87 N.C. 384 | N.C. | 1882
The law is well settled by a series of decisions in this state, that a trustee or mortgagee acting under a power vested in him by the deed cannot become a purchaser at his own sale, either directly or though an intervening agency, for the reason that his duties as trustee in making sale, under circumstances to command the highest price for the property, would (387) be in conflict with his interests as a purchaser in obtaining it for the smallest sum. This is principle enforced in equity for the benefit of the cestui que trust or mortgagor, and he may affirm or avoid the sale at his election. Brothers v. Brothers,
And this reserved right to avoid the sale may be exercised by creditors who are not secured in the trust deed, but are interested in the estate conveyed as the source to which they must look for payment. Elliott v.Pool,
It is also decided that the relation of the mortgagee (at least with a power of disposition) to the mortgagor, are, if not the same, so similar to those subsisting between a trustee and his cestui que trust, as to require the application of the rule, that where the mortgagor obtains the equity of redemption or equitable estate from the mortgagor, he must show in support of the validity of the conveyance or transfer, beyond that afforded by the production of the instrument itself, the fairness of the transaction and rebut the presumption of the exercise of undue influence arising out of the relation in securing it. McLeod v. Bullard,
If the facts of the present case brought it within the scope of the rule, we should disregard the sale and restore the parties to the position, previously occupied by them, respectively, as mortgagor and mortgagee, with the incidents inseparable from that relation.
But not estate or interest in the land was passed or acquired under the agreement as to the bidding, but only the assent of the mortgagor given to the bidding by the agent of the defendants for them, and *303
their becoming the purchasers, if their bid was higher than the bid of others, and was of a sum sufficient to discharge the debt; and thus dispense with the rule, which, for his protection only, (388) prohibited them from purchasing at the sale. The consideration for the assent is a further extension of the time of redemption, and such contract though by parol is valid. Blount v. Carroway,
There is no suggestion in the complaint that the sale was not in all respects open and fair, or that any injury resulted to the plaintiff from the manner in which it was conducted and closed. The assent to the sale was unnecessary, for it was made pursuant to an agreement, and in the exercise of a power contained in the mortgage deed, and could have been made without the further assent then given. The only consent required was that the defendants might bid and buy, if necessary, to save their debt, and this was procedure by an agreement for a right of redemption to be exercised within a year thereafter. The effect of the transaction was consequently to convert the mortgage into an absolute deed, with a legal right in the plaintiff to re-acquire the land on the terms of the substituted agreement entered into between the parties. If there were circumstances of fraud, oppression or undue advantage taken of the plaintiff, of which the record discloses none, the matters in pais might afford ground for the interposition of the court granting the plaintiff relief.
But his asserted equity is to have declared null the sale itself because of the bidding and purchase, however fair and honest and notwithstanding the waiver for a valid consideration, because the equitable principle governing such transactions, generally, has not been observed in this. We do not assent to the proposition, and in our view the arrangement was effectual and the plaintiff failing to take advantage of its terms cannot now find relief in this court.
We therefore uphold the ruling of his Honor and affirm the judgment.
No error. Affirmed.
Cited: Bruner v. Threadgill,
(389)