{ "id": 8519643, "name": "IN RE: FORECLOSURE OF A DEED OF TRUST GIVEN BY BILL M. TAYLOR AND WIFE, LINDA B. TAYLOR TO J. KENYON WILSON, JR., TRUSTEE, DATED JUNE 4, 1976, RECORDED IN BOOK 372, PAGE 186, PASQUOTANK COUNTY REGISTRY, BY G. ELVIN SMALL, III, SUBSTITUTE TRUSTEE", "name_abbreviation": "In re Foreclosure of a Deed of Trust Given by Taylor", "decision_date": "1982-12-21", "docket_number": "No. 811SC1309", "first_page": "134", "last_page": "139", "citations": [ { "type": "official", "cite": "60 N.C. App. 134" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "651 F. 2d 910", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1245245 ], "year": 1981, "pin_cites": [ { "page": "918" } ], "opinion_index": 0, "case_paths": [ "/f2d/651/0910-01" ] }, { "cite": "553 P. 2d 1090", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1976, "pin_cites": [ { "page": "1091", "parenthetical": "installment sales contract was an \"inter vivos transfer\" within meaning of mortgage clause prohibiting such without written consent of mortgagee" } ], "opinion_index": 0 }, { "cite": "87 Wash. 2d 437", "category": "reporters:state", "reporter": "Wash. 2d", "case_ids": [ 1113748 ], "year": 1976, "pin_cites": [ { "page": "439", "parenthetical": "installment sales contract was an \"inter vivos transfer\" within meaning of mortgage clause prohibiting such without written consent of mortgagee" } ], "opinion_index": 0, "case_paths": [ "/wash-2d/87/0437-01" ] }, { "cite": "116 Cal. Rptr. 633", "category": "reporters:state", "reporter": "Cal. Rptr.", "year": 1974, "pin_cites": [ { "page": "637-38", "parenthetical": "one who executes an installment land sales contract conveys \"an interest in the property - to wit, his equitable interest\"" } ], "opinion_index": 0 }, { "cite": "526 P. 2d 1169", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1974, "pin_cites": [ { "page": "1173-74", "parenthetical": "one who executes an installment land sales contract conveys \"an interest in the property - to wit, his equitable interest\"" } ], "opinion_index": 0 }, { "cite": "12 Cal. 3d 629", "category": "reporters:state", "reporter": "Cal. 3d", "case_ids": [ 2315606 ], "year": 1974, "pin_cites": [ { "page": "637", "parenthetical": "one who executes an installment land sales contract conveys \"an interest in the property - to wit, his equitable interest\"" } ], "opinion_index": 0, "case_paths": [ "/cal-3d/12/0629-01" ] }, { "cite": "364 A. 2d 558", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1976, "pin_cites": [ { "page": "563" } ], "opinion_index": 0 }, { "cite": "144 N.J. Super. 48", "category": "reporters:state", "reporter": "N.J. Super.", "case_ids": [ 864668 ], "year": 1976, "pin_cites": [ { "page": "57" } ], "opinion_index": 0, "case_paths": [ "/nj-super/144/0048-01" ] }, { "cite": "631 P. 2d 1158", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 10441479 ], "year": 1981, "pin_cites": [ { "page": "1160" } ], "opinion_index": 0, "case_paths": [ "/p2d/631/1158-01" ] }, { "cite": "58 Wis. 2d 99", "category": "reporters:state", "reporter": "Wis. 2d", "case_ids": [ 8669061 ], "weight": 2, "year": 1973, "pin_cites": [ { "page": "105" }, { "page": "766" } ], "opinion_index": 0, "case_paths": [ "/wis-2d/58/0099-01" ] }, { "cite": "604 P. 2d 504", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1979, "pin_cites": [ { "page": "506" } ], "opinion_index": 0 }, { "cite": "24 Wash. App. 652", "category": "reporters:state", "reporter": "Wash. App.", "case_ids": [ 459203 ], "year": 1979, "pin_cites": [ { "page": "654" } ], "opinion_index": 0, "case_paths": [ "/wash-app/24/0652-01" ] }, { "cite": "14 S.E. 2d 653", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1941, "opinion_index": 0 }, { "cite": "219 N.C. 636", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625835 ], "year": 1941, "opinion_index": 0, "case_paths": [ "/nc/219/0636-01" ] }, { "cite": "98 S.E. 2d 481", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1957, "pin_cites": [ { "page": "484" } ], "opinion_index": 0 }, { "cite": "246 N.C. 356", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626440 ], "year": 1957, "pin_cites": [ { "page": "358-59" } ], "opinion_index": 0, "case_paths": [ "/nc/246/0356-01" ] }, { "cite": "155 S.E. 2d 532", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1967, "pin_cites": [ { "page": "539" }, { "page": "539" } ], "opinion_index": 0 }, { "cite": "271 N.C. 65", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562459 ], "year": 1967, "pin_cites": [ { "page": "70" } ], "opinion_index": 0, "case_paths": [ "/nc/271/0065-01" ] }, { "cite": "117 S.E. 625", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1923, "pin_cites": [ { "page": "627" } ], "opinion_index": 0 }, { "cite": "185 N.C. 518", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656635 ], "year": 1923, "pin_cites": [ { "page": "550-51" } ], "opinion_index": 0, "case_paths": [ "/nc/185/0518-01" ] }, { "cite": "69 S.E. 2d 557", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1952, "opinion_index": 0 }, { "cite": "235 N.C. 244", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8622809 ], "year": 1952, "opinion_index": 0, "case_paths": [ "/nc/235/0244-01" ] }, { "cite": "224 S.E. 2d 580", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "pin_cites": [ { "parenthetical": "commercial property" } ], "opinion_index": 0 }, { "cite": "289 N.C. 620", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8572567 ], "year": 1976, "pin_cites": [ { "parenthetical": "commercial property" } ], "opinion_index": 0, "case_paths": [ "/nc/289/0620-01" ] }, { "cite": "293 S.E. 2d 798", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "pin_cites": [ { "parenthetical": "residential property" } ], "opinion_index": 0 }, { "cite": "306 N.C. 451", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571154 ], "year": 1982, "pin_cites": [ { "parenthetical": "residential property" } ], "opinion_index": 0, "case_paths": [ "/nc/306/0451-01" ] } ], "analysis": { "cardinality": 627, "char_count": 10998, "ocr_confidence": 0.803, "pagerank": { "raw": 1.2970262896279165e-07, "percentile": 0.6212900829353372 }, "sha256": "c0fad300f62bc332b6f9bf370680ad93297182b5d56c4e1cd8d7b10ed4e6ca30", "simhash": "1:c9e6bd61756eb8d4", "word_count": 1757 }, "last_updated": "2023-07-14T17:52:46.639047+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Martin (Robert M.) and Arnold concur." ], "parties": [ "IN RE: FORECLOSURE OF A DEED OF TRUST GIVEN BY BILL M. TAYLOR AND WIFE, LINDA B. TAYLOR TO J. KENYON WILSON, JR., TRUSTEE, DATED JUNE 4, 1976, RECORDED IN BOOK 372, PAGE 186, PASQUOTANK COUNTY REGISTRY, BY G. ELVIN SMALL, III, SUBSTITUTE TRUSTEE" ], "opinions": [ { "text": "WHICHARD, Judge.\nI.\nWhere the language of a promissory note and deed of trust clearly bestows such a right, a savings and loan may demand full and present payment of the balance of a loan, secured by a deed of trust upon real property, if the borrowers breach their covenant not to convey the security property without the lender\u2019s consent; and if the borrowers fail to comply with the demand for payment, the lender may institute foreclosure proceedings upon the security property. In re Foreclosure of Bonder, 306 N.C. 451, 293 S.E. 2d 798 (1982) (residential property); Crockett v. Savings & Loan Assoc., 289 N.C. 620, 224 S.E. 2d 580 (1976) (commercial property).\nThe issue here is whether a contract for sale, on an installment payment basis, of real property subject to a deed of trust, constitutes a \u201cconveyance\u201d which triggers operation of a due-on-sale clause. We hold that it does.\nII.\nPetitioner, Albemarle Savings and Loan Association, loaned respondents money with which to purchase real property. The debt was secured by a combined note and deed of trust which contained a \u201cdue-on-sale\u201d clause providing that \u201cupon any conveyance of the property . . . without the prior consent of the Association . . . the holder of this note may exercise the option of treating the remainder of the debt as immediately due and collectible.\u201d The instrument further provided that if respondents failed to perform any of the obligations imposed thereunder, petitioner could treat all sums owed as due and collectible; and on non-payment thereof, followed by petitioner\u2019s request, the trustee would have the right and duty to foreclose on the security property.\nRespondents thereafter, without petitioner\u2019s prior consent, executed an instrument captioned \u201ccontract of sale,\u201d the subject of which, in part, was the property which secured respondents\u2019 note and deed of trust to petitioner. The instrument described respondents as \u201cSeller\u201d and provided that \u201cSeller hereby sells and agrees to convey\u201d the subject property. The purchaser was to pay a portion of the purchase price upon execution of the contract and a further portion on or before the first day of the following year. It was to pay the balance in monthly installments which precisely equalled the monthly payments on respondents\u2019 note and deed of trust with petitioner. It could pay these installments either to respondents or directly to petitioner.\nThe instrument further provided that the purchaser would thereafter pay all taxes and assessments on the property, and would keep the property insured and pay the premiums. It granted the purchaser entitlement to immediate possession of the property, to be retained absent default in its terms and conditions. It provided that respondents would be responsible for a realtor\u2019s commission upon execution of the contract. Upon completion of the payments and performance of the other contract conditions, respondents were to convey the subject property to the purchaser free of encumbrances.\nThis \u201ccontract of sale\u201d was recorded with the Register of Deeds of Pasquotank County. Petitioner learned of the contract and notified respondents that it was exercising its right to accelerate payment of the balance due on their obligation. Upon respondents\u2019 failure to pay the balance due or to modify the provisions of the note and deed of trust, petitioner instituted foreclosure proceedings.\nFrom an order authorizing foreclosure, respondents appeal.\nIII.\nThe validity of the due-on-sale clause is established by Bonder and Crockett, supra, and respondents do not assert otherwise. They contend, rather, that the installment sales contract was not a \u201cconveyance\u201d within the meaning of that term as used in the controlling instrument, and that it thus did not trigger petitioner\u2019s right to accelerate the debt. The basis of their contention is that they made only an executory promise to convey, not an actual transfer of legal title.\nIV.\nRespondents\u2019 contention regards form over substance. The transaction clearly granted the purchaser all the benefits and responsibilities of ownership. The instrument expressly stated that respondents were \u201csell[ing] and agreeing] to convey.\u201d The payment arrangement was the evident equivalent of payment to respondents\u2019 for their equity and assumption of their indebtedness. The purchaser became responsible for taxes, assessments, and insurance. Immediate possession went to the purchaser. Respondents became liable for payment of a realtor\u2019s commission upon execution of the contract, not upon subsequent execution of the deed. The evident substance of the transaction, then, was a completed conveyance of all equitable interest in the security property, leaving only the formality of a subsequent transfer by deed of the legal title.\nV.\nThe vendee in an executory contract for the sale of land holds an equitable interest therein. See Scott v. Jordan, 235 N.C. 244, 69 S.E. 2d 557 (1952). Absent inability of the vendor to convey, or express stipulation to the contrary, the risk of loss of property subject to such a contract falls on the vendee, who is treated as the equitable owner. See Warehouse Co. v. Warehouse Corp., 185 N.C. 518, 550-51, 117 S.E. 625, 627 (1923); Webster\u2019s Real Estate Law in North Carolina \u00a7 151 (Hetrick rev. ed. 1981). See also G.S. 39-39(2). The relation between vendor and vendee in an executory contract for sale of land is legally analogous to, and follows the same general rules as, the relation between mortgagee and mortgagor. Brannock v. Fletcher, 271 N.C. 65, 70, 155 S.E. 2d 532, 539 (1967). \u201cAs between the parties, the vendor may be considered a mortgagee and the vendee a mortgagor.\u201d Id. at 71, 155 S.E. 2d at 539. A mortgagee holds legal title, but only as security for the debt. Gregg v. Williamson, 246 N.C. 356, 358-59, 98 S.E. 2d 481, 484 (1957). The mortgagor holds beneficial title in the equity of redemption which, absent provision to the contrary, he may freely transfer. See Pearce v. Watkins, 219 N.C. 636, 14 S.E. 2d 653 (1941); Webster\u2019s, supra, \u00a7 267.\nPursuant to the foregoing principles, the \u201ccontract of sale\u201d here fully transferred to the purchaser the equitable interest in the property which secured petitioner\u2019s loan to respondents.\nVI.\nIn Terry v. Born, 24 Wash. App. 652, 654, 604 P. 2d 504, 506 (1979), the court stated: \u201cAlthough the term \u2018conveyance\u2019 in a strict legal sense means a transfer of legal title to land ... it also denotes any transfer of title, legal or equitable. [Citation omitted.] We hold that the challenged transfer of the equitable interest. . . was a \u2018conveyance.\u2019 \u201d\nIn Mutual Federal Savings & Loan Association v. Wisconsin Wire Works, 58 Wis. 2d 99, 105, 205 N.W. 2d 762, 766 (1973), the court stated:\nThe term \u201cconvey\u201d applies to any transfer of title to the mortgaged property whether legal or equitable. By the execution of a land contract which conveyed equitable title . . . [the grantor] conveyed away the mortgaged premises. The contractual term is not ambiguous. In the parlance of both laymen and lawyers, a land contract is a conveyance.\nIn Krause v. Columbia Savings and Loan Association, \u2014 Colo. App. ---, ---, 631 P. 2d 1158, 1160 (1981), we find:\nAlthough an installment sale may take a different form and more time to complete than an outright sale, the difference is one of procedure and not substance. It is a \u201csale or transfer of the real property\u201d for purposes of the due on sale clause in the deed of trust.\nIn Century Federal Savings & Loan Association v. Van Glahn, 144 N.J. Super. 48, 57, 364 A. 2d 558, 563 (1976), the court held that \u201ca long-term contract which transfers equitable title is a \u2018change of ownership\u2019 sufficient to invoke [an] acceleration clause.\u201d See also Tucker v. Lassen Savings and Loan Association, 12 Cal. 3d 629, 637, 526 P. 2d 1169, 1173-74, 116 Cal. Rptr. 633, 637-38 (1974) (one who executes an installment land sales contract conveys \u201can interest in the property \u2014 to wit, his equitable interest\u201d); Bellingham First Federal Savings & Loan Association v. Garrison, 87 Wash. 2d 437, 439, 553 P. 2d 1090, 1091 (1976) (installment sales contract was an \u201cinter vivos transfer\u201d within meaning of mortgage clause prohibiting such without written consent of mortgagee); Black\u2019s Law Dictionary 301 (5th ed.) (\u201cconveyance\u201d includes \u201c[a]n instrument by which some estate or interest in lands is transferred from one person to another\u201d) (emphasis supplied).\nVII.\nWe concur in the foregoing reasoning. The transaction here was a transparent subterfuge designed to circumvent Crockett and Bonder. To permit it to nullify application of petitioner\u2019s due-on-sale clause would be altogether inconsistent with those decisions. As stated in Williams v. First Federal Savings & Loan Association, Etc., 651 F. 2d 910, 918 (4th Cir. 1981):\nThere can be no doubt that, had a customary real estate deed been employed to accomplish directly the essentially identical result . . . , the due-on-sale clause would have been triggered. If one travels by by-roads rather than use an interstate highway, but ends up at the same destination, the journey has nonetheless taken place.\nVIII.\nWe hold that the installment contract for sale of the security property transferred equitable title therein to the purchaser and constituted a \u201cconveyance\u201d within the meaning and intent of that term as used in petitioner\u2019s due-on-sale clause. Petitioner thus was entitled to accelerate the balance of respondents\u2019 debt when respondents entered the contract without petitioner\u2019s prior consent; and on non-payment of the sum then due, petitioner was entitled to foreclose on the security property.\nThe order authorizing foreclosure is therefore\nAffirmed.\nJudges Martin (Robert M.) and Arnold concur.", "type": "majority", "author": "WHICHARD, Judge." } ], "attorneys": [ "Wilson & Ellis, by M. H. Hood Ellis and David W. Boone, for petitioner appellee.", "LeRoy, Wells, Shaw, Homthal & Riley, by Mark M. Maland, for respondent appellants.", "Brooks, Pierce, McLendon, Humphrey & Leonard, by L. P. McLendon, Jr., Edward C. Winslow, III, and Randall A. Underwood, for North Carolina Savings and Loan League, amicus curiae." ], "corrections": "", "head_matter": "IN RE: FORECLOSURE OF A DEED OF TRUST GIVEN BY BILL M. TAYLOR AND WIFE, LINDA B. TAYLOR TO J. KENYON WILSON, JR., TRUSTEE, DATED JUNE 4, 1976, RECORDED IN BOOK 372, PAGE 186, PASQUOTANK COUNTY REGISTRY, BY G. ELVIN SMALL, III, SUBSTITUTE TRUSTEE\nNo. 811SC1309\n(Filed 21 December 1982)\nMortgages and Deeds of Trust \u00a7 15\u2014 installment contract for sale of security property \u2014 conveyance within meaning of due-on-sale clause\nA contract for the sale, on an installment payment basis, of real property subject to a deed of trust transferred equitable title to the purchaser and constituted a \u201cconveyance\u201d which triggered the operation of a due-on-sale clause in the note and deed of trust.\nAppeal by respondents from Small, Judge. Order filed 2 October 1981 in Superior Court, PASQUOTANK County. Heard in the Court of Appeals 17 September 1982.\nRespondents appeal from an order authorizing foreclosure of a deed of trust.\nWilson & Ellis, by M. H. Hood Ellis and David W. Boone, for petitioner appellee.\nLeRoy, Wells, Shaw, Homthal & Riley, by Mark M. Maland, for respondent appellants.\nBrooks, Pierce, McLendon, Humphrey & Leonard, by L. P. McLendon, Jr., Edward C. Winslow, III, and Randall A. Underwood, for North Carolina Savings and Loan League, amicus curiae." }, "file_name": "0134-01", "first_page_order": 166, "last_page_order": 171 }