Council v. Greensboro Joint Stock Land Bank

• Decision Date: 13 April 1938
• Docket Number: 117.
• Citation: 196 S.E. 483,213 N.C. 329
• Parties: COUNCIL et al. v. GREENSBORO JOINT STOCK LAND BANK et al.
• Court: North Carolina Supreme Court

196 S.E. 483

213 N.C. 329

COUNCIL et al. v. GREENSBORO JOINT STOCK LAND BANK et al.

No. 117.

Supreme Court of North Carolina

April 13, 1938

Appeal from Superior Court, Edgecombe County; Walter J. Bone, Judge.

Action by J. W. Council and others against the Greensboro Joint Stock Land Bank and others to set aside a foreclosure sale and deeds executed pursuant thereto, and for other relief. Judgment for defendants, and plaintiffs appeal.

Affirmed.

Civil action to set aside foreclosure sale and deeds pursuant thereto made by, and to mortgagee through its agent, and subsequent deed allegedly taken by grantees with notice, and for an accounting for fire insurance collected and for rents and, in the event it should be decided by the court that the subsequent grantees are innocent purchasers for value, to recover of the mortgagee and its agent, the bidder at the sale, the value of the land, less the mortgage indebtedness.

Material allegations of the complaint as a first cause of action may be found in opinion on former appeal reported in 211 N.C 262, 189 S.E. 777.

Defendants Land Bank and C. E. Fleming filed answer denying material allegations of the complaint, and pleaded that plaintiffs had full knowledge at all times of all the facts and circumstances in connection with the sale and consented thereto, and by their actions ratified same, and are estopped by their conduct to attack the validity of the foreclosure. Defendant Land Bank pleads 3-year statute of limitations. C.S. § 441. The defendants Blount, after decision of this court on their appeal, supra, filed answer denying all material allegations of the complaint, and plead estoppel. All defendants aver that the defendants Blount are innocent purchasers for value.

In the trial below the plaintiffs introduced evidence tending to show that: The plaintiffs, owning a farm in Edgecombe county containing 244.5 acres, J. W. Council three-fifths undivided interest and each of his sisters, coplaintiffs, one-fifth undivided interest, executed to defendant Greensboro Joint Stock Land Bank a mortgage deed on the date and for the purpose alleged. The mortgage provides that in the event of default foreclosure sale may be had at "public auction to the highest bidder for cash, after advertising same for 30 days at least," but does not specify place of sale.

After the loan was made, plaintiff J. W. Council was in charge. He made all payments "until around 1929." In July 1931, payments being nearly 2 years in default, defendant Land Bank foreclosed and sold the lands on August 21, 1931 at the courthouse door in Tarboro, the county seat of Edgecombe, when C. E. Fleming became the highest bidder. Pursuant thereto and on April 29, 1932, the Land Bank, as mortgagee, executed and delivered deed to C. E. Fleming, in which it is recited that the sale was had "after due and proper advertisement as required by law and the terms of the said mortgage, and that the amount bid is $4,000."

On May 6, 1932, C. E. Fleming and wife, for recited consideration of $10, conveyed the lands by deed to the Land Bank. On January 8, 1934, the Land Bank, for recited consideration of $10, by deed signed in its corporate name and under its seal, by C E. Fleming, president, and duly attested, conveyed the lands to defendants J. H. Blount, M. K. Blount, and F. L. Blount.

Defendants Land Bank and Fleming admit that Fleming was secretary and treasurer of the Land Bank at the time of the foreclosure. The defendants Blounts denied any knowledge of that fact. The defendant Land Bank admits that one of the buildings on the property was destroyed by fire, and that it received $1,500 on account of insurance policy held by it. Entry showing foreclosure was made on the margin of the record of the mortgage on January 12, 1934.

J. W. Council testified. His oral testimony, when read in connection with the letters exchanged between him and the Land Bank introduced in evidence, presents this narrative in substance: Though he did not see notice of the advertisement in the paper, he had a letter and knew the date and place of the sale and came to Tarboro that day. He knew the Land Bank bought the property. After the sale he moved tobacco flues off the place and quit the possession of the land. He wrote the Land Bank that he wanted to redeem the land. He said: "They told me I could redeem it. They told me no deed would be executed before December 1, and if we would pay the past due installments they would re-instate it. * * * I had negotiations with the Land Bank with reference to renting land in 1932. * * * I tried to rent the farm from Greensboro Joint Stock Land Bank in 1932."

He wrote the Land Bank on November 7, 1931: "When Mr. Fleming was down here to foreclose farm, I thought possibly after selling crop I would be able to pay some on notes and buy the farm back, but everything we are selling is from 1/3 to 1/5 what produce was selling for when I borrowed the money and it looks like now that the fertilizer company will get about what the crop brings for fertilizer this year. If your company don't sell the farm, it may be that I could rent same if you would let the fertilizer company come before your rent and of course the rent would have to be reasonable. I will be in Greensboro one day next week and will see you or call you up to see if you would care to rent farm as above." Again, on December 7, 1931: "The reason I had not answered your letter of Nov. 9th was waiting to sell more of the tobacco crop, it sold so low I will not be in position to pay you cash in advance for rent of farm 1932."

Then on November 17, 1933, Council wrote Land Bank, in part: "I am interested in buying farm back, either me or my sister that Company bought in when sold * * * I understand the government will make a loan on same. * * *" Land Bank expressed willingness to permit repurchase, but negotiations to that end failed, and on February 20, 1934, the Land Bank advised J. W. Council that property was sold on January 11, 1934.

The plaintiff Mrs. Helen Council Andrews testified in part that She knew nothing about the correspondence between her brother, J. W. Council, and the bank after the foreclosure; she did not authorize same; she did not get any of the proceeds of loan, and paid nothing on it; "my brother handled the...