Riddick v. . Davis

16 S.E.2d 662, 220 N.C. 120, 1941 N.C. LEXIS 486

• Court: Supreme Court of North Carolina
• Decided: October 8, 1941
• Status: Published

Opinion

WiNBORNE, J.

Upon the facts shown in the record on this appeal, these questions arise for decision:

(1) Are the makers of the deed of trust necessary parties to the action instituted under the provisions of C. S., 994, by the purchaser at the foreclosure sale for the purpose of obtaining authority for the infant trustee to execute a deed pursuant thereto ?

(2) If so, may the makers of such deed of trust, not having been parties to such action, exercise equity of redemption against such purchaser to whom deed has been made by the infant trustee upon order of court ?

The language of the statute and the rationale of kindred decisions point to affirmative answer to each of these questions.

It is provided in C. S., 994, that “When an infant is seized or possessed of any estate in trust, whether by way of mortgage or otherwise, for another person who may be entitled in law to have a conveyance of such estate, . . . the court may decree that the infant shall convey and assure such estate, in such manner as it may direct, to such other person; and every conveyance and assurance made in pursuance of such decree shall be as effectual in law as if made by a person of full age.”

In this connection it is interesting to note that this statute, 0. S., 994, is derived from an Act of the 1821 session of the General Assembly (Laws of North Carolina, 1821, ch. XXXIX), entitled: “An Act to enable infants who are seized or possessed of estates in fee, in trust, or by way of mortgage, to make conveyance of such estates.”

The preamble to the act and the act read as follows:

“Whereas many inconveniences do and may arise, by reason that persons under the age of one and twenty years, having estates in lands, tenements or hereditaments, only in trust for others, or by way of mortgage, cannot (though by the direction of the cestay que trust, or mortgagor) convey any sure estate in any such lands, tenements or heredita-ments, to any other person or persons; for remedy thereof,

“Be it enacted by the General Assembly of the State of North Carolina, and it is hereby enacted by the authority of the same, That it shall and may be lawful to and for any such person or' persons, under the age of one and twenty years, by the direction of the Court of Equity of the County in which such lands, tenements or hereditaments are situate signified by an order made upon hearing all parties concerned, on the petition of the person or persons for whom such infant or infants shall be seized or possessed in trust, or of the mortgagor or mortgagors, or guardian or guardians of such infant or infants or person or persons entitled to the moneys secured by or upon any lands, tenements or here-ditaments, whereof any infant or infants, are or shall be seized or possessed by way of mortgage, or of the person or persons entitled to the redemption thereof, to convey and assure any such lands, tenements or hereditaments, in such manner as the said Court of Equity shall by such order so to be obtained, direct to any other person or persons; and such conveyance or assurance so to be bad and made as aforesaid, shall be as good and effectual in law, to all intents and purposes whatsoever, as if the said infant or infants were, at the time of making such conveyance or assurance of the full age of one and twenty years; any law, custom or usage to the contrary in any wise notwithstanding.

- “II. And be it further enacted by the authority aforesaid, That all and every such infant or infants, being only trustee or trustees, mortgagee or mortgagees as aforesaid, shall and may be compelled by such order so as aforesaid to be obtained, to make such conveyance or conveyances, assurance or assurances as aforesaid in like manner as trustees or mortgagees of full age are compellable to convey or assign their trust, estates or mortgages.”

As originally enacted the statute, omitting the preamble, was reenacted in almost the same language in Revised Code Statutes (1837), ch. 37, sec. 31. However, in subsequent enactments the Revised Code (1854), ch. 37, sec. 27, Code of 1883, see. 1265, and Revisa.1 of 1905, sec. 1036, the statute appears in condensed form reading substantially as appears in sec. 994, C. S., 1919, except in the Revised Code the court referred to is a court of equity.

Too, it may be noted that when this Act was originally passed distinction between actions at law and suits in equity existed in this State— that distinction not having been abolished until the adoption of the Constitution of 1868. See North Carolina Constitution, Art. IV, sec. 1; C. S., 399.

Thus it appears that the Legislature of 1821, in providing a remedy against the imperfection of trust estates conveyed by infant trustees, contemplated specifically an order in a court of equity “made upon hearing all parties concerned,” on the petition of “mortgagor or mortgagors,” or others therein named. This, at least, throws light upon the intent of subsequent enactments referred to, including C. S., 994.

The language of the statute, C. S., 994, that “the court may decree” is indicative of the procedure prescribed in the original act, that is, a proceeding in equity. A decree is the judgment of a court of equity, corresponding for most purposes to the judgment of a court at law. It is an order of a court, pronounced on hearing and understanding all the points in issue, and determining the rights of all the parties to the suit, according to equity and good conscience. Black’s Law Dictionary, 3rd Edition.

The remedy prescribed by the statute, relating as it does, in the present action, to the foreclosure of a deed of trust, must be, under our form of civil procedure, an action in the nature of an equitable proceeding to foreclose a mortgage. No other remedy is given by statute. Hence, it .is exclusive and must be resorted to, and in the manner prescribed. Wilkinson v. Boomer, 217 N. C., 217, 7 S. E. (2d), 491; also Bar Asso cialion v. Strickland, 200 N. C., 630, 158 S. E., 110; Maxwell, Comr. of Revenue, v. Hinsdale, 207 N. C., 37, 175 S. E., 847; Rigsbee v. Brogden, 209 N. C., 510, 184 S. E., 24.

Regarding parties to an action in this State, it is provided by statute that every action must be prosecuted in the name of the real party in interest, C. S., 446. It is also provided that all persons who have, or claim to have, an interest in a controversy adverse to the plaintiff, or who are necessary parties to a complete determination or settlement of the question involved, may be made defendants. C. S., 456. And the statute further requires that when a complete determination of the controversy cannot be made without the presence of other parties, the court must cause them to be brought in. C.S.,460.

Furthermore, the decisions in this State are uniform in holding that all persons, having an interest in the equity of redemption, should be parties to a proceeding for foreclosure. Jones v. Williams, 155 N. C., 179, 71 S. E., 222; Lee v. Giles, 161 N. C., 541, 77 S. E., 852; Barrett v. Barnes, 186 N. C., 154, 119 S. E., 194; Bank v. Watson, 187 N. C., 107, 121 S. E., 181; Trust Co. v. Powell, 189 N. C., 372, 127 S. E., 242; Winston-Salem v. Coble, 192 N. C., 776, 136 S. E., 123; Guy v. Harmon, 204 N. C., 226, 167 S. E., 796; Bank v. Thomas, 204 N. C., 599, 169 S. E., 189, and many others.

While in a mortgage or deed of trust to secure a debt the legal title to the mortgaged premises passes to the mortgagee or trustee, as the case may be, the mortgagor or trustor is looked upon as the equitable owner of the land — with the right to redeem at any time prior to foreclosure. This right, after the maturity of the debt, is designated “his equity of redemption.” See Stevens v. Turlington, 186 N. C., 191, 119 S. E., 210; Crews v. Crews, 192 N. C., 679, 135 S. E., 784, and cases cited.

2. Defendants, not having been parties to the proceeding instituted by the purchaser at the foreclosure sale to obtain authority for the infant trustee to execute a deed pursuant to such sale, are not bound by the judgment rendered. See Trust Co. v. Powell, supra, an action to compel an administrator to comply with a bid of his intestate for property offered at foreclosure sale under a deed of trust. Stacy, G. J., speaking for the Court, said: “Let it be observed in limine that W. D. Wooten and wife, Elizabeth Wooten, makers of the deed of trust and whose equity of redemption in the locus in quo is sought to be extinguished and cut off by the judgment rendered herein, are not parties to this proceeding. The judgment, therefore, would not be binding on them,” citing Jones v. Williams, supra.

Hence, defendants are not foreclosed of their equity of redemption. When a court of equity, or a court having equitable jurisdiction, is invoked to grant relief, it strives to do justice and will not deprive a party of bis property without a bearing. Jones v. Williams, supra.

Tbe judgment below will be

Reversed.