Opinion
(December Term, 1830.)
1. If the mortgagee obtains judgment and execution for the mortgage debt, and under the act of 1812 (Rev., ch. 830), sells the equity of redemption and becomes the purchaser, how is the relation between him and the mortgagor affected thereby? Quaere?
2. Does he abandon his mortgage and become the owner of the land to all purposes, and liable to pay the mortgagor the amount he bid at the sale, or is he still liable to an amount and redemption? Quaere?
3. If a third person buys at such sale does he hold the whole equitable estate in the land, and is he entitled to call for the legal title without payment of anything beyond his bid? Quaere?
4. But in such a case, the contract of sale being made with the sheriff, whatever may be right of the mortgagor in equity he cannot, at law, recover the sum bid by the mortgagee.
5. Per HENDERSON, Chief Justice. — No analogy exists between the sheriff and an original agent, so as to enable the person whose goods are sold by the former to recover the price in his own name, as the principal can, in a sale by the latter, because the power to the sheriff is irrevocable.
ASSUMPSIT upon a special count, and for money had and received by the defendant to the use of the plaintiff. Plea Non-assumpsit. On the trial MANGUM, J., directed a nonsuit to be entered, with liberty to the plaintiff to have it set aside, and a verdict entered for $298, if, upon the following facts, the Court should be of opinion he was entitled to it:
J. M. Carson, for the plaintiff.
No counsel for defendant.
FROM RUTHERFORD.
The plaintiff had purchased a tract of land of the defendant at the price of $800, half of which was paid down, and to secure the balance a bond and mortgage of the same land was executed to the defendant. When the money thus secured became due, the defendant commenced an action on the bond, obtained a judgment, issued an execution, and had it levied upon the plaintiff's equity of redemption in the mortgaged premises. At the sale under this execution the sheriff gave notice that he offered the land for sale, subject to the defendant's mortgage. (503) The defendant became the purchase for the sum of $298, which the sheriff credited on the execution. The defendant afterwards took measures to enforce the collection of the residue of his judgment from the plaintiff. The mortgaged premises had been sold as the property of the defendant. Upon these facts his Honor, retaining his original opinion, refused to set the nonsuit aside, and the plaintiff appealed.
I regret that there is no contract between the plaintiff and defendant, and therefore that this action cannot be sustained. The sheriff is between the parties and keeps them asunder.
But on the other question, I am not prepared to give an opinion. It is plain enough, when another creditor of the mortgagor sells the equity of redemption, what the rights of the mortgagor, mortgagee, and purchaser are. But when the mortgagee himself sells the mortgaged premises, not under his mortgage, but under an execution at law for the mortgage debt, a case is presented requiring much consideration before pronouncing judgment. On the one hand it seems contradictory in terms, that a sale should be made under execution, and yet the thing disposed of be sold subject to the very debt mentioned in the execution. It would amount to this: that equities of redemption may be sold at law by all creditors except the mortgagee for the mortgage debt. For if the mortgagor be entitled after the sale to an account, his equity is not in fact extinguished by the sale. Perhaps this would be the safest construction, that the mortgagee must proceed on his contract to foreclose, though the act seems as one of its objects to give him in this way a kind of legal foreclosure, instead of the more dilatory one in equity. Yet, on the other hand, that may produce the greatest hardship and appalling injustice to the debtor. If a sale at law between these parties be allowed at all, and a third person purchase, I do not know that it ought to be regarded as the sale of the equity of redemption merely; but as those having the whole legal and equitable interest are parties to the proceeding, the one as plaintiff (506) and the other as defendant in the execution, it may be taken as a sale of the estate out and out. It is true the mortgagee's legal title does not pass by the sheriff's deed, but the purchaser might call for it in equity, without paying any more than is his bid, since the mortgagee has had the full benefit of it. This, I suppose, is clear enough when the bid exceeds the mortgage debt. When it falls short of it, a difficulty arises. Upon the whole it seems to me to be a very nice point, and not fit to be settled but in a case which will make it absoluetly [absolutely] necessary. Whatever may be the rights of the parties, they depend upon complicated equities, which can never be adjusted in a Court of Law; which is another reason why the plaintiffs here cannot recover. I concur fully in that; but as to the equitable demands of either party, I reserve myself altogether, until the question shall be directly made in a proper case, and then I will bestow on it my best reflection.
The plaintiff's equity of redemption in the land, mortgaged by him to the defendant to secure the sum of $400, had been sold under an execution issued on a judgment obtained by the defendant against him for the mortgage debt, and bid off by the defendant for the sum of $298, which sum the sheriff credited on the execution. The land has since been sold as defendant's property to satisfy his creditors, and the defendant is now pursuing the plaintiff for what he calls the balance of the mortgage debt. This action is brought by the defendant in the execution against the plaintiff therein to recover the amount of his bid, upon the ground that it was so much bid over and above the mortgage debt, and therefore belongs to him. Or, to speak more intelligently, the biddings at such sales are the sums named or offered, added to the mortgage debt. And if the construction of the act of 1812 (Rev., ch. 830), contended for is correct, the money thus bid belongs to the defendant in the execution. But even (507) if it does, can the action be sustained? Is there any contract or privity between the defendant in the execution and the bidder? Is not the contract made with the sheriff? Is he not the person to enforce it? And if he omits or refuses to perform his duty, is he not the person responsible to the defendant? Certainly, no action can lie for this plaintiff against the bidder, unless in analogy to those cases where a contract is made by a mere agent, and the principal assumes the right to himself, and brings an action to enforce it. But these are cases of mere agents to sell, and to collect if the principal pleases. The principal may put an end to the agency at his pleasure, and assume his rights to himself. When he does this he affirms the sale as his act, and can enforce performance. But is the sheriff a mere agent to sell? Is not his authority entire and irrevocable? Do not his duties require that his agency, if it be one, should continue until the transaction is finished? We think it does, and that he is the proper person to enforce the performance of the contract. The same principle would sustain an action against any purchaser at a sheriff's sale, where more is bid than will satisfy the execution. If this action will lie, an action will lie against such bidder at the instance of the defendant in the execution to recover the surplus. If it be said this is arguing in a circle, and that such an action will lie, it is answered that cases of that kind are of daily occurrence, and yet we never have known such an action brought, which is strong evidence that it could not be supported. Whatever, therefore, may be the just construction of the act of 1812, we think this action cannot be sustained.
PER CURIAM. Affirmed.
Cited: Bissell v. Bozman, 17 N.C. 165; Camp v. Coxe, 18 N.C. 52.
(508)