Monroe v. Fuchtler

• Decision Date: 26 October 1897
• Citation: 28 S.E. 63,121 N.C. 101
• Court: North Carolina Supreme Court
• Parties: MONROE et al. v. FUCHTLER et al.

28 S.E. 63

121 N.C. 101

MONROE et al.

v.FUCHTLER et al.

Supreme Court of North Carolina.

Oct. 26, 1897.

Mortgages —Trustee's Sale — Fiduciary Relations—Fraud—Inadequacy of Price.

1. The fact that the trustee in a trust deed is a clerk in the store of the cestui que trust does not create a fiduciary relation between the makers of the deed and the cestui que trust, and hence it is competent for the trustee to sell the property at a trustee's sale to the cestui que trust.

2. The fact that property worth $2,000 was sold at a sale under a trust deed for $1,000 does not justify the setting aside of a deed to the purchaser.

Appeal from superior court, Wayne county; Adams, Judge.

Action by Monroe Bros. & Co. against Fuchtler & Kern and others. From a judgment for defendants, plaintiffs appeal. Affirmed.

W. C. Munroe, for appellants.

Allen & Dortch, for appellees.

FURCHES, J. In 1890 the defendants Fuchtler & Kern and their wives conveyed the land in controversy to Julius Slocumb, in trust to secure the payment of a debt to H. Weil & Bros, and a debt to Sol. Weil, amounting in all to about $1,000. This trust deed contained the usual powers of sale, and was filed for registration and registered in 1890, though it was not indexed in the individual names of the grantors or grantee, and there was no alphabetical index of the same ever made. In 1893 the plaintiffs recovered a judgment against the makers of said deed in trust for $421.91, which was docketed in Wayne county. After this judgment was docketed in Wayne county, where the land lies, the trustee sold under the power contained in said deed; and S. Weil, one of the cestuis que trustent in the deed, became the purchaser, at the price of $1,000; and said land was worth $2,000. The trustee named in the deed was a clerk of H. Weil & Bros., but said sale was conducted in accordance with the powers and provisions contained in the deed, and was fair and honest. No money was actually paid at the sale, as the property did not bring enough to pay the debts secured; and the parties to whom the money was going credited the amount of the bid on their debts, and the trustee made the purchaser a deed for the property so sold. Easton v. Bank, 127 U. S. 532, 8 Sup. Ct. 1297. This action is brought by the judgment creditors to set aside the deed from the trustee to S. Weil, and to have a resale of the property, out of the proceeds of which the trust debts to be first paid, and the residue, or a sufficient amount thereof, applied to the payment of plaintiffs' debt. The parties agreed upon the facts in this case, which we have, in substance, stated above. Upon the facts agreed, the court gave judgment for defendants, and the plaintiffs appealed, and claim that they were entitled to judgment upon two grounds: First, that as the trustee, Slocumb, was a clerk for the firm of H. Weil & Bros., this constituted a fiduciary relation between the makers of the deed and S. Weil, a member of the firm of H. Weil & Bros., and the purchaser at the trust sale; second, that the price paid, $1,000. for property worth $2,000, was so grossly Inadequate as to shock the moral sense of honest men, and cause them to exclaim "that he got the property for nothing."

The plaintiffs, in discussing the first ground (fiduciary relations), treated the deed of trust as a mortgage, and the sale by the trustee as a sale by a mortgagee where he bought at his own sale, and cited Gibson v. Barbour, 100 N. C. 192, 6S.E. 766, as authority for this position. But the case cited does not support the contention of the plaintiffs. That case has reference to a sale by a trustee where the trustee became the purchaser, and would have been in point if Slocumb had become the purchaser in this case, and not S. Weil. It Is a mistake when the plaintiffs think that, because Slocumb was a clerk in the store of H. Weil & Bros., this fact created a fiduciary relation between the makers of this deed of trust and the parties whose debts were secured therein. Clark v. Trust Co., 100 U. S. 149. If this had been a mortgage to S. Weil, the doctrine enunciated in Hall v. Lewis, 118 N. C. 509, 24 S. E. 209, Atkins v. Crumpler, 118 N. C. 532, 24 S. E. 367, and again in s. c. 120 N. C. 308, 26 S. E. 912, would apply, and a presumption of fraud would rest on the purchaser that he would have to explain and make good. But the relations of a trustee to the parties whose debts are secured are very different from those of a mortgagee.

He is the agent of both the maker of the deed and the cestui que...