Bolton v. Harrison

108 S.E.2d 666, 250 N.C. 290, 1959 N.C. LEXIS 670

• Court: Supreme Court of North Carolina
• Decided: May 20, 1959
• Docket: 309
• Status: Published

Opinion

Higgins, J.

The plaintiffs’ appeal challenges the nonsuit as to all plaintiffs except Frank Coley upon the grounds (1) the Land Bank foreclosure sale was void for fraud, collusion, and the breach of trust, and for want of service of process; and (2) Paul Coley, Luther Coley, and J. W. Coley acquired title to the tract of land described in Item 5 of the Will under such circumstances as in equity made them trustees for the plaintiffs’ interests as remaindermen.

Two of the plaintiffs now contend they were not served with process in the foreclosure proceeding in 1930. Neither could corroborate the other's claim. The return of the sheriff shows service. The court found that all parties were represented. “When the return shows legal service by an authorized officer, nothing else appearing, the law presumes service. The service is deemed established unless, upon motion in the cause, the legal presumption -is rebutted by evidence upon which a finding of nonservice is properly based.” Harrington v. Rice, 245 N.C. 640, 97 S.E. 2d 239. Any other rule would place solemn judicial proceedings in jeopardy upon'the flimsy foundation that one or more of the parties may have forgotten that process was searved. Where the record shows service, as here, the remedy must be by motion in the cause. Jordan v. McKenzie, 199 N.C. 750, 155 S.E. 868; Caviness v. Hunt, 180 N.C. 384, 104 S.E. 763.

There is no question but that J. W. Coley was properly before the court. He was the father of the plaintiffs, two of whom claim they were not served. He was the life tenant. It is seriously debatable whether service on him as life tenant would not be sufficient even if the remaindermen, his children, were not served in a foreclosure proceeding. Yarborough v. Moore, 151 N.C. 116, 65 S.E. 763; Carraway v. Lassiter, 139 N.C. 145, 51 S.E. 968.

The plaintiffs allege fraud, collusion, and carelessness in permitting the Land Bank to foreclose the mortgage which the testator placed upon all his real estate and which was unsatisfied at his death. They fail to allege or prove any defense to the foreclosure proceedings. While they allege, -they fail to offer proof of actual fraud. Conceding this failure, they contend the inadequate price and the purchase at the sale by the executors, and later by their father, furnish proof sufficient to establish a trust in their favor. In support, 'they offer two witnesses who looked back from 1958 to 1930 and testified the land was worth seventy thousand dollars 28 years ago. On the contrary, one sale after another, under order of the court, under the power of sale, in deeds of trust and mortgages, fail utterly to disclose any such value. The value now fixed by the witnesses as of 28 years ago shows only too well how much had 'been forgotten in 1958 about the value of property in 1930. The testimony of value was the result of a backward look after 28 years. “To grant to one whose property is sold by decree of court the right, five years 'after the sale and confirmation, to attack the sale because of asserted inadequate price would destroy all respect for judicial sales. Decrees of confirmation entered into by courts of competent jurisdiction are entitled to greater respect.” Franklin County v. Jones, 245 N.C. 272, 95 S.E. 2d 863.

The plaintiffs contend the fraud originated by reason of the purchase of the executors at the foreclosure sale in 1930. Prior to the sale, however, on January 25, 1929, the executors had completed the settlement of the estate in all matters with the exception of the outstanding mortgage to the Land Bank. The will gave the executors discretionary authority to rent all lands, and to suspend the effective date of all devises accordingly until the rents discharged all debts of the estate. On February 14, 1929, all the children of the testator entered into a contract to pay a named trustee semiannual payments which, if carried out, would liquidate the mortgage to the Land Bank within a period of ten years. Paul Coley made immediate payment of his share in cash. The others agreed among themselves as to the amount each should pay. J. W. Coley agreed to make semiannual payments of $311.30 for the 10-year period as his share. Failure of the parties to make the payments as agreed resulted in a default in 'the mortgage to the Land Bank.

On May 2, 1930, the Land Bank instituted an action in the Superior Court of Wayne County to foreclose the mortgage, the full amount having become due under the acceleration clause. All de-visees were made parties. The court appointed a guardian ad litem for the children, born and unborn, of J. W. Coley because of their interest under Item 5 of the will. (The record in this case recites that Paragraph 9 of the complaint in the foreclosure proceeding “Alleges that J. Frank Coley died/ in 1926, and alleges the terms of the Will.” Paragraph 11 “Alleges the names 'and ages of the children then living of J. W. Coley.”) All were made parties to the foreclosure proceeding except Frank Coley who was not bom until years later. The judgment of foreclosure recites that “the minor defendants, naming them . . . and unborn persons who may have right in the land (by guardian ad litem) have filed answers.” The court then rendered judgment for the 'balance due on the mortgage, decreed foreclosure, and appointed two eminent lawyers commissioners to sell the land, including the 63.7 acre tract here involved.

After due advertisement the commissioners offered the land for sale. Paul Coley and Luther E. Coley -became the purchasers for $12,860.41, subject to accrued taxes. After 20 days the court confirmed the sale -and ordered the commissioners to execute deed to the purchasers. The deed was executed 'and recorded on October 8, 1930. On the .same day Paul Coley and L. E. Coley, and their wives, executed a deed of trust to Chickamauga Trust Company to secure 'a loan of $13,000.00 .advanced by Prudential Insurance Company of America. The money thus advanced became the purchase price paid to 'the commissioners and the Land Bank’s lien was thus discharged. Later, upon default, the substitute trustee sold under the deed of trust and Prudential purchased and took the -substitute trustee’s deed. Prudential then sold 172.5 acres of land, including the 63.7 acre tract, to L. E. Coley and wife who executed a deed of trust -to secure the purchase price. Another default and another sale placed the title back in Prudential. Prudential then sold the 63.7 acre tract to J. W. Coley and wife. The deed was executed November 1, 1934. (J. W. Oo-ley was the beneficiary under Item 5 of the will .and the father of -the plaintiffs.) On November 14, 1935, J. W. Coley and wife sold and conveyed the land to O. D. Owens and wife, Lizzie Pearl Owens, for $500.00 oash and the assumption of a $2,700.00 lien. Mrs. Owens is a sister of J. W. Coley and one of the beneficiaries under the will. On December 29, 1939, C. D. Owens and wife conveyed the land to G. A. Harrison for .a consideration of $5,000.00.

G. A. Harrison was a stranger to the Goley family. The transfer from Owens .and wife was the first time the land had been free of the encumbrance since the testator .put it under mortgage to the Land Bank in 1924. The title to Plarrison thus goes back to the mortgage given by the testator to the Land Bank. The legal title has passed by successive steps through foreclosure by order of a court which had jurisdiction of the subject-matter and of the parties. The duly appointed guardian ad litem represented the interest of the plaintiffs, including Frank Coley, then unborn.

The record in the foreclosure action showed no defense to a foreclosure sale. All the facts were before the court. The court had before it the will which showed that Paul Coley and Luther Coley were executors. With this knowledge the court ordered its commissioners to approve their purchase at the sale and to convey title to them. For a full discussion of judicial sales and duties of a guardian ad litem, see Franklin County v. Jones, supra, and the many cases there cited.

The Land Bank mortgage, its foreclosure, and subsequent deeds of trust, foreclosures, and other mesne conveyances places the legal title in G. A. Harrison and from 'him by descent to the defendants. Nowhere along the chain does the record disclose a break or flaw in the legal title. Both parties claim through Frank Coley, the plaintiffs under the will, the defendants under his mortgage and its foreclosure. The foreclosure sale left nothing to pass to the plaintiffs under the will.

The plaintiffs, as an alternate prayer for relief, ask “that this action be considered as a motion in the cause in the foreclosure proceeding.” The evidence does not show the court was misled or was not in possession of all the pertinent facts necessary to decision/ or that any defense to foreclosure existed, either in law or in fact, save and except two witnesses were found in 1958 who thought the land was worth $70,000.00 in 1930. Otherwise, .time has added nothing new.

The plaintiffs make out a defense to their own claim. They allege the execution of the mortgage to the Land Bank. They introduced the judgment roll in the foreclosure proceeding and all the mesne conveyances to G. A. Harrison. The record fails to show these documents were introduced for the purpose of attack; but assuming otherwise, the attack fails for want of proof.

The parties have assumed that the minor plaintiff, born 25 years after the testator’s death but during the term of the life tenant, could qualify for -benefits under Item 5 -of the will. The parties likewise have assumed that a guardian ad litem -could have been -appointed to represent his interest. However, in this type of case, under the doctrine of virtual or -cla-ss representation, the living persons (sisters) in his same classification and with identical interests under the will represented -and bound his interest. McPherson v. Bank, 240 N.C. 1, 81 S.E. 2d 386. “Without regard to the act of 1903, the court -has the power to order the -sale of real estate limited to a tenant for life, with remainder to children -or iss-ue, upon failure thereof, over to persons, all or some of whom are not in esse, when one of the class being first in -remainder after the expiration of the life estate is in esse and -a -party .to -the proceeding to represent the class, and that upon decree passed, -and sale and title made pursuant thereto, the purchaser acquires a perfect title as against all persons in esse -or in posSe.” Lumber Co. v. Herrington, 183 N.C. 85, 110 S.E. 656.

Necessarily, purchasers of property, especially land, must have faith in and place reliance on the validity of judicial proceedings. Franklin County v. Jones, supra; Cherry v. Woolard, 244 N.C. 603, 94 S.E. 2d 562; Park, Inc. v. Brinn, 223 N.C. 502, 27 S.E. 2d 548; Graham v. Floyd, 214 N.C. 77, 197 S.E. 873; Morris v. Gentry, 89 N.C. 248; Sutton v. Schonwald, 86 N.C. 198.

For -the reasons herein assigned, we hold the judgment of nonsuit was required as to all plaintiffs, including the minor, Frank Coley.

On plaintiffs’ appeal, the judgment is

Affirmed.

On defendants’ appeal, the judgment in favor of Frank Coley, minor, is

Reversed.