Woodell v. Davis, 261 N.C. 160 (1964)

Jan. 17, 1964 · Supreme Court of North Carolina

261 N.C. 160

MRS. PEARL WOODELL v. C. R. DAVIS and wife, LILLIAN B. DAVIS.

(Filed 17 January 1964.)

1. Mortgages and Deeds of Trust §§ 19, 26—

Allegations that the purchaser of ‘a note secured by a deed of trust promised uoit to foreclose so -long 'as the interest was paid on the note and not to foreclose .without giving the maker of the note personal notice so that she could refinance, held insiufiiciemt to allege a; defense to foreclosure in, the absence of allegation that such .promises were supported by conr isidenation, there being no contention that the notice required by statute was not given. G-.S. 45-21.17.

2. Appeal and Error § 40—

Where the allegations of the complaint fail to state a cause of action the Supreme Court may take notice thereof ex mero motu, and Judgment dismissing the action will mot he disturbed even though defendants’ demurrer may have been sustained for the wrong reason.

Parker, J., dissents.

Appeal by plaintiff from Braswell, J., April 1963 Session of John-STON.

Plaintiff denominates this an action for the wrongful foreclosure of a deed of (trust. She sues the purchasers of the property who are the holder of the note land deed of trust and his wife. The ease was heard on a motion to ©trike and a demurrer to .the complaint.

In summary, the allegations remaining in the complaint after the judge ¡ruled- upon the motion to strike are: On October 7, 1957, plaintiff .and her husband purchased a house and lot -as tenants by the en-tireties in Bladen County from F. L. Boole. To secure the ¡balance of the purchaise price they executed a note 'and -deed -of trust to- him in the amount of $2,370.21. On August 19, 1959, Poole transferred the note ■and deed of trust to the defendant O. R. Davis -and thereafter plaintiff paid him various sums on ¡both the principal and interest, the last payment having been made on January 6, 1962, leaving a balance of $1,510.00 then due. On March 31, 1962, without notifying plaintiff as he agreed to do, Davis called on the .trustee to foreclose the -deed of trust. The foreclosure was completed on May 21, 1962 and a deed was executed to the defendant C. R. Davis 'and .his wife who- had conspired to withhold from the plaintiff all notice of the foreclosure and thereby wrongfully and fraudulently obtained title to the property. On July 18, 1962, after plaintiff had discovered the sale, ¡she called on defendants to reconvey the property to her upon payment in full of the indebtedness but they refused to do so. The fair market value of the property was $5,000.00 ’and ©he is entitled to -recover the difference between its value ¡and the amount -due on the mote -or $3,490.00. Plaintiff also prayed -for punitive damages.

Over plaintiff’s obj ection .and exception, -paragraphs 6, 7, 8, 9, 10, 12, 13, -and 14 of the complaint, or portions thereof, were stricken. Except ¡when quoted, these -stricken portions are ¡summarized as follows: At the time defendant C. R. Davis ¡acquired the plaintiff’s mote and deed of (trust the defendants knew that plaintiff’s husband “was an alcoholic •and completely irresponsible with respect to the payment of debts.” The plaintiff was gainfully -employed -and informed defendants “that she would continue to do the best ©he could in view of the condition of ¡her husband.” After tibe assignment, C. R. Diavis “contracted and agreed with the plaintiff thait so long as she kept the interest .paid on the aforesaid indebtedness he would not attempt to foreclose her house and lot, 'and that she and her children, could stay in the home so long ■as the interest was paid, and that in any event he would give her ample notice of hiis intention to foreclose her .property, so. that she would have an opportunity to refinance said indebtedness with someone else.” Pursuant tio the “neiw arrangement entered into between the plaintiff and the said C. R. Davis,” -and relying upon it, she performed her part of the new contract. C. R. Davis “reaffirmed and acknowledged his contract and agreement with plaintiff” every time she made a payment. About the time oif the last payment on January 6, 1962, plaintiff left her husband because of his excessive drinking and moved to Johnston County with her children. C. R. Davis “could have easily ascertained her .whereabouts and her .address in Clayton.”

After allowing the motion to strike the above allegations, the judge sustained the defendant®’ demurrer ore terms to the complaint for failure to state -a cause .of action. In. response to his Honor’s question, plaintiff announced that she did not desire to amend the complaint. He .entered a judgment dismissing the action and plaintiff appealed.

Lyon and Lyon for plaintiff appellant.

Albert A. Corbett for defendant appellee.

Sharp, J.

The .motion to is.tr.ike was properly allowed. The stricken paragraphs alleged .the breach of an agreement to delay foreclosure as long as plaintiff paid the interest on .the indebtedness and, in .any event, not to foreclose without giving .plaintiff sufficient notice so that she could refinance. However, plaintiff alleges no consideration for this promise. Therefore, it will not support a contract enforcible in law or sustain an action for damages for its breach. Craig v. Price, 210 N.C. 739, 188 S.E. 321, a case in which the plaintiff .alleged an agreement similar to the one ¡averred here, is decisive and supports hiis Honor’s ruling.

A foreclosure made under a power of sale in the instrument must be made in. strict conformity with it and with the .pertinent statutory provisions which are .by operation of law included in 'all mortgages ■and deeds of trust. Foust v. Loan Asso., 233 N.C. 35, 62 S.E. 2d 521; Jenkins v. Griffin, 175 N.C. 184, 95 S.E. 166; 37 Am. Jur., Mortgages §§ 663, 664. The plaintiff has alleged no failure by the defendant to observe 'either tire statutory requirements .or the provisions of the deed of trust. If there was any failure to advertise properly, tbe burden was on ¡the plaintiff to allege it. Jenkins v. Griffin, supra; Cawfield v. Owens, 129 N.C. 286, 40 S.E. 62. She merely 'alleges that defendant's failure to give her notice of the ©ale after be Lad promised to do so constituted a breach of contract and wais fraudulent.

In tihe absence of a valid contract so to do, there is no requirement that a 'Creditor shall give personal notice of a foreclosure by ©ale to a debtor wibo is in default. Plaintiff hais alleged no valid contract nor has she alleged 'any facts which would taint, the foreclosure with fraud. The mortgagor is always entitled -to notice of ©ale under foreclosure, ¡but notice is given when the advertisement required by the statute (G.S. 45-21.17) is made. 1 Glenn, Mortgages § 110. This .is true even1 .though “the principal obj ect in publishing notice of sale of mortgaged property in .the exercise of a power of sale is not so much to notify ¡the grantor or mortgagor as it is to inform the public generally, so .that bidders may be present 'at the ©ale 'and a fair price obtained; 59 C.J.S., Mortgages § 563.

In Biggs v. Oxendine, 207 N.C. 601, 603, 178 S.E. 216, we find the following statement: “While it is proper and desirable for a trustee or a mortgagee to give notice of sale to the mortgagor, nevertheless such notice is not required.” In sustaining a judgment of nonsuit upon this and other grounds 'in Craig v. Price, supra, the Oourt said, “Plaintiff •complains that he did not receive personal notification of the foreclosure sale, but there was no evidence that the provisions of the deed oif trust or of the statute, with respect to advertisement, were not fully complied with.” In Carter v. Slocomb, 122 N.C. 475, 29 S.E. 720, it was held that a sale of land made -by a mortgagee under -the provision of sale in the mortgage, after the death of the mortgagor and without notice to hiis heirs, .conveyed a good title. The Court said, “The mortgagor cannot demand any notice of intention to sell under the power, and the heir at law stands in the place of .'his ancestor.”

It is noted from the stricken portions of the complaint that the plaintiff vacated the mortgaged property about January 6, 1962 and from then, until July 1962 she was out of touch with the defendants leaving it up to them to discover her whereabouts as best they could.

IJis Honor ¡sustained the demurrer ore tenus on the grounds that there was a defect of parties plaintiff. The property was originally purchased by plaintiff and her husband as tenants by the entireties and the husband was not a party plaintiff. However, at this stage of the proceedings, plaintiff’s allegation that she is now the owner of the equity of redemption in the property eliminated the necessity for his presence in the suit. The 'demurrer ore tenus was properly sustained albeit for the wrong reason. Even if the husband were a party plaintiff the complaint would still abate no cause of action. When this is the situation the court may 'raise the question ex mero motu. Skinner v. Transformadora, S. A., 252 N.C. 320, 113 S.E. 2d 717; Lamm v. Crumpler, 233 N.C. 717, 65 S.E. 2d 336.

The judgment of the lower court is

Affirmed.

PARKER, J. dissents.