Foreclosure of Deed of Trust from Allan & Warmbold Const. Co., Inc., In re
| Citation | 364 S.E.2d 723,88 N.C.App. 693 |
| Court | Court of Appeal of North Carolina (US) |
| Decision Date | 27 October 1980 |
| Parties | In re FORECLOSURE OF DEED OF TRUST FROM ALLAN & WARMBOLD CONSTRUCTION CO., INC., Original Mortgagor, to Kemp M. Causey, Trustee, dated |
Parker Whedon and Waggoner, Hamrick, Hasty, Monteith, Kratt, Cobb and McDonnell by James D. Monteith, Charlotte, for appellants Allan & Warmbold Const. Co., Inc. and Carmel Chace II.
Wray, Layton, Cannon, Parker & Jernigan by David R. Cannon, Charlotte, for appellee Substitute Trustee David A. Layton.
Miller, Johnston, Taylor & Allison by Steven D. McClintock and Steele B. Windle, III, Charlotte, for appellee Robert R. Rhyne, Jr.
Parker, Poe, Thompson, Bernstein, Gage & Preston by Fred T. Lowrance and Sally Nan Barber, Charlotte, for appellee North Carolina Federal Sav. and Loan Ass'n PHILLIPS, Judge.
This proceeding to foreclose on three parcels of Mecklenburg County real estate is based upon the failure of the appellant mortgage debtors, Allan & Warmbold Construction Co., Inc. and Carmel Chace II, to make the payments required by a note and deed of trust held by North Carolina Federal Savings and Loan Association, and the correctness of the proceeding through the first resale following an upset bid to the first public sale is not questioned. The appellants question only the validity of an order that permitted the upset bidder to withdraw his bid, then the last and highest, and directed that the property be resold, and the refusal of the trustee to start the resale with the bid that stood before the upset bid was filed. The appellee upset bidder, Robert R. Rhyne, Jr., questions the validity of the appeal because the appellants did not appeal from the resale order, but from the final order confirming the second resale four months later. The facts that determine these questions follow:
The land that was being foreclosed was described in the deed of trust and the trustee's notices of sale as (a) an 8.51 acre tract, (b) a 2.61 acre tract on which twelve specifically numbered condominium units are situated, and (c) a 1.4 acre tract. The trustee's notice stated, as G.S. 45-21.8(b) permits and the deed of trust expressly authorized, that the parcels of land would be sold separately and as a whole for the highest amount realizable. At the public sale on 27 January 1986, the trustee read the notice in its entirety and offered the 8.5 and 1.4 acre parcels for sale separately, but no bid was made on either parcel; he then offered those two parcels for sale as a whole and North Carolina Federal Savings and Loan Association bid $388,534.99, enough to satisfy the secured debt, and no attempt was made to sell the condominium parcel either in whole or part. The report of sale stating that a portion of the land described in the deed of trust had been sold for $388,534.99 was filed by the trustee, who attached to the report an accurate description of the parcels sold. In filing the report the Clerk of Court wrote on it the last date an upset bid could be made and the amount such a bidder would have to deposit. Within the time allowed Robert R. Rhyne, Jr., a Charlotte commercial real estate broker with twenty-five years experience, filed an upset bid in the amount of $408,034.99, and the Clerk ordered that the property be resold. At the resale no additional bid was received, and upon the trustee asking Rhyne to complete the purchase he refused and filed a motion to withdraw his bid upon the ground that it was made in the mistaken belief that the property being sold included the condominiums. The motion was denied by the Clerk, but upon appeal the Superior Court granted it on condition that Rhyne pay the resale expenses and interim interest. In reselling the two tracts of land the trustee refused to start with North Carolina Federal's initial bid of $388,534.99, as the appellants demanded, the only bid made was by North Carolina Federal in the amount of $280,500 and the sale at that price was confirmed, first by the Clerk and then by the Superior Court judge. Appellants' appeal is from the latter order, though they excepted to the earlier order permitting the upset bid to be withdrawn.
In making the upset bid Rhyne was acting for some undisclosed parties interested in obtaining the condominiums and he thought that the property sold included the condominiums. He had not attended the sale, though he received copies of the notices of sale, and before making the bid he neither examined the report of sale nor inquired of North Carolina Federal Savings and Loan, Allan & Warmbold, Carmel Chace II, the Clerk of Court, the trustee, or anyone else officially connected with the sale as to the identity of the land that he bid upon. Immediately before making the bid Rhyne met attorney John Ray in the Clerk's office, handed him the file and asked him if "that description covered all the property," and Ray told him it did. Ray did not represent Rhyne or anyone directly involved in the foreclosure and had not attended the sale or seen the report of sale either. In granting Rhyne's motion, after finding facts somewhat as stated above, the court concluded that Rhyne was not negligent and justice required that the bid be withdrawn.
First, we dispose of the appealability issue. Contrary to Rhyne's contention we are not barred from considering the validity of the order withdrawing his upset bid and directing a resale of the foreclosed property...
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State ex rel. Cooper v. Nccs Loans, Inc.
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