Court Opinion

ID: 5201121
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:52:35.112639+00
Date Added: 2024-06-11T08:27:11.942207
License: Public Domain

Houghton, J. (dissenting):
I dissent.
In this.case the order for'resale, which did not adjudicate in any manner that the purchaser would be liable for any deficiency which might arise, was obtained ex parte, before the purchaser, this appellant, presented his petition to the court to be relieved from his bid. ’
The prevailing opinion concedes the proposition, and it must -be conceded, that an order directing a resale, where the terms of a judicial sale are not coin plied with, is res adjudicata-mto the rights of the purchaser and of the parties to the action in which the sale is made. This being the effect of such an order, I do not think any subsequent order which might have been made upon the appellant’s petition for relief would have any effect upon the prior order of resale. Whether it would or not,' it would seem to be a sufficient answer to the proposition that the petitioner is barred of his rights, by its provisions, to say that the-record does not contain any such order. The record does contain the petition of Newman Grossman praying that he be relieved from his bid because of the misapprehension under which hé labored when he made it, and asking that *312the check which he liad given for a part of the purchase money be returned to him, and a memorandum of Mr. J usticé Tbuax giving certain reasons for denying such petition; but no order appears in the record and no reference to it, except it is stated in. the moving affidavits that- an order was entered and no appeal taken.
Of course, the memorandum, or opinion is not an order and cannot •be treated as such. | '
In the first place, it seems to me that if We are to hold that a judgment is binding upon a party we ought to have the opportunity of inspecting the judgment itself; and, in the next place, that whatever the form of the order of denial may have béen, it could not fasten liability upon the purchaser because he had been" relieved from liability by the order Of resale made prior thereto.
The order for resale being, in effect a binding adjudication and containing no provision fastening liability for deficiency upon the, purchaser, he could not be made liable by any subsequent order while the former order was .still in force.- The parties to the action saw fit, instead of reselling without an order of the court to obtain and enter, without notice to the purchaser, an order having all the" effect of a judgment which did not adjudicate that he should be. liable for any deficiency which might arise upon a.resale.
, Parties conducting a judicial sale have ,four courses open to them when the purchaser refuses to cothplete his bid": (1) They can move to compel him to complete, and if just that he should, the court can enforce his compliance by contempt proceedings:; (2) they can "resell without order, at once,, according to' the terms of sale, and he Will be held for the deficiency ; (3) they can, on -notice to him, obtain-an order of the court for resale- on his. account, adjudging that lie shall be liable for any .deficiency and repuiblish,: in which, case the purchaser will-be entitled to any surplus' Which may arise as well as liable for any deficiency that may occur ; (4) they can obtain an order ex parte or on notice, without any adjudication that the purchaser shall be liable for any deficiency and republish, in which case the parties to the action and not the purchaser will be entitled tó any surplus arising. !
t It Was the latter course, which was pursued in this case. From what the parties to the action did it must be assumed that they did not care to give the purchaser the benefit of any. surplus which *313might arise, but chose rather to waive their deficiency claim against him and retain the right to the surplus to themselves. If this assumption is not true then we simply have the fact that the parties were mistaken as to the law and obtained a judgment in the form of an order which adjudicated no liability against the delinquent purchaser. In either case the purchaser was relieved.
In considering the question the character of liability .of a purchaser at a judicial sale should be borne in mind. By bidding he subjects himself to the jurisdiction of the court, although not a party to the action in which the sale is made. (Andrews v. O'Mahoney, 112 N. Y. 567; Requa v. Rea, 2 Paige, 339; Hegeman v. Johnson, 35 Barb. 200; Bicknell v. Byrnes, 23 How. Pr. 486.) He may be held liable upon his bid, although no memorandum of sale is signed, for a judicial sale of real property is not within the Statute of Frauds. (Andrews v. O' Mahoney, supra.) The signing by him of a memorandum of sale is merely a submission of himself to the jurisdiction of the court as a purchaser, and he thereby enters into no contract and cannot be sued thereon nor bring action against the officer conducting the sale or any of the parties to the decree. (Miller v. Collyer, 36 Barb. 250.) He may be compelled to complete his purchase by motion whether he signs a memorandum of sale or not. (Miller v. Collyer, supra; Requa v. Rea, supra.) If he refuses to complete his purchase and an order for resale is made upon notice to him, the resale may be had ob his account and an adjudication made that he will be liable for any deficiency which may arise, and if the property brings more on the resale than he bid he is entitled to the surplus as well as liable for the deficiency. (Jones Mort. [6th ed.] § 1642.)
An order for resale directed to be made on account of the purchaser, on notice to him, adjudging that he pay any deficiency that may arise on such resale, is res adjudioata of his rights and liability. (Rowley v. Feldman, 74 App. Div. 493.) If the order for resale, even if lie be given notice thereof, is a bare order of resale, and does not specify that it is on his account or that he shall be liable for deficiency, whether he signs the terms of sale or not, he cannot be held liable for the deficiency if the property sells' for less than he bid. (Phelan v. Downs, 59 App. Div. 282; affd., 173 N. Y. 619 ; Goodwin v. Simonson, 74 id. 133.)
*314I have taken occasion to examine the record in Phelan v. Downs ()supra), and find that the terms of salé signed by the purchaser in that case áre identical in all material points with the: terms of sale, in the present case. It is true that in that case an unauthorized agent had bid in the property and used the money of his principal to make the required deposit, and that the action was- brought by the principal to recover such moneys'. The case was! decided, however, on the groimd that the principal could recover them back because the agent himself could, recover them. The agent had signed the terms of sale which provided that in case he did not comply with them a resale might be had 'without notice'and without order, or upon a new order, at the option of the plaintiff. After making his deposit he failed to pay the balance of his bid. An order was made requiring him to complete,, with lyhich he failed to comply. Instead of taking contempt proceedings against him, the ■ premises were resold upon a new order which neither forfeited the deposit nor adjudged him responsible for the deficiency, and it was held that such order was a protection from liability • for deficiency and from any forfeiture of the deposit which had been made.
In Goodwin v. Simonson (supra) the purchaser signed the terms of sale and failed to complete Ms purchase. An order was granted requiring him to complete.. He failed to comply with this order, and subsequently another order was made directing á resale, which was had, a large deficiency arising. The mortgagor Moved to vacate the judgment of deficiency entered against her,.: which' would not have arisen if the purchaser had been held to his first bid. The motion was denied and an appeal taken. In considering the questions involved, Miller, J., said : “ Aside from: the. considerations suggested, there is another reason for sustaining the order. A purchaser at a foreclosure sale may be compelled to complete his purchase, or may be discharged and a resale ordered. (Requa v. Rea, 2 Paige, 339; Miller v. Collyer, 36 Barb. 250.) The plain tiff had an election either to proceed against'the purchaser for-a contempt or to apply for a resale; and the omission to take the former course did not discharge the surety.. As the; court granted a resale, the purchaser was discharged from liability to make good the deficiency arising in the last sale by the order of the court. This' order is conclusive, and relieved the plaintiff ¡from any obli*315gation to institute proceedings to recover the deficiency of the purchaser.” ....
The principles enunciated in these two latter cases, it seems to me, are decisive of the question presented on this appeal. The order for a resale did not save any rights against the appellant as purchaser, or direct that the resale be had. on his account, or provide that he should be liable for any deficiency which might arise on the resale. The order thus made being decisive of his rights as well as his liability and it not having made him liable for any deficiency, he could not thereafter be made liable on his own motion to be relieved frbm his purchase, even if it be assumed that am order denying his petition was actually entered. His motion to be relieved might very properly have been denied upon the ground that he was already relieved by the order for resale which the' parties to the action had elected to take.
I think the order should be reversed and. the motion denied.
Order affirmed, with ten dollars costs and disbursements. Order . filed.