Bolich v. Prudential Insurance Co. of America

BeogkdeN, J.

Does the depression or unprecedented scarcity of money for ordinary transactions or enforced stagnation of the real estate market constitute an equity sufficient to warrant a court in restraining the exercise of the power of sale in a .deed of trust ?

The power of a court of equity to restrain sales of real estate made in pursuance of the terms of a mortgage or deed of trust is undoubted, and the decisions of this Court disclose that the restraining power of equity in proper cases has been frequently exercised. However, the exercise of the beneficent powers of equity has usually been based upon allegations of fraud, restraint, oppression, usury, mistake or other facts disclosing unconscionable advantage. Unless such elements are alleged, the courts have refused to ,stay the exercise of the power of sale in a mortgage or deed of trust when all the necessary requisites of a valid sale have been observed and pursued.

Lumber Co. v. Conrades, 195 N. C., ,626, 143 S. E., 138 . It does not appear that this Court has heretofore discussed the particular question involved in this appeal. However, there are some old cases in other jurisdictions directly in point. For example, in 1871, the Virginia Court considered the question in Muller v. Bayly, 62 Va., 521 . The Court said: “Then, what other ground of equity is there in the bill? Only the allegations that the time is unpropitious for a sale or was when the bill was filed; that money was scarce, and that owing to the large amount of the cash payment required, the sale, if made as advertised by the trustee Bayly, would be attended with great if not irreparable loss and injury to the wife and her children. Certainly these allegations can afford no just *792 ground for enjoining tbe sale.” To tbe same effect is tbe declaration in Lipscomb v. N. T. Life Ins. Co., 39 S. W., 465 . Tbe Court says: “However strongly our sympathies may be enlisted for tbe unfortunate victim of bard times, tbey cannot furnish a basis for equity jurisdiction; and such courts cannot and ought not to be made tbe instruments of speculation in tbe future values of property even for tbe benefit of tbe unfortunate.” See, also, Dunn v. McCoy, 52 S.

W., 21 ;

Muller's Admr. v. Stone, 6 S. E., 223 , 84 Va., 834 ;

Floors v. Morgan, 175 S.

W., 727, 41 C. J., 931, section 1353, 19 R. C. L., 618, section 434; Pomeroy, Vol. 4, p. 4041.

Perhaps no court is wise enough to declare with absolute finality that no economic or financial stringency or distress would warrant tbe intervention of equitable principles in restraining tbe power of sale in instruments securing debts, but certainly tbe mere allegations of general depression before tbe property has been sold and an unconscionable purchase price established, has not heretofore been deemed adequate to invoke equitable power.

It is contended that as tbe Bolieh Holding Company has been placed in tbe bands of a receiver that tbe property is in custodia legis, and, therefore, subject to tbe control and discretion of tbe court. However, it has been decided in Pelletier v. Lumber Co., 123 N. C., 596 , 30 S. E., 855 -1002, that even if property is in custodia legis, a court of equity has power to order a sale in its discretion for tbe reason “a court of equity is not required to retain possession of property when it would be inequitable to do so.” Consequently tbe vacating of an injunction restraining tbe sale is equivalent to leave to proceed in tbe exercise of tbe power.

Affirmed.