#### SAMUEL W. WILSON v. UNION TRUST COMPANY OF MARYLAND and INSURED MORTGAGE BOND CORPORATION OF NORTH CAROLINA, Trustees, MORTGAGE SECURITY CORPORATION OF AMERICA, and ALLISON W. HONEYCUTT and His Wife, MARY W. HONEYCUTT.

(Filed 13 May, 1931.)

Mortgages H b — Plaintiff held entitled to have order restraining foreclosure continued to hearing in order to ascertain amount of debt.

The holder of a second mortgage on lands brought action against the first mortgagee to restrain the foreclosure of the first mortgage. The court found as a fact that the second mortgagee was ready, able and willing to pay, upon assignment of the mortgage, the amount of the debt secured thereby, less interest, the second mortgagee alleging that usury had been charged thereon, C. S., 2306, the charge of usury was denied by the first mortgagee: *Held,*the second mortgagee was entitled to have the restraining order continued to the final hearing in order that the amount of the debt might be ascertained by the determination of the issue of usury.

*789Apical by defendants other than Allison *W.*Honeycutt and his wife, Mary *W.*Honeycutt, from *Schenck,*J., at Chambers in Hendersonville, N. C., on 3 January, 1931.

Affirmed.

This is an action to restrain the sale of land described in the com" plaint under the power of sale contained in a deed of trust executed by the defendants, Allison W. Honeycutt and his wife, Mary *W.*Honeycutt, to the defendants, Union Trust Company of Maryland and Insured Mortgage Bond Corporation of North Carolina, trustees, to secure their bonds for the sum of $6,000, negotiated to and now held by the defendant, Mortgage Security Corporation of America.

The plaintiff is the holder of a note executed by the defendants, Allison *~W.*Honeycutt and his wife, Mary *~W.*Honeycutt, and secured by a mortgage on the land described in the complaint. This mortgage was executed and recorded subsequent to the registration of the deed of trust, under which the land has been advertised for sale.

In his complaint plaintiff alleges that the amount now due on the principal of the bonds secured by the deed of trust, after applying all payments made thereon by the makers, is $2,568, and that he is ready, willing and able to pay said amount to the holder of said bonds, together with such sum as the defendants, other than Allison *~W.*Honeycutt and his wife, Mary *~W.*Honeycutt, have paid as taxes on the land described in the complaint, upon the assignment to him of said bonds and said deed of trust.

The plaintiff further alleges that the defendant, Mortgage Security Corporation of America, the holder of said bonds, has knowingly charged, reserved, taken and received interest on the principal of said bonds at a greater rate than six per centum per annum, and that, therefore, under the provisions of O. S., 2306, the entire interest on said bonds has been forfeited. This allegation is denied in the answer filed by the defendants other than Allison *W.*Honeycutt and his wife, Mary *W.*Honeycutt. These last named defendants have filed no answer.

The action was heard on the motion of the answering defendants that the temporary restraining order issued on the motion of the plaintiff be dissolved. This motion was denied.

From the order continuing the temporary restraining order to the final hearing, the answering defendants appealed to the Supreme Court.

*Shipman & Arledge for plaintiff.*

*Johnson, Smath&rs & Rollins for defendants.*

CoNNOs, J.

At the hearing of the motion of the answering defendants that the temporary restraining order issued in this action be dissolved, the judge found as a fact, from the admissions in the pleadings, *790that tbe aggregate amount of tbe monthly payments made by tbe defendants, Allison "W". Honeycutt and bis wife, Mary W. Honeycutt, on tbe bonds beld by tbe defendant, Mortgage Security Corporation of America, and secured by tbe deed of trust to tbe defendants, Union Trust Company of Maryland, and Insured Mortgage Bond Corporation of North Carolina, trustee, is $3,432. Tbe aggregate principal amount of these bonds was $6,000. There is no controversy, therefore, between plaintiff and tbe answering defendants, that tbe amount due on said principal is now $2,568.

Tbe judge further found as a fact that tbe fair market value of tbe land described in tbe complaint is less than tbe amount which tbe answering defendants contend is due on tbe bonds secured by tbe deed of trust, plus tbe amount due tbe plaintiff on tbe note beld by him and secured by tbe mortgage registered subsequent to tbe registration of tbe deed of trust.

Tbe judge also found as a.fact that tbe plaintiff is ready, willing and able to pay to tbe bolder of tbe bonds secured in tbe deed of trust, which has priority over tbe mortgage by which bis note is secured, tbe sum of $2,568, together with tbe sum paid by tbe defendants, other than Allison W. Honeycutt and bis wife, Mary *~W.*Honeycutt, as taxes and premiums for insurance, which sum is found to be $215.36, upon tbe assignment of said bonds and deed of trust to him.

Tbe answering defendants contended at tbe bearing before tbe judge of tbe Superior Court, and contend on their appeal to this Court, that tbe amount due on tbe bonds secured by tbe deed of trust, which has priority over tbe mortgage by which tbe note beld by tbe plaintiff is secured, is $6,000, tbe aggregate amount of said bonds, with interest at tbe rate of six per cent, less tbe aggregate sum of tbe monthly payments made on said bonds by tbe defendants, Allison *W.*Honeycutt and bis wife, Mary *W.*Honeycutt, which sum, it is admitted by said defendants, is $3,432; and that notwithstanding tbe allegation in tbe complaint that tbe bolder of said bonds has knowingly charged, reserved, taken and received interest on said bonds at a rate greater than six per cent, which allegation is denied by said defendants, tbe holder of said bonds has a prior lien on tbe land described in tbe complaint for tbe amount due thereon, enforceable against tbe plaintiff, in this action by which plaintiff seeks the equitable remedy of injunction. In support of this contention tbe said defendants cite and rely on *Waters v. Garris,*188 N. C., 305, 124 S. E., 334, in which it is said: *791granted relief and allowed to have tbe usurious charges eliminated from bis debt only upon paying or tendering tbe principal sum witb interest at tbe legal rate, tbe only forfeiture wbicb be may tbus enforce being tbe excess of tbe legal rate of interest. *Corey v. Hooker,*171 N. C., 229, 88 S. E., 236; *Owens v. Wright,*161 N. C., 127, 76 S. E., 735. Tbis ruling wbicb bas been established by an unbroken line of precedents, beginning witb *Taylor v. Smith,*9 N. C., 465, and running through a multitude of cases down to our latest decision in *Adams v. Bank,*187 N. C., 343, 121 S. E., 529, is based upon tbe principle that be who seeks equity must do equity.” " *Waters v. Garris*bas been cited and tbe principle on wbicb tbe decision in that case rests applied in *Miller v. Dunn,*188 N. C., 397, 124 S. E., 746, and in *Edwards v. Spence,*197 N. C., 495, 149 S. E., 486.

> *790“It is tbe established law of this jurisdiction that when a debtor, who has given a mortgage to secure tbe payment 'of a loan, comes into equity, seeking to restrain a threatened foreclosure under tbe power of sale in bis mortgage, as a deliverance from tbe exaction of usury; be will be

*791Plaintiff in tbis action is not tbe debtor on tbe bonds secured in tbe deed of trust; be is a junior mortgagee. As such, be is under no obligation, legal or moral, to pay tbe amount due on tbe bonds. He bas tbe right, enforceable in tbis action, to have tbe amount due on tbe bonds secured by tbe deed of trust wbicb bas priority over tbe mortgage by wbicb bis note is secured, ascertained, and definitely determined, and upon paying tbe amount so ascertained and definitely determined, to have tbe bonds and tbe deed of trust assigned to him. *Elliott v. Brady,*172 N. C., 828, 90 S. E., 951. Until this amount, wbicb is in controversy between plaintiff and tbe answering defendants, bas been ascertained and definitely determined, plaintiff is entitled to have tbe sale of tbe land described in tbe complaint, under tbe power of sale contained in tbe deed of trust, enjoined and restrained. *Parker Co. v. Bank, ante,*441, 157 S. E., 419.

Tbe plaintiff contended at tbe bearing before tbe judge of tbe Superior Court, and as appellee in tbis Court contends, that tbe amount due on tbe bonds, for which tbe answering defendants have a lien on tbe land described in tbe complaint, by virtue of tbe deed of trust, is tbe principal of said bonds, to wit, $6,000, less tbe aggregate sum of tbe monthly payments made thereon by tbe debtors, to wit, $3,432, without interest. Tbis amount, to wit, $2,568, tbe plaintiff is ready, willing and able to pay upon tbe assignment of tbe bonds and deed of trust to him. His contention is founded on tbe allegation in bis complaint, wbicb is denied in tbe answer of tbe defendants, that tbe bolder of tbe bonds bas exacted usury of tbe debtors thereon, and have thereby, under tbe provisions of C. S., 2306, forfeited tbe entire interest on tbe bonds. Tbis contention is supported by our decision in *Broadhurst v. Brooks,*184 N. C., 123, 113 S. E., 576. In that case it was held that where tbe senior mortgage is affected witb a charge of usury, tbe amount, to be paid by tbe junior mortgagee, before requiring tbe assignment of *792the debt secured by the senior mortgage to him, is the principal sum due, without interest.

There is no error in the order continuing the temporary restraining order to the final hearing, when the issue raised by the pleadings, involving the execution of usury, may be submitted to and determined by a jury.

Affirmed.