Case Name: GURNEY P. HOOD, North Carolina COMMISSIONER of Banks, ex rel. THE MERCHANTS BANK OF DURHAM, N. C., v. JAMES H. COLLINS, JR., and Wife, CAROLINE FULLER COLLINS
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1935-06-26
Citations: 208 N.C. 326
Docket Number: 
Parties: GURNEY P. HOOD, North Carolina COMMISSIONER of Banks, ex rel. THE MERCHANTS BANK OF DURHAM, N. C., v. JAMES H. COLLINS, JR., and Wife, CAROLINE FULLER COLLINS.
Judges: 
Reporter: North Carolina Reports
Volume: 208
Pages: 326–328

Head Matter:
GURNEY P. HOOD, North Carolina COMMISSIONER of Banks, ex rel. THE MERCHANTS BANK OF DURHAM, N. C., v. JAMES H. COLLINS, JR., and Wife, CAROLINE FULLER COLLINS.
(Filed 26 June, 1935.)
Indemnity B a. — Under facts of this case, suffering of loss by party indemnified held not prerequisite to action by assignee against security.
The makers of notes executed a deed of trust to secure the endorser on the note from any loss resulting from the endorsement, but the deed of trust recited that it was given to secure payment of principal and interest on the notes, and provided that upon default in the payment of any of the notes, all tlie notes should become due and payable, and that the trustee should foreclose upon demand of the cestui qui trust or the holder of the notes. The endorser assigned the note to the payee bank in consideration of the bank’s releasing him of liability on the endorsement. Upon default in payment of the note the deed of trust was foreclosed, the property bought in by the bank, and a purchaser from the bank secured, who refused to accept deed on the ground that the foreclosure was void because no loss had been suffered by the endorser, the beneficiary in the deed of trust. Held: The suffering of loss was not a prerequisite to foreclosure of the deed of trust by the assignee bank, since from the provisions of the deed of trust it was intended to secure the entire debt as well as to save the endorser from loss, and since the bank assignee for value held same as security for the debt, and had the right to foreclosure upon default.
Civil ACTION, before Harris, J., at April-May Term, 1935, of DURHAM.
A jury trial was waived and tbe trial judge found tbe facts. From sucb findings it appears that on 9 March, 1930, Clyde D. Tickers and wife executed and delivered to tbe Merchants Bank of Durham, N. C., two promissory notes aggregating $5,448.14. Both of these notes were endorsed by Claude T. Tickers. Thereafter, on 21 March, 1930, the said Clyde D. Tickers and wife made and executed a deed of trust to L. P. McLendon, trustee. This deed of trust recites that “whereas, said parties of the first part desire to secure and provide for the payment of said notes at their maturity, and to also provide for the prompt payment of interest thereon, as it matures according to the tenor of said notes.” Said deed of trust further provides that “said parties of the first part are justly indebted to said party of the third part in the sum of $5,448.14.” It was further provided: “But if default be made in the payment of any of said notes, or any part thereof, . . . then and in any such case all of said notes shall immediately mature and fall due and become collectible, anything herein or in said notes to the contrary notwithstanding. Said party of the second part shall, upon being so requested to do by said party of the third part, or holder of said notes, sell any or all of said land at public auction, for cash, . . . and convey the land so sold to the purchaser in fee.” In said deed of trust Claude T. Tickers was named as party of the third part, and it was stipulated therein that “this deed of trust being given to secure Claude T. Tickers by reason of his endorsement of said notes, and any renewal or extension of them, or either of them.” Claude T. Tickers assigned and delivered the deed of trust to the Merchants Bank in consideration of the promise on the part of the bank to release him from all liability on account of his said endorsement. Claude T. Tickers never paid anything on said notes on account of his endorsement, and has in no respect been damaged as a result thereof. There was default in tbe payment of tbe note, and L. P. McLendon, trustee, upon demand of tbe plaintiff, bolder of tbe notes, duly advertised and sold tbe property under a power of sale contained in tbe instrument, and at sucb sale Gurney P. Hood, Commissioner of Bants, became tbe purchaser of a portion of tbe property in controversy at tbe price of $4,000. Thereafter, on or about 30 March, 1935, tbe Commissioner of Banks offered to sell a portion of tbe property to tbe defendants for tbe sum of $1,500. Tbe defendants were willing to pay $1,500 for tbe property, but refused to accept tbe deed tendered by tbe plaintiff upon tbe ground that tbe plaintiff could not convey a good title by reason of tbe fact that tbe deed of trust was given to secure tbe endorsement of Claude T. Tickers, and that as Claude T. Vickers bad suffered no loss, tbe sale by tbe trustee was invalid.
Upon tbe facts found tbe trial judge was of tbe opinion that a sale of tbe land by McLendon, trustee, and tbe purchase thereof by tbe plaintiff was in all respects legal and valid, and that tbe deed tendered by plaintiff to tbe defendants would convey a good and marketable title to tbe land described in sucb deed.
From tbe foregoing judgment tbe defendants appealed.
Brawley & Gantt' for plaintiff.
Fuller, Beade & Fuller and F. G. Owen for defendants.

Opinion:
BhogtoeN, J".
Tbe defendants rely upon an intimation contained in tbe case of Brower v. Buxton, 101 N. C., 419, 8 S. E., 116, as authority for tbe position that tbe trustee bad no power to make a valid sale of tbe land by reason of tbe fact that tbe endorser bad suffered no loss. Even if it be granted that tbe intimation is sound law, tbe facts in tbe case at bar distinguish it from tbe Buxton case, supra. An examination of tbe provisions and stipulations in tbe deed of trust carry tbe conviction that tbe instrument was intended to secure tbe entire debt as well as to save tbe endorser from loss. Moreover, when tbe endorser for valuable consideration assigned and delivered tbe deed of trust to tbe Merchants Bank, it thereupon held tbe same as security for tbe debt, and bad tbe right, in tbe event of default, to require a sale of tbe property. Tbe sale was properly and regularly made, and thereby invested tbe plaintiff as Commissioner of Banks with a valid title to tbe property. Therefore, it necessarily follows that tbe deed tendered by tbe plaintiff to tbe defendants will convey a valid and marketable title.
Hence, tbe judgment is approved.
Affirmed.