Opinion
No. 4478.
Argued April 4, 1956.
Decided April 27, 1956.
The statutory provisions (RSA 479:25 II) relating to notice to the mortgagor in power of sale foreclosure proceedings do not require that similar notice be given to creditors having attachments subsequent to the date of the mortgage; and failure to so notify them does not invalidate the sale.
However, the recommended procedure is to give such notice to subsequent creditors as is required to be given to the mortgagor, and the following of such procedure is indicative of the mortgagee's good faith and due diligence toward the mortgagor in conducting the mortgage foreclosure.
Where a foreclosure sale of real estate under a power of sale mortgage is adjourned to an indefinite or unspecified date, foreclosure proceedings must be commenced anew and the statutory provisions (RSA 479:25) as to notice to the mortgagor and publication for the prescribed period before the actual sale, must again be complied with.
BILL IN EQUITY, to remove cloud on title and confirm the validity of a power of sale mortgage foreclosure. The plaintiff, who acquired his title from the purchaser at the foreclosure sale, joined as principal defendants, Lovett and American Fidelity Company, who filed attachments on the mortgagor's property subsequent to the mortgage but prior to the foreclosure sale. The mortgagor George B. Landers, the mortgagee Pilgrim Trust Company and the purchaser at the power of sale foreclosure proceeding Edward S. Stutman were also joined as parties defendant in the bill in equity. The plaintiff and the principal defendants submitted an agreed statement of facts. The Court decreed "that the foreclosure proceedings which are the subject matter of this action were legally carried out and that there was a valid and legal foreclosure of said mortgage so as to remove the attachments made as clouds on the title acquired under said foreclosure." The exceptions of the principal defendants to this decree in favor of the plaintiff were reserved and transferred by Leahy, J.
The power of sale mortgage on premises in the town of Newington in the amount of $13,000 was executed March 12, 1954, and recorded. Foreclosure proceedings by the mortgagee were commenced in October 1954. Notice was published in the local newspaper for three successive weeks and a copy of the foreclosure proceedings was sent by registered mail to the mortgagor who was also served in hand with a copy of the notice. The sale on the premises at public auction was scheduled for November 24, 1954. At that time by public announcement the sale was postponed to December 3 and on that date to December 10, at which time it was postponed without date until further order of the Court for the reason that an injunction had been obtained by the mortgagor prohibiting the sale. On February 17, 1955, the mortgagor requested his counsel to seek dissolution of the temporary injunction prohibiting the sale. The injunction was dissolved on February 24.
Foreclosure proceedings were immediately resumed by mailing a notice by registered mail to the mortgagor on February 25 and by service in hand on him calling for the mortgage foreclosure sale to be held March 5 on the same terms and conditions as stated in the original notice of foreclosure. This notice was published once in the local newspaper on March 2, 1955, and the sale was held as advertised on March 5, at which time the mortgagor was present and the property was sold to the purchaser Edward S. Stutman for $13,000.
Attachment by the defendant Lovett was made May 27, 1954, and the attachment by the defendant American Fidelity Company was made February 15, 1955. No notice of the foreclosure sale was sent to the attaching creditors.
Samuel A. Margolis (by brief and orally), for the plaintiff.
Waldron, Boynton Waldron and Richard E. Dill (Mr. Dill orally), for the defendant Lovett.
Allen A. Backer (by brief and orally), for the defendant American Fidelity Company.
The remaining defendants furnished no briefs.
The first question presented by this case, which has not heretofore been decided, is whether notice must be given to subsequent attaching creditors in a power of sale foreclosure proceeding. The defendants contend that this is required under RSA 479:25 II: "NOTICE TO MORTGAGOR. A copy of said notice shall be served on the mortgagor or his representative in interest, or sent by registered mail addressed to him or such representative at his last known address, or to such person and address as may be agreed upon in said mortgage, at least twenty-one days before said sale." (Emphasis supplied). More specifically the defendants contend that an attaching creditor is a representative in interest of the mortgagor within the meaning of this statute. Reference is also made to the chapter on Statutory Construction wherein it is provided that the "word `mortgagor' . . . may include any person claiming under such party or having his right." RSA 21:17.
The word "representative" whether used in the singular or plural has no fixed meaning in the law. Merchants c. Co. v. Egan, 91 N.H. 368, 371. Its meaning necessarily varies according to the context in which it is used. Conant v. Curtiss, 93 N.H. 398; Grinnell v. O'Brien, 93 N.H. 403. The phrase "representative in interest" is more restricted in its meaning than the word "representative" and when used in conjunction with the definition of mortgagor appearing in RSA 21:17, the phrase refers to those holding subordinately and not adversely to the mortgagor. The phrase connotes an interest consistent with that of the mortgagor and not one in opposition to it. Clore v. Graham, 64 Mo. 249, 253. 3A Words Phrases 185. An attaching creditor is not a representative in interest as that phrase is used in RSA 479:25 II nor was it intended that he be notified as a "mortgagor" within the definition of RSA 21:17. Furthermore there is an additional reason why the statute does not apply to attaching creditors. The requirement that a notice may be served on the representative in interest of the mortgagor is an alternative and not a conjunctive requirement. It was intended to apply to those cases where the mortgagor's interest, may be represented by grantees, heirs, executors, administrators or others who do not occupy an adversary position to the mortgagor.
Unless the power of sale mortgage or the statute requires notice to junior lienors a power of sale foreclosure is valid with notice only to the mortgagor. This rule has been established for a long time and applies to the instant case. Scott v. Paisley, 271 U.S. 632; Watkins v. Booth, 55 Colo. 91. The rule is set forth in 4 American Law of Property, s. 16.207, p. 507 (1952) as follows: "When notice is of the personal variety, unless it is required by the terms of the power itself or by statute, it does not have to be given to anyone other than the mortgagor." We conclude that the defendants as attaching creditors (Felker v. Hazelton, 68 N.H. 304, 305) were not required to be given the same notice as the mortgagor and that the failure to do so did not affect the validity of the foreclosure sale.
It may be true that the careful conveyancer, for the protection of the mortgagee, generally will notify junior lienors and this course of procedure has been recommended by an acknowledged authority even though not required by statute. See 1 Glen, Mortgages, s. 110.1, p. 671 (1943): "But the better method, I suggest, is a general requirement that the junior encumbrancer shall receive the same sort of notice that the mortgagor gets, whatever that may be." See also, Forum on Title Examinations in 9 Proc. N.H. Bar Assn. (new series no. 2) 51-52 (1952). While it is not a statutory prerequisite to the validity of the title conveyed on foreclosure, this recommended procedure may be additional evidence that the mortgagee has performed his duty to the mortgagor to exercise good faith and due diligence in conducting the mortgage foreclosure. Pearson v. Gooch, 69 N.H. 208; Wheeler v. Slocinski, 82 N.H. 211.
The second question is whether the notice given on March 2, 1955, of the postponed sale of March 5, 1955, was sufficient to make the foreclosure valid. It is not disputed in this state that the postponement of a foreclosure sale is lawful and in some cases may be required by the circumstances. Wheeler v. Slocinski, supra; Roberge v. Cyr, 84 N.H. 204, 206. When the sale is postponed to a definite hour and day, no new notice or advertisement is required and it is sufficient if the date and time of the postponed sale are either announced at the latest proposed sale of which due notice has been given or stated in a notice of adjournment posted on the premises to be foreclosed. Roberge v. Cyr, supra; Taylor v. Weingartner, 223 Mass. 243; Forum on Title Examinations, supra.
In the present case, however, the sale was finally adjourned to an unknown or unspecified date and the public as well as the prospective bidders had no means of knowing when the foreclosure sale would finally take place. As to them the foreclosure proceedings were to all intents and purposes abandoned. In that situation a new foreclosure proceeding must be commenced and notice to the mortgagor and notice by publication for not less than twenty-one days before the day of the sale must be given as required by RSA 479:25.
A decree should be entered setting aside the foreclosure sale and deed.
Remanded.
All concurred.