Opinion
03-02-1908
OAKLEY et al. v. SHAW.
Leroy A. Gibby, for complainants. John E. Shaw and Alvah A. Clark, for defendant.
(Syllabus by the Court.)
Bill by Mary Oakley and others against John Erskine Shaw. Decree for complainants.
Leroy A. Gibby, for complainants. John E. Shaw and Alvah A. Clark, for defendant.
WALKER, V. C. The bill was filed to foreclose a mortgage for $6,000 made by the defendant to the complainants May 17, 1900, on two tracts of land in Bridgewater township, Somerset county, one known as the "Williamson" tract and the other as the "Wharton" tract. The sheriff made two reports of the sale under the fieri facias, both dated November 4, 1907, in one of which he sets forth that he sold the lands and premises described in the writ of execution to John Erskine Shaw for $276.87, and in the other of which he makes identically the same report, except that he certifies that the sale was for $5,000, without, in either report, certifying which tract was sold for the price named therein. On December 9, 1907, an order was made as of course confirming the sale reported to have been made for $270.87 presumably for the Wharton tract. On November 13, 1907, the defendant filed in this cause a paper entitled "Exceptions to the report of sheriff's sale," and which is leveled expressly against the sale of the Williamson tract. The paper (containing the objections) recites that the defendant excepts to the report of the sale, and to any confirmation thereof as to so much of the premises as are known as the Williamson tract; first, because there is a mortgage on the premises which is prior to the mortgage foreclosed, the prior mortgagee being the Guarantee Loan, Savings & Improvement Company; second, that the holders of that mortgage were not made parties to the bill; and, third, that the sale was not made subject to the mortgage of the Guarantee Loan, Savings & Improvement Company, and that there was no reasonable description of the defects in title nor the liens and incumbrancesthereon, with the approximate amount of said liens and incumbrances, inserted in the notice and advertisements required by law, or in the conditions of sale. This paper excepting to the report of the sheriff's sale, and in which objection is made to the confirmation thereof, cannot be classed as an objection to the confirmation of the sale under rule 205 of this court, adopted September 20, 1880, although it is evidently intended to have such effect. The rule provides that the sheriff or other officer by whom mortgaged premises shall be sold on proceedings for foreclosure shall within five days after the sale report the same to this court in writing, stating the name of the purchaser and the price obtained, and shall accompany the report with his affidavit, that the price was the best that the property would, at the time of the sale, bring in cash, and that, unless written objection to the confirmation of the sale shall be tiled, an order, which shall be an order of course, confirming the sale and directing the execution of a good and sufficient conveyance to the purchaser, may be entered after the expiration of the time limited for making objections, and, if objections shall be filed, the question whether the property was sold for the best price that could be obtained for it in cash shall be disposed of summarily by the court on affidavits or depositions. This rule was promulgated to settle the practice under the act of March 12, 1880 (Gen. St. p. 2111, § 45), requiring reports of sale of mortgaged premises and their confirmation, provided the court was satisfied by evidence that the property had been sold at the highest and. best price the same would bring in cash.
The first case under this statute and rule was that of Mut. Ben. Life Ins. Co. v. Gould, 34 N. J. Eq. 417 (1881), and was before Chancellor Runyon on objections to a sheriff's sale, and petition to set the sale aside. Then followed that of D., L. & W. R. R. Co. v. Scranton, 34 N. J. Eq. 429, before the same chancellor, also on objections to sheriff's sale, and petition to set it aside. It is observable that in the two cases just mentioned there were not only objections to the sheriff's sales, but also petitions to set them aside. In Mut. Ben. Life Ins. Co. v. Gould, a resale was ordered because one claiming an interest in the premises had, by neglect of her counsel, been deprived of an opportunity to protect that interest, and the property seemed not to have produced the highest and best price it would bring in cash at the time of sale. In D., L. & W. R. R. Co. v. Scranton the court was asked to set aside the sale because the mortgage was only collateral, and that the principal security for the debt had not been restored to or exhausted, as well as on an allegation of inadequacy of price. Chancellor Runyon remarked in the latter case that the object of the fourth section of the act 1880 (Gen. St. p. 2111, § 45) was merely to prevent the sacrifice of property at foreclosure sales, so far as it may be done, by requiring proof, to the satisfaction of the court, that at the sale the property brought the best price then obtainable for it at a foreclosure sale for cash. The other questions in the two cases appear to have arisen upon the petitions to set the sales aside.
Now, I take it that the only office of a written objection to the confirmation of a sheriff's sale in foreclosure under the act of March 12, 1880, and rule 205 of this court, is to urge the overthrow of a sale upon the sole ground that the property did not bring the highest and best price that could be obtained for it in cash; and that an attack upon the sale on any other ground must be made the basis of independent action, either by bill or petition. Vice Chancellor Pitney said in Boorum v. Tucker, 51 N. J. Eq. 135, 26 Atl. 450, that purchasers at a foreclosure sale who are not parties to the suit become parties by signing the bid, and are liable to be proceeded against by petition for the specific performance of their contract; and in Campbell v. Parker, 59 N. J. Eq. 343, 45 Atl. 116, in which there was a dispute between a receiver and a purchaser of real estate at the receiver's sale, the same learned Vice Chancellor said (at page 346 of 59 N. J. Eq., page 118 of 45 Atl.) that no question was made in that case as to the power of the court to deal with the matter by petition. Zimmerman v. Place, 61 N. J. Eq. 273, 48 Atl. 994, was another case on objections and petition, and in his opinion Chancellor Magie made some doubt as to whether under the act of March 12, 1880 (P. L. p. 255), an objection to confirmation of a foreclosure sale on the ground that a conveyance by the sheriff would be inequitable to the defendant (which was, it will be observed, ground other than inadequacy of price) could be presented on petition rather than on original bill, but he proceeded to decide the question raised upon the petition. In the matter sub judice the controversy is between those who are parties to the suit, namely, the complainants and the defendant, and therefore I am of opinion that the question other than inadequacy of price may properly be litigated on petition in this cause. My judgment is that any ground of relief against a sheriff's sale on foreclosure, except that the property was not sold for the highest and best price it would bring in cash at the time of sale, is not admissible under the act and rule to which reference has been made (and under which the objections in this case were filed), no matter in what form presented.
Reprobating the practice of urging all sorts of grounds against confirmation of foreclosure sales under objections so filed, I might nevertheless consider the matter and squarely decide the questions raised concerning the alleged prior lien on the lands sold by the sheriff in this cause, as Chancellor Magie considered the question of confirmation in an equitable phase in Zimmerman v. Place, notwithstandingthe apparent irregularity of the proceeding, but for the fact that I believe the defendant in this cause has no standing to be protected under P. L. 1906, p. 269, which he invokes, and which provides that a purchaser of real estate at foreclosure sale shall be relieved from his bid if he satisfies the court of the existence of any substantial defect in or cloud upon the title, which would render it unmarketable, or of the existence of any lien or incumbrance thereon, unless a reasonable description of the estate or interest to be sold and of the defects in the title and liens or incumbrances thereon, with the approximate amount thereof, be inserted in the notices and advertisements and conditions of sale. In Armstrong v. Fisher (N. J. Ch.) 66 Atl. 1071, Vice Chancellor Garrison said: "Before the enactment of this statute (P. L. 1906, p. 269) a purchaser at a judicial sale in New Jersey took such title as the proceedings showed, and could not claim to be relieved because of the existence of prior incumbrances or of defects in the title. The effect of this statute is to prevent the purchaser or bidder from being relieved, if the defects in the title and the liens and incumbrances thereon are brought to his notice before the sale." What is aimed at by this statute is notice, and, independently of the statute, it seems to me that one who has notice of the condition of the title cannot object that he did not obtain that notice in the manner and form prescribed by the statute. In other words, he cannot be relieved if he has notice. The statute is entirely remedial, and should not be extended to one whose claim to the remedy is without equity. On the subject of the construction of statutes Mr. Justice Blackstone says that, if an act of Parliament gives a man power to try all causes that may arise within his manor of Dale, yet, if a cause should arise in which he himself is party, the act is construed not to exceed to that, because it is unreasonable that any man should determine his own quarrel. 1 Bl. Com. p. 91. Now, it seems to me that the act of April 20, 1906 (P. L. p. 269), no more extends to a bidder at a judicial sale who knows all about the title, and who, as in this case, was at the time of sale vested with that very title himself, than did the English statute giving a man power to try all causes arising within his manor extend to him when he himself was a party. To hold as I do is consonant with the rule that statutes shall be construed with a view to the old law, the mischief and the remedy. The law upon this subject was that a bidder at a judicial sale bought caveat emptor, and could not be relieved from his bid because of defects in title or incumbrances upon the property, although in equity, under special circumstances, the contract for purchase was sometimes not specifically enforced, and the parties were left to their remedy at law. Twining v. Neil, 38 N. J. Eq. 470: Sullivan v. Johnson, 44 N. J. Eq. 11, 14 Atl. 104. The real intention, when ascertained, will prevail over the literal sense of terms, and the intention is to be taken or presumed according to what is consonant with reason and good discretion. Morris Canal Co. v. Central R. R. Co., 16 N. J. Eq. 419. A matter may fall within the words of a statute, but will not be controlled by it unless within the reason and spirit of the act, according to the intention of the makers. 1 Stew. Dig. p. 1026, § 179, and cases cited.
The facts in the case at bar are these: The premises foreclosed were mortgaged to the Honorable James J. Bergen, trustee, on February 13, 1893, which mortgage was recorded on the 27th day of the same month. On February 1, 1898, the same premises were conveyed to John E. Shaw, the defendant in this suit, who recorded his deed on the 20th of July then following. On October 8, 1898, Judge Bergen filed a bill to foreclose his mortgage, and John E. Shaw, the owner and defendant in this suit, was the sole defendant in that suit, in which the final decree was filed November 26, 1898, and fieri facias issued thereon on December 7, 1898. On April 18, 1899, the same John E. Shaw mortgaged the same premises, with others, to the Guarantee Savings, Loan & Improvement Company for $53,000, which mortgage was duly recorded, and in it appears, after the description of the mortgaged premises, this clause: "Subject to judgment of foreclosure and sale upon which there is due the sum of $3,449.92, with interest from Nov. 25, 1898, held by James J. Bergen, trustee of the estate of Culver Barcalow, deceased." The premises were sold under Judge Bergen's foreclosure on July 24, 1899, to John E. Shaw, the mortgagor and defendant in those proceedings, and who, the same John E. Shaw, is the mortgagor and defendant in this suit. It would appear, therefore, that the mortgage of the Guarantee Savings, Loan & Improvement Company was subsequent and subject to the mortgage held by Judge Bergen as trustee, and was cut off by the sale under his foreclosure; but whether so or not makes no difference in this cause on this application. The bill in the present case was filed on April 1, 1904, and alleges that this same John E. Shaw on May 17, 1900, made a mortgage to Mary Oakley and Sarah Oakley, the complainants, for $6,000, payable in one year, with interest, and that the whole of the principal money mentioned in and secured by the mortgage with large arrears of interest were due and owing to the complainants, and that the defendant since the execution of the mortgage had possessed and enjoyed and did still possess and enjoy the mortgaged premises. He is the sole defendant, and, after the bill had been taken as confessed against him for want of an answer and final decree of foreclosure made, the mortgaged premises were sold to him by the sheriff of Somerset county on November 4, 1907, under the fieri facias issued on the decree, and he himselfbecame the purchaser of the Williamson tract for $5,000, not only with full knowledge of the exact situation of the title, but he had himself created that situation. Therefore, upon every principle of justice and right reason, he cannot now be heard to say that he should be relieved of his bid because no description of the estate or interest in the mortgaged premises to be sold, and of the defects in the title and liens or incumbrances thereon, with the approximate amount thereof (if any) was not inserted in the notice and advertisements of sale and in the conditions of the sale. It should be observed that the only thing he urged against the title on the hearing of the objections was the alleged existence of the guarantee company's mortgage as a lien prior to the mortgage foreclosed, both of which mortgages were made by himself, as already remarked.
Having, as I said, created the situation against which he asks to be relieved, and knowing it the while, and seeking to take advantage of that situation, he is with respect to it without equity.
Therefore I will advise that the sale be confirmed, with costs.