Wilson v. Union Trust Co. of Maryland

CoNNOs, J. At the hearing of the motion of the answering defendants that the temporary restraining order issued in this action be dissolved, the judge found as a fact, from the admissions in the pleadings, *790 that tbe aggregate amount of tbe monthly payments made by tbe defendants, Allison "W". Honeycutt and bis wife, Mary W. Honeycutt, on tbe bonds beld by tbe defendant, Mortgage Security Corporation of America, and secured by tbe deed of trust to tbe defendants, Union Trust Company of Maryland, and Insured Mortgage Bond Corporation of North Carolina, trustee, is $3,432. Tbe aggregate principal amount of these bonds was $6,000. There is no controversy, therefore, between plaintiff and tbe answering defendants, that tbe amount due on said principal is now $2,568. Tbe judge further found as a fact that tbe fair market value of tbe land described in tbe complaint is less than tbe amount which tbe answering defendants contend is due on tbe bonds secured by tbe deed of trust, plus tbe amount due tbe plaintiff on tbe note beld by him and secured by tbe mortgage registered subsequent to tbe registration of tbe deed of trust. Tbe judge also found as a.fact that tbe plaintiff is ready, willing and able to pay to tbe bolder of tbe bonds secured in tbe deed of trust, which has priority over tbe mortgage by which bis note is secured, tbe sum of $2,568, together with tbe sum paid by tbe defendants, other than Allison W. Honeycutt and bis wife, Mary ~W. Honeycutt, as taxes and premiums for insurance, which sum is found to be $215.36, upon tbe assignment of said bonds and deed of trust to him. Tbe answering defendants contended at tbe bearing before tbe judge of tbe Superior Court, and contend on their appeal to this Court, that tbe amount due on tbe bonds secured by tbe deed of trust, which has priority over tbe mortgage by which tbe note beld by tbe plaintiff is secured, is $6,000, tbe aggregate amount of said bonds, with interest at tbe rate of six per cent, less tbe aggregate sum of tbe monthly payments made on said bonds by tbe defendants, Allison W. Honeycutt and bis wife, Mary W. Honeycutt, which sum, it is admitted by said defendants, is $3,432; and that notwithstanding tbe allegation in tbe complaint that tbe bolder of said bonds has knowingly charged, reserved, taken and received interest on said bonds at a rate greater than six per cent, which allegation is denied by said defendants, tbe holder of said bonds has a prior lien on tbe land described in tbe complaint for tbe amount due thereon, enforceable against tbe plaintiff, in this action by which plaintiff seeks the equitable remedy of injunction. In support of this contention tbe said defendants cite and rely on Waters v. Garris, 188 N. C., 305, 124 S. E., 334, in which it is said: *791 granted relief and allowed to have tbe usurious charges eliminated from bis debt only upon paying or tendering tbe principal sum witb interest at tbe legal rate, tbe only forfeiture wbicb be may tbus enforce being tbe excess of tbe legal rate of interest. Corey v. Hooker, 171 N. C., 229, 88 S. E., 236; Owens v. Wright, 161 N. C., 127, 76 S. E., 735. Tbis ruling wbicb bas been established by an unbroken line of precedents, beginning witb Taylor v. Smith, 9 N. C., 465, and running through a multitude of cases down to our latest decision in Adams v. Bank, 187 N. C., 343, 121 S. E., 529, is based upon tbe principle that be who seeks equity must do equity.” " Waters v. Garris bas been cited and tbe principle on wbicb tbe decision in that case rests applied in Miller v. Dunn, 188 N. C., 397, 124 S. E., 746, and in Edwards v. Spence, 197 N. C., 495, 149 S. E., 486. *790 “It is tbe established law of this jurisdiction that when a debtor, who has given a mortgage to secure tbe payment 'of a loan, comes into equity, seeking to restrain a threatened foreclosure under tbe power of sale in bis mortgage, as a deliverance from tbe exaction of usury; be will be *791 Plaintiff in tbis action is not tbe debtor on tbe bonds secured in tbe deed of trust; be is a junior mortgagee. As such, be is under no obligation, legal or moral, to pay tbe amount due on tbe bonds. He bas tbe right, enforceable in tbis action, to have tbe amount due on tbe bonds secured by tbe deed of trust wbicb bas priority over tbe mortgage by wbicb bis note is secured, ascertained, and definitely determined, and upon paying tbe amount so ascertained and definitely determined, to have tbe bonds and tbe deed of trust assigned to him. Elliott v. Brady, 172 N. C., 828, 90 S. E., 951. Until this amount, wbicb is in controversy between plaintiff and tbe answering defendants, bas been ascertained and definitely determined, plaintiff is entitled to have tbe sale of tbe land described in tbe complaint, under tbe power of sale contained in tbe deed of trust, enjoined and restrained. Parker Co. v. Bank, ante, 441, 157 S. E., 419. Tbe plaintiff contended at tbe bearing before tbe judge of tbe Superior Court, and as appellee in tbis Court contends, that tbe amount due on tbe bonds, for which tbe answering defendants have a lien on tbe land described in tbe complaint, by virtue of tbe deed of trust, is tbe principal of said bonds, to wit, $6,000, less tbe aggregate sum of tbe monthly payments made thereon by tbe debtors, to wit, $3,432, without interest. Tbis amount, to wit, $2,568, tbe plaintiff is ready, willing and able to pay upon tbe assignment of tbe bonds and deed of trust to him. His contention is founded on tbe allegation in bis complaint, wbicb is denied in tbe answer of tbe defendants, that tbe bolder of tbe bonds bas exacted usury of tbe debtors thereon, and have thereby, under tbe provisions of C. S., 2306, forfeited tbe entire interest on tbe bonds. Tbis contention is supported by our decision in Broadhurst v. Brooks, 184 N. C., 123, 113 S. E., 576. In that case it was held that where tbe senior mortgage is affected witb a charge of usury, tbe amount, to be paid by tbe junior mortgagee, before requiring tbe assignment of *792 the debt secured by the senior mortgage to him, is the principal sum due, without interest. There is no error in the order continuing the temporary restraining order to the final hearing, when the issue raised by the pleadings, involving the execution of usury, may be submitted to and determined by a jury. Affirmed.