Subsequent to the foreclosure in pais of a deed of trust executed by the appellees in favor of A.J. McLaurin, as trustee, for the benefit of the appellant, Home Owners Loan Corporation, this suit was instituted in the circuit court of Hinds County to recover a judgment for the balance then left due on the indebtedness thereby secured. The amount of the bid at the trustee's sale when the appellant became the purchaser of the property involved, after due and legal notice in the manner provided for in the deed of trust and as required by law, was the sum of $1800, which was in excess of 50% of the value of *Page 758 the property, and which amount, less a reasonable trustee's fee and the other expenses paid by the appellant in connection with the cost of foreclosure, was credited on the indebtedness then in default, amounting to the sum of $3,243.77, leaving a balance of $1,504.57 due on the note sued on, plus a reasonable attorney's fee of not exceeding 10% of the said amount, as contracted for, and for all of which a judgment was demanded.
Appellees filed a plea of the general issue and gave notive thereunder that they would show upon the trial of the case that the property conveyed by their deed of trust and sold by the trustee to the appellant was worth at the time of sale, at a fair cash market value, a sum equal to or in excess of the entire indebtedness then due; and that hence the plaintiff was not entitled to recover a deficiency judgment in any sum whatsoever against them. Over the objections of the plaintiff there was testimony introduced before the jury on that issue, and with the result that the verdict was in favor of the defendants, notwithstanding that there were neither allegations contained in the notice of affirmative defenses which was filed with the general issue plea, nor proof made upon the trial, of such facts as would be sufficient to render the sale fraudulent, so as to entitle the defendants to recoupment for the difference between the price at which the property sold and its reasonable market value at the time of sale. Mere inadequacy of price alone does not render a foreclosure sale fraudulent, even in a court of equity, unless the bid is so low as to shock the conscience of the court. Newman v. Meek, Freem. Ch. 441; Fischer v. Spierling,93 N.J.L. 167, 107 A. 420; Weyburn v. Watkins, 90 Miss. 728, 44 So. 145; Federal Credit Co. v. Boleware, 163 Miss. 830,142 So. 1; Wheeler v. Cleveland State Bank, 174 Miss. 542, 164 So. 400; Hardin v. Grenada Bank, 182 Miss. 689, 180 So. 805. And, in the absence of allegations of facts constituting fraud, as well as clear and convincing proof thereof, the price at which property is sold under a foreclosure in pais is the *Page 759 full measure of credit that the grantors in a deed of trust may legally demand.
We deem it unnecessary to enter into a discussion of the numerous decisions cited in the briefs of counsel, for the reason that it is sufficient to say that an examination of the cases relied upon discloses that they are each distinguishable from the case at bar, both on the issues therein presented, and on the facts involved. None of the decisions of this Court, nor the authorities generally, sustain the view that when a beneficiary in a deed of trust finds it necessary, in the absence of a higher bidder, to become the purchaser at a foreclosure sale in pais, although at a lower bid than the property is actually worth, he is required to credit the full value of the property on the indebtedness held against the same, even though the sale has been unaffected by either actual or legal fraud. When a deed of trust is being foreclosed in pais it is often necessary for the grantors therein to procure the attendance of other bidders at the sale than the beneficiary in order to obtain the benefit of the full value of the property involved as a credit on the indebtedness secured. In this instance the grantors failed to do so, and while complaint is made that the appellant declined to furnish information to interested persons sometime prior to the foreclosure sale as to the amount of indebtedness due, it was neither alleged nor proved that the debtors themselves sought such information, although they had the right under the law and the terms of the deed of trust to sell the property at private sale subject to the rights of the appellant therein. They had ample opportunity to make a sale, or invite bidders to attend the trustee's sale, since they discontinued their payments in January and moved from the premises long before the foreclosure sale during the following September.
Nor does the fact that the proof herein shows that the agent, who was requested to bid for the appellant at the sale here in question, was authorized to start the bidding at only $1,800 plus the expenses, and to raise it to the *Page 760 full amount of the indebtedness if it should become necessary to do so in the event of competitive bidding, cause the bid of $1,800 to be an invalid or fraudulent one when it became the highest bid because of the absence of other bidders at the sale, since the amount thereof, being 50% or more of the value, does not fall within the rule of condemnation against sales made for prices so grossly inadequate as to shock the conscience of the court, referred to in the cases hereinbefore cited.
The foreclosure proceedings being in all respects regular and sufficient, and the balance due on the indebtedness after crediting the net proceeds of the sale having been clearly established, and the testimony given on behalf of the appellees being incompetent, for reasons hereinbefore stated, on the issue of whether or not the fair market value of the property would be equal to or exceed the amount of the debt at the time it was sold, it follows that the peremptory instruction requested by the appellant in the following form should have been given, to-wit: "The Court instructs the jury for the plaintiff to find for the plaintiff in the sum of $1504.57 with interest at the rate of 5% per annum from September 2d 1938, together with reasonable attorney's fee to be fixed by you not to exceed ten per cent."
Reversed and remanded.
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