Moring v. Privott

• Decision Date: 26 February 1908
• Citation: 60 S.E. 509,146 N.C. 558
• Parties: MORING et al. v. PRIVOTT et al.
• Court: North Carolina Supreme Court

60 S.E. 509

146 N.C. 558

MORING et al. v. PRIVOTT et al.

Supreme Court of North Carolina

February 26, 1908

Appeal from the Superior Court, Chowan County; O. H. Allen, Judge.

Action by Joseph Moring and others against H. C. Privott and others. From a judgment for plaintiffs, defendants appeal. Affirmed

This case was submitted to the court upon the following case agreed:

"First. That on the 13th day of March, 1891, J. H. Piland executed to J. H. Blount, trustee, a certain deed of trust, duly on its day of date recorded in said county, on certain lands of said Piland, therein described, to secure the payment to M. H. White of a certain note given by said Piland for the purchase money of said land.

"Second. That on the 22d day of December, 1904, said Piland and wife executed to W. S. Privott, trustee, a second deed in trust to secure a certain note to H. C. Privott upon a portion of the lands aforesaid. Said deed in trust duly recorded on its day of execution.

"Third. That on the 9th day of January, 1906, in consideration of the $1,500 paid to M. H. White, said Piland, his wife being dead, executed to the plaintiffs a deed for a portion of said land conveyed to Blount and Privott, as aforesaid; and the said money, $1,500, same being the purchase price, and a fair and full purchase price of the land conveyed in said deed, was paid to M. H. White and same credited on the J H. Piland note, same being less than the sum due upon the said note, and in consideration of said amount said White executed the following paper writing, viz.: 'This is to certify that I hereby release all of the claims I hold against the lands deeded by J. H. Piland to J. R. Moring, of date December 20th, 1895, and also lands contained in deed from J. H. Piland to Jules and Joseph Moring, dated this day. This January 9th, 1906. M. H. White.' The execution of said deed, etc., of said paper writing, and the payment of the money, were all parts of the same transaction. That at the time of the said transaction said defendants in nowise assented or became parties to the same, nor had they knowledge of the same at the time. That Jules and Joseph Moring are the plaintiffs, and said deed of Piland to them and said release of White to them were duly and respectively recorded.

"Fourth. That at the time of the said transaction it was mutually understood and agreed, without any knowledge or assent of defendants, that the plaintiffs were to take and hold in consideration of the said $1,500 paid all the right, title, and interest of said White and of said Piland in and to the land then conveyed and released to them. The said plaintiffs immediately entered into possession of said land.

"Fifth. That on April the 23, 1906, Privott, trustee, after due advertisement, sold at public auction, first, the J. H. Piland land, in deed of trust to him conveyed, other than land conveyed and released aforesaid unto plaintiffs, for the sum of twenty-one hundred dollars ($2,100), with which said trustee discharged and paid upon the note of Piland to M. H. White what remained due thereon, to wit, $2,100, after the credit of the $1,500 paid by plaintiffs, as aforesaid. Said trustee then proceeded to sell the land conveyed and released by Piland and White to plaintiffs, whereupon the plaintiffs, colored men, in ignorance of their rights in law and fact as now contended for, and honestly believing in and relying upon representations to them by H. C. Privott and others, honestly made, that said lands so conveyed and released to them had to be sold to satisfy the H. C. Privott note secured by Privott deed of trust, represented to be a valid lien upon said land, appeared and bid and paid to H. C. Privott for said trustee the sum of six hundred and fifty ($650) for the lands aforesaid, previously conveyed and released to them by White and Piland.

"Sixth. It is agreed that such representations of H. C. Privott and others were honestly made in the honest belief that said Privott, trustee, had the right, legal and equitable, to sell land, to convey and release to plaintiffs, to pay said H. C. Privott note.

"Seventh. It is agreed that there was due on the H. C. Privott note the sum of $650, and that said land conveyed and released to plaintiffs, as aforesaid, was responsible in that amount, if upon the facts as herein agreed it was responsible at all.

"Eighth. It is further agreed that, if upon the foregoing statement of facts the court should be of the opinion that W. S. Privott, trustee, under his deed of trust and to discharge the H. C. Privott note, had the legal and equitable right to sell, as aforesaid, the lands conveyed and released by White and Piland unto the plaintiffs, and that the plaintiffs upon their $650 bid became liable unto said trustee for payment of said sum for benefit of H. C. Privott note, then the plaintiffs should recover nothing; otherwise the plaintiffs are entitled to recover the sum of six hundred and fifty dollars ($650), with interest from April 23, 1906, and that judgment should be entered for that amount."

His honor, being of the opinion that plaintiffs were entitled to recover, rendered judgment accordingly. Defendant appealed.

The rule that the trustee in a junior deed of trust, in selling under his power, makes the sale subject to the prior deed, and that he should apply the proceeds of the sale to payment of his debt, did not apply where a provision in such second deed of trust required the trustee to discharge the notes secured by the prior deed from the proceeds of the sale.

Plaintiffs purchased a portion of certain lands subject to two deeds of trust securing the payment of money, paying the full and fair price therefor to the holder of the prior deed of trust on account of his note, who executed to plaintiffs a release of all of his claim against the land deeded. Thereafter the trustee in the second deed of trust, pursuant to the power of sale therein, sold the portion of the land which had not been sold to plaintiffs, the proceeds of which he applied to the payment of the balance due on the indebtedness secured by the prior deed of trust. He thereupon advertised and sold plaintiffs' tract under his power of sale. Plaintiffs, believing the representations to them by said trustee and others that the land so conveyed and released to them had to be sold to satisfy the junior indebtedness represented to be a lien on their land, appeared and bid, and paid the amount of such indebtedness. It was admitted that all the parties acted honestly and in good faith, and that plaintiffs were ignorant colored men. Held, that plaintiffs, on payment of the purchase price to the holder of the first lien, were entitled to be subrogated to his rights, and were entitled to recover the money paid.

Subrogation is of equitable origin, not dependent on contract, and is always invoked to prevent injustice. It will never be permitted to work to the prejudice of the rights of others or produce injustice.

W. S. Privott, for appellants.

J. H. McMullen, Jr., for appellees.

CONNOR J.

Eliminating immaterial matter, the record presents the following case White sold to Piland a tract of land for some $3,500. For the purpose of securing the payment of the purchase money, Piland executed to Blount a deed in trust for the land. Thereafter Piland executed to defendant W. S. Privott a deed in trust on the same land, also a tract belonging to his wife, to secure a note of $650 due defendant H. C. Privott. Both deeds were duly recorded. Subsequent to their execution Piland sold to plaintiffs a portion of the land for $1,500, which was a full and fair price therefor. Pursuant to an arrangement between White, Piland, and the plaintiffs, the purchase money was paid to White on account of his note, and he executed to plaintiffs the release set out in the record. Thereafter the defendant W. S. Privott, pursuant to the power of sale in the deed in trust executed to him, sold the portion of the land which had not been sold to plaintiffs for the sum of $2,100, which he applied to the payment of the balance due on White's note. He thereupon advertised and sold the portion of said tract conveyed by Piland to plaintiffs for the sum of $650. Plaintiffs, supposing that he had the right to sell, purchased and paid the amount. The question is: To whom does the $650 belong? If, upon these facts the court...