424 S.E.2d 385 (N.C. 1993), 430A91, In re Michael Weinman Associates General Partnership

Docket Nº:430A91.
Citation:424 S.E.2d 385, 333 N.C. 221
Party Name:In re Foreclosure of Deed of Trust of MICHAEL WEINMAN ASSOCIATES GENERAL PARTNERSHIP.
Case Date:January 08, 1993
Court:Supreme Court of North Carolina

Page 385

424 S.E.2d 385 (N.C. 1993)

333 N.C. 221

In re Foreclosure of Deed of Trust of MICHAEL WEINMAN


No. 430A91.

Supreme Court of North Carolina.

January 8, 1993

Page 386

[333 N.C. 223] Appeal by petitioner as of right pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 103 N.C.App. 756, 407 S.E.2d 288 (1991), which affirmed a judgment entered for respondent by Griffin, J., at the 20 August 1990 Civil Session of Superior Court, Mecklenburg County. Heard in the Supreme Court 14 April 1992.

Byrd, Byrd, Ervin, Whisnant, McMahon & Ervin, P.A. by John W. Ervin, Jr. and Robert C. Ervin, Morganton, for petitioner-appellant.

Weinstein & Sturges, P.A. by L. Holmes Eleazer, Jr., Thomas D. Myrick and T. LaFontine Odom, Charlotte, for respondent-appellee.

LAKE, Justice.

This case arose upon an application to commence foreclosure pursuant to a power of sale in a deed of trust. It presents directly to this Court, as the essential issue, the extent of authority and responsibility of the Clerks of Superior Court in their consideration and determination of the four elements which must be found to exist under our power of sale foreclosure statute, N.C.G.S. § 45-21.16(d), before foreclosure may commence. The specific portion of the subsection involved in this case is element (iii) the "right to foreclose under the instrument." While this subject has been addressed peripherally, with some inconsistency over the years by the Court of Appeals since the enactment of N.C.G.S. § 45-21.16 in 1975, this issue has not heretofore been considered and determined by this Court.

On 19 June 1987, Michael Weinman Associates General Partnership (Weinman) and North Mecklenburg Associates executed a Contract of Sale in which Weinman agreed to buy from North Mecklenburg 402.67 acres consisting of Mecklenburg County tax parcels, 015-161-13, 015-161-14 and 23-031-08 for $1,409,345 or $3,500 per acre. The exact purchase price was to be adjusted based upon a survey to determine the actual acreage. The parties agreed in [333 N.C. 224] thecontract that if Weinman elected to have North Mecklenburg finance a portion of the property, North Mecklenburg would permit Weinman to make a payment of twenty-five percent of the final purchase price at the time of closing, and three successive payments of twenty-five percent at the end of each year following closing, plus accumulated interest at the time of each such payment. The contract further provided:

Should this option be exercised, Buyer agrees to prepare a land use map showing the property being divided into four parcels with equal road frontage.

One parcel representing approximately 25% of the land on one end of the property would be released at closing, and additional contiguous parcels would be released at one year intervals as payments outlined above are made.

Weinman elected to have North Mecklenburg finance a portion of the property in accordance with these provisions of the contract.

At the time of closing on 7 April 1988, North Mecklenburg conveyed to Weinman 399.449 acres by a deed recorded 8 April 1988. The finally determined purchase price of the property bought by Weinman from North Mecklenburg was $1,400,556.50. Upon receipt of the deed, on 7 April 1988, Weinman made a payment of $350,139.13, representing twenty-five percent of the purchase price, and executed and delivered to North Mecklenburg a promissory note in the amount of $1,050,417.37 for the balance of the purchase money, together with a purchase money deed of trust for the property securing said promissory note. Upon acceptance of the initial twenty-five percent payment, North Mecklenburg executed and delivered to Weinman a release of the first tract, Tract 1, from the Deed of Trust. A map of the approximately 400 acres and the areas designated for each subsequent release was agreed to at the time of closing. Tracts 2, 3 and 4 were to be released at the time of each subsequent annual payment. Each of

Page 387

the four tracts was designated in the original map as contiguous and equal in size. The Deed of Trust provided for the release of the remaining three-fourths acreage as follows:

The Beneficiary agrees to release additional tracts of land from the Deed of Trust in direct proportion to principal payments made by the Grantor to the Beneficiary under the Promissory Note which is secured by this Deed of Trust. As to such Releases, [333 N.C. 225] the Grantor and the Beneficiary have agreed as follows: Approximately 100 acres of land shall be released on each of the principal payment dates, to wit, April 7, 1989, April 7, 1990, and April 7, 1991.

On 7 April 1989, pursuant to the Contract and the Deed of Trust, a second payment of $444,676.68 was made by Weinman to North Mecklenburg for Tract 2. This payment represented a principal payment of $350,139.12, plus accrued interest through 7 April 1989 amounting to $94,537.56. After making this payment, Weinman never received or was tendered a release of Tract 2, which under the terms of the contract and the Deed of Trust, was agreed to be released simultaneously with the second payment. North Mecklenburg acknowledged this payment by letter reading:

Receipt is hereby acknowledged of Michael Weinman Associates General Partnership check no. 1019, dated April 6, 1989, payable to North Mecklenburg Associates, in the amount of $444,676.68, representing the first payment due...

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