50 N.C. App. 654 | N.C. Ct. App. | 1981
Defendants make one argument on appeal, that the court erred in signing and entering the order of foreclosure. Defendants did not make any exceptions to the findings of fact or conclusions of law made by the court in its order. Therefore, the findings of fact are deemed to be (and are in fact) supported by substantial competent evidence and are conclusive upon appeal. Schloss v Jamison, 258 N.C. 271, 128 S.E.2d 590 (1962); In re Vinson, 42 N.C. App. 28, 255 S.E.2d 644 (1979). The findings of fact support the conclusions of law and the entry of the order allowing foreclosure. See In re Enoch, 36 N.C. App. 255, 243 S.E.2d 388 (1978).
Defendants argue that Adams v. Taylor, 253 N.C. 411, 117 S.E.2d 27 (1960), controls this appeal. In Adams, part of the land subject to a deed of trust was condemned for highway purposes and some of the proceeds of the judgment were paid to the creditor. The debtor contended that he was not obligated to make any monthly payments until the proceeds of the judgment had been consumed by applying them as monthly payments under the terms of the note and deed of trust. The Court agreed and held:
The payment made by the Highway Commission was not a payment voluntarily made by the debtor. The taking of the land was over the protest of debtor and creditor. Compensation for the taking was enforced by judicial proceeding. Since the payment was not voluntary, the debtor had no right to direct how it should be used, nor did the creditor have that right____Since neither debtor nor creditor had a right to direct the manner in which the payment should be used, it became the duty of the court to*657 direct application so as to accord with “intrinsic justice or the equity of the case.”
Id. at 413, 117 S.E.2d at 28-29 (citations omitted).
The distinction between Adams and the present case is that here defendants made the $30,000 payment voluntarily as consideration for the execution of the subordination agreement, which was essential to defendants’ development of the property. The rationale of Adams is not applicable to the facts of this case, as equity and justice would not require the noteholders to wait years before receiving the final $7,000 payment where they had allowed their security for the debt to be drastically impaired for the benefit of defendants.
“[I]f neither debtor nor creditor applies payment, it will be applied to unsecured or most precariously secured debt, or according to intrinsic justice or the equity of the case.” Power Co. v. Clay County, 213 N.C. 698, 709, 197 S.E. 603, 610 (1938). Here, neither party directed application of the $30,000, but it is apparent from the record that their intent was to reduce the most precariously secured portion of the debt, that which was due furthest in the future. The contemporaneous agreement that defendants would pay the balance on 15 March 1979 supports the noteholders’ expectation that they would be repaid fully within the current year.
The trial court in effect found that the $30,000 payment was not a mere prepayment of insta! lments of the indebtedness, but was given as consideration for the subordination agreement. The conclusion of the court that defendants were obligated to make the 27 May 1979 payment is supported by findings of fact. The order allowing foreclosure is
Affirmed.