Kornegay v. Spicer

• Decision Date: 31 January 1877
• Parties: HENRY R KORNEGAY, Administrator of Richard B Hatch and others, v. JOHN D. SPICER.
• Court: North Carolina Supreme Court

76 N.C. 95

HENRY R KORNEGAY, Administrator of Richard B Hatch and others,

v.JOHN D. SPICER.

Supreme Court of North Carolina.

January Term, 1877.

APPEAL, from a Decretal Order made on the 26th of February, 1876, at Chambers, by McKoy, J.

In January, 1874, the intestate of plaintiff executed a mortgage deed to the defendant, conveying certain lands in Duplin and Wayne counties to secure the payment of a note for $1,815.00, with a power to sell the land in default of payment. It was alleged that the note was usurious, but denied in the defendant's answer.

The defendant and the plaintiff's intestate joined in a deed to one Flowers, conveying that part of the land situated in Wayne county in consideration of $2,500. The defendant admitted that $1,470 of this sum was received by him on the mortgage debt. The defendant and said intestate subsequently entered into a written agreement that the Duplin county lands should be conveyed to intestate on payment of $3,530; but if said sum was not paid by a certain time, the defendant should have the power to sell for cash at public sale. The said intestate failed to pay, and defendant sold the said lands on November 27, 1874, v hen one Griswold became the purchaser at $1,225. It was alleged in the answer that Griswold was a “judgment creditor,” and that the defendant expected to get the title from Griswold by paying his debt. which he afterwards did; he making a deed to Griswold who reconveyed to defendant. There were other facts relating to various dealings between the parties, the statement of which is deemed unnecessary.

The plaintiff demanded an order that the defendant be perpetually enjoined and restrained from selling or conveying the lands in Duplin county, and that he be declared a trustee for the plaintiffs, who are the widow and heirs at law of Richard B. Hatch. An injunction was granted by His Honor, and the defendant upon notice given, moved to dissolve the same, which motion was not allowed, and the injunction was continued to the hearing. Defendant appealed.

Messrs. Smith & Strong, for the plaintiff , cited Hunt v. Bass, 2 Dev. Eq., 292; Brothers v. Brothers, 7 Ire. Eq., 150; Patton v. Thompson, 2 Jones Eq., 285; Shearin v. Hunter, 72 N. C., 493; Elliot v. Pool, 3 Jones Eq., 17; Miller v. Washburn, 3 Ire. Eq., 161; Monroe v. McIntyre, 6 Ire. Eq., 65; Allen v. Pearce, 6 Jones Eq., 309.

Mr. D. L. Russell, for the defendant .

PEARSON, C. J.

The principles involved in this case, are discussed and in the main settled by Whitehead v. Hellen decided at this term.

1. A mortgagee with a power of sale, is a trustee, in the first place to secure the payment of the debt secured by the mortgage, and in the second place for the mortgagor, as to the excess. The idea of allowing the mortgagee to foreclose the equity of redemption, by a sale made by himself, instead of a decree for forelosure and a sale made under the order of the Court, was yielded to, after great hesitation, on the ground that in a plain case, when the mortgage debt was agreed on and nothing was to be done except to sell the land, it would be a useless expense to force the parties to come into equity, when there were no equities to be adjusted, and the mortgagor might be reasonably assumed...