Opinion
06-18-1904
POLHEMUS v. PRINCILLA et al.
Mr. Newcorn, for petitioner, James M. Boice. Willard P. Voorhees, for Mrs. Parker.
Bill to foreclose a mortgage by Abraham V. D. Polhemus, guardian, against John B. Princilla and others. Petition by James M. Boice for an order to open the decree of foreclosure after sale. Order vacating the order to confirm the sale and directing a resale advised on payment by petitioner to purchaser of amount paid, with interest, costs, and counsel fee of $50.
Mr. Newcorn, for petitioner, James M. Boice. Willard P. Voorhees, for Mrs. Parker.
STEVENS, V. C. This is an application on petition of James M. Boice for an order to open a decree of foreclosure, after sale, to enable him to file an answer, or for such other relief as may be equitable and just. On the return of the order to show cause, leave was given to take affidavits on notice, and such affidavits have been taken. The petitioner has endeavored to prove, first, that at the time of the service of the subpoena to answer he was resident in the city of Brooklyn, N. Y., and that the sheriff's return that he was served by leaving a copy of the subpoena at his residence, in New Jersey, with a member of his family, was untrue; second, that the premises did not bring their fair value at the sheriff's sale.
With regard to the first insistment, I think the result of the evidence is that it is not satisfactorily shown that the petitioner was a resident of Brooklyn in August, 1001, the time of the service of the subpoena, but that it is shown that the petitioner did not have actual notice of the suit until after the sale of the property by the sheriff.
In reference to the insistment that the property did not bring its fair value, the evidence is conflicting and not very satisfactory on either side. The petitioner's witnesses did not show that they were qualified to speak as to the value of real estate, and both the defendants' witnesses, while shown to be qualified on that subject, took little or no account of the machinery in the building, of whose value they admitted themselves to be ignorant. There are, however, some undisputed facts which would seem to indicate that the property was worth more than $2,490, the price for which it was sold to Mrs. Parker at sheriff's sale, on January 22, 1902. Prior to September, 1896, the property had belonged to Gertrude N. Boice, who had expended about $9,000 on the building and machinery, and who had for two years received a yearly rent of $900 for it. Because of its location, probably, beyond the built-up portion of New Brunswick, it does not seem to have been worth the money expended upon it In 1896 Mrs. Boice sold it to one Comfort for $5,000. In 1897 it was resold by Comfort to Mrs. Boice for the same sum. Mrs. Boice afterwards died, and in August, 1900, it was again sold by her sons to the defendant Princilla for $4,500. There was then resting upon it complainant's mortgage for $2,100, and a mortgage of $1,900 was given to secure a part of the purchase money. The balance ($500) was presumably paid in cash. The $1,900 mortgage was subsequently assigned to James M. Boice, the present petitioner. I think the evidence, on the whole, indicates that the property was not sold, in the language of the act of 1891 to which I will presently refer, for "a fair price," at the foreclosure sale.
This brings me to what I consider to be the only question in the case. It appears from the record that, after the sheriff's sale had taken place, Mrs. Parker discovered that the property had not been advertised in two newspapers as required by law, and she refused to take the deed. Thereupon the sheriff presented a petition to this court under the act of 1891, p. 24. This act provides as follows: "All sales of land made by virtue of any order, judgment or decree of any court of record of this state, shall be confirmed by the court, notwithstanding any defect or Irregularity in the publication of the advertisement of such sale; provided, that the officer making such sale shall certify under oath that such sale was otherwise regular and that the property was sold for a fair price in the judgment of such officer; and, provided further, that the court shall be satisfied by affidavit that the defect or irregularity in the publication was not injurious to the parties in interest." On the sheriff's petition, an order was made requiring Mrs. Parker, the purchaser, but not the second mortgagee, to show cause why she should not complete her purchase. Mrs. Parker answered, and on February 18, 1903, without further evidence except a stipulation of counsel, it was ordered that the sale be confirmed, notwithstanding the defect or irregularity in the publication of sale, and the sheriff was directed to execute a conveyance, which, he dying, was done under an order of court by his successor. Polhemus v. Priscilla (N. J. Ch.) 54 Atl. 141. This order recited, in the language of the act of 1891, that the court was satisfied by affidavit "that the defect or irregularity aforesaid was not injurious to the parties in interest."
It is elementary that no one ought, in general, to be affected or prejudiced by a proceeding in respect of which he has had no opportunity to be heard. The only partieslitigant to the proceeding to compel Mrs. Parker to take the deed were the sheriff and herself. She manifestly was not injured by the lack of advertisement, for she appeared and hid. Neither was the sheriff. The only persons who could have been injured were the second mortgagee and the owner of the equity, and these persons were neither of them called upon to show cause. Now, the very object of advertising in the newspapers is to give wide publicity to the sale. The law deems it proper to require advertisement in two newspapers, rather than in one. This can only be because of the wider publicity afforded. Under these circumstances, I think it quite impossible to say, when the proof shows that the property was sold for less than what would seem to have been its fair value, that the defect in the publication was not injurious to the second mortgagee. In the present case it may have resulted injuriously in two ways. Publication in another paper might have secured more bidders and a higher price—a price which would have inured to the benefit of such mortgagee, for the amount bid was only sufficient to pay the first mortgage, and it might have brought this sale either directly or indirectly to the notice of the petitioner. The evidence shows that one of his daughters lived in the neighborhood of the property, and that he was an occasional visitor at her house.
Now, the proceeding to confirm was, as I have said, one between the sheriff and Mrs. Parker exclusively. The order was based only upon the affidavits appended to the sheriff's petition and upon the admission of Mrs. Parker. One of these affidavits was that of Polhemus, the complainant, who was interested in having the sale confirmed, for the bid was large enough to cover the entire amount due to him. In his affidavit he swears that "the said sum ($2,490) at which said premises were sold was and is the full value thereof and all that said premises would bring if the same should be resold." On his examination on the present application he was asked the question, "Do you know anything at all about the values of real estate in the vicinity of the Landing property?" and his answer was, "I do not." The other affidavit was that of the sheriff, who is dead, and whose grounds for believing that the property brought a fair price we cannot know. Under these circumstances, inasmuch as the only parties in interest who could have been injured by the defect in the advertisement were not given an opportunity of being heard, and inasmuch as it is probable that the property did not bring a fair price, I think a resale should be ordered. Where there is a defective advertisement the act of 1891 throws the burden of proving that the price was fair upon the officer or purchaser alleging it.
It must be remembered, however, that Mrs. Parker is free from blame in the matter. She resisted the sheriff's application to compel her to take the deed. Consequently, if there is to be a resale, she should be fully indemnified. The second mortgagee occupies substantially the same position as if he were here on bill to redeem. I only advised the order to take affidavits on the condition that he should pay the costs of the proceeding in any event. I think the proper order to be made is that on proof of payment to Mrs. Parker, within 40 days from the date of the order, of all her costs, including a counsel fee of $50, and of the full amount which she paid to the sheriff, with legal interest from the time of payment, Mr. Boice will be entitled to an order vacating the order to confirm the sale and directing a resale. I think Mrs. Parker is entitled to interest, because the property has been in litigation ever since she took it, and she has derived no benefit from it. If the second mortgagee pay the money, he will, of course, be entitled to reimbursement out of the proceeds of sale.