Court Opinion

ID: 6410515
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:20.395912+00
Date Added: 2024-06-11T15:51:21.530873
License: Public Domain

Dewey, J.
This is an action on a penal bond. The condition of the bond is, substantially, that the obligors shall well and truly proceed to collect the amount due on a mortgage given by Moses F. Peasley, and either, 1st, collect and pay to the obligee *316$900, and interest thereon; or, 2d, if by entry and foreclosure the estate shall be vested in them, pay to the obligee the sum of $900 and interest thereon; or, 3d, after foreclosure, if any shall take place, sell the mortgaged premises at public auction, and pay to the obligee all that the same shall produce, after deducting and retaining the sum of $1,700 and interest therein, and-costs of sale.
The first of these conditions, it is conceded, has not been performed ; but the defendants are not in default thereby, through any omission on their part to collect the debt secured by the mortgage, by ordinary process of law, or otherwise. The second condition, of paying to the obligee the sum of $900, was wholly dependent upon the estate vesting in the obligors by foreclosure of the mortgage. If no such foreclosure and vesting of the property thereby in the obligors has taken place, this sum of money is not to be paid. The third condition also was dependent upon a foreclosure.
The real question is, therefore, whether the defendants have foreclosed the mortgage, and sold the estate at auction after such foreclosure, agreeably to the last stipulation in the condition of the bond. The defendants did not proceed to foreclose the mortgage in the usual form, by an entry and three years’ continued possession, or by an action at law, and an entry and possession under a conditional judgment. Although the note fell due on the 28th of November 1848, no entry for the purpose of foreclosure- took place until the 5th of June 1850. Soon after this entry to foreclose, the individuals who had previously purchased the-mortgage of the defendants, and who made the entry, also purchased the equity of redemption, and in November 1851 sold the same at auction for $1,500. There was therefore no foreclosure of the mortgage in the ordinary mode. The further inquiry is, whether what was done was tantamount to a foreclosure.
In our opinion, the parties to the bond contemplated an actual foreclosure of the mortgage, as the basis of the performance of the last condition, and the defendants could only be discharged from a breach of the bond, under this head, by an actual fore*317closure under the statute. The purchase of the equity was nor a foreclosure, in the sense of the term as used by these parties. It may be that the plaintiff would have been benefited by the literal performance of its condition, or it may be, on the other hand, that the course pursued by the defendants was equally beneficial to the plaintiff. There was at least a nominal breach of the bond.
But the damages for this particular breach of the bond are not, as the plaintiff insists, liquidated damages. The breach is that the defendants did not foreclose the mortgage, and, after such foreclosure, sell the property at auction. There is no ground for charging the defendants with the liability to pay $900 as liquidated damages. The only measure of damages is the loss the plaintiff has sustained by reason of the defendants’ not foreclosing the mortgage in the ordinary way, and, after the expiration of the three years’ possession, selling the premises at auction, instead of purchasing the equity more than two years before a foreclosure would have been effected under the statute, and selling the property eighteen months before it could have been sold, had the party delayed till a foreclosure was perfected. But whether the difference between these modes of proceeding, as to the amount that would be realized from a sale at auction, would be so great as to affect at all the interest of the plaintiff, would be a material inquiry. The actual sale produced $1,500 ; but the plaintiff could realize nothing from the property until after the payment of $1,700 and accruing interest from May 25th 1848, and costs and expenses of sale. Judging from the facts disclosed by the report of the case, we are of opinion that the damages to which the plaintiff would be entitled would be only nominal, and that it would be impracticable for the plaintiff to show any actual damage resulting to him from the mode adopted to dispose of the estate.