Young v. Stone , 4 Watts & Serg. 45 ( 1842 )

The opinion of the Court was delivered by

Sergeant, J.

— In one point, and one only, do we think there is an error in the opinion of the court below; and that is, in the instruction to the jury, that nothing but the amount of the sheriff’s sale could be applied to the payment of the judgment of the Allens. The principles of justice and equity, as well as of sound policy, require the contrary. The Allens holding a mortgage and judgment against the property, undertake to treat it as theirs, fix a price on it, and from the control which their levy and execution gaye them, may be deemed, pro hac vice, the owners of the property. By their attorney, Fuller, they contract with certain persons to sell it for $3675. The sheriff’s sale takes place under and subject to this contract, and in performance of it, and. is, in fact, but a means adopted by the parties for passing the title devested of liens, a mode of conveyance by legal process and matter of record. The sale is afterwards effected for the price thus agreed on, and the money paid, or secured to be paid to the Allens. It would be a perversion of terms to call such a proceeding, as between the parties, a mere ordinary sheriff’s sale, in which the price bid is the real- purchase money. It was not left to the ordinary course of the law; it was, in effect, a private sale by the creditor, through the medium of a sheriff’s deed. Yet, though sold in reality for $3675, and that price received by the Allens as the consideration money, the plaintiffs’ attorney takes an assignment to himself of the judgment, and claims the difference between that and the nominal sum (for it was no more) bid for it at the public sale. The plaintiffs’ attorney and the plaintiffs are but one; any transaction by the attorney in that capacity is the transaction of his clients, and it is difficult to understand how a plaintiff can receive from the sale of the defendant’s property, by the use of legal process, the full amount of his debt, interest and costs, and yet pretend to claim a large balance under an assignment from himself. Considered also on the ground of policy, it would be dangerous to permit such arrangements to be made, and they might prove the means of oppression on unfortunate debtors. Their tendency is to make it the interest of the plaintiff and his attorney to contrive it so that the property shall sell at the sheriff’s sale as low as possible, in order that they may realize a larger profit. Bidders may be discouraged by giving it to be understood privately that the property will not be suffered to go under the price agreed upon. It is true, there is no proof here of this; nor is it easy afterwards to find proof where it has been done, The safest course is a preventive one; to take away all temptation to make a sheriff’s sale an opportunity to the plaintiff to speculate on the distresses of the debtor, by bringing about a public sale at low prices, the plaintiff being secure in the meanwhile in the receipt of his debt by a secret agreement with' a purchaser. It is wise to keep official sales free from previous arrangements and negotiations between the plaintiff and the purchaser’ that would unduly control or affect them, and give any of the parties an advantage. For these reasons, we think the defendants, Youngs, were entitled to a credit for the $3675, and that in this respect the court below erred.

As to the other errors assigned, the main point in the case is very properly stated by the court below to be, whether the defendants were in default in not performing their part of the agreement, in consequence of which the sale took place under the judgment. If the agreement was to pay off the mortgage, or to cause it to be released or arranged to the satisfaction of the mortgagee, so as tó prevent its being levied on the property, it is clear the defendants failed to fulfil their agreement. And that this was their agreement would seem to be pretty clearly shown by the evidence, and appears to be found by the jury under the charge of the court; and is, moreover, an agreement naturally flowing in equity, from the very circumstance of the mortgage being part of the consideration money, and therefore an encumbrance which the purchaser is under an obligation to indemnify the vendor against. See Trevor v. Perkins, (5 Whart. 244). Certainly the- plaintiff would not be bound to tender a deed to the defendants so long as this most material act on the part of the defendants remained unperformed, and the property continued in jeopardy. And even if this had been done, still there remained the payment of the $1500, which, it would seem from the testimony of Wilder, the only witness who speaks with any precision on the subject, was to be simultaneous with the tender of the deed; so that the defendants could not demand a deed till this money was tendered. If the defendants failed in either of these, it was not incumbent on the plaintiffs to make them a deed. It seems plain, however, that it was in consequence of the defendants not providing for the mortgage that the Allen debt was enforced by execution and the property swept away. I am of opinion that the court charged correctly that if the contract was as the plaintiff alleged, he was not,: under the circumstances, bound to tender a deed before the sheriff’s sale; and after that, it was nugatory, as his title was altogether devested.

The adjustment of the set-off claimed by the plaintiffs against the Allens, and the alleged defect in the acknowledgment of the parties to one of the title deeds, seem to have had little or no influence on the catastrophe that resulted. These questions were brought before the Court of Common Pleas, in the suit by the Allens, by the affidavit of the plaintiffs on the 19th of August 1839, and, as appears by the charge of the court, were disposed of by the ascertainment of the balance and the execution of a deed on the 15th of November 1839, prior to the sheriff’s sale. This concluded the plaintiffs as to their claim to a deduction from the mortgage on these accounts, and enabled the defendants to know whether they were to pay the Allens the amount of their judgment or not; which was the matter material to them. Then if they agreed to take on themselves the arrangement with the Allens, they were bound to attend to this suit and take notice of its result. It would seem they left it to the plaintiffs, and no evidence is given of any collusion or neglect on the part of the plaintiffs in relation to the suit by the Allens against them. If this decision did not dispose of the objection made to the title, we think the defendants should show that they had put themselves in a situation to ask for a title, when, perhaps, any defect might be removed, or if not removed compensation be allowed for it. But in truth these seem to be minor matters. The real cause of the loss that ensued appears not to be attributable to them, but solely to the failure of the defendants to pay off the mortgage, or arrange it so as to secure the property from being sacrificed.

It is objected that the court below erred in treating this as a suit brought to enforce a specific performance of the contract; whereas it was in effect but a parol contract, and the declaration does not sufficiently state the part performance of such parol contract to make it a case in which equity would execute it. For although it states that the defendants entered into possession, it does not state it was done in pursuance of the contract. Considering, however, that the declaration says, that after making the agreement for this property the plaintiffs surrendered the possession of it to the defendants, and they entered and took possession, we think the verdict cures an insufficiency of this kind, and that after verdict the inference that the entry was in pursuance of the agreement, may be fairly drawn from the whole tenor of the pleadings, and the proof that must be presumed to have been given.

As to the damages, the rule is properly laid down by the court below, that the plaintiff is entitled to the difference between the amount of purchase money contracted to be paid and that which the plaintiffs received from the sale, added to the $500 cash paid to the plaintiffs, with interest from the time of the sale.

Judgment reversed, and venire facias de novo awarded.