R. M. Sutton Co. v. Wells

*527 AlleN, J. Tbe first position of the plaintiffs cannot be sustained because they are subsequent creditors, and they admit that M. M. Wells owed nothing at the time of the execution of the deeds they seek to attack, the controlling principle being stated in Aman v. Walker, 165 N. C., 227, as follows: “If the conveyance is voluntary, and the grantor -did not retain property fully sufficient and available to pay his debts then existing, it is invalid as to creditors; but it cannot be impeached by subsequent creditors without proof, of'the existence of a debt at the time of its execution, which is unpaid, and when this is established ■and the conveyance avoided, subsequent creditors are let in and the ■property is subjected to the payment of creditors generally.” The second position is upon the ground that the deed of 1903, although ■absolute in form, was intended as a security for debt, and established the relation of mortgagor and mortgagee, and that from this relation■ship a presumption of fraud arises as to dealings between the mortgagor and mortgagee, and casts the burden on the mortgagee to show that the transaction was fair and free from fraud, undue influences or oppression, and the burden being on the defendants, it was error to enter .judgment of nonsuit. The principle contended for is well supported by authority (Pritchard v. Smith, 160 N. C., 84; Alford v. Moore, 161 N. C., 386), and has been rigidly enforced, but it has no application on the admitted facts, for the reason that the trust relation was closed by the execution of deeds between the parties in 1914, before the debts due the plaintiffs came into existence, and no one who then had any interest in the property is complaining. “It is a rule of equity not to allow the mortgagee to enter into a contract with the mortgagor, at the time of the loan, for the absolute purchase of the estates for a specific sum, in case of default made in the payment of the mortgage money at the appointed time, justly considering it would throw open a wide door to oppression and enable the creditors to drive an inequitable and hard bargain with the debtor, who is rarely prepared to discharge his debt at the specified time.. But even in equity, the mortgagee at a subsequent time may purchase the equity of redemption as well as a stranger, for then the mortgagor is not so much in his power, as he may himself redeem the mortgage or sell the estates mortgaged to another person, and raise the money and discharge the mortgage.” Shelton v. Hampton, 28 N. C., 218. The mortgagee having this right to buy the equity of redemption, ■subject to the supervision of a court of equity, exercised to prevent 'fraud and oppression, and no one having any interest in the property ■or the right to follow its proceeds at the time of the execution of the <deed in 1914 raising any objection, 'the relation of mortgagor and *528 mortgagee was then closed by tbe deeds then executed, and tbe plaintiffs,, whose debts were thereafter contracted, have no right to complain. Affirmed.