Hairston v. Keswick Corp., 214 N.C. 678 (1939)

Jan. 4, 1939 · Supreme Court of North Carolina

214 N.C. 678

W. P. HAIRSTON v. KESWICK CORPORATION, MARYLAND CASUALTY COMPANY and RECONSTRUCTION FINANCE CORPORATION, and CENTRAL INVESTMENT CORPORATION (Original Parties Defendant); and CAROLINA BOND CORPORATION (Additional Party Defendant).

(Filed 4 January, 1939.)

Mortgages § 30d — Mortgagor seeking to restrain foreclosure on ground of usury must first tender amount legally due.

The equitable maxim that “He who seeks equity must do equity” requires that a mortgagor claiming that the mortgage debt is tainted with usury, and seeking to restrain foreclosure until the debt may be stripped of its usury, must first tender the amount legally due according to his own contentions, and a mere averment that he is ready, able and willing to pay the amount legally due is insufficient.

Appeal by defendants from Phillips, J., at November Term, 1938, of Forsyth.

Reversed.

Plaintiff brought this action in the county court of Forsyth County to restrain tbe defendants from foreclosing a deed of trust executed to secure an indebtedness of tbe plaintiff to tbe Carolina Mortgage Company until such time as tbe amount legally owed by tbe plaintiff could be ascertained.

Tbe plaintiff complained that be bad executed to tbe Carolina Mortgage Company mortgages securing loans aggregating about $11,000 in principal money, and that by retention of principal money, under guise of various fees, charges, and bonuses, grossly usurious interest charges were exacted from plaintiff, and that representatives of tbe mortgagees falsely represented to tbe plaintiff that be owed a balance of $6,450 on account of said loan; that plaintiff, in order to save bis properties from sacrifice, procured a loan from tbe Building and Loan Association and paid to tbe Carolina Mortgage Company tbe sum of $5,500, and executed and delivered to it Ms promissory note for $950.00, secured by a deed of trust on real property in Winston-Salem, in full settlement of tbe amount demanded by tbe Mortgage Company. -Tbe plaintiff recites that be bad no knowledge of tbe grossly usurious interest and charges that bad been reserved by tbe Mortgage Company until tbe execution and delivery of tbe note; that an audit of tbe account involved in tbe loan disclosed that plaintiff owed tbe Mortgage Company only $5,787.52 at tbe time be paid tbe sum of $5,500 and, therefore, tbe plaintiff owed now only tbe sum of $287.50 instead of tbe $950.00 evidenced by tbe promissory note which be made and delivered to tbe defendants. Plaintiff further alleges that tbe defendants have threatened to foreclose tbe deed of trust securing tbe $950.00, including usury, with interest thereon at six per cent, and demands that defendants be restrained from such foreclosure.

Upon tbe bearing in tbe county court, tbe injunction was continued to tbe bearing, and a complaint setting up substantially tbe cause of action above set out was filed and answer was made by tbe defendants denying tbe material allegations thereof.

Tbe matter was further beard in tbe county court, upon a notice to tbe defendants to show cause why tbe restraining order should not be continued to tbe final bearing, and at tbe 14 November, 1938, Term of tbe said county court tbe injunction was continued until tbe bearing of tbe issues arising on tbe pleadings.

From this order of tbe county court tbe defendants appealed to tbe Superior Court, and tbe matter was there beard by Judge Phillips, who affirmed tbe order of tbe county court, and tbe defendants appealed.

Ingle, Bucher <& Ingle for plaintiff, appellee.

W. 6r. Mordecai and Ratcliff, Hudson & Ferrell for defendants, appellants.

Seawell, J.

One of tbe best known and most often reiterated maxims of equity is: “He who seeks equity must do equity.” It is a mandatory application of tbe “Golden Eule” in tbe field of law administration, and has been said to express tbe fundamental principle of equity jurisprudence. In tbe application of tbe underlying principle to this case it means that tbe plaintiff, who has pleaded usury in bis debt to tbe defendants and has asked tbe court to enjoin tbe foreclosure of tbe mortgage securing tbe indebtedness until that debt may be stripped of its usury, must first tender to tbe defendants tbe amount legally due them before be can obtain tbe equitable relief demanded. Buchanan v. Mortgage Co., 213 N. C., 247, 195 S. E., 787; Wilson v. Trust Co., 200 N. C., 788, 158 S. E., 479; Mortgage Corp. v. Wilson, 205 N. C., 493, 171 S. E., 783.

In this case plaintiff merely avers tbat be is ready, willing, and able to pay the defendants the amount legally due, but makes no tender.

The case is so thoroughly covered by the opinion in Buchanan v. Mortgage Co., supra, and cases there cited, that we deem further analysis and citation supererogatory.

The judgment is

Reversed.