Broadhurst v. . Brooks

113 S.E. 576, 184 N.C. 123, 1922 N.C. LEXIS 28

• Court: Supreme Court of North Carolina
• Decided: September 27, 1922
• Status: Published

Opinion

Ciabk, C. J.

Stancill and wife, in 1915, executed their several promissory notes to Alonzo Parrish aggregating $20,000, the last of which fell due 1 January, 1921, and executed-to E. H. Brooks, trustee, a deed of trust conveying certain lands as security therefor. The defendant Brooks, trustee, advertised said lands for sale under the deed of trust on 20 December, 1921. Stancill and wife thereupon instituted suit to restrain said sale, alleging that the defendant Parrish was guilty of usury, and had retained $2,000 of the principal, and that Stancill actually received only $18,000. On the hearing of the Stancill suit, Calvert, J., continued the restraining order upon condition that Stancill and wife should pay, on or before 4 April, 1922, $11,462.98, with the provision that if that sum was not paid by said date the restraining order would be dissolved and the trustee should be at liberty to readvertise and sell the land. The sum thus prescribed was the principal with legal interest. This action is by the second mortgagee, who contends that the sale should not take place if Stancill should fail to make such payment until the plaintiff is afforded full opportunity to pay the principal only, without interest.

The plaintiff alleges that he will be forced to purchase the mortgaged land in order to protect his rights as a junior mortgagee, and contends that this injunction should be continued to the hearing unless the sum due on the first mortgage, deducting all interest, should be ascertained and definitely determined, and he be given opportunity to pay that sum and take an assignment of the first mortgage.

The junior mortgagee is entitled to pay off and discharge any valid lien upon the property, which cannot be done unless and until this amount is ascertained. Elliott v. Brady, 172 N. C., 828.

The plaintiff, as second mortgagee, has the legal title to the property subject only to the amount legally due upon the first mortgage, and the equity of redemption in the mortgagor. The lien of the first mortgage as against the second mortgagee, under our statute, if there has been usury as to the first mortgagee, is the principal without interest. C. S., 2306. The plaintiff is entitled to have such sum ascertained and an order by the judge that upon payment of that sum by the second mortgagee the first mortgage shall be assigned to him and the injunction should then be dissolved. Elliott v. Brady, supra; Erwin v. Morris, 137 N. C., 48.

Affirmed.