Strowd v. Whitfield

• Decision Date: 18 May 1932
• Docket Number: 341.
• Citation: 163 S.E. 860,202 N.C. 732
• Parties: STROWD v. WHITFIELD et ux.
• Court: North Carolina Supreme Court

163 S.E. 860

202 N.C. 732

STROWD v. WHITFIELD et ux.

No. 341.

Supreme Court of North Carolina

May 18, 1932

Appeal from Superior Court, Orange County; Daniels, Judge.

Action by R. L. Stroud against J. R. Whitfield and wife. From a judgment for plaintiff, defendants appeal.

Affirmed.

Vendor's agreement to convey tract to realty company making certain payments and authorized to sell tract held "option" enabling vendor to recover deficiency judgment on purchaser's notes, though realty company accepted purchaser's rescission.

This is an action to recover the amount due on certain notes executed by the defendants, and payable to the plaintiff. The consideration for said notes was part of the purchase price for certain lots sold and conveyed to defendants by plaintiffs. The notes were secured by a deed of trust executed by the defendants. Upon default in the payment of the notes, the lots conveyed by the deed of trust were sold by the trustee, and conveyed to the purchaser, in accordance with the power of sale contained in the deed of trust. The amount received by the trustee for said lots, less the costs and expenses of the sale, was applied as a payment on the notes, leaving a balance now due thereon of $1,126.53, with interest from October 12, 1930. The plaintiff demands judgment that he recover of the defendants the said amount.

As their defense to plaintiff's recovery in this action, the defendants allege in their answer that, pursuant to an agreement entered into at the time the notes sued on in this action were executed, by and between the defendants and the agent of the plaintiff by whom the lots were sold to the defendants, and after the execution of said notes, the contract between the plaintiff and the defendants for the sale of the lots was rescinded, and that the agent of the plaintiff, acting for him and in his behalf, agreed to cancel and surrender said notes to the defendants. The defendants prayed judgement that the notes now be canceled and surrendered, and that plaintiff recover nothing of the defendants in this action.

The allegations in the answer with respect to the agreement for the cancellation of the notes sued on, and the rescission of the contract for the sale of the lots, were denied by the plaintiff in his reply to the answer.

The action was referred to a referee for trial. The referee heard evidence offered by both plaintiff and defendants. Upon his findings of fact and conclusions of law, the referee recommended that judgment be entered in the action (1) that the notes sued on be canceled and surrendered by the plaintiff to the defendants, and (2) that plaintiff recover nothing of the defendants in this action. Both plaintiff and defendants filed exceptions to the report of the referee.

The report of the referee was heard on the exceptions filed thereto by the judge presiding at the October term, 1931, of the superior court of Orange county, who affirmed the findings of fact made by the referee, and from the evidence found certain additional facts. Upon these facts, the judge reversed certain conclusions of law made by the referee, and ordered and adjudged that plaintiff recover of the defendants the sum of $1,126.53, with interest thereon from March 12 1930, and the costs of the action.

The defendants appealed from the judgment to the Supreme Court.

S. M Gattis, Jr., of Hillsboro, for appellants.

R. T Giles and J. A. Giles, both of Chapel Hill, for appellee.

CONNOR J.

The facts found by the referee, and affirmed by the judge, at the hearing of the exceptions to the report of the referee, are as follows:

"1. That on April 22, 1925, and for some time prior thereto, the plaintiff was the owner in fee simple of a tract of land situated in Orange County, North Carolina, known as the 'Strowd Place,' a short distance from Chapel Hill. This property is traversed by Chapel Hill Boulevard, more generally known as North Carolina Highway No. 75.

"2. That some time prior to April 22, 1925, plaintiff entered into a written contract with the Chapel Hill Insurance & Realty Company, under the terms of which the Chapel Hill Insurance & Realty Company had said property surveyed and platted, a copy of said plat was introduced in evidence at the trial. This property was widely advertised for sale at public auction on April 22, 1925, and the plaintiff knew about same and during the time said property was being cleared up, preparatory to sale, he went on the property and advised with the men at work, and instructed them what to leave undisturbed in the clearing process and in general exercised the right of ownership over said property.

"3. That the property was duly offered for sale on April 22, 1925, and that the Chapel Hill Insurance & Realty Company and Durham Auction Company were in charge of the sale. Before the bidding commenced the auctioneer announced that this would be a first class development--that lights, water, streets and sewers would be installed, but these things have never been installed, and no improvements have been made on this property except such as have been made by the individual owners. The plaintiff attended the sale and at one time stopped the sale until certain matters were discussed between him and the selling agents.

"4. That at said auction sale the defendants became the last and highest bidders for lots Nos. 16 to 23, inclusive, and executed a memorandum of sale, offered in evidence, which was to the effect that defendants had purchased the said lots from the plaintiff through Chapel Hill Insurance & Realty Company and Durham Auction Company, on the terms set out therein. The next day after the sale, the defendant, J. R. Whitfield, went to the office of the Chapel Hill Insurance & Realty Company and talked with Mr. W. S. Roberson, president and general manager of the company, and advised Mr. Roberson that defendants did not want the lots as they were not of uniform width and were not as they were represented to be. Mr. Roberson stated to the defendant that he did not want the purchaser to become dissatisfied, and if defendants would take the property and execute the deed of trust and notes to secure the payment of the unpaid balance, the defendants would be given more land or their money back if they later became dissatisfied with the transaction. Relying upon this agreement, the defendants did execute the deed of trust and notes. The notes were payable to R. L. Strowd, and the deed of trust was executed to the Bank of Chapel Hill, trustee for R. L. Strowd. Said notes and deed of trust bear date of April 22, 1925, but were actually executed after the conversation between defendant, J. R. Whitfield and Mr. Roberson. The deed of trust was introduced in evidence.

"5. That the defendants later did become dissatisfied with their purchase and notified Mr. Roberson to that effect. Whereupon, Mr. Roberson had defendants to execute to Chapel Hill Insurance & Realty Company a deed for the property, and returned to defendants the cash payment which had been made by defendants, and promised that he would return to them the notes and deed of trust, which were executed when the lots were purchased.

"6. That the notes and deed of trust which defendants executed were never cancelled and returned to them, and nothing was ever paid on said notes. The trustee in the deed of trust

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