CONNOR, J.
Tbe defendants, North Carolina Trust Company, and Pilot Life Insurance Company, on their appeal to this Court assign as error the failure of the court below to find, as facts material to the judgment in this action, (1) that the plaintiff, John A. "Wood, is indebted to the defendant, Pilot Life Insurance Company, in the sum of $5,000, the amount of the note executed by said plaintiff, and payable to said company, with interest thereon from 2 February, 1928, and that said plaintiff is also indebted to said company in the sum of $511.08, the amount paid by it for taxes and paving assessment for the years 1927 and 1928, on the land described in the deed of trust from said John A. Wood and wife to North Carolina Trust Company, trustee, to secure said indebtedness; (2) that the plaintiff, John A. Wood, was in default in the payment of said indebtedness on and after 2 February, 1928, and that said deed of trust was properly foreclosed by sale of the land described therein on 18 March, 1929, under the power of sale contained in said deed of trust; and (3) that at said foreclosure sale the defendant, Pilot Life Insurance Company, was the purchaser of said land at and for the sum of $650.
In their brief filed in this Court the plaintiffs and the defendant, Mrs. Blanche E. Brindle, appellees, admit that all the evidence at the hearing of this action shows that the defendant, Pilot Life Insurance Company, paid the sum of $511.08, for taxes and paving assessment for the years 1927 and 1928, on the land described in the deed of trust, upon the default of the plaintiff, John A. Wood, in the payment of said sum, and consent that paragraph 5 of the judgment may be modified by including the said sum of $511.08, with interest, in the amount of the judgment rendered in favor of the defendant, Pilot Life Insurance Company, and against the plaintiff, John A. Wood. The other facts involved in the contentions presented by these assignments of error, are admitted in the pleadings and shown by the undisputed evidence at the hearing. These assignments of error are sustained. As these facts are admitted in the pleadings, and in the brief filed by the appellees in this Court, the action is not remanded to the Superior Court for further finding as to these facts.
Defendants’ assignment of error based on their exception to that part of paragraph 3 of the judgment in which it is adjudged that the foreclosure of the deed of trust from John A. Wood and wife to North Carolina Trust Company, trustee, is null and void, must be sustained. Upon the facts admitted in the pleadings and found by the court, pertinent to the cause of action alleged in their complaint, the plaintiffs, John A.
"Wood and -wife, are not entitled to judgment in tbis action that the defendant, North Carolina Trust Company, trustee, be restrained and enjoined, perpetually} from foreclosing said deed of trust, or from executing a deed conveying the land described therein to the defendant, Pilot Life Insurance Company, the purchaser at the foreclosure sale on 18 March, 1929, upon the payment by said purchaser of the amount of its bid. It is immaterial to the cause of action on which plaintiffs, John A. Wood and wife seek to recover on this action, whether the plaintiff, the First National Bank of Burlington, N. C., and the defendant, Mrs. Blanche E. Brindle, have a lien on the land described in the complaint, by virtue of the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company, superior to the title which was conveyed by the said John A. Wood to the North Carolina Trust Company by the deed of trust subsequently executed by them. This deed of trust was valid, and default having been made by John A. Wood in the payment of the indebtedness secured thereby, the foreclosure sale, made in compliance with the terms of the power of sale contained therein, was valid. The defendant, Pilot Life Insurance Company, the purchaser at said sale, upon compliance with the terms of its bid, is entitled to a deed conveying to said purchaser all the right, title and interest of the plaintiffs, John A. Wood and wife in the land described in the deed of trust. The temporary restraining order enjoining the defendant, North Carolina Trust Company, trustee, from executing said deed, or from foreclosing the deed of trust, should be dissolved. There is error in the judgment perpetually restraining and enjoining the foreclosure of the deed of trust from John A. Wood and wife to the North Carolina Trust Company, trustee. Whether or not the purchaser at the foreclosure sale of the land described in the deed of trust will take title to the same subject to the prior lien of the holders of bonds secured by the deed of trust to the Alamance Insurance and Real Estate Company, cannot affect the validity of the deed of trust, or the right of the' trustee to foreclose the same.
Defendants assign as error so much of paragraph 3 of the judgment as adjudges that the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company, trustee, under which the plaintiff, the First National Bank of Burlington, N. C., and the defendant, Mrs. Blanche E. Brindle, claim, is a first lien on the land described therein, and that said lien is superior to the lien of the North Carolina Trust Company, trustee, by virtue of the deed of trust to said company, under which the defendant, Pilot Life Insurance Company, claims. For the purpose of determining the validity of this assignment of error, the facts as found by the court below, with respect to the record title to the land described in the complaint, at the date of the deed of
trust from John A. Wood and wife to tbe North. Carolina Trust Company, trustee, are conclusive.
When examined by the attorney for the Pilot Life Insurance Company, prior to its acceptance of the application of John A. Wood for a loan of $5,000, .to be secured by a deed of trust on the land described in the complaint, the records in the office of the register of deeds of Alamance County showed that the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company had been foreclosed by a sale of the land conveyed thereby on 3 May, 1926. An entry on the margin of the record of said deed of trust, in compliance with the provisions of C. S., 2594(a) was made by the duly authorized attorneys of the Alamance Insurance and Real Estate Company, trustee. The record on this appeal shows that on 3 May, 1926, the Alamance Insurance and Real Estate Company, trustee, reported said sale to the clerk of the Superior Court of Alamance County, and that said report was duly recorded by said clerk in his office.
The said records in the office of the register of deeds of Alamanbe County further showed that on 5 August, 1926, the Alamance Insurance and Real Estate Company, grantee, conveyed the land described in the deed of trust from John A. Wood and wife to said trustee, to George G. Sharpe, the purchaser at said foreclosure sale, by deed duly executed and recorded. This deed contains a recital that the grantee had complied with his bid as purchaser at the foreclosure sale, and had paid to the trustee the amount of his bid, to wit, the sum of $5,000. By deeds subsequently executed and recorded, prior to the registration of the deed of trust from John A. Wood and wife to North Carolina Trust Company, trustee, the said land had been conveyed to the said John A. Wood, who thus claimed under the purchaser at the foreclosure sale made on 3 May, 1926.
Free access — add to your briefcase to read the full text and ask questions with AI
CONNOR, J.
Tbe defendants, North Carolina Trust Company, and Pilot Life Insurance Company, on their appeal to this Court assign as error the failure of the court below to find, as facts material to the judgment in this action, (1) that the plaintiff, John A. "Wood, is indebted to the defendant, Pilot Life Insurance Company, in the sum of $5,000, the amount of the note executed by said plaintiff, and payable to said company, with interest thereon from 2 February, 1928, and that said plaintiff is also indebted to said company in the sum of $511.08, the amount paid by it for taxes and paving assessment for the years 1927 and 1928, on the land described in the deed of trust from said John A. Wood and wife to North Carolina Trust Company, trustee, to secure said indebtedness; (2) that the plaintiff, John A. Wood, was in default in the payment of said indebtedness on and after 2 February, 1928, and that said deed of trust was properly foreclosed by sale of the land described therein on 18 March, 1929, under the power of sale contained in said deed of trust; and (3) that at said foreclosure sale the defendant, Pilot Life Insurance Company, was the purchaser of said land at and for the sum of $650.
In their brief filed in this Court the plaintiffs and the defendant, Mrs. Blanche E. Brindle, appellees, admit that all the evidence at the hearing of this action shows that the defendant, Pilot Life Insurance Company, paid the sum of $511.08, for taxes and paving assessment for the years 1927 and 1928, on the land described in the deed of trust, upon the default of the plaintiff, John A. Wood, in the payment of said sum, and consent that paragraph 5 of the judgment may be modified by including the said sum of $511.08, with interest, in the amount of the judgment rendered in favor of the defendant, Pilot Life Insurance Company, and against the plaintiff, John A. Wood. The other facts involved in the contentions presented by these assignments of error, are admitted in the pleadings and shown by the undisputed evidence at the hearing. These assignments of error are sustained. As these facts are admitted in the pleadings, and in the brief filed by the appellees in this Court, the action is not remanded to the Superior Court for further finding as to these facts.
Defendants’ assignment of error based on their exception to that part of paragraph 3 of the judgment in which it is adjudged that the foreclosure of the deed of trust from John A. Wood and wife to North Carolina Trust Company, trustee, is null and void, must be sustained. Upon the facts admitted in the pleadings and found by the court, pertinent to the cause of action alleged in their complaint, the plaintiffs, John A.
"Wood and -wife, are not entitled to judgment in tbis action that the defendant, North Carolina Trust Company, trustee, be restrained and enjoined, perpetually} from foreclosing said deed of trust, or from executing a deed conveying the land described therein to the defendant, Pilot Life Insurance Company, the purchaser at the foreclosure sale on 18 March, 1929, upon the payment by said purchaser of the amount of its bid. It is immaterial to the cause of action on which plaintiffs, John A. Wood and wife seek to recover on this action, whether the plaintiff, the First National Bank of Burlington, N. C., and the defendant, Mrs. Blanche E. Brindle, have a lien on the land described in the complaint, by virtue of the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company, superior to the title which was conveyed by the said John A. Wood to the North Carolina Trust Company by the deed of trust subsequently executed by them. This deed of trust was valid, and default having been made by John A. Wood in the payment of the indebtedness secured thereby, the foreclosure sale, made in compliance with the terms of the power of sale contained therein, was valid. The defendant, Pilot Life Insurance Company, the purchaser at said sale, upon compliance with the terms of its bid, is entitled to a deed conveying to said purchaser all the right, title and interest of the plaintiffs, John A. Wood and wife in the land described in the deed of trust. The temporary restraining order enjoining the defendant, North Carolina Trust Company, trustee, from executing said deed, or from foreclosing the deed of trust, should be dissolved. There is error in the judgment perpetually restraining and enjoining the foreclosure of the deed of trust from John A. Wood and wife to the North Carolina Trust Company, trustee. Whether or not the purchaser at the foreclosure sale of the land described in the deed of trust will take title to the same subject to the prior lien of the holders of bonds secured by the deed of trust to the Alamance Insurance and Real Estate Company, cannot affect the validity of the deed of trust, or the right of the' trustee to foreclose the same.
Defendants assign as error so much of paragraph 3 of the judgment as adjudges that the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company, trustee, under which the plaintiff, the First National Bank of Burlington, N. C., and the defendant, Mrs. Blanche E. Brindle, claim, is a first lien on the land described therein, and that said lien is superior to the lien of the North Carolina Trust Company, trustee, by virtue of the deed of trust to said company, under which the defendant, Pilot Life Insurance Company, claims. For the purpose of determining the validity of this assignment of error, the facts as found by the court below, with respect to the record title to the land described in the complaint, at the date of the deed of
trust from John A. Wood and wife to tbe North. Carolina Trust Company, trustee, are conclusive.
When examined by the attorney for the Pilot Life Insurance Company, prior to its acceptance of the application of John A. Wood for a loan of $5,000, .to be secured by a deed of trust on the land described in the complaint, the records in the office of the register of deeds of Alamance County showed that the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company had been foreclosed by a sale of the land conveyed thereby on 3 May, 1926. An entry on the margin of the record of said deed of trust, in compliance with the provisions of C. S., 2594(a) was made by the duly authorized attorneys of the Alamance Insurance and Real Estate Company, trustee. The record on this appeal shows that on 3 May, 1926, the Alamance Insurance and Real Estate Company, trustee, reported said sale to the clerk of the Superior Court of Alamance County, and that said report was duly recorded by said clerk in his office.
The said records in the office of the register of deeds of Alamanbe County further showed that on 5 August, 1926, the Alamance Insurance and Real Estate Company, grantee, conveyed the land described in the deed of trust from John A. Wood and wife to said trustee, to George G. Sharpe, the purchaser at said foreclosure sale, by deed duly executed and recorded. This deed contains a recital that the grantee had complied with his bid as purchaser at the foreclosure sale, and had paid to the trustee the amount of his bid, to wit, the sum of $5,000. By deeds subsequently executed and recorded, prior to the registration of the deed of trust from John A. Wood and wife to North Carolina Trust Company, trustee, the said land had been conveyed to the said John A. Wood, who thus claimed under the purchaser at the foreclosure sale made on 3 May, 1926. There was nothing on record in Alamance County showing that the said purchaser had not paid the amount of his bid to the trustee or that the trustee had not applied the purchase money in payment of the bonds secured by the deed of trust. The court below found as a fact that the Pilot Life Insurance Company had no actual notice of the fact as found by the court, that said bonds had not been paid.
The court found as a fact that the attorney who conducted the foreclosure sale for the Alamance Insurance and Real Estate Company and who signed the entry on the margin of the record, showing that the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company, trustee, had been foreclosed by the sale of the land conveyed thereby, also examined the records and made therefrom an abstract of title to said land as attorney for the Pilot Life Insurance Company. It was not found by the court, nor was there evidence tend
ing to show, that said attorney knew either that the purchaser at the foreclosure sale did not pay the amount of his bid to the trustee, or that the trustee did not apply the amount of said bid to the payment of the bonds secured by the deed of trust. It may well be that said attorney had no knowledge of either of said facts, but whether he had or not, is immaterial as affecting the rights of the Pilot Life Insurance Company under the deed of trust from John A. Wood and wife to the North Carolina Trust Company. On the facts of the instant case, the knowledge of its attorney, acquired while acting as the attorney for the Alamance Insurance and Real Estate Company, trustee, of facts not disclosed by the record, although affecting the title of the purchaser at the foreclosure sale to the land conveyed to him, cannot be imputed to the Pilot Life Insurance Company as notice of these facts.
Arrington v. Arrington,
114 N. C., 151, 19 S. E., 351. The Pilot Life Insurance Company, as an innocent purchaser for value, had a right to rely and did rely on the record as the source of its information with respect to the title of John A. Wood to the land described in the complaint. This record showed conclusively that the deed of trust from John A. Wood and wife to the Alamance Insurance and Real Estate Company had been foreclosed, and that the purchaser at the foreclosure sale had acquired title to the land conveyed by said deed of trust freed from the claims of the bondholders. If the said foreclosure Avas fraudulent, as found by the court, it -was fraudulent only as to John A. Wood and wife, who thereafter took title to said land from the grantee of the purchaser, and as to the bondholders, who knew that by the provisions of the deed of trust the trustee had the power to foreclose the same, at its option, and upon a sale of the land described in the deed of trust, to convey the same to the purchaser upon payment by him of the purchase money to the trustee. Neither John A. Wood and Avife, nor the bondholders, can rely on the fraudulent foreclosure of the deed of trust to defeat the rights of the defendants who are innocent purchasers for value, claiming title under the purchaser at said sale. There is error in the judgment that the plaintiff, the First National Bank of Burlington, N. 0., and the defendant, Mrs. Blanche E. Brindle, have a lien on the land described in the complaint which is superior to the lien of the defendant, Pilot Life Insurance Company, under the deed of trust from John A. Wood and vafe to the defendant, North Carolina Trust Company.
This action is remanded to the Superior Court of Alamance County in order that judgment may be entered on the facts found by the court in accordance with this opinion. It is so ordered.
Reversed.