In Re Sermons' Land.

• Decision Date: 12 October 1921
• Docket Number: (No. 183.)
• Citation: 108 S.E. 497
• Court: North Carolina Supreme Court
• Parties: In re SERMONS' LAND.

108 S.E. 497

In re SERMONS' LAND.

(No. 183.)

Supreme Court of North Carolina.

Oct. 12 1921.

Appeal from Superior Court, Craven County; Devin, Judge.

In the matter of the sale of Sermons' Land under mortgage by the Farmers' & Merchants' Bank of Kinston, N. C. On motion to relieve bidder from obligation to buy land which motion the clerk denied and entered an order confirming the sale. On bidder's appeal the judge reversed the clerk's action and directed a resale by the bank, and the assignor of the mortgage excepts and appeals. Cause dismissed.

Motion to relieve a bidder from obligation to buy land. Heard on appeal from clerk of the superior court before his honor, Devin, Judge, holding the courts of the Fifth judicial district on May 24, 1921.

From the facts properly presented it was made to appear that R. L. Sermons and wife having executed a mortgage with power of sale to H. L. Sermons, of date September 12, 1919, to secure three promissory notes aggregating $3,200, the mortgagee, for valuable consideration, duly assigned said notes and mortgage and the land conveyed to Merchants' Bank of Kinston, N. C, by assignment under seal, written on back of said mortgage, as follows:

"For value received, I hereby transfer and assign all my right, title, interest and estate in and to the within mortgage and the property conveyed therein to the Farmers' & Merchants' Bank of Kinston, N. C, including the power of Bale therein contained. This December 12, 1919."

Default having been made in the payment of said note and requirements of the mortgage, the said bank sold same by proper advertisement in said county on the 18th day of April, 1921, at which Clarence Oettinger became the last and highest bidder in the sum of $4,500, and said sale was immediately reported to the clerk of superior court of the county.

It appears further that within the 10 days, where it is provided by statutes that such a sale "should not be deemed closed" (C. S. § 2591), the dwelling house on the lot, amounting to a third or more of its value, was accidentally destroyed by fire, whereupon the bidder, Clarence Oettinger, filed his petition before the clerk alleging the facts and asking that sale be rescinded and the applicant be relieved from his bid. The clerk being of opinion against the applicant entered his judgment as follows:

"This cause coming on to be heard and being heard upon the petition and affidavit of Clarence Oettinger, and the court finding that the building described in the petition was a material part of the value of the premises and was destroyed by fire as set out in the affidavit, but the court being of the opinion that the destruction of said house by fire does not affect or release the petitioner's liability on his said bid and that it has no jurisdiction and is not vested with power to set aside the sale and to direct a resale, denies the petition, confirms the sale, and directs the assignee of the mortgagee to collect the purchase money and execute deed to the purchaser."

On appeal by the bidder from the order, his honor, Judge Devin, reversed the action of the clerk and entered judgment as follows:

"This cause came on to be heard before W A. Devin, Judge, upon the appeal of Clarence Oettinger, petitioner, from an order of the clerk of the superior court of Craven confirming a sale and denying petitioner's plea to withdraw his bid therein.

"This was a proceeding before the clerk in relation to sale of land under mortgage made by the Farmers' & Merchants' Bank, assignee of mortgage. After due advertisement, sale was made under power contained in the mortgage and reported to the clerk. At the sale the petitioner became the last and highest bidder for the land at the price of $4,500. A material inducement to the sale and one relied on by the petitioner was the statement at the sale that a valuable dwelling house was situated on said land. After said sale and within ten days thereof and before confirmation, the dwelling house on said land was, without fault on part of petitioner, accidentally destroyed by fire. Thereupon petitioner filed his plea asking that he be allowed to rescind his bid and that the sale be not confirmed.

"The facts set forth in the petition are found by the clerk to be true, and his findings are approved by the judge.

"It therefore, appearing by the admitted facts that a substantial part of the property, to wit, a third or more in value, was destroyed after sale and before confirmation, and that such fact was a material inducement for petitioner's bid and a substantial part of the consiaeration thereof, and that the property has been physi-cally changed before confirmation, that the court is of the opinion that before confirmation no title had passed to petitioner and that his rights were only those of a preferred bidder, and that the loss sustained by the destruction of a portion of the property ought not to fall upon the petitioner when he had neither possession to enable him to protect it, nor title to permit him to insure it, and had only the uncertain right of a preferred proposer and the assignee of the mortgage unable to make title to the petitioner for all the property advertised and bid off by him, the court should not now confirm the sale and order him to pay the full purchase price. For these reasons the order of the clerk herein is overruled and a resale of the property according to law directed to be made."

To this judgment the assignor of the mortgage excepts and appeals to the Supreme Court. Notice waived; etc. Appeal bond given.

It is further stated in the record that upon the foregoing appeal being prayed there was no request for a stay bond by the applicant and none was fixed by the judge. Thereafter the land was advertised and sold again on the 1st day of August, 1921, when and where the former bidder, Clarence Oettinger, again became the last and highest bidder in the sum of $2,500, which bid was reported to the clerk, and after a delay of 10 days from the filing of the report, order was made that a deed be executed. No increased bid had been made.

R. A. Nunn, of Newbern, for H. L. Sermons.

Cowper, Whitaker & Allen, of Kinston, and Guion & Guion, of Newbern, for appellee.

HOKE, J. (after stating the facts as above). [1] Chapter 54, § 2591, Consolidated Statutes, is as follows:

"In the foreclosure of mortgages or deeds of trust on real estate, or in the case of the public sale of real estate by an executor, administrator, or administrator with the will annexed, or by any person by virtue of the power contained in a will, the sale shall not be deemed to be closed under 10 days. If in 10 days from the date of the sale, the sale price is increased ten per cent. where the price does not exceed five hundred dollars, and five per cent. where the price exceeds five hundred dollars, and the same is paid to the clerk of the superior court, the mortgagee, trustee, executor, or person offering the real estate for sale shall reopen the sale of said property and advertise the same in the same manner as in the first instance. The clerk may, in his discretion, require the person making such advance bid to execute a good and sufficient bond in a sufficient amount to guarantee compliance with the terms of sale should the person offering the advance bid...