Woodhull v. Osborne

2 Edw. Ch. 614 | New York Court of Chancery | 1836

The Vice-Chancellor:

Supposing the petitioners, Hendrickson and his assignees, to have an interest in the mortgaged premises, so as to give them a standing in court; the first question is, whether enough appears to authorize the court to set aside the sale and permit them to redeem or have a re-sale ?

This question is between the Petitioners and the purcha? ser Mr. Philip. The mortgagees are indifferent about it: because, in any event, they will be paid in full. On the first hearing of this motion, I was inclined to think it was a case in which the court could, with propriety, set aside the sale provided the Petitioners had a right to make the application.

Upon reflection, however, and looking more attentively into the cases cited; I am of opinion that the circumstances do not warrant the court’s interference to disturb the sale.

The English practice of opening biddings upon an offer of a greater or advanced price has not been adopted by us nor will the court order a re-sale merely because the property will sell for more money : except, perhaps, in the single instance of the property selling for less than the mortgage debt, the mortgagee or party filing the bill becoming the purchaser and the party, asking a re-sale, remaining liable, for the deficiency: Lansing v. McPherson, 3 J. C. R. 414. Where a-stranger or third person, becomes the purchaser in good faith, something more than a mere offer of a higher price must appear to induce a re-sale :—such as fraud or misconduct of the master or other person having the control of the sale—or surprise upon the party interested—or his having been misled as to the time and place of sale. Where circumstances of the latter description are relied upon, the party must show they proceeded from or were caused by the purchaser or some person connected with or having the management of the sale. If he be of full age and under no disability, he catinot be permitted to állege his own negligence or inattention as the cause of his surprise or mistake. These principles are fairly deducible from the cases of Williamson v. Dale, 3 J. C. R. 290; Duncan v. Dodd, 2 Paige’s C. R. 99; Collier v. Whipple, 13 Wend. 224; Baring v. Moore, 5 Paige, 48.

Here, the purchaser is not a complainant but a stranger to the parties and to the suit, who, attracted by the public advertisement of sale, attended and fairly bid for the property. He was declared the purchaser ; and bound himself to perform the terms and conditions of the sale. The court is obliged, on the ground of good faith with such a purchaser, to carry the sale into effect: unless there are special circumstances (such as those which have been adverted to) forbidding it.

The petition attempts to put the claim to relief upon the ground that the Petitioners were lulled by the promise of the complainants not to proceed to a decree and sale without first giving them notice; and that the sale took place without their being at all apprised of it. So far as such promise is alleged to have been made, it is expressly denied by the complainants; and as to the Petitioners or Hendrickson not being apprised of the time of sale, it appears to me it was clearly the result of their own remissness or inattention or that of Osborne, the mortgagor, who, in the transaction of purchasing the property and taking the title in his name and giving the mortgages, is clothed with the character of agent or trustee for Hendrickson. According to Osborne’s statement, he was fully aware of the master’s advertisement of sale, he answered enquiries ' respecting the property and the sale, and, if Hendrickson did not receive information of the fact that it was advertised, it was his own fault or that of his ' agent. Knowledge of the agent in such case may be considered the knowledge of the principal. And it is not sufficient that Osborne, himself supposed the property would not be sold or, if sold, that the sale would be a mere formal one and, resting under this impression, that he diverted biddei-s and did not attend. In what way and from whom he got the impression does not appear. It is not traced to the master or the complainants in the cause ; and nothing is said to induce a belief that it originated with or proceeded from any act, promise or declaration of any one having the control or management of the sale.

I am of opinion, therefore, that the circumstances of this case do not bring it within any of the principles upon which this court has heretofore interposed to deprive an honest purchaser at a master’s sale of the benefit of his bargain. It may be a serious loss and sacrifice of the property, but the parties having or supposing they had an interest in it, should have been more vigilant and attentive to the result of the foreclosure which they knew had been commenced.

The manner of selling the property, in one entire parcel, is objected to as irregular ; and it is said, the master ought to have divided it into lots and sold only so many as were necessary to satisfy the mortgage debt. It is a sufficient answer to this objection that the property was purchased in one parcel, described as containing four acres, mortgaged as such, and, by the same description, was decreed to be sold. If the parties wished a subdivision into lots for the purpose of a sale, they should have attended the entry of the decree and asked for directions to that effect or have requested the master, before the sale, to make the subdivision. "Unless there were directions in the decree or a request from the parties, the master was not bound to take upon himself the duty of laying the land out into lots ; nor were the mortgagees under any obligation to do so. They were at liberty to sell it as it was mortgaged: in one parcel; although, if they had apprehended a deficiency and thought it to their own advantage, they might have asked leave for the master to sell in lots according to a survey and map to be procured at the expense of the estate. Whatever disadvantage there was, if any, in selling in an entire parcel, must now be attributed to the neglect of the parties in interest, other than the mortgagees, and cannot affect the rights acquired by the purchaser at the sale.

If these views of the case are correct, it is unnecessary to consider the objection raised on the part of the purchaser against disturbing the sale: that the petitioners—or Hendrickson in whose place they stand—have no interest in the property and can claim no benefit from it.

It appears to me, however, that the transaction between Hendrickson and Osborne, as disclosed in the petition, is within the 1 R. S. 728, § 51, which forbids the raising of a trust in favor of a person paying the consideration money upon the purchase of land, where he voluntarily allows the grant or conveyance to be made to or in the name of another. This provision in the statute was doubtless intended to prevent the practice resorted to in this instance. The law now considers that there is no reason why a person, who is able to advance money for the purchase of landed estate, should allow the title to be taken for his benefit in the name of another, except for some sinister or fraudulent purpose ; and it will not allow him to claim any benefit of the transaction in the shape of a resulting or implied trust.

In the present case, Osborne buys the property; takes the title in his own name ; and gives a mortgage for a part of the purchase money, although merely broker or agent for Hendrickson, who advanced the money actually paid. This is not such a transaction as will raise a trust in favor of Hendrickson.

But while the law prevents him, who will thus advance his money and permit the title to be taken in the name of another, from deriving any benefit from the purchase, it takes care that his creditors shall not suffer by his parting with his money; and hence the provision in the next two sections, raising a trust in the land in favor of the creditors of the person, paying the consideration money, and also in favor of the person himself where a conveyance is taken ¡n the name of another against his consent or without his knowledge and in fraud of his rights: § 51, 52. This case -is not within the principle of,either of the last mentioned sections. Hendrickson’s creditors are not parties to this application, nor are they shown to be interested.

The petition must be dismissed.