{
  "id": 8357915,
  "name": "MARION BASCUM MERRITT, FRANCES M. SMITH, HENRY C. MERRITT, ELEANOR M. JORDAN and HENRY C. SMITH in his capacity as Guardian for WILLIAM P. MERRITT v. EDWARDS RIDGE, A General Partnership, JOHN W. COFFEY, PHILIP E. WALKER and PAMELA A. McCULLOUGH, Individually and as Partners",
  "name_abbreviation": "Merritt v. Ridge",
  "decision_date": "1987-12-15",
  "docket_number": "No. 8715SC408",
  "first_page": "132",
  "last_page": "136",
  "citations": [
    {
      "type": "official",
      "cite": "88 N.C. App. 132"
    }
  ],
  "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": "N.C. Gen. Stat. \u00a7 45-21.31",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "pin_cites": [
        {
          "page": "(a)"
        }
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      "opinion_index": 0
    },
    {
      "cite": "250 S.E. 2d 271",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 1980,
      "opinion_index": 0
    },
    {
      "cite": "296 N.C. 366",
      "category": "reporters:state",
      "reporter": "N.C.",
      "case_ids": [
        8566139
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      "year": 1980,
      "opinion_index": 0,
      "case_paths": [
        "/nc/296/0366-01"
      ]
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    {
      "cite": "281 S.E. 2d 78",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 1981,
      "opinion_index": 0
    },
    {
      "cite": "53 N.C. App. 496",
      "category": "reporters:state",
      "reporter": "N.C. App.",
      "case_ids": [
        8521965
      ],
      "year": 1981,
      "opinion_index": 0,
      "case_paths": [
        "/nc-app/53/0496-01"
      ]
    },
    {
      "cite": "N.C. Gen. Stat. \u00a7 45-21.38",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "opinion_index": 0
    }
  ],
  "analysis": {
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    "char_count": 8545,
    "ocr_confidence": 0.808,
    "pagerank": {
      "raw": 2.3181068408277913e-07,
      "percentile": 0.7894388823441058
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    "sha256": "a420755d3f5f5290f8a859b966e023bf17b48176eee666356beb5914e1016331",
    "simhash": "1:e96bcfc0e042f194",
    "word_count": 1361
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  "last_updated": "2023-07-14T22:20:42.285314+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges Johnson and Cozort concur."
    ],
    "parties": [
      "MARION BASCUM MERRITT, FRANCES M. SMITH, HENRY C. MERRITT, ELEANOR M. JORDAN and HENRY C. SMITH in his capacity as Guardian for WILLIAM P. MERRITT v. EDWARDS RIDGE, A General Partnership, JOHN W. COFFEY, PHILIP E. WALKER and PAMELA A. McCULLOUGH, Individually and as Partners"
    ],
    "opinions": [
      {
        "text": "WELLS, Judge.\nThe principal question presented is whether North Carolina\u2019s Anti-Deficiency Judgment statute, N.C. Gen. Stat. \u00a7 45-21.38, bars a purchase-money mortgagee from recovering from a defaulting purchase-money mortgagor attorney\u2019s fees and the expenses of foreclosure, including the trustee\u2019s commission, where such recovery was expressly provided for in the promissory notes executed by the parties. Plaintiffs contend that this question was squarely addressed and resolved in Reavis v. Ecological Development, Inc., 53 N.C. App. 496, 281 S.E. 2d 78 (1981). In Reavis, as in the present case, the purchase-money creditor brought suit, after foreclosure, to recover attorney\u2019s fees and expenses, as expressly provided for in a promissory note. The defendants in Reavis argued, as do defendants in the present case, that North Carolina\u2019s Anti-Deficiency Judgment statute bars the recovery of costs and attorney\u2019s fees in such transactions. Our Court disagreed. We held that G.S. \u00a7 45-21.38 only prohibits a purchase-money creditor from suing to recover for a decline in the value of the property conveyed:\nA deficiency under G.S. 45-21.38 refers to an indebtedness which represents the balance of the original purchase price for the real estate not recovered through foreclosure. The attorneys\u2019 fees and expenses in this case do not represent the unrecovered \u201cbalance of purchase money for [the] real estate,\u201d G.S. 45-21.38; the fees represent the costs of foreclosing on the property.\nDefendants in the present case rely chiefly on Ross Realty Co. v. First Citizens Bank & Trust Co., 296 N.C. 366, 250 S.E. 2d 271 (1980), in which our Supreme Court held that the Anti-Deficiency Judgment statute not only abolishes deficiency judgments after foreclosure of a purchase-money mortgage or deed of trust, but also prohibits an action on the note even in the absence of an antecedent foreclosure of the mortgage or deed of trust securing the note. Defendants direct our attention to such broad language in Ross as the following:\nWhile the statute now codified as G.S. 45-21.38 is not artfully drawn, we think the manifest intention of the Legislature was to limit the creditor to the property conveyed when the note and mortgage or deed of trust are executed to the seller of the real estate and the securing instruments state that they are for the purpose of securing the balance of the purchase price. [Emphasis added.]\nDefendants contend that G.S. 45-21.38, as construed broadly in Ross, strips purchase-money creditors of the right to bring action on any term or provision of a secured note and limits the note-holder strictly and narrowly to the proceeds of the foreclosure sale, regardless what the terms of the note provide. They contend that to permit the recovery of attorney\u2019s fees and expenses threatens circumvention of the statute and defeat of its historical purpose.\nWe agree with plaintiffs that Reavis controls the decision of the present lawsuit. Reavis is not inconsistent with Ross. Ross enforces the statutory prohibition against suing on the note for the unpaid balance of the purchase price. Reavis merely permits the recovery of attorney\u2019s fees and expenses after default and foreclosure, insofar as attorney\u2019s fees and expenses are not part of the balance owing on the note. We note that the language of the term providing for attorney\u2019s fees and expenses given effect in Reavis is identical to the language of the term promising payment challenged in the present case.\nDefendants further contend that in the light of the terms of the deed of trust and the provisions of N.C. Gen. Stat. \u00a7 45-21.31(a) the expenses of foreclosure should have been deducted from the proceeds of the sale and are not recoverable from them. The deed of trust provides that the proceeds received from the foreclosure sale be applied first to pay the trustee\u2019s commission, next to pay the costs of foreclosure, and finally to pay the amount due on the notes. The provisions of G.S. \u00a7 45-21.31(a) require that the proceeds of a foreclosure sale be applied first to the costs and expenses of the sale, including the trustee\u2019s commission, next to taxes due and unpaid on the property, next to special assessments as designated by statute, then finally to the obligation secured by the deed of trust.\nBut defendants fail to recognize that the costs of a foreclosure sale must be debited to the foreclosing noteholder, who receives that much less from the sale. In fact, plaintiffs in the present case have paid the costs of the foreclosure sale, and they are here seeking indemnifying recovery of those expenses in accordance with the terms of the promissory notes which were, as indicated supra, incorporated by reference into the deed of trust.\nRelying on Ethics Opinion 166 of the N.C. State Bar, defendants further contend that the trustee could not legally act as attorney for the noteholders in enforcing their rights under the notes and deed of trust. We disagree. Opinion 166 merely enjoins an attorney/trustee from representing a noteholder \u201cin a role of advocacy\u201d at a foreclosure proceeding. The record in the present case discloses no contest in the foreclosure action. Defendants did not appear at the foreclosure hearing and have never denied their default nor contested plaintiffs\u2019 right to foreclose.\nWe have carefully examined the rest of defendants\u2019 assignments of error and find them to be without merit.\nFor the reasons elaborated above, plaintiffs were entitled to judgment as a matter of law. It follows that the trial court\u2019s allowance of plaintiffs\u2019 Motion for Summary Judgment must be, and is,\nAffirmed.\nJudges Johnson and Cozort concur.",
        "type": "majority",
        "author": "WELLS, Judge."
      }
    ],
    "attorneys": [
      "Bayliss, Hudson & Merritt, by Ronald W. Merritt, for plaintiff-appellees.",
      "Northen, Blue, Little, Rooks, Thibaut & Anderson, by J. William Blue, Jr., for defendant-appellants."
    ],
    "corrections": "",
    "head_matter": "MARION BASCUM MERRITT, FRANCES M. SMITH, HENRY C. MERRITT, ELEANOR M. JORDAN and HENRY C. SMITH in his capacity as Guardian for WILLIAM P. MERRITT v. EDWARDS RIDGE, A General Partnership, JOHN W. COFFEY, PHILIP E. WALKER and PAMELA A. McCULLOUGH, Individually and as Partners\nNo. 8715SC408\n(Filed 15 December 1987)\n1. Attorneys at Law \u00a7 7.4; Mortgages and Deeds of Trust \u00a7 32.1\u2014 foreclosure of purchase-money deed of trust \u2014 recovery of attorney\u2019s fees and foreclosure expenses\nThe anti-deficiency judgment statute, N.C.G.S. \u00a7 45-21.38, does not bar a purchase-money mortgagee from recovering from a defaulting purchase-money mortgagor attorney\u2019s fees and the expenses of foreclosure, including the trustee\u2019s commission, where such recovery was expressly provided for in the promissory note executed by the parties. Nor does N.C.G.S. \u00a7 45-21.31(a) prohibit recovery of the expenses of foreclosure from the defaulting purchase-money mortgagor.\n2. Attorneys at Law \u00a7 3\u2014 foreclosure \u2014 trustee acting as attorney for noteholders\nEthics Opinion 166 of the N. C. State Bar did not prohibit the trustee from acting as attorney for the noteholders in enforcing their rights under the note and deed of trust where there was no contest in the foreclosure action.\nAppeal by defendants from Hobgood, Robert H., Judge. Order entered 2 March 1987 in ORANGE County Superior Court. Heard in the Court of Appeals 28 October 1987.\nThe facts in this case are not in dispute. On 26 January 1982, plaintiffs conveyed to defendants an 80.55-acre tract of land in Chatham County and accepted in return two purchase-money promissory notes in the total amount of $200,000.00, secured by a purchase-money deed of trust on the property. Both notes contained the following term:\nUpon default the holder of this note may employ an attorney to enforce the holder\u2019s rights and remedies and the maker, principal, surety, guarantor and endorsers of this note hereby agree to pay to the holder the sum of fifteen percent (15\u00b0/o) of the outstanding balance owing on said note for reasonable attorney\u2019s fees, plus all other reasonable expenses incurred by the holder in exercising any of the holder\u2019s rights and remedies upon default.\nThe provisions of the promissory notes were expressly incorporated by reference into the deed of trust.\nSubsequently, defendants defaulted on the notes, and plaintiffs foreclosed on the property. After foreclosure, plaintiffs sued to recover attorney\u2019s fees and expenses, as provided for in the notes. Upon defendants\u2019 denial of liability, plaintiffs moved the court for summary judgment. Based on the pleadings and supporting documents, the trial court allowed plaintiffs\u2019 motion, and defendants appealed.\nBayliss, Hudson & Merritt, by Ronald W. Merritt, for plaintiff-appellees.\nNorthen, Blue, Little, Rooks, Thibaut & Anderson, by J. William Blue, Jr., for defendant-appellants."
  },
  "file_name": "0132-01",
  "first_page_order": 160,
  "last_page_order": 164
}