Roush v. Fort , 2 Mont. 482 ( 1876 )

Blahe, J.

The,respondent Fort commenced an action against the appellants February 23, 1871, to foreclose a mortgage upon real property, and obtained a judgment IVIarch 16, 1871. On November 10, 1871, the premises 'were sold by the sheriff under an execution to the respondents Fort, Beese and Stoner, who purchased separate parcels, and received certificates of sale therefor. The appellants commenced this action April 23, 1872. The complaint alleged that the sale to the respondents was irregular and void, and prayed that the same be set aside, and that the possession of the property be restored to the appellants. The cause was referred to a master in chancery, who submitted his findings March 5, 1873. The court then ordered that the sale be confirmed, and that the respondents have the income of the property from the day of the sale. This appeal was taken from this order.

The respondent, Fort, and the appellants made a written agreement July 8, 1871 by which the property was not to be sold until after October 1, 1871. Fort was to have the possession and rents of the premises, and receive interest at the rate of two and one-half per cent per month from July 1,1871, upon the judgment recovered by him and one judgment which he bought. The income of the property was to be applied at the end of every month upon the judgments and any other indebtedness held against the premises by Fort. TJnder this agreement Fort collected $815, and paid $159.79 for the redemption of the property from a tax sale, at which he was the purchaser, and $84.05, the amount of the tax for 1871. No part of this sum was applied upon the judgments. There were due to Fort on the day of the sale upon the judgment, $3,055.79, after allowing all the credits to which the appellants were entitled, including the interest agreed upon and the amounts paid on account of the taxes. Fort caused the premises to be advertised and sold to satisfy the amount of the judgments, $3,342.68. The sale appears to have been legal in other respects, and we must determine the effect of the irregularities which have been specified upon the rights of the parties.

An execution which is issued in excess of the judgment can be amended upon motion and is not void, but voidable. A mistake of this character committed by any officer or party interested in the writ does not entitle the appellants to the relief prayed for in then* complaint. The executions are regular upon their face, and were issued upon two valid judgments rendered against the appellants. The respondents, Reese and Stoner, had no knowledge of the agreement between Fort and the appellants, and pui-chased their portions of the premises in good faith and for a valuable consideration. If the record shows that the court had jurisdiction to render the judgments against the appellants, and the executions were valid, the rights of Reese and Stoner cannot be impaired by any secret vice in the proceedings of Fort under the agreement. In Reeve v. Kennedy, 43 Cal. 650, Mr. Justice CbocKett says: “ The repose of titles, and indeed every consideration of public policy, demands that a purchaser at a judicial sale, without notice, under proceedings regular on their face, and by a court of competent jurisdiction, should be protected as against mere errors of the court, and against secret vices in the proceedings founded on fraud, accident or mistake, and which can only be made to appear by the proof of extrinsic facts not appearing on the face of the record.” In Hunt v. Loucks, 38 Cal. 372, Mr. Justice SANDERSON reviews the authorities, and says: “¥e understand the settled rule to be that if the execution be merely erroneous, that is to say, voidable, a sale under it to a bona fide purchaser will be valid, although the execution be afterward set aside.” * * * “ An execution which is amendable is not void, and an execution which merely calls for too much money is amendable.” Blood v. Light, 38 Cal. 649, and cases there cited. The appellants did not make any motion to amend the executions, and we are satisfied that the interests of the respondents, Reese and Stoner, as purchasers of the property in controversy, cannot be affected by this action. Martin v. Parsons, 49 Cal. 99, and cases there cited.

If the executions were issued in excess of the judgments through a mistake upon the part of the respondent, Fort, the appellants cannot obtain the relief sought against him. But the legal relations of these parties were changed by the agreement which was entered into. This respondent then occupied the position of a trustee for the appellants, and was required to apply upon .the judgments certain funds which came into his hands. He reaped all the advantages of the bargain upon his side, and received an exorbitant rate of interest, when the statute allowed him ten per cent per annum, and acquired the possession of the property before the same could be obtained by the aid of legal process. After Fort neglected to perform his trust, by applying tipon the judgments the money which he had received for this purpose, he caused the executions to be, issued for the sale of the property, and became a purchaser. Will a court of equity tolerate this conduct?

The law guards sedulously the rights of the debtor in the steps that are taken for the sale of his property, and will not sanction the slightest undue advantage over him. In King v. Platt, 37 N. Y. 160, the court says: “ A court of equity justly scrutinizes the conduct of a party placed by the law in a position where he possesses the power to sacrifice the interests of another in a manner which may defy detection, and stands ready to afford relief on very slight evidences of unfair dealing, whether it is made necessary by moral timpitude, or only by a mistaken estimate of others’ rights.” A sale will be set aside when there has been fraudulent conduct in the purchaser. Lefevre v. Laraway, 22 Barb. 167, and cases there cited; Breese v. Busby, 13 How. Pr. 485. The holder of a mortgage does not stand upon the same footing of public policy with other buyers. Tripp v. Cook, 26 Wend. 158. “ If one acting as trustee for others becomes himself interested in the pm’chase, the cestuis gue trust are entitled, of course, to have the sale set aside.” Stephen v. Beall, 22 Wall. 340, and eases there cited. The respondent, Fort, misapplied the funds intrusted to him, endangered the interests of the appellants, and showed a want of reasonable fidelity to his trust. 1 Story’s Eq. Jur., § 239 ; 2 id., § 1289. He was faithless in the performance of his fiduciary duty, and the foregoing authorities declare the consequences of his misconduct. ¥e cannot allow a party to take advantage of his own wrong, and must set aside the sale of the property to Fort.

Cause rema/nded for further proceedings.