Denson v. Davis, 242

• Decision Date: 11 April 1962
• Docket Number: No. 242,242
• Citation: 124 S.E.2d 827,256 N.C. 658
• Parties: Randolph B. DENSON and wife, Theo J. Denson, and Joyce D. Smithdeal v. James M. DAVIS.
• Court: North Carolina Supreme Court

Page 827

124 S.E.2d 827

256 N.C. 658

Randolph B. DENSON and wife, Theo J. Denson, and Joyce D. Smithdeal v. James M. DAVIS.

No. 242

Supreme Court of North Carolina.

April 11, 1962

Bourne & Bourne by Henry C. Bourne, Tarboro, for plaintiff appellant.

Battle, Winslow, Merrell, Scott & Wiley by Robert M. Wiley, Rocky Mount, for defendant appellee.

RODMAN, Justice.

The record evidence shows:

(1) The one acre was, in November 1925, allotted to Maggie Battle Daughtry in the division of the estate of her father, Israel Battle. The other tract was allotted in that division to Jim Battle.

Daughtry and her husband conveyed the one-acre tract to defendant and his wife in 1946. By deed dated 8 December 1953 Maggie Daughtry and husband conveyed the 20.9-acre tract to defendant. This deed recited that Jim Battle had agreed in 1925 to convey it to the Daughtrys. He had not done so. Pursuant to the agreement to purchase, the Daughtrys had taken possession in 1925 and had been in exclusive adverse possession since that date, thereby acquiring good title. Defendant secured the purchase price of the 20.9 acres by deed of trust which was duly recorded. It secured three notes payable in November of the years 1954, 1955, and 1956. This deed of trust has not been cancelled.

(2) On 3 April 1956 defendant and his wife executed a deed of trust to M. L. Cromartie to secure an indebtedness to V-C payable 1 October 1956. The deed of trust conveyed the land here in controversy, the crops to be grown thereon, and some other personalty. It contained the usual provisions authorizing the trustee to sell upon default in the payment of the debt secured.

(3) A foreclosure deed dated --------- 1957, acknowledged 26 November 1957, from Cromartie, trustee, to V-C. This deed recites it was executed pursuant to and in compliance with the power of sale contained in the deed of trust to Cromartie. It conveys both tracts for a recited consideration of $1200, the amount bid at the sale.

(4) A deed from V-C to plaintiffs dated 6 January 1960, describing both tracts, for a recited consideration of $1000. The granting clause of the deed reads: '* * * SAID party of the first part * * * has remised, released and quit claimed by these presents doth forever remise, release, and quit claim unto * * * parties of the second part * * * all right, title, claim and interest of the said Virginia-Carolina Chemical Corporation * * *' The habendum reads: 'TO HAVE AND TO HOLD the aforesaid tracts or parcels of land, with all privileges and appurtenances thereunto belonging, unto them * * * parties of the second part * * free and discharged from all right, title, claim, or interest of the said Virginia-Carolina Chemical Corporation, party of the first part, or anyone claiming by, through or under it.'

Cromartie, trustee in the deed of trust, a witness for defendant, testified: 'I supervise credit and loans * * * Most likely Mr. Delbridge, our dealer negotiated with James Davis for extending the credit secured in that Deed of Trust, submitted it to me and I approved the same for the Virginia-Carolina Chemical Corporation * * * The loan was never repaid and I foreclosed it. He had had sufficient time to make the payment. I haven't the explicit right to foreclose. I have the right to extend credit and did, but when it comes to foreclosure its different. I was ordered to do that. I foreclosed it. Mr. Clarence Brown, a V-C Fertilizer dealer in Tarboro bid in the property. Mr. Brown was an agent of V-C at the time he bid in the property. At the time I sold the property as Trustee I was an agent of the Virginia-Carolina Chemical Corporation * * * Mr. Brown is a peanut dealer in Tarboro and sells V-C fertilizer. He buys fertilizer from us and sells it. He is not a subordinate of mine. He was buying for the Virginia-Carolina Chemical Corporation at this sale. The decision to foreclose was made in the Norfolk office and I was instructed to foreclose.'

The court charged the plaintiffs had the burden of establishing they were, as alleged, the owners of the land in controversy. This is true in actions to try title when the parties assert title under different sources, but the rule has no application when plaintiff traces title to defendant by instruments valid on their face and the asserted invalidity of these instruments is based on matters dehors the record. The invalidity due to such matters is an affirmative defense, placing the burden on one who asserts it. Chisholm v. Hall, 255 N.C. 374, 121 S.E.2d 726; DeBruhl v. L. Harvey & Son Co., 250 N.C. 161, 108 S.E.2d 469; Kelly v. Kelly, 246 N.C. 174, 97 S.E.2d 872; Hayes v. Ricard, 245 N.C. 687, 97 S.E.2d 105; Jones v. Percy, 237 N.C. 239, 74 S.E. 2d 700.

The court told the jury that courts look with jealousy upon the exercise of the power of sale in a mortgage or deed of trust. Then he charged: 'Neither the mortgagee nor the trustee is permitted to bid in and purchase the property at his own sale either directly or indirectly but if he does so the sale is not void but voidable and the mortgagor or trustor, the one who executed the mortgage or deed of trust, may set aside such sale or may bring suit to do so, or sue for wrongful foreclosure regardless of good faith or absence of fraud. * * * The law is, and I instruct you that one who is the agent of someone else and acting as agent is acting for his principal, and if one in the employ of someone else, a company or corporation or an individual, sells land at a foreclosure sale then he is the agent if he is doing it for the folks by whom he is employed, then he is the agent and the acts of an agent are the acts of the agent's principal. And one who buys at a foreclosure sale, if he is an agent of the principal, then his acts are his principal's acts, and the one who sells, if he is the trustee, if he is also an employee and agent for the company for whose advantage the sale is made or to pay off an indebtedness to that person, his acts are the acts of the principal, and the law is in this state a trustee who is acting as agent for a cestui que trust, if in doing so he sells land at a foreclosure sale to his employer for whom he is agent then that is a voidable sale. That is also so if another agent for the same principal purchases the property at that sale, the law looking at it that the principal is doing all of it.'

Based on the testimony, the court's charge amounted to a peremptory instruction to find for defendant. The fact that defendant's debt was in default, that the parties acted in good faith, and without any fraud, was, according to the court's charge, immaterial. All that was necessary was to show that the trustee was an employee of the cestui que trust, that the person who appeared and bid for the property was another agent or employee of the cestui que trust, and was acting for his...