Crane v. Robinson

Daly, P. J.

The dismissal of this action, by the justice was proper, because no action at law will lie by a referee appointed by the court to sell property under foreclosure, against the purchaser, or his assignee, who either fails to complete hi's purchase, or fails to pay the consideration, or any part of it, on the delivery of the referee’s deed. The remedy of the referee is by motion to the court in the original action in which the sale has been had, to whose jurisdiction the purchaser and his assignee submit themselves with respect- to all matters connected with the sale. The purchaser or the assignee may be compelled to complete, or to relinquish, his purchase, and the court by whose order the sale is made must decide in the original suit whether either is equitable and right. “ The existence of this jurisdiction in the original action is a sufficient reason why a court of law should not entertain a new action on the alleged contract as between party and party.” Miller v. Collyer, 36 Barb. 250. The sale by the referee is a proceeding in the action; the purchaser who signs a memorandum of the terms of sale submits himself to the jurisdiction of the court; his rights and liabilities do not grow out of contract, but-arise from this proceeding and submission. Willets v. Van Alst, 26 How. Pr. 325-343. “ The sale is made by the court through the sheriff acting as its officer, and, strictly speaking, there can be no written contract. The purchaser could not sue the court and it could not sue him upon his contract. The sheriff in such case is under no duty to bind himself personally or to demand that the bidder shall be bound to himself personally; the bidder is under no obligation to bind himself by contract to the sheriff; in bidding, he subjects himself to the jurisdiction of the court and in effect becomes a party to the proceeding and may be compelled to complete his purchase by order of the court, and by its process for contempt if necessary.” Andrews v. O’Mahoney, 112 N. Y. 567.

It appears that the referee resorted to the proper remedy and sought, 'by motion at Special Term in the action in which the sale was had, to compel the payment by the assignee’s attorneys of the sum which they insisted they had a right to retain and did retain out of the amount of the bid. His. motion was denied, presumably because, in construing the terms of sale, which permitted a deduction of taxes ■ accrued at the tvnie of sale, it was considered that the time of the delivery of the deed was to' be deemed, the time of sale, following a memorandum" decision in Moeslein v. Hyman, N. Y. L. Jour., September 26, 1895. The referee seems to have relied upon this view of the law by the court which appointed him, and to have permitted the assignee to retain out of the bid the amount of the. taxes in dispute. But, upon a subsequent application at Special Term in the same action for the confirmation of his report of sale, a contrary view of the law was taken by the court and he was required, at the instance of the defendant in foreclosure, to make good to the surplus moneys the amount of such taxes. He then resorted to this action.'

■ As we have soon, this action cannot be maintained! The referee took the proper proceeding in the first instance by motion to the court - which appointed him and in the action in which he was appointed. If the later decision of the Special Term in that action be correct, he should have prevailed upon the original motion, and the attorneys of the assignee should have been compelled to refund the amount of the taxes retained by them. He will not be permitted- by the court which appointed him to suffer because he acquiesced in its first order to allow the amount of the taxes to such assignee, and was afterwards compelled.to account for it to the defendant entitled to the surplus. He will undoubtedly be allowed a rehearing' or renewal of his original application for relief in a new motion against the assignee upon timely application at "Special Term. .

Judgment appealed from affirmed, with costs.

McAdam and Bischoff, JJ., concur. .

Judgment affirmed, with costs. The plaintiff should seek relief by motion as indicated in opinion.