Mead v. Brunnemer — 6 N.Y. St. Rep. 38

Majority

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Gheistein Mead, Resp’t, v. John Brunnemer, Def’t, and Harry J. Lea, App’lt.

(Supreme Court, General Term, Second Department,

Filed December 14, 1886.)

Headnote

1. Foreclosure—Sale under judgment of—Terms of sale—Assignee of BID.

In an action for the foreclosure of a mortgage, the mortgaged premises were sold pursuant to a decree granted therein. At the sale, defer.dant, the mortgagor, bid them in, signing the terms of sale, and paying ten percent of the amount so bid. The terms of sale contained a provision that in case any purchaser should fail to comply with any of the conditions thereof, the premises should be resold without application to the court, unless the plaintiff’s attorney should elect to make such application, and that the purchaser should be liable for any deficiency there might be between the sum for which the premises were struck down on the first sale and that for which they were purchased on the second sale. The purchaser assigned his bid to the appellant, but at the time fixed for the completion of the purchase neither of them, nor any one on their behalf, appeared to complete the same. Accordingly, in pursuance wdtli the terms of sale, the premises were resold for a lesser price, the plaintiff purchasing, and judgment for the deficiency entered against the original purchaser. The assignee of the bid refused to complete the purchase, alleging objections against the title, and moved that the ten per cent paid by his assignor be refunded. Held, that an assignee of the bid took the responsibility of the broken condition, at least so far as to lose the deposit by a deficiency on the second sale. That he could not take an assignment free from the equitable claim which the plaintiff might establish against the fund; that as against the mortgagor the title must be deemed good.

3. Same—Application of payment—Liability to refund.

Held, that the application by plaintiff of the amount paid by the purchaser tothebiderwas not such an election not to apply on the judgment as to make lier liable to refund the same to the mortgagor or his assignee.

Appeal by assignee of purchaser in a foreclosure suit from an order of the special term, denying his motion that the plaintiff refund a deposit made by purchaser.

The premises described in the complaint were on June 28, 1884, sold by the sheriff of Rockland county, pursuant to a decree of foreclosure and sale, granted on May 6, 1884. The mortgagor, at the sale, bid $5,000, and the premises were struck down to him for that sum, he signing the terms of sale, and paying $500, being ten per cent, of his bid. The terms of sale provided among other things, this, as follows: c ‘ And in case any purchaser shall fail to comply with

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any of the above conditions of sale, the premises so struck down to him will be again put up for sale, under the direction of said sheriff, under the same terms of sale, unless the plaintiff’s attorney shall elect to make such application, and such purchaser will be held liable for any deficiency there may be between the sum for which said premises shall be struck down upon the sale, and that for which they may be purchased on the resale, and also for any costs and expenses occurring on such resale.” The purchaser assigned his bid to one Lea, but at the time appointed for the completion of the purchase, neither- purchaser nor assignee, nor any one on their behalf, appeared to complete the same, and the assignee served objection to the title. Thereupon, by the instruction of the plaintiff, the sheriff resold the premises on September 6, 1884, the plaintiff purchasing the same for $3,500. and a judgment for the deficiency was entered against the purchaser.

John J. Mead, for resp’t; Elbert Crandall, for app’lt.

The papers show that the plaintiff held a mortgage against the defendant, Brunnemer. The mortgage was foreclosed, and at the sale was purchased by the mortgagee for $5,000. The mortgagee assigned his bid to one Lea, and he failed to complete the purchase. The plaintiff resold the property, and bid it in himself for $3,500. There was a deficiency of $1,5.14.19. Lea made no application to the court to he relieved from his bid, nor did his assignor. By the terms of the first sale, upon failure to comply with the conditions of the sale, the premises were to be resold, and the purchaser was to be hable for the deficiency between the first sale and the subsequent one. An assignee of the bid took the responsibility of the broken condition, at least so far as to be a total loss of the deposit, by a deficiency in the second sale. He could not take an assignment free from the equitable claim, which the plaintiff might establish against the fund. Mickle v. Townsend ( 13 N. Y., 575 ); Gay v. Gay (10 Paige, 369).

As against the mortgagor, the title must be deemed good. He assented to its validity by the execution of his mortgage upon it, given by himself. The formal application of the $500 on the second bid was not such a decisive election as to make the plaintiff liable to refund the same to the mortgagors, or his assignee. Lea, by the purchase of the bid, became a quasi party to the action, and either he or his assignor could have compelled the application by motion. Cazet v. Hubbard ( 36 N. Y., 677 ).

The order should be affirmed with costs and disbursements.

Dykman and Pratt, Ju., concur.