Court Opinion

ID: 3876150
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:09:05.978909+00
Date Added: 2024-06-11T13:51:06.479363
License: Public Domain

I very earnestly favor a rehearing in this case for the following reasons in addition to those urged in my dissenting opinion and in the exceedingly forcible views presented in the petition which should be reported:
The Court, having affirmed the decree of the circuit Judge for the reasons stated by him, has committed itself not only *Page 493 
to an affirmance of the decree, but to the annunciation of a principle which I regard as erroneous and fraught with incalculable harm and confusion — that an attorney of record, especially in an equity case, has both actual and implied authority to purchase for his client, without instruction, property offered for sale in a case to which such client is a party.
In an experience of 42 years at the bar I have never known such a principle to be acted upon or even suggested, and do not believe now, notwithstanding this decision, that any reputable lawyer in the state would assume such responsibility, particularly where he has failed to notify his client of the sale, and has created upon his mind the impression that it would not be necessary for the client to bid upon the property, as appears in this case.
In the case of Savery v. Sypher, 6 Wall., 157;18 L.Ed., 822 (Supreme Court of the United States), the administratix of the mortgagee brought foreclosure proceedings against the mortgagor, a proceeding as here in equity. At the sale of which the mortgagee had notice, the attorney for the mortgagee bid off the property at a certain price and had it charged to his client. The mortgagor insisted upon the mortgagee complying with the bid which her attorney had made. The Court declined to confirm the sale, saying:
"The burden of proof was imposed on * * * [the mortgagor] who seeks to confirm the sale, to show the authority of * * * [the attorney]; for an attorney,virtute officii, has no authority to purchase property in the name of his client."
In Bauman v. Eschallier, 184 F., 710; 107 C.C.A., 44, another case in equity, the mortgagee placed the mortgage in the hands of an attorney for foreclosure; judgment was obtained and at the foreclosure sale the attorney, without instructions, bid off the property and had it charged to the *Page 494 
mortgagee. Upon the question whether the mortgagee was bound by the act of the attorney, the Court said:
"We find nothing in the record to support such a conclusion [that the attorney acted as the agent of the mortgagee in bidding off the property]. McQuaide [the attorney] was her agent to foreclose the mortgage and have the mortgaged property sold by the sheriff; but he was not authorized to bid for Mrs. Bauman [the mortgagee] at the sheriff's sale. His relation to Mrs. Bauman was that of attorney to client. While an attorney has large discretionary powers in the conduct of a suit, he has no power, by virtue of his mere authority to conduct a suit and collect the judgment, to purchase property for his client, and thereby substitute such property for the money."
In Beardsley v. Root, 11 Johns. (N.Y.), 464; 6 Am. Dec., 386, the syllabus is as follows:
"An attorney, by his general authority as such, cannot purchase land sold under execution in favor of his client, either in trust or for the benefit of such client."
The Court very aptly says:
"To permit an attorney, in this way, to make his client his debtor, might frequently lead to the most injurious consequences. Many clients, instead of recovering and receiving their money according to the ordinary course of proceeding, would unexpectedly find themselves involved in intricate and extravagant speculations, to the management of which they might be totally incompetent, and which in the end might prove ruinous."
It appears in the case at bar that the Murchison Bank had collateral which to a considerable extent protected them, and naturally, located in another state, in the banking, not real estate business, they would not have authorized the purchase at the full price of both mortgages, which is admitted to have been more than could have been realized except after long holding. *Page 495 
In Treasurers v. M'Dowell, 1 Hill (S.C.), 184; 26 Am. Dec., 166, it is said:
"The authority of an attorney, * * * is confined to the conduct and management of his client's cause, in which his skill and learning only is put in requisition."
In LeConte v. Irwin, 19 S.C. 554, it was held that the attorney for the plaintiff had the right at foreclosure sale to purchase the property for himself. The Court says:
"We do not see why the attorney of the plaintiff, * * * may not be a bona fide bidder at a judicial sale fairly conducted, as well as any other person. He has no duty to perform that is inconsistent with the character of purchaser."
From these authorities and upon principle I think it is clear that Gasque as attorney for the Murchison Bank had no implied authority arising from that relation, to bind the bank to his bid.
It is equally clear that he had no express authority to do so, and does not claim that he had. The plain unvarnished facts of the case are that he had received no instructions from the bank to bid any amount at the sale; that the bank, having collateral sufficient to protect them, was not interested at all in making the property bring the amount of both mortgages; that the bank was not notified of the sale; that the bank was left under the impression by Gasque that Lide would run the property up to a figure that would protect both mortgages senior to Lide's claim.
The effect of the decision is to saddle the bank with the ownership of a piece of property which it did not want and authorized no one to buy for them. Of course in complying with their bid the bank must pay in the amount of the national bank mortgage, $2,250 with interest and attorney's fees and receipt for the amount of its mortgage $3,347 and interest, although it holds other Collateral sufficient to protect a substantial part of its debt. All of *Page 496 
this collateral will be lost to the bank as soon as it receipts for the amount of its mortgage.
But assume for the sake of argument that Gasque had express or implied authority to bid for the bank at the sale, in protection of its interest, I think that his action in running the property up to $6,500 was so improvident as to render the bank not responsible therefor. He was advised that the bank held other collateral. He did not inform himself as to its value and the consequent interest which the bank may have had in running up the property. Certainly that interest did not require the property to bring the full amount of both mortgages. He concedes that his bid of $6,500 was more than could be realized out of the property except it be held for a considerable time in the uncertain hope of better times for real estate.