Court Opinion

ID: 4932248
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:09:27.285856+00
Date Added: 2024-06-11T08:14:31.798207
License: Public Domain

Walton, J.
It is undoubtedly a rule of very general application, that when a trustee of any description, or any person acting as an agent or attorney for another, sells trust property, and becomes himself the purchaser, either directly or indirectly, the cestui que trust, or person for whom he acts, may, at his election, disaffirm the sale, provided he does so within a reasonable time. The law does not allow him to lie by for an unreasonable length of time, and then disaffirm the sale, especially where the rights of third persons have in .the mean time attached. And it has been doubted whether this rule ought to be applied at all to public sales made under a power contained in a mortgage. It seems that in England, a mortgagee is allowed to bid under an order in chancery for the sale of a mortgage estate. Ex-parte Marsh, 1 Madd. 148. And in New York it is declared by statute, that a mortgagee may purchase at a sale at auction under a power in his mortgage. 4 Kent’s Com. 10th ed., p. 517, note. It is quite certain that in such cases, where the property mortgaged is not sufficient to pay the debt, the mortgagee will be quite as anxious to have the property sell for all it is worth as the mortgagor.
But whatever the rule may be in such cases/ it is well settled that if the mortgagor elects to treat the sale to the mortgagee as invalid, he must signify his intention to do so within a reasonable time. And if one collaterally interested, as a surety or indorser on the note secured by the mortgage, has a right to interfere and insist that such a sale shall be treated as a nullity (which we think may well be doubted), it is clear that he ought to exercise his right to do so in a reasonable time.
In this case the sale was made in August, 1859 ; and when this suit against the defendant, to recover of him as indorser, the balance due on the note was commenced, neither he, nor the mortgagor, nor any one else, so far as appears, had intimated an intention to disaffirm the sale, or had claimed that it was not fairly made, and for a fair price. We think the attempt made to disaffirm it at the trial of this cause was too late.
Besides, if the attempt should succeed, the result would not be *224what the defendant claims. He could not claim what the property was subsequently sold for. That was inter alios. The effect would be that the mortgagor’s right of redemption would not be sold at all; for if the first sale under the power is avoided, the subsequent sales will of course become inoperative. And then, instead of recovering only the balance due on the note, we perceive no reason why the plaintiff would not be entitled to recover the whole amount for which it was given, with interest. The defendant would then have a right to be subrogated to the rights of the mortgagee, but whether he would thereby better his condition may well be doubted. Clearly he has no right to treat the property as sold for the purpose of passing the title, and to disaffirm the sale for the purpose of claiming a larger price. He must either affirm or disaffirm the sale as a whole, and abide the consequences.
But, for the reasons before stated, we think the sale cannot now be avoided. The rights of third parties have intervened, and the claim to avoid it was not made within a reasonable time. Nor are we satisfied that the defendant is a proper party to avoid it; nor that it could be avoided in this collateral way by any one.
Treating the sale, then, as valid, nothing remains but to ascertain the amount due upon the note. The parties have agreed that the full court shall fix the amount notwithstanding the verdict of the jury. And the only matter likely to mislead is the fact that the interest on the note in suit was paid to Aug. 1, 1859, but was not indorsed. The amount indorsed upon the note was the balance in the holder’s hands, after the interest to Aug. 1, 1859 ($105.21), had been taken out. The amount for which the plaintiff is entitled to judgment, is the face of the note, $2,215, less the indorsement, $1,081, and interest from Aug. 1, 1859. Principal, $1,134. Interest, $832.73. Total, $1,966.73. The verdict should be reduced to the latter sum, on which it will be the duty of the clerk to add interest from the time of the rendition of the verdict to the date of the judgment, as provided by law. R. S., c. 77, §23.
*225The certificate should be as follows:
Verdict reduced to $1,966.78. Judgment on the verdict, when thus reduced, with interest from time of the rendition of the verdict to the date of the judgment.
Appleton, C. J.; Cutting, Kent, and Barrows, JJ., concurred.