Case Name: A. V. JONES and Wife, ALETHIA JONES, v. R. J. STEWART
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1937-10-13
Citations: 212 N.C. 228
Docket Number: 
Parties: A. V. JONES and Wife, ALETHIA JONES, v. R. J. STEWART.
Judges: 
Reporter: North Carolina Reports
Volume: 212
Pages: 228–230

Head Matter:
A. V. JONES and Wife, ALETHIA JONES, v. R. J. STEWART.
(Filed 13 October, 1937.)
Equity § 2 — Plaintiffs held estopped by laches from attacking foreclosure for misrepresentations when facts had been of record for six years.
Defendant, the last and highest bidder at a judicial sale, had his bid transferred to plaintiffs, as shown by the commissioner’s records, and the commissioner executed deed to plaintiffs subject to a prior mortgage, which deed was registered but not delivered. Defendant paid the commissioner the amount of the bid, less the amount of the encumbrance. Plaintiffs, who had agreed to buy the land from defendant at a stipulated price, part in cash, were unable to make the cash payment, and in lieu thereof executed a deed of trust on the tract conveyed and on other lands of plaintiffs, to secure the entire purchase price. Plaintiffs alleged that defendant represented he owned the fee simple unencumbered title to the lands, but that soon after the transaction they received notice of interest due from the prior mortgagor, that they paid interest to the prior mortgagor upon defendant’s statement that he would credit them with the amounts paid. Default having been made on defendant’s deed of trust, he had the trustee foreclose, and bid in the entire property at the sale. This action was instituted some three years after foreclosure and some six years after the execution of the commissioner’s deed, plaintiffs contending that they did not see the commissioner’s deed until the institution of the action, and that they had been damaged by defendant’s fraudulent misrepresentations. Held: The circumstances under which the com missioner’s deed was executed does not invalidate the deed of trust executed by plaintiffs, and plaintiffs are estopped by tbeir laches from maintaining this action, the facts being of record and ascertainable by plaintiffs upon the exercise of due diligence.
Appeal by plaintiffs from Grady, J., at May Term, 1937, of WabebN.
Affirmed.
This is a civil action, instituted by the plaintiffs to invalidate a trust deed executed by them to T. S. Kittrell, trustee, securing a note in the sum of $1,900, payable to the defendant; for the recovery of certain sums expended upon a first mortgage on the lands in controversy and for taxes; and to recover damages. Defendant’s motion to dismiss as of nonsuit at the conclusion of all the evidence was allowed and the plaintiffs excepted and appealed.
John Kerr, Jr., and W. H. Yarborough for plaintiffs, appellants.
Julius Banzet and Frank Banzet for defendant, appellee.

Opinion:
BabNhill, J.
In 1929 the administratrix of Charles Jones, deceased, instituted a special proceeding against his heirs to sell land to make assets. An order was entered, appointing T. S. Kittrell commissioner, and directing that the land be sold at public auction for cash. At the sale the defendant E. J. Stewart became the last and highest bidder in the sum of $1,000. The defendant entered into negotiations with the plaintiffs to purchase said land, allegedly representing that he was the owner thereof in fee and that the land was free and clear of any encumbrance. The plaintiffs agreed to purchase the lands for $1,900, to be paid $300.00 in cash and the balance in installments. Thereupon, the defendant assigned his bid to the plaintiffs and the commissioner reported the sale and the transfer of bid and the same was duly confirmed. The report of sale, the written transfer of bid, and the decree of confirmation all appear on the same sheet of paper. Shortly thereafter the plaintiffs and the defendant met in the office of the commissioner to close the deal. It then appeared that the plaintiffs were not in a position to pay the $300.00' cash as agreed. In lieu of the cash payment the defendant agreed to permit the plaintiffs to include a 12%-acre tract of land then owned by them in the deed of trust as additional security for the purchase price. The commissioner's deed was filed for recordation, either by the commissioner or the defendant, but was not delivered to the plaintiffs, and they did not see it until the day of the trial. The commissioner, instead of collecting the purchase price in full, made the deed subject to a then outstanding Land Bank mortgage and the defendant paid the difference.
In December, 1929, the plaintiffs received notice of semiannual installment due the Federal Land Bank, and they paid amounts on the Land Bank mortgage on several occasions thereafter. Upon receiving a notice from tbe Land Bank, tbe plaintiffs saw tbe defendant and called his' attention to bis representation tbat be was tbe owner of tbe land in fee, free of encumbrance. Tbe defendant thereupon instructed tbe plaintiffs to pay tbe Land Bank installments and be would credit such payments on tbe installments due him, and tbe plaintiffs did make payments through December, 1932, but paid tbe defendant nothing. Tbe plaintiffs surrendered tbe land in December, 1932; tbe deed of trust was foreclosed in May, 1932, and tbe defendant became tbe purchaser of both tracts. This suit was instituted 27 August, 1935.
Tbe mere statement of the pertinent facts discloses tbat tbe plaintiffs discovered tbe falsity of tbe alleged representations made by tbe defendant to induce them to purchase tbe land and to execute a mortgage almost six years prior to tbe institution of this suit, and tbat they waited more than three years after' tbe foreclosure of tbe deed of trust before taking action. It may be tbat tbe economic conditions existing at tbat time led tbe plaintiffs to believe tbat in no event did they have any real financial interest in tbe property. Whatever may have been tbe moving cause of their delay, it appears from this record tbat tbe plaintiffs' own negligence and lack of diligence has caused them to lose any rights they may have bad in tbe premises. One whose laches is so pronounced cannot successfully seek relief in a court of equity, whatever bis original rights may have been.
In tbe argument here counsel for tbe plaintiffs stressed tbe evidence tending to show tbe circumstances under which tbe commissioner's deed was executed. Even should it be conceded tbat this testimony tends to establish a fraud upon tbe court, it is to be doubted tbat tbe purchaser could take advantage of it. Certainly tbe contention tbat these circumstances invalidates tbe trust deed executed by tbe plaintiffs is not available to tbe plaintiffs. While they did not originally receive tbe deed, it was on record and tbe plaintiffs could have discovered, by tbe exercise of ordinary diligence, tbe full circumstances of tbe sale. They let more than six years elapse before discovering tbe provisions of tbe special proceedings and tbe deed, never having gone to tbe register's office for tbat purpose. They ascertained, tbe truth only when tbe deed was offered in evidence by tbe defendant. Nor are any facts in relation to tbe circumstances surrounding the sale of the land pleaded in the complaint.
It is unfortunate tbat tbe plaintiffs were unable to pay for tbe land purchased, and tbat in attempting to acquire more property they lost tbat which they already bad. This is -but a casualty of tbe adverse economic conditions then existing and tbe laches of tbe plaintiffs themselves. They have slept upon their rights. Tbe judgment below is
Affirmed.