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Statement of the case.
A few days after the conclusion of these arrangements, that is to say on the 8th of January, 1859, Hovey, as he testified in a deposition found in the record, and as Olcott himself also testified, conveyed the premises to Olcott and Stephenson, by deed' in due form. But to such deed was now to be found nor any registry of it. It was proved to have been lost, and a certified copy from the proper office was produced of a copy which had been registered there.
On the 18th of December, 1867, Stephenson released all his interest to Olcott, by deed in due form, of whose existence there was no question. Default in the first payment secured by the mortgage being made, the mortgagees, on the 31st of January, advertised the property for sale on the 8th day of March, 1860. Upon hearing of the advertisement of sale, Stephenson and Olcott wrote to Bynum, the acting trustee, as follows:
" New York, February 25th, 1860. “DEAR SIR: You will recollect that when the High Shoal property banged hands in January, 1859, we stated to you that our aim would be to pay off the entire amount of the mortgage before the expiration of the year. To bring about a result so desirable to all parties interested, we bave taken the position with our friends, in organizing a new company, that a less sum than the whole amount required to satisfy tho mortgage would pot answer our purpose.
This, we have felt assured, was the true policy for us to pursue, and the only ground we could take and do justice to them, and realize what we had encouraged you to expect. We are now, we think, on the eve of accomplishing our aim, having already a large part of the required sum offered to us, but as we may not be prepared with the whole amount on the day fixed by you in the advertisement, we beg to ask the postponement of the day of the sale for a short time, under the conviction that we shall be able to meet your wishes and our own at a very early day, and much in advance of the average time named in the mortgage. We should like to have the time of payment put off to the 1st May, but if that is longer than you think ought to be granted, we must be satisfied with a shorter date.
“Although, by the strict letter of the contract, you have the
Statement of the case.
right to require us to fulfil its conditions punctually, yet, in view of the large amount already paid to the stockholders of the company wbirb you represent, and the still larger sum expended upon the property, we hope it will not be deemed necessary to compel is to sacrifice these large disbursements at a time when the delay of a few weeks will enable us to protect them, and cannot jeopard or in any way prejudice the rights of those you represent.
" Recollecting and appreciating the good feeling evinced towards us by the stockholders of the old company during our long struggle with outside claimants, we dare venture to hope for the continuance of their indulgence for the brief period asked for to enable us to bring this our determined effort to cancel the entire debt to a successful issue.
“ Believing that your good wishes are with us, and that you will, as far as you can consistently with your obligations to others, grant our request, "We are, very respectfully, yours, &c.,
" E. S. STEPHENSON,
“T. OLCOTT. " T5 W. P. BYNUM, Esq., &c."
The sale was accordingly postponed; and'on tlre 19th of Mareli, 1860, the property was again advertised as about to be publicly sold “at the Iligh Shoals, Gaston County, N. C.," on the 28th of April; it being announced that “the sale will lie positive and for cash.”
This, and the further history of the matter, was thus given in the testimony of Bynum himself:
“I postponed the sale to the 28th of April, in compliance with the request of Messrs. Stephenson and T Olcott, baving business elsewhere on the 1st May. Mr. Olcott was informed of this postponement, both by letter from myself and from Thomas Darling, the agent upon the premises, and I was informed by the said agent that the arrangement was satisfactory to all the parties. On the 28th April, the property was duly exposed to public sale liy me and Grier, as mortgagees, when and where (on the premises at the High Shoals), William Sloan, as the agent of the High Shoals Manufacturing Company, being the creditors, became the highest bidder and purchaser, at the sum of $13,200 the estimated debt and interest due on the mortgage. I am not
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I was, be.
aware that there was any opposition bid, or that he made more tban one bid. At the time of the sale, the creditor company were anxious to realize that debt without purchasing in the property. I and others accordingly made every reasonable effort, both before and at the sale, to induce the mortgagees to pay, or third parties to buy the property; and in fact, I did induce several capitalists from Charlotte to attend the sale, with the view of buying. But on surveying the property, they concluded to run the same to $35,000 and no moro. At the time of sale, and during the entire bidding, both Hovey, the mortgagor, and Darling, the agent of the New York company, were personally present and assenting thereto, well knowing that Sloan was bidding in behalf of the creditors, the old High Shoals Company. I expressly deny that Sloan was the agent of the mortgagees, or employed by them to bid off the property, but know that he was directed by the High Shoals Company to bid for them to the amcint of their debt, and no more. fore said sale, informed, both by Hovey and Darling, that the purchasers had failed, and were unable to meet the payments, and they acknowledged the necessity of the sale and acquiesced in it, as representing the New York company. After tl. vale, the same day, or shortly thereafter, the peval bond of dovey for $80,000 was credited with amount of said bid by Sloan, and the bond itself was cancelled in satisfaction of said debt.
"Mr. Olcott came to North Carolina and visited this property in the year 1860, and after said sale, and in repeated conversations with me, and with a full knowledge of said sale and all the circumstances connected with it, acknowledged the validity of the sale and the full and complete title of the purchasers at it. In the summer of 1860, he, on two occasions, visited me with the view of procuring a lease on a portion of said property, for yold-mining purposes, and the further riew of purchasing the entire property, if his mining project proved successful. In fact he did procure from me a mining lease (to himself and one Muir), on a part of the property, which was in writing, and for the period of six months from that time, subject to be revoked at any time on the sale of the property. And I am informed that he did make explorations, &c., but finally abandoned his lease and left the State in April, 1861, or thereabouts. In March, 1862, by the direction of the High Shoals Manufacturing Company, I contracted to sell the property to R. R. & J. L. Bridgers,
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for the sum of $65,000; $30,000 of said sum was to be paid in North Carolina bank bills, and the said sum was accordingly paid in miscellaneous bills of the various banks of the State, then considerably depreciated. The balance, being $35,000, was to be paid in specie or equivalent, in three and four years, with interest. The interest for two years has been paid on said debt and the balance is still due and unpaid. When the Messrs. Bridgers bought in March, 1862, they immediately took possession, and worked the property until their sale to Admiral Wilkes, in 1865, when the said Wilkes entered into possession, and has ever since occupied and worked the same.”
After the sale of April 28th, 1860, no deed was ever executed by Bynum and Grier to Sloan until June 12th, 1860.
In this state of things Olcott, on the 22d of April, 1868, filed a bill in the court below, against Bynum and Grier (the trustees), Sloan, Bridgers, and Wilkes, setting out-
The purchase by Hovey for him, Olcott, and the Stephenson already mentioned; an express trust :
That the sale was not an executiou of the powers of the mortgage deed, but an attempt irregularly to foreclose the mortgage by a mere agreement between Bynum and Grier, and Sloan, without any regard to the interest of the plaintiff and Stephenson, and was void against them :
That the exposure to sale of said property in solido, at public auction, for cash, on the premises, in a remote and unfrequented neighborhood, when there was due not more than $14,500 of the mortgage debt, was highly injurious to the mortgagors, and gave an assurance to the mortgagees of a foreclosure at an amount not greater than their debt:
That the property was easily susceptible of division, and that a fraction thereof would have brought the amount due at the time of sale, such amount being within the compass of the means of bidders; that the property was situated far in the interior of the country, where capital did not abound, where there were divers iron manufactories on a small scale, embracing investments of from $2000 to $10,000, but that there was no ground for expecting a purchaser of the whole property at a cash sale, unless it were the mortgagees or
Statement of the case.
their trustees, and that the result was a sacrifice of the property at such price as they chose to bid; that but a single bid was made, and that by the defendant, Sloan; that upon this the property was knocked down; but no money was paid and no deed executed; and soon thereafter the said trustees, the vendors, took possession in their character as such:
That the effect of this course of proceeding, unless relieved against by this court, would be to deprive the plaintiff of a property which had already been sold for $75,000, and was then worth more than that sum, to satisfy a balance of $40,000, of which only one-third was then due:
That on account of the threatening aspect of affairs in the Southern country, resulting in war, neither the plaintiff nor Stephenson visited North Carolina again until since the close of the war, after the announcement by the Chief Justice of this court that the Federal courts were again in the exercise of their full jurisdiction iu that State:
That the purchasers, Messrs. Bridgers, in the first instance, and Charles Wilkes in the second, had notice of the equities of the plaintiff in the premises.
Answers having been put in, testimony was taken.
Bynum testified that he had an interest as a stockholder in the old High Shoals Company of $1200; that the property in question was the most valuable property in that vicinity; “that in the section of country where this property is situated he had never known property of the value of $40,000 or upwards set up at auction sale, in the lump for cash, but this."
Sloan testified “that the question whether the property could best be sold in separate parcels, with advautage to any of the parties concerned, was fully discussed by the stockholders of the original company before the sale, and it was deemed by them totally in practicable, as they could not, by such a course, obtain money enough to pay off the debt.” He added, “If the sale had been on credit it might have been more advantageous to have offered the property in parcels; but that selling for cash, it was better to sell in bulk.” He testified further that he was bidding only for the High Shoals