Roberson v. . Matthews

BbogdeN, J. Did the trial judge rule correctly in setting aside the sale by Jenkins, trustee, to Roberson, and the deed made pursuant thereto ? There is no evidence that there was any actual fraud, oppression, or unfairness in advertising and selling the land. Moreover, the sale was properly advertised and the deed of trust empowered the trustee to appoint “a day and place of sale,” etc. There was evidence that the note secured by the deed of trust had not been barred by the statute of limitation. Therefore, the power to set aside the sale and deed must be based upon one or all of three theories, to wit, (a) that the purchase price was so grossly inadequate as to shock the conscience of a court of equity; (b) the application of C. S., 2594, subsection 5; (c) that the purchaser Roberson was at the time of the sale, agent for the trustee and acting for said trustee in conducting the sale and taking title to the property. *245 The first theory cannot be maintained upon the evidence offered at the trial. Mere inadequacy of purchase price alone is not sufficient to upset a sale when duly and regularly made. “But gross inadequacy of consideration, when coupled with any other inequitable element, even though neither, standing alone, may be sufficient for the purpose, will induce a court of equity to interpose and do justice between the parties.” Weir v. Weir, 196 N. C., 268, 145 S. E., 281. Neither can the second theory be maintained. Indeed, the trial judge instructed the jury that O. S., 2594, did not apply. This ruling was correct. Hicks v. Kearney, 189 N. C., 316, 127 S. E., 205. That decision declares the law to be that O. S., 2594, subsection 5, has no application to a mortgage given prior to the passage of that statute nor does it wipe out a valid debt existing at the time the statute took effect. The third theory presents the real question upon this record. The trustee was the owner and holder of the note secured by the deed of trust. Said trustee transferred the note to a kinsman by marriage, and three days thereafter the land is advertised for sale. The purchaser, Roberson, testified that “the purpose of the transfer was made to help Mr. Jenkins (trustee) straighten out his business. . . . Mr. Jenkins was getting old and wasn’t able to straighten it out, disabled to look after it. ... I saw Mr. Jenkins right often. In his old age he got me to look after some of his business affairs for him.” Upon this evidence and other evidence in the record, the question arises: Was Roberson, the purchaser, the agent of Jenkins, the trustee, in making the sale, and thereafter acquiring title to the property pursuant to süch sale? The general principle pertinent to this phase of the case was thus expressed by Hoke, J., in Owens v. Mfg. Co., 168 N. C., 397, 84 S. E., 389: “In exercising such a right, however, the utmost degree of good faith is required, the mortgagee being looked upon as a trustee for the owner as well as the creditor, and, in applying the principle, it is very generally held that such a mortgagee is not allowed, either directly or indirectly, to become the purchaser at his own sale, and where this is made to appear the transaction, as between the parties and at the election of the mortgagor, is ineffective as a foreclosure, and the relationship of mortgagor and mortgagee will continue to exist. . . . Under well considered decisions here and elsewhere, the position extends to the ease of assignees of the mortgage or the debt secured by it when it is shown that such an assignee, by himself, his agent or attorney, was in control and charge of the sale; the mortgagee only participating by allowing the use of his name for the purpose.” Joyner v. Farmer, 78 N. C., 196; Morris v. Carroll, 171 N. C., 761, 88 S. E., 511; Jessup v. Nixon, 199 N. C., 122. *246 An examination of tbe record discloses that the third theory was not submitted to the jury, and the question of agency upon the facts disclosed is essentially an issue of fact. If it shall be determined that Roberson, the purchaser, was acting as agent for the trustee, Jenkins, then a court of equity has the power to set aside the sale and the deed pursuant thereto. Wherefore, the cause is remanded for further proceedings. Reversed and remanded.