Dyer v. Shurtleff, 112 Mass. 165

Dyer v. Shurtleff

112 Mass. 165 | Mass. | 1873

Endicott, J.

The principal question in this case is, whether the solicitor or agent for a mortgagee, selling under a power of sale, can be the purchaser of the property for himself or another. It appears by the answers and testimony that Band, one of the defendants, acted for Shurtleff, another defendant, and was his counsel in the matter of the sale ; that he prepared the published notice, employed the auctiopeer, made all the arrangements, and attended the sale. It also appears that he there pointed out the boundaries of the estate ; was prepared with the figures to show *167how much was due as principal, interest, and expenses under the mortgage, and was prepared to stop the sale if any one should appear to redeem. The auctioneer testified that he received all his instructions from Rand and no one else, and never had any conversation with Shurtleff as to the sale or the manner of conducting it. The son of the defendant Shurtleff, who had a general power of attorney from his father, testified that Rand was counsel through the whole transaction. There can be no question that the sale took place under Rand’s direction, and that he acted with full powers, and exercised all the control that his principal could have exercised. Previously to the sale, Francis, who was guarantor on one of the notes held by Shurtleff and secured by the mortgage, called upon Rand, and instructed him to see that the property brought enough to protect his interest and cover the notes; and Rand agreed so to do, and to bid for the property for Francis a sum sufficient for that purpose. Francis was present at the sale, but took no part himself. The only bid made was by Rand, who bid, on behalf of Francis, $18,000, a sum sufficient to cover the notes, interest, and expenses. Rand then signed the memorandum of sale, as the purchaser, not as the agent of Fran ois, and it was confirmed by the son of the defendant Shurtleff, who was present, but who took no other part at the sale. It also appeared that after the sale Rand declined to allow the plaintiffs to redeem, unless an advance was paid to Francis.

By reference to the mortgage, under which this sale took place, it appears that the power of sale is in the common form, and does not contain any power to the mortgagee to purchase himself, as in some of the later forms.

Shurtleff, therefore, could not directly or indirectly himself be the purchaser, and thereby hold the property against the mortgagor or any parties claiming an interest in the estate under the mortgagor. Litchfield v. Cudworth, 15 Pick. 23, 30. 2 Sugden on Vend. & Pur. (8th Am. ed.) 688, 689. He is, therefore, a trustee for sale, “ rendering the overplus of the purchase money, if there be any,” to the mortgagor or his assigns. In ihis respect his position is the same as any trustee or person holding a fiduciary or confidential relation to other parties, hav*168ing an interest in the property. The same disability attaches to his solicitor or agent, who, in his behalf duly authorized, conducts the sale, and exercises the authority and control which Shurtieff himself could have exercised if present. He cannot have any larger powers than his principal, and cannot purchase for himself. Lord Eldon, in holding that a solicitor to a commission in bankruptcy could not purchase at a sale of the bankrupt’s property, said: “-Perhaps he is upon principle the person of all others disabled.” Ex parte Bennett, 10 Ves. 381, 385. And in another case of sale by the assignees under a commission bankruptcy the same judge said: “ As to the solicitor, if there is any utility in applying the principle against the assignee, the application as against the solicitor is more loudly called for.” Ex parte James, 8 Ves. 337, 346. The solicitor, Rand, stands in precisely the same position in regard to the purchase of this property as his principal. It does not come within that class of cases where a solicitor may purchase for his client or for another, on the condition of entire good faith, and that all the facts are known by all the parties in interest; Hesse v. Briant, 6 De G., M. & G. 623; but within that other class, where other parties having interests, as eestuis que trust, the solicitor must divest himself of his character of quasi trustee, or obtain the consent of the eestuis que trust, or "parties in interest, by a bargain or contract for liberty to buy. Coles v. Trecothick, 9 Ves. 234, 247. Ex parte James, supra, Carter v. Palmer, 8 Cl. & F. 657, 706.

It is clear, therefore, that Rand could not purchase for himself, and as the memorandum of sale is signed by him personally, and as no other person but Rand can have any right to enforce the sale, if legal, we might well stop here, except for the fact that it now appears that he acted for Francis with the knowledge and acquiescence of the younger Shurtieff.

It was strongly urged in the argument that this was a mere ministerial act; that it was only to protect the interest of Francis; that it was in perfect good faith on the part of Francis and Rand. The court has no reason to doubt the good faith of either, or to question the entire honesty of both; but the facts of this case bring it clearly within the rule that agents to sell, holding a *169fiduciary relation to others, cannot be purchasers in any form or for any person, and that in such case the characters of buyer and seller are so incompatible that they cannot be vested in the same person, although all parties act in entire good faith.

The authority that Rand received from Francis was a limited authority, merely to protect his interest, and perhaps that of the other guarantors on the notes, by bidding a sum sufficient to cover notes, interest, and expenses, which amounted to about $18,000. There was no authority to buy or to bid beyond that sum. There was no authority to bid up to the value of the property, which Francis states to be, in his judgment, $24,000. Rand obeyed these instructions, and in the interest of Francis bought the property for $18,000. In this he did all his duty, as agent of Francis, and protected his interest. But the protection of his interest was not in all respects compatible or identical with the protection of the mortgagor and the other parties in interest. Shurtleff, the mortgagee, was bound while securing his own interest to protect as far as he could the mortgagor ; to obtain the best price he could; to get the full value of the estate and secure an overplus if possible. Rand was his man of business in the transaction, his agent at the sale; in one sense he was the vendor, having the same duties and bound by the same obligations to secure the best possible results, regardless of the interest of all other persons, except the mortagor and mortgagee. He could not, therefore, act for a third party having a different interest, in no wise identical with the interest of those for whom he was first bound to act. By reason of his relations to the mortgagee he was bound to get the highest price, the full value if possible; by virtue of the agency he undertook for Francis, he was bound to bid only the sum necessary to protect Francis’s interest, and to obtain the property for him, if such sum would obtain it. The characters assumed are utterly inconsistent, and the policy of the law does not allow them to be united in the same person. The sale, therefore, may be avoided by the plaintiffs, and on this ground they are entitled to redeem.

Two questions remain to be considered, whether the published notice was sufficient, and whether the plaintiffs were entitled to receive express notice.

*170We think the notice was sufficient. The only defect alleged was that it did not contain or mention the name of the second mortgagee, or the owners of the equity of redemption. In the notice in Roche v. Farnsworth, 106 Mass. 509, there was a similar omission, and it was alluded to in the opinion as one of the defects in the notice, but it was not necessary to the decision, and the case does not rest upon it. The fatal defect there was the omission of the name of the present owner, the assignee of the mortgage, which was not stated either in the body of the notice or the signature; but in this case the notice describes the mortgage as made to Shurtleff, and is signed by him as mortgagee. It is no part of the duty of the mortgagee to state in his notice the names of those who have acquired an interest in the estate from the mortgagor since the mortgagee’s title accrued.

In regard to the express notice in case of sale, which the plaintiffs say that they were entitled to receive, upon the evidence we do not find that any agreement was made by the defendant to give such notice. The plaintiffs refused to pay the interest, they were told that the defendant would put the papers in the hands of his solicitor for foreclosure, and they were entitled to only the usual published notice.

As all the proceedings were regular and proper to the time of the sale, the defendant is entitled to his reasonable expenses of the sale. The decree is therefore to be modified in this respect, but affirmed in all other particulars. As the decree is thus changed, no costs are allowed to either party in the appeal.

Decree accordingly.