Pringle v. Winston-Salem Building & Loan Ass'n , 182 N.C. 316 ( 1921 )

Ch. 146, Laws 1915, and amendments, now C.S. 2591, was intended for the protection of mortgagors where sales are made under a power of sale without a decree of foreclosure by the court. In the latter cases there was always an equity to decree a resale when a substantial raise in the bid, usually 10 per cent, had been deposited in court. There being no such protection as to mortgages with power of sale, this statute was passed to extend to mortgagors, whose property had been sold under power of sale without a decree of foreclosure, the same opportunity of a resale when there has been an increased bid of 10 per cent when the bid at the first sale did not exceed $500, and of 5 per cent when the bid of the first sale was more than $500.

This statute has been construed at this term, In re Sermons, ante, 122, not to require a report to the clerk of every sale made under a mortgage with power of sale, but that in all such cases if the prescribed amount of the raise in bid is guaranteed, or paid, to the clerk he shall require the mortgagee or trustee to advertise and resell on 15 days notice. In short, the condition of a mortgagor in a mortgage with a power of sale is assimilated to the condition of property sold under a decree of foreclosure so far as the right to set aside the bid at the first sale and to require a resale. Therefore, the decisions upon the right of the commissioner to commissions on a sale under a decree of foreclosure is applicable in these cases.

In Pass v. Brooks, 118 N.C. 398, it was held that after the trustee had advertised, but before the sale day the trustor, with the knowledge and consent of the trustee, paid off the debt and interest and costs of advertisement, the trustee was not entitled to any (318) commissions. In Fry v. Graham, 122 N.C. 773, where the trustees in a deed of trust with power of sale advertised the land for sale but the sale was postponed, and before the day of the adjourned sale the debt was paid in full, it was held the trustee could not recover commissions on the amount of the debt, but was entitled to a just allowance for time, labor, services, and expenses, and that these could be assessed in an action by the trustee for the same. In the present case the matter being before the clerk under C.S. 2591, by virtue of the order of resale made by him, we are of opinion that these charges can be assessed by the clerk, subject to review on appeal, or by the judge in this proceeding, as in Fry v.Graham, supra.

In Whitaker v. Guano Co., 123 N.C. 370, it was held that where there is no sale a just allowance can be allowed the commissioner for his time, labor, and expenses. All these cases cite Boyd v. Hawkins, 17 N.C. 336. InTurner v. Boger, 126 N.C. 303, the above three cases were cited, and the Court affirmed the dissenting opinion in Cannon v. McCape, 114 N.C. 584 in which it was pointed out that originally, "when property was levied on and advertised for sale under execution, if payment was made before sale, the sheriff was allowed no commission on the sale. Dawson v. Grafflin,84 N.C. 100, and it took a statute to change this (Code 3752), but there has been no statute as yet extending this rule to trustees or mortgagees when the debtor pays before sale. It is to be feared that such practice, if adopted, will result in oppression."

The order of resale vacated the first sale absolutely, and under the above authorities the trustee, at most, would be entitled only to an allowance for his trouble and expenses of advertising, which last has been paid into the clerk's office. The trustee claims that he was entitled to 5 per cent upon the $3,000 which the land brought at the vacated sale. The question is not before us whether if the sale had not been set aside the trustee would have been entitled to commissions on the $3,000 or only upon the amount collected and paid over on the indebtedness, in analogy to the sale by the sheriff upon execution who receives commissions not upon the price the property has brought, but only upon the amount collected, C.S. 3908, or like the allowance to an administrator who, in selling land under a decree to make assets, is entitled to commissions only on so much of the proceeds of the sale as is applied to the indebtedness of the intestate, and there are other instances. In Smith v. Frazier,119 N.C. 158, it was held that formerly no commissions were allowed commissioners for making sale under judicial decree, but only a just allowance for time, labor, and expenses and a decree allowing 5 per cent on the purchase price instead of on the amount of debt collected, was reversed. This was cited and approved in Turner v.Boger, 126 N.C. 303, which intimated that by analogy to sales in partition the allowance (even when the sale is not (319) set aside) might follow the rate allowed by that statute, now C.S. 3896, Ray v. Banks, 120 N.C. 389; Williamson v. Bitting,159 N.C. 321.

Though this matter is not strictly before us, and we do not decide it, it would seem that the spirit of the statute is to protect mortgagors like defendants in executions against the payment of commissions on more than the debt that is collected by the sale.

The restraining order against the resale was properly continued, and the amount of allowance to the trustee for his labor and trouble can be fixed by the judge at the final hearing, or if so advised, application for such allowance can be made by the trustee to the clerk, with the right of appeal.

Affirmed.

Cited: Lawrence v. Besk, 185 N.C. 199; In re Ware, 187 N.C. 694; TrustCo. v. Powell, 189 N.C. 375; Briggs v. Developers, 191 N.C. 787; In reHollowell Land, 194 N.C. 224; Cherry v. Gilliam, 195 N.C. 235; BankingCo. v. Greene, 197 N.C. 537; Koonce v. Fort, 204 N.C. 430; Land Bank v.Bland, 231 N.C. 32.