Sanderlin v. Cross

Ai.leN, 3". The cause of the plaintiffs has been presented with zeal and ability, and circumstances have been called to our attention which, from the viewpoint of the plaintiffs, are calculated to excite sympathy and to arouse indignation; but we can give no weight to these matters except in so far as they relate to the legal questions involved in the appeal. The exercise of the power of sale by the trustee upon the demand of the secured creditors at a time when the wife, who was the owner of the property, was at the bedside of a dying husband was a harsh exercise of a power which is not favored and is jealously guarded at all times; but we must keep in mind the admonition of our predecessors, that “Hard cases are the quicksands of the law.” — 240 — Tbe plaintiffs’ cause of action, as stated in tbe complaint, is for tbe purpose of redeeming tbe tract of land sold under tbe power in tbe trust deed on 4 November, 1899, upon tbe grounds (1) tbat none of tbe conditions existed at tbat time wbieb gave tbe trustee tbe right to sell; (2) tbat at tbe sale there was collusion for tbe purpose of suppressing bidding; (3) tbat tbe trustee, in violation of tbe terms of tbe deed of trust, sold tbe land and timber separately when be was only authorized to sell tbe land with tbe timber on it. Tbe trust deed secures a note payable in six, seven, eight, nine, and ten years after date, with interest from date, payable semiannually; and it authorizes a sale upon failure “to pay interest on said bond as tbe same may hereafter become due, or both principal and interest at tbe maturity of tbe bond, or any part of either”; and it directs tbe trustee, after tbe payment of bis commissions, to “apply so much of tbe residue as may be necessary to pay off and discharge said bond and all interest then accrued and due thereon, both those due and not due.” This provision clearly contemplates a sale before tbe maturity of tbe bond, and upon failure to pay any installment of interest, and as interest was due and unpaid at tbe time of tbe sale, tbe trustee bad tbe right to sell. Capehart v. Dettrick, 91 N. C., 344; Gore v. Davis, 124 N. C., 234. In tbe last case cited tbe terms of tbe mortgage were very much like those in tbe trust deed before us, and it was held tbat tbe mortgagee could foreclose before tbe maturity of- tbe bond upon failure to pay interest; and if be could foreclose by decree, be could sell under tbe power. Tbe Court said: “Tbe note sued on was dated 19 October, 1897, and payable three years after date, but tbe interest was made ‘due and payable semiannually.’ Tbe mortgage to secure tbe note specified, ‘If default shall be made in payment of said bond or 'the interest on tbe same, or any part of either at maturity,’ tbe creditor could proceed to sell the land and out of proceeds of sale ‘pay said bond and interest on tbe same.’ Tbe defendant failed to pay tbe interest which fell due 19 April, 1898. By tbe conditions of tbe mortgage tbe principal and interest became due. The demurrer of tbe defendant, tbat this action for judgment on tbe note and foreclosure of tbe mortgage was_ premature, was prope’rly overruled.” Nor do we find any evidence in tbe record of combination to suppress-bidding at tbe sale. There is evidence tbat tbe purchasers, James Parker and J. D. Parker, and tbe manager of tbe Elizabeth City Lumber Company entered into an agreement on tbe day of tbe sale tbat in tbe event tbe Parkers bought, tbe lumber company would take tbe — 241 — timber on tbe land for $5,000; but tbis, according to tbe evidence,, was not made known at tbe sale, and instead of decreasing, would bave a tendency to increase tbe amount bid. Tbe sale was duly advertised, was conducted openly, and opportunity was given to any one wbo desired to buy to do so. Tbis leaves remaining, as a sole ground upon wbicb tbe plaintiffs can demand relief, that tbe trustee exceeded bis power in selling tbe timber and land separately instead of selling 'tbe land with tbe timber on it as a whole; and for tbis reason they ask that the sale be set aside and that an accounting be bad, wbicb brings tbe action within tbe meaning of an action to redeem; and, if so, it is barred after ten years (Edwards v. Tipton, 85 N. C., 479; Bernhardt v. Hagaman, 144 N. C., 526), as it is not denied that the defendants and those under whom they claim bave been in tbe open, notorious possession of tbe land since 1900. In tbe Bernhardt case this statute of limitations was applied to a deed of trust. Tbe plaintiffs, however, contend that tbe ten years statute has no application, and that the action is controlled by Revisal, sec. 395, subsec. 9, wbicb says that in an action for relief on tbe ground of fraud or mistake, tbe cause of action shall not be deemed to' bave accrued until tbe discovery of the aggrieved party of tbe facts constituting such fraud or mistake, and that tbe action of the trustee in selling tbe land and timber separately was a fraud upon their rights wbicb they did not discover until January, 1913, less than three years from tbe commencement of tbe action. Conceding that there was evidence of fraud, tbe plaintiffs bave failed to bring themselves within tbe language or spirit of tbe statute. Tbe burden was upon them to prove not only that they bad not discovered tbe fraud, which consisted of selling tbe land and timber separately, but also that their mother, who lived until 1912, about thirteen years after tbe sale, did not know the facts; and when we examine tbe evidence, we find that although they testify that their mother did not know' it, and we do not question their credibility, they explain tbis statement by saying that they bave come to this conclusion because they never beard their mother say anything about it, and that their mother never told them whether she knew bow tbe sale was conducted or not. Tbis does not come within tbe rule of contradictory statements, wbicb must be submitted to tbe jury; but tbe latter statements, of tbe witnesses are explanatory of tbe first, and when considered as a whole, simply amount to saying that tbe witnesses never beard their mother refer to tbe matter. — 242 — To illustrate, we give an excerpt from the examination of the principal witness for the plaintiffs: Q. “Where did you get the information that she did not know that the timber and land were sold separately?” A. “Because she never mentioned it in our conversation.” Q. “That is the only way you know it?” A. “That is the only way I know it.” If, however, there was evidence that the mother did not know how the sale was conducted, this would not conclude the matter, for, “under authoritative decisions here and elsewhere construing this and similar statutes, it has been very generally held that these words, The action not to be deemed to have accrued until the discovery of the facts constituting the fraud/ etc., by correct interpretation mean until the impeaching facts were known or should have been discovered in the exercise of reasonable business prudence.” Hhubarik v. Lyman, 170 N. C., 508. “A man should not be allowed to close his eyes to facts readily observable by ordinary attention, and maintain for his own advantage the position of ignorance. Such a principle would enable a careless man, and by reason of his carelessness, to extend his right to recover for an indefinite length’of time, and thus defeat the very purpose the statute was designed and framed to accomplish. In such case a man’s failure to note facts of this character should be imputed to him for knowledge, and in the absence of any active or continued effort to conceal a fraud or mistake, or some essential facts embraced in the inquiry, we think the correct interpretation of the statute should be that the cause of action will be deemed to have accrued from the time when the fraud or mistake was known or. should have been discovered in the exercise of ordinary diligence.” Peacock v. Barnes, 142 N. C., 218. The sale was made in 1899, and two deeds were immediately executed, one conveying the land to James and J. D. Parker and the other conveying the timber to the Elizabeth City Lumber Company, and these deeds were placed upon the record within two weeks. The mother of the plaintiffs knew that the sale had been made, and the purchasers of the land were in the open possession thereof, claiming it as their own, and it is a fair presumption that the timber was cut eight or nine years before this action was commenced, as the timber deed only gave five years for' cutting, with an extension clause of five years. Under these circumstances, ordinary prudence would require some investigation, and the slightest examination of the record would have disclosed that the deeds recited that' the land and timber were sold separately. — 243 — It is true that in several of the cases, such as Modlin v. R. R., 145 N. C., 226; Tuttle v. Tuttle, 146 N. C., 493, and others, it is said that the registration of a deed is not sufficient to put a party on notice that a fraud has heen committed; but in those cases the action was based on fraudulent representations in procuring a deed, and the record did not disclose any fraud or violation of trust, while in this case the record shows all of the facts for which the plaintiffs contend, and, in addition, there is the circumstance of possession. In the Tuttle case the distinction is inferentially drawn when the Court says: “The fact that the commissioner made a deed to the Corpenings on 22 December, 1902, if registered, would not even put the plaintiffs upon inquiry, much less fix them with the notice that a fraud had been committed, as there is no evidence of that upon the face of the deed.” Why say this if it was not intended to convey the idea that if the facts appeared on the face of the deed it would be notice? The case of Dunn v. Beaman, 126 N. C., 171, is strong authority for the position that when the facts appear on the record, the party is affected with notice. In that case a valuable tract of land was devised in 1844.to the children of John R. Beaman. The father qualified as guardian for the children and filed an ex parte petition for a sale of the land for partition, and the land was sold and the sale confirmed, and the guardian received the purchase money. The children of Mr. Bea-man did not know until within three years prior to the institution of their action that any land had ever been devised to them or that their father was their guardian, or that the land had been sold. They presented their claim against the estate for the purchase money of the land, and having been made parties to a creditors’ hill, one of the creditors pleaded the statute'of limitations to the claim, and the children, while disavowing any charge of intentional fraud upon the part of their father, replied that they had discovered the facts within three years. The contention was not sustained, and it was held that their cause.of. action was barred. The Court said: “The children had legal notice of the facts. The will of Carraway, under which their title accrued, was probated and recorded in 1844, and the land devised to them was sold for partition in 1861 at the courthouse door after due advertisement under a decree in equity; the proceedings in equity were duly recorded, to which three of the children, who were adults, together with their husbands, were-imrties praying the sale, and the decree of confirmation was properly enrolled. The deed from the clerk and master to the purchaser was duly recorded in the register’s office, and was notice to the children as well — 244 — as to all tbe world, and they were put on notice by tbe recitals therein contained.” We have thus far dealt with tbe question assuming that tbe land and timber were sold separately, and there is evidence of this fact growing out of tbe recitals in tbe deeds; but on tbe trial tbe defendants introduced eight or ten witnesses who .testified that tbe land was put up for sale and sold as a whole without any reference to tbe timber, and that tbe deeds were afterwards made separately for tbe land and tbe timber for tbe convenience of tbe parties. There was also evidence offered by tbe defendants that the price paid for tbe land, $12,460, ivas its full value at that time, and tbe only evidence to tbe contrary was that tbe mother of tbe plaintiffs bad been offered $15,000 for tbe land about tbe time of tbe sale by a party living in Philadelphia. We have carefully considered tbe case, and being of opinion that in any aspect of tbe evidence tbe cause of action of tbe plaintiffs is barred by tbe statute of limitations, tbe judgment of nonsuit is Affirmed.