Summary
In McDougald v. Graham, 75 N.C. 316, Pearson, C. J. says: 'We conclude that by force of sale and the cancellation of the notes and title bond, the defendant became the absolute owner of the land.
Summary of this case from Arnold v. McAuliffeOpinion
June Term, 1876.
Bond to Make Title — Contract.
A. bought of B. a tract of land on time, executed his note for the purchase money and took a bond for title. Being unable to pay the purchase money as it became due, they agreed that the land should be publicly sold for cash, the proceeds of such sale to be applied in payment of the purchase money due, and the residue, if any, to be paid over to A. It was further agreed that B. should bid for the land, to prevent its selling for less than the balance due, B. at the same time informing A. that he would bid no more than said balance amounted to, and became the purchaser at that sum. The bond for title and the notes for the purchase money were canceled. Shortly afterwards B. sold the land at an advance of $500. In an action by A. to recover of B. the amount so realized: It was held, that there being no allegation of fraud, the plaintiff A. was not entitled to recover.
APPEAL, by plaintiff from Henry, J., at Spring Term, 1876, of McDOWELL.
Plaintiffs bought of defendant a tract of land on time, executed notes for the purchase money, and took bond for title. Plaintiffs, after paying considerable part of the purchase money, were unable to pay the balance; whereupon it was agreed that the land should be sold at auction for cash, the proceeds of sale to be applied, first to the payment of the unsatisfied part of the purchase money, and the residue, if any, to be retained by the plaintiffs. According to this arrangement (311) the plaintiffs advertised the sale at auction, and the land was sold and bought by defendant, at a bid just equal to the amount due for the purchase money. It was understood that the defendant was to bid, so as to keep the land from going at a less sum than the balance due, but he told the plaintiffs he would not run the land up any higher. Accordingly the defendant became the purchaser at a bid amounting to the balance of the purchase money. The bond for title and the notes given by plaintiffs for the purchase money were canceled. A short time afterwards the defendant sold the land at an advance of some $500.
This action is to recover that sum of money "had and received" for the plaintiffs — or on any other ground, legal or equitable — that will sustain the action.
Busbee Busbee for plaintiffs.
Walter Clark for defendants.
delivering the opinion of the Court, after stating the case as above, proceeds:
After giving to the very learned argument of the plaintiffs' counsel due consideration, we are unable to see any ground on which the action can be sustained.
1. Had the defendant, after he had sold the land at an advance on his bid, expressly assumed to pay the amount of the sum received in advance to the plaintiffs, possibly this promise might be taken out of the rule nudum pactum upon the idea of a moral obligation, as where one promises to pay a debt barred by statute of limitations, by reason of the fact that the defendant had been paid a considerable part of the purchase money.
But there is no obligation of any such promise, and this novel question is not presented.
2. There is no allegation of fraud; on the contrary, the defendant, throughout the whole transaction, both by himself and his agent, acted fairly, openly and above board. True, it would have been more liberal to have consented to a sale on credit instead of insisting upon a sale for cash, but he was not obliged to do so by any rule of law or equity, and as the plaintiffs were in default by not paying as they were bound to do, he had a right to require a sale for cash.
3. Mr. Folk took the position that by the contract of sale before the payment of the purchase money the plaintiffs acquired an equitable estate, and the defendant held the land in trust to secure the purchase money and then as a trustee for the plaintiffs. There (316) can be no doubt as to the correctness of this position. He then insisted that the relation of trustee and cestuis que trust being established, the court will scrutinize very closely any dealing between the parties in regard to the trust fund. There can be no doubt as to the correctness of this doctrine, but the defendant has submitted to this scrutiny, and it is proved that he used no undue influence, but without making any delusory promises simply urged the right to have his money.
4. It is claimed that defendant, being a trustee, had no right to buy at his own sale, and will be held to have bought in the land for the benefit of the trust fund. In the first place this was not a sale made by the defendant, but was made by the plaintiffs, with his concurrence, and in the second place it was agreed that he might bid to prevent the land from going at less than his debt, and he expressly refused to agree to run the land up any higher; he complied literally with this arrangement, and it was the plaintiff's misfortune that no other person was prepared to bid more, according to the terms of the sale, which had been fully advertised by the plaintiffs, whose interest it was to make the land bring more if they could. So it comes back to the complaint that the defendant was not liberal enough to allow the sale to be made on credit.
5. It is insisted that as plaintiffs had an equitable estate in the land, the agreement to let it be sold was not binding under the statute of frauds, because not in writing.
We are inclined to the opinion that so long as this agreement was executory, to wit, at any time before the land was actually sold and the agreement had been executed by a surrender and cancellation of the title bond and notes given for the purchase money, the plaintiffs might have refused to allow the sale to be made, but it is too late to fall back on the statute of frauds after the agreement is executed and the equitable estate of the plaintiffs had been extinguished.
We conclude that by force of sale and the cancellation of the notes and title bond the defendant became the absolute owner of the land, and was well entitled to sell it for his own benefit, and was under no liability to account to the plaintiffs for the sum he received in advance of his bid.
PER CURIAM. Affirmed.
Cited: Tucker v. Baker, 86 N.C. 3; Conley v. R. R., 109 N.C. 696; Taylor v. Taylor, 112 N.C. 31; Gorrell v. Alspaugh, 120 N.C. 368.