Jones v. . Kingsey

The defendant, being indebted to the plaintiff in the sum of eleven hundred and thirty-six dollars, ($1136,) executed a mortgage-deed of a certain tract of land, described in the pleadings, to secure the payment thereof. At the end of the time stipulated for the payment, the money being unpaid, except $400, this bill was filed for a foreclosure of the equity of redemption; or, in the alternative, for a sale of the mortgaged premises.

The answer of the defendant sets forth that, shortly after executing the mortgage-deed to the plaintiff, he discovered there was a judgment and execution outstanding in the County Court of Henderson county, wherein the defendant was surety of another person, which formed a prior lien to the mortgage-deed, of which he was not aware at the time of executing the deed; that he made known the fact to plaintiff immediately afterwards, and he (plaintiff) promised to advance the necessary funds to remove this prior incumbrance, and look to the mortgage-deed as security for this further sum also; but the plaintiff failed to perform this promise, and permitted the property to be sold under the execution.

He alleges further, that at this sale, one Michael Francis, became the purchaser of the premises, and that he bought them back from (464) Francis; that Mr. Francis did not purchase as his agent, or by any privity or understanding with him, and that there was paid a bona fide consideration, and he took an assignment to himself and his wife, of the deed which the sheriff had made to Francis. The consideration expressed in this assignment is $100. The surplus of the money, after satisfying the small execution, under which the land sold, ($400,) was paid to the plaintiff upon this debt.

The defendant insists that, as plaintiff, against his promise, permitted the land to be sold, and as the purchaser at that sale, bought it bonafide, and as he bought it back from Francis, bona fide, and not in pursuance of any previous arrangement or understanding, the plaintiff is not entitled to the relief which he seeks in his bill.

There were replication to the answer, commissions and proofs; and the cause having been set down for hearing, was sent to this Court by consent. This is a bill of foreclosure, in which the prayer is in the alternative, for a sale of the mortgaged premises; or that the defendant's equity of redemption may be foreclosed. The answer admits the mortgage, and the debt for which it was given. The only defense set up is, that at the time when the mortgage was executed, there was an outstanding judgment and execution which were unknown to the parties; that the defendant as soon as he ascertained the fact, informed the plaintiff of it, who then promised to pay off the judgment debt, and thus remove the encumbrance, which, however, he neglected to do, and the land was sold under execution, and purchased bona fide by one Michael Francis, who paid and took the sheriff's deed for it; that the plaintiff received about $400, the overplus after paying off the said execution and costs; and that the said Francis had, subsequently, upon being repaid his purchase-money, conveyed the land to the defendant and his wife; or at least, had contracted to do so. The (465) defendant contends that these transactions are a bar to the plaintiff's claim. The defendant has filed, as an exhibit, the deed from the sheriff to Francis, upon which is endorsed a valid conveyance from him to the defendant and his heirs, for the said land, reciting as a consideration therefor, the payment to him of one hundred dollars. The answer does not state by whom this consideration was paid; but in the absence of any allegation and proof to the contrary, we must presume that it was paid by the defendant himself.

The case then is simply this; that there was an encumbrance upon the land at the time when the mortgage was made, which was unknown to both parties, and that the defendant has since removed it, as it was his undoubted duty to have done. No argument can make the plaintiff's right to the relief which he seeks, plainer that it is made by the bare statement of the facts. There must be a decree that unless the defendant, within six months after being served with a copy of the decree, shall pay to the plaintiff the residue of the mortgage debt, the clerk of this Court shall, after due advertisement, proceed to sell the mortgaged premises for the payment of said debt; to ascertain which, if necessary, there must be a reference.

Per curiam.

Decree accordingly.

Cited: Hallyburton v. Slagle, 130 N.C. 487.