Case ID: nc_166/html/0477-01.html
Source: Caselaw Access Project
Author: {"author": "Clark, O. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

C. L. and A. L. HINTON, Executors, v. CALEB HALL and W. L. COHOON.
    (Filed 16 September, 1914.)
    1.. Mortgages — Registration — Fraud — Trials — Evidence—Attorney and Client.
    Where the owner of lands takes’ a mortgage to secure the balance of the purchase price, but holds it and has it registered subsequent to the registration of another mortgage the purchaser has made and executed thereon, and the later made but prior registered mortgage is attacked for fraud and failure of consideration, it is competent for the attorney of such mortgagee to testify, in corroboration of his evidence as to the bona fieles of the loan, that he had loaned as such attorney the money out of funds of his client in his hands for the purpose, and had made many transactions of a similar character for him.
    2. Deeds and Conveyances — Acknowledgments—Privy Examination —Notaries Public — Interests.
    The mere fact that the notary, public taking the acknowledgment of the grantor in a mortgage deed to lands, and the privy examination of his wife, is a brother-in-law of the mortgagee does not disqualify him, for interest, to act as such notary, nor is he disqualified by the fact that under agreement with the mortgagor he received a certain part of the money loaned, in payment of obligations of the mortgagor to his wife and himself.
    3. Mortgages — Sales — Advertisements—Irregularities—Notice—lm-' mediate Purchasers — Remote Grantees — Chain of Title.
    While the immediate purchaser at a sale of lands under mortgage is required to see that proper advertisement of the lands has been made, this does not apply to subsequent or remote grantees of the land, for they acquire a good title if the recitals in their chain of title appear to be regular. Eubank v. Beoton, 158 N. 0., 230, cited and distinguished.
    4. Mortgages — Sales—Advertisements—Irregularities—Second Mortgagee — Measure of Damages.
    Where there are two or more mortgages on the same land, and by a sale under the first mortgage, not advertised according to its terms, the lands have been acquired by subsequent grantees without notice of the irregularity, the second mortgagee may elect to sue the first mortgagee for any damage which he has suffered on account of the irregularity, the measure thereof being the difference between the amount due under the first mortgage and the value of the land at the time of the sale.
    5. Issues.
    Where the trial judge has submitted to the jury issues upon the controverted facts which are fully determinative of the rights of the parties, his refusal to submit additional issues will not be held for reversible "error.
    Appeal by defendant from Ferguson, J., at December Term, 1913, of CamdeN.
    
      'Aydlett & Simpson for plaintiff's.
    
    
      Ward & Thompson and Ehringhaus & Small for defendants.
    
   Clark, O. J.

Tbe plaintiffs’ intestate, J. L. Hinton, conveyed to tbe defendant Caleb Hall a tract of land on 11 July, 1908, and Hall executed a mortgage to Hinton on tbe same date to secure tbe purchase money. Tbe deed to Hall was recorded at once, but bis. mortgage back- to Hinton was not registered till 23 August, 1909. In tbe meantime, on 5 February, 1909, Hall and wife executed a mortgage to D. E. Williams to secure a loan of $800, and tbis was recorded at once. Tbe acknowledgment and privy examination to tbis were taken before W. L. Coboon, tbe brotber-in-law of D. E. Williams, wbo made tbe loan as agent for Williams.

On 26 April, 1910, Williams, tbe mortgagee, sold under tbe power of sale in said mortgage and executed a deed to tbe purchaser, Margaret W. Coboon, which was duly recorded. On 29 December, 1910, Margaret W. Cohoon and husband, W. L. Coboon, executed to A. E. Cohoon a deed for tbe same property, which was duly registered. On 31 January, 1911, A. E. Coboon executed a deed for tbe same property to M. N. Sawyer, and on ■28 March, 1911, Sawyer and wife executed a deed therefor to Missouri Sawyer.

Tbe complaint alleged that tbe mortgage deed from Hall to Hinton was a fraud and a sham pursuant to an agreement between W. L. Coboon and Hall in order to defeat Hinton’s mortgage, which bad not been recorded; that in fact no loan bad been made Hall by Williams, as set out in the mortgage; that in fact no money was received by Hall; that Cohoon was really the only one interested in the transaction; that the property was not properly advertised at the time of the sale under the mortgage,. and hence the sale was null and void to pass title.

The jury, in answer to the issues submitted, found that the defendant D. E. Williams loaned through-his attorney, W. L. Cohoon, to Caleb Hall $800, for which the mortgage was given as security; that there was no--other irregularity except that in the foreclosure the advertisement was not made in a newspaper published in Pasquotank County; that the value of the land in question at the time of the sale was $1,050; that Missouri Sawyer, and also M. N. Sawyer, from whom she purchased, had no notice of any defect in title or of any irregularity in the foreclosure proceeding.

Upon the verdict the judge held that Missouri Sawyer had obtained a good title to the land; that the irregularity in the advertisement made the sale irregular, and that D. E. Williams and Margaret W. Cohoon were responsible to the owner of the junior recorded mortgage for the difference in the value of the land at the time of the sale, i. $1,050, as found by the jury, less $800, the sum secured in the mortgage to Williams.

It was competent for the witness Cohoon, in corroboration of his evidence as to the bona fides of the loan to Williams, to testify that he had acted as agent- for Williams in many other transactions of this kind, and that he had money on hand of Williams’ which he loaned to Hall. W. L. Cohoon had no pecuniary interest in the transaction, and his relation to Williams as brother-in-law did not disqualify him as notary public to take the acknowledgment of Hall and the privy examination of Hall’s wife. Cohoon testified that of the $800 loaned Hall, $75 was paid to himself for a debt which Hall owed him and $300 for an indebtedness of Hall to Cohoon’s wife for a tract of land.

The court submitted to the jury under proper instructions these matters, and the jury found that there was: a bona fide loan of $800 made by Williams to Hall. . The fact that out of this loan Hall agreed to pay certain debts to Cohoon and his wife did not give them an interest in the mortgage, which the jury found was a bona fide transaction between Williams and .Hall.

The mortgage contained a power of sale, requiring that the property should be advertised by posting notices at the courthouse door and three- other public places in the county for thirty days, and also by publishing said notice for four weeks in some newspaper in Elizabeth City. It was in evidence that the advertisement was made as thus required, excejff that there was no publication in the newspaper, and the jury found that there was no other irregularity in the proceeding.

It was true that failure to advertise according to the terms of the power of sale invalidates the sale. Eubank v. Becton, 158 N. C., 230. But it is said that such sale is not absolutely void, but will pass the legal title. Eubank v. Becton, supra; Brett v. Davenport, 151 N. C., 58. While such sale would be set aside as to the purchaser, a subsequent or remote grantee without notice and in good faith takes a good title against such defects or irregularities in the sale of which he had no notice. 21 Cyc., 1494.

. The jury find that Missouri Sawyer and her grantor, M. N. Sawyer, through whom she claims, had no notice of any defect in the title or foreclosure proceeding. As said in Eubank v. Becton, they would be affected with notice of any defect which would appear in their chain of title, but this is all. In going to the record to look up this title, they found it recited that due advertisement as in said mortgage prescribed, and by law provided, had been made. In Eubank v. Becton the record disclosed that while the mortgage required advertisement in four public places, the trustee’s deed recited that it had been made at only three places.

The purchaser at a mortgage sale is required to investigate and is fixed with notice of the defect in advertising or other like irregularity, but this is not true of subsequent grantees, who are required only to look to the recitals in the trustee’s deed.

The second mortgagee could elect to sue the first mortgagee for any damage which he has suffered by any irregularity in making the sale. The most that the second mortgagee could possibly have suffered in this case was the difference between the actual amount of the indebtedness due under the Williams mortgage, which the jury find to have been $800, and the .actual value of the land at the time of the sale.

The only other exception is the refusal to submit additional issues; but the issues submitted were fully determinative of the rights of the parties to the action, and this is all that is required. Kimberly v. Howland, 143 N. C., 398; Clark v. Guano Co., 144 N. C., 64.

No error.