Burns v. Thayer

115 Mass. 89 | Mass. | 1874

Wells, J.

The title of a purchaser from a mortgagee under a power of sale is not defeated by the neglect of the mortgagee to make and file the affidavit required by the Gen. Sts. c. 140, § 42. Field v. Gooding, 106 Mass. 310.

This report must be taken to establish the propositions that Dow was a nominal purchaser only ; and that the benefit of his purchase and resale to the defendant was secured to Potter, the mortgagee, by some arrangement or understanding between him and Dow. The plaintiff contends that this made void the whole proceeding of the sale under the power; so that no title could pass by the conveyances, except the mortgage title of Potter. This bill is accordingly brought against the defendant alone, as assignee of the mortgage.

Such however is not the effect of an attempt, by one who is intrusted with a power of sale, to become indirectly a purchaser. The sale, if otherwise regular, is voidable only, at the election of the party whose interests are prejudiced thereby. It is not absolutely void. The title passes. The party injured may avoid and defeat it. But if, before he exercises that right, the estate has been conveyed to another, wno has purchased in good faith, upon adequate consideration and without notice, such tmrchasei Will hold the estate.

The purchase by the defendant in this case was made upon sufficient consideration. The report is silent upon the question of notice and good faith, so far as he is affected; and there are no facts stated, from which we can infer that there was any finding upon that point. Apparently the decree was based entirely upon the invalidity of the original sale and conveyance from Potter to Dow. That, without more, does not entitle the plaintiffs to a decree against this defendant.

There is another difficulty in the plaintiffs’ case. The sale and conveyance did not purport to be of the mortgagee’s interest. It was a sale of the land for $1200 ; whereas the mortgage debt exceeded $1400. That debt, except so far as it was satisfied by the proceeds of the sale, remained in the ownership of Potter. For the protection of the purchaser the conveyances may perhaps be treated as carrying the mortgagee’s legal title in the land: even though set aside in their intended operation to carry the mortgagor’s title and cut off his right to redeem. But the mortgage being incident to the debt, the creditor is a proper and necessary party to a bill to redeem. Upon the facts reported Potter would seem to be a necessary party to the proceedings in this case.

The minor plaintiff is not chargeable with loches.

Case must stand for further hearing.