. C., 492 (493). In Parker Co. v. Bank, 200 N. C., 441 (443), speaking to the subject citing numerous authorities, it is said: “It is the general practice of equity courts, upon showing of a basis for injunctive relief, to continue the restraining order to the final hearing, when it appears that no harm can come to the defendants from such continuance, and great injury might result to the plaintiffs from a dissolution of the injunction.” The court below under the facts and circumstances of this case, with its equitable power, had the discretion to continue the injunction to the hearing. Alexander v. Boyd, 204 N. C., 103. In 14 R. C. L. (Injunctions), part sec. 172, p,'472, is the following: “The power of the court to impose terms and conditions, including the giving of a bond, in connection with the issuance of an injunction, is one which is generally recognized.” In Woltz v. Safe Deposit Co., ante, 239, the constitutionality of chapter 275, Public Laws of 1933, entitled, “An act to regulate the sale of real property upon the foreclosure of mortgages or deeds of trust,” is upheld and the reasons given therefor. The brief of defendants is learned and persuasive, but not convincing from the facts and circumstances of this case. We think for the reasons given, the judgment of the court below must be Affirmed.