Oliver v. . Piner , 224 N.C. 215 ( 1944 )

ScheNCK, J.

The decision of this case turns upon the question as to whether the foreclosure sale, consummated by the delivery of the deed ■of 3 July, 1942, from Rouse, Trustee, joined in by Hazel Blalock, assignor of the last and highest bid at the foreclosure sale, to the plaintiffs was valid. If valid, the plaintiffs must prevail and the judgment of the Superior Court must be affirmed; if not valid, .the defendants must prevail and the judgment of the Superior Court must be reversed.

The plaintiffs contend that the foreclosure sale was valid for the reason that the defendants defaulted in the compliance- with the conditions in the deed of trust executed by them to Rouse, trustee for Hazel Blalock, in that the defendants, first, failed to make the payments of $60.00 on the first day of September of each year for nine years, as provided in the deed of trust; second, failed to pay the taxes on the land involved for the years 1936, 1937, 1938 and 1939; and, third, failed to keep the property insured for the benefit of the party of the third part, Hazel Blalock.

As to the first default which the plaintiffs contend the defendants made in the compliance with the conditions in the deed of trust, namely, the failure to pay $60.00 on the first day of September for nine successive years, the contention cannot be sustained for the reason that .the testimony of W. B. Rouse, Trustee, as witness for the plaintiffs, is to the effect that these annual payments of $60.00 were all finally made up to and including 1 September, 1941, and, according to the written conditions in the deed of trust, another such payment was not due until 1 September, 1942, and the advertisement of the foreclosure sale was begun on 20 May, 1942, and the said sale was conducted on 22 June, 1942, and this action was commenced on 24 July, 1942, all before the due date of the installment in 1942, namely, the first day of September, 1942, in which there was no default.

As to the second default which the plaintiffs contend that the defendants made in the compliance with the conditions in the deed of trust, namely, failure to pay the taxes on the lands for the years 1936, 1937, 1938, and 1939, inclusive, the contention cannot be sustained. The provisions in the deed of trust reads : “It is hereby expressly stipulated and agreed that the said parties of the first part shall pay all taxes accruing upon said property; to keep the same in good order and condition, and shall keep the property herein conveyed insured in a good and reliable insurance company for the benefit of the party of the third part in the sum of.Dollars, and upon the failure of said party so to do, said party of the third part is authorized and empowered to pay said taxes and effect said insurance, and such sums so paid therefor shall become a part of the aforenamed indebtedness and draw interest from the date of such payment at the rate afore-agreed to be made; but the election of said party to pay said taxes and insurance shall not be a waiver of the right to demand a sale as above provided.”

Nowhere in the deed of trust is any specific or definite time fixed when the nonpayment of taxes shall constitute a default; and in order for the benefit of a default to inure to the holder of the note, it is necessary that he pay the taxes and charge it in as a part of the debt, and then if the maker of the note shall suffer the taxes due on said property to remain unpaid, the holder of the note may collect the amount that he has paid on the taxes as a part of the debt when a foreclosure is had for failure to pay the debt or for any other reason.

As to the third default which the plaintiffs contend the defendants made in the compliance with the conditions in the deed of trust, namely, the failure to keep the property insured for the benefit of the party of the third part, Hazel Blalock, the contention cannot be sustained for the reason that while the deed of trust appears to have been drawn upon a form providing for the keeping of the property insured, the blank left for the amount of the insurance is not filled out, thereby evidencing an intention of the parties not to incorporate any provision as to insurance in the deed of trust. Certainly in the absence of any amount being •specified in the deed of trust, the parties of the first part therein, the defendants in this action, could not be penalized by a foreclosure sale for not procuring insurance.

Since we have reached the conclusion that the evidence fails to establish that there have been breaches in the conditions of the deed of trust justifying a foreclosure sale, it becomes unnecessary to discuss the other ■questions presented in the briefs, namely, the validity of the advertisement of the foreclosure sale, and the question of fraud arising out of the •contention that the trustee in the deed of trust was acting for the plaintiffs, and those under whom they claim, without regard to the protection .and rights of the defendants.

There being no evidence of a breach by the parties of the first part in the performance of the conditions in the deed of trust authorizing a foreclosure thereof, the deed from the party of the second part, the trustee, joined in by the party of the third part, the cestui que trust, who was likewise the assignor of the last and highest bid at the foreclosure sale, to the plaintiffs is rendered void, and since said void deed constituted an ■essential link in the chain of title of the plaintiffs, their action in ejectment must fail, as the burden was upon them to establish their title. It follows that the motion of the defendants duly lodged when the plaintiffs had introduced their evidence and rested their case, and renewed after all the evidence on both sides was in, to dismiss the action and for a judgment as in case of nonsuit (G. S., 1-183), should have been allowed. Hence the judgment of the Superior Court is

Reversed.