Court Opinion

ID: 9833872
Source: CourtListenerOpinion
Date Created: 2023-09-01 23:06:41.007332+00
Date Added: 2024-06-11T07:44:08.276829
License: Public Domain

On Motion for Rehearing.
Appellee, 'Carroll, insists with much earnestness that we erred in our conclusions on original hearing with respect to the measure of damages to his security resulting from the removal of the elevator from the building which was covered by Carroll’s mortgage lien. The contention is, ih substance, that since appellant purchased the elevator with notice of the mortgage thereon as a part of the realty, he cannot be heard to say that the price realized at the foreclosure 'sale of the realty and building was inadequate, and that therefore in measuring the damages to the security the price so realized must be accepted as the full market value of what Carroll has already received thereon. To so hold would be to say that although appellant was not made a party to the foreclosure suit, he is bound by all the proceedings therein, including the sale, to the same extent as his vendor, Pittman, who was made a defendant in that suit. Under the doctrine of res ju-dicata, the rule is that the price realized by a foreclosure sale is binding upon the defendant in the suit as the fair market value of the property, in the absence of appropriate proceedings instituted by him to set aside the sale for fraud, gross inadequacy of price, or ■other equitable grounds, as noted in 16 R. C. L. p. 86 et seq. But we know of no rule of law or equity which extends the Operation of that rule so as to make it equally applicable to a stranger to the foreclosure suit, who is a subsequent purchaser of a portion of the mortgaged property, and who is entitled, to his day in court before he can be judicially deprived of his property rights. The present suit was for damages to Carroll’s security, and the burden was upon him to show such damage. He had already received the lot and the building thereon as a credit on his debt, and necessarily the burden was upon him to show that the value of the same was insufficient to satisfy the notes for which the security was given. Proof of the price for which he bid in the property at sheriff’s sale *253was Clearly hearsay, and inadmissible as against appellant, Edmondson, to the same extent as if the property had been conveyed to Carroll by the mortgagor, Pittman, without a foreclosure sale; and that too for the manifestly nominal sum of $249.50, if it be true, as appellant offered to prove, that the market value of the property bought was $20,-000 — an amount in excess of Carroll’s entire debt. And even if appellant had not objected to the proof of the amount realized for the property at foreclosure sale, he still was clearly entitled to show that the value of the property was in excess of plaintiff’s entire debt, and thus to show no right of recovery for that reason.
The eases cited by appellee in support of the motion are distinguishable from the present suit, in that in those cases it seems that no effort was made to show that the prices realized at foreclosure sales were less than the market values of the property sold.
The motion for rehearing is overruled.