Hartman v. Pemberton

Opinion by Henderson, J., The defendant does not deny that he was the purchaser at the sheriff’s sale ; that he declined to complete the sale by the payment of the balance of his bid, and that there was a resale at a reduced price. The sale was made under the following terms : “ Fifty dollars of the price or sum at which the property shall be struck off shall be paid to the sheriff at the time of sale unless the purchase money shall be less than that sum, in which case only the purchase money shall be paid. Otherwise the property will again be immediately put up and sold. The balance of the purchase money must be paid to the sheriff, at his office within ten days from the time of sale, without any demand- being made by the sheriff therefor. Otherwise the property may be sold again at the expense and risk of the person to whom it is struck off, who, in case of any deficiency at such resale shall make good the same.” It has been held in many cases that an action will lie against the defaulting purchaser at a sheriff’s sale for the difference between the' price bid by him and the smaller sum obtained at a second sale: Gaskell v. Morris, 7 W. & S. 32 ; Adams v. Adams, 4 Watts, 160 ; Cooper v. Borrall, 10 Pa. 491 ; Tindle’s Appeal, 77 Pa. 201 ; Peck v. Whitaker, 103 Pa. 297. The first defense set up in the affidavit is that the defendant bid in the property under a misapprehension as to existing liens. No allegation of fraud or misrepresentation on the part of the sheriff, the plaintiff in the execution, or the debtor, is alleged, the only cause of misapprehension being the belief of the defendant that it was customary for the sheriff to give notice of prior incumbrances in his advertisements, and the further [227] fact that the agent of the defendant who attended the sale was led to believe by the course of the bidding that there were no prior incumbrances. The affidavit does not disclose, however, any act of any of the parties in interest in the sale by which he was misled, or which affected the validity of his contract with the sheriff. The rule is well established that a purchaser at sheriff’s sale buys at his own risk. The sheriff offers to sell and the purchaser can only buy the interest of the debtor in the land to bn sold. The purchaser takes the title of the defendant in the execution as it is. The record of a prior mortgage is constructive notice to him, and he is bound by the facts which the record discloses. “ They (bidders at judicial sales) bid at their peril, and are supposed to be acquainted with the location of the property and its title, and, if they are not, they, and not the creditors and debtors, must stand the loss : ” Cooper v. Borrall, supra ; Davis v. Baxter, 5 Watts, 515 ; Weidler v. Farmers Bank, 11 S. & R. 134 ; Wells v. Van Dyke, 106 Pa. 111. Where a purchase has been made at judicial sale under material misapprehension as to facts, the purchaser may be relieved in a proper case by application to the court having control of the sale, but, unless that is done, he must stand to his bargain: Davis v. Baxter, supra; Crawford v. Boyer, 14 Pa. 380. From the misapprehension alleged in the affidavit, the defendant is not entitled to relief in an action by the sheriff for deficiency in the second sale. Another defense presented is that the defendant was relieved from the obligation of his bid because when he informed the attorneys of the plaintiff and the defendant in the execution that he would not perfect the sale, he was not immediately or shortly thereafter notified that he would be held to his bid. The hand money had then been paid by the defendant, and he had signed his bid. It does not appear that he notified the sheriff that he declined to comply with his undertaking, nor under the terms of the sale was the sheriff required to demand the balance of the purchase money from him, it being expressly stipulated that that balance should be paid within ten days from the time of sale without demand therefor by the sheriff. If not so paid, the sheriff was at liberty to resell the property at the risk of the defaulting purchaser. In Gaskell v. Morris, supra, it was said: “ This notice, if any of the sort was requisite, was sufficient to [228] put him on the lookout so as to guard against the consequences of a resale, which could only be done by his paying the purchase money without delay.” Nor if notice had been given, was the sheriff bound to immediately re-expose the property to sale. He had a right to rely upon the defendant’s contract and hold him for the whole amount of the purchase money, and we cannot say that he might not at the end of ten days elect whether he would proceed against the purchaser on his bid or resell the property and hold him for any deficiency. It had already been twice sold on the day appointed. Whether bidders were present after the defendant had signed his bid and made the hand payment, we are not informed. It is easily seen that there might be good reason for not offering the property a third time that day.' It is a matter of general experience that at such sales property offered a second timé brings a lower price. The interests of the. creditors and the debtor might be greatly prejudiced by such resale: Forster v. Hayman, 26 Pa. 266; Cooper v. Borrall, supra. It is admitted that the attorneys of the use plaintiff gave notice in writing to the defendant September 18,1900, that the same property would be sold by the sheriff on the 17th of that month, and that he would be held responsible for the difference should the property sell for less than the amount bid by him at the former sale. If any other notice were required than that contained in the conditions of the sale, this was sufficient to inform the defendant, and to give him an opportunity to protect himself at the second sale. It is affirmed in the declaration, and not denied by the plaintiff, that no change occurred in the condition of the property and the terms of sale, and the relations of the parties were clearly maintained by the notice referred to, if indeed that were necessary. The averment that the sheriff was bound to tender a deed to the defendant and demand payment of the balance of the purchase money cannot be maintained. The sheriff is not bound to tender a deed before payment of the purchase money. The sale is under the direction and control of the court, and all of the interests of the purchaser are thus protected: Negley v. Stewart, 10 S. & R. 207; Allen v. Gault, 27 Pa. 478. It is further alleged by way of defense that the property should.have been sold at the sheriff’s sale in the succeeding [229] month. It appears from the pleadings that after the lapse of the ten days allowed for the payment of the balance of the purchase money there was not time in which to procure the sale at the time fixed 'for the August sale. As before indicated, we are of the opinion that the parties were not bound to proceed at once by an alias writ to cause a second sale. They might have relied on the defendant’s bid and have undertaken to hold him for the whole of the purchase money. The defendant is not in a situation to object thatinstead of doing this they determined to cause the property to be resold, and to hold him for the deficiency. The defendant having failed to perform, and a resale having taken place, he cannot excuse his default by the plea that he should more promptly have been released from his obligation to pay the purchase money on his bid. In Schoening v. Leeds, 7 W. N. C. 243, there was a second sale at which a greater sum was bid than that at the first sale. The second bidder also made default. It was there contended that the second sale terminated the liability of the first bidder. The court held, however, that the first bidder remained liable until there was a resale consummated by the payment of the purchase money, and that he was liable for the deficiency in price between his bid and that obtained at the third sale. It is further objected that the action should have been brought in the name of the sheriff alone. Forster v. Hayman, supra, and Tin die’s Appeal, supra, are authority for the practice of introducing a use plaintiff. The right of action, however, is in the sheriff. The contract was with him, and he is responsible for the proper application of any amount recovered : Emley v. Drum,. 36 Pa. 123; Peck v. Whitaker, supra; Connell v. Shryock, 167 Pa. 483. It is not necessary that the name of the use plaintiff appear in the action. A judgment in the present case would be a complete bar to another action against the defendant growing out of the same liability. A careful examination of the elaborate affidavit of defense does not disclose any facts amounting to a defense to the plaintiff’s claim. The affidavit of defense in the ease of Connell v. Webb, 175 Pa. 52, relied upon by the defendant, contained three material averments which distinguish it from the defendant’s case. There was first a denial that the purchasers refused to comply with the first purchase by them ; second, an averment of a failure by any [230] of the parties in interest to notify them that if they did not comply they would be held responsible for a deficiency of price of the second sale; and third, an averment that the defendants were lien creditors and entitled to any fund which might be recovered in the action for a deficiency in price. The case of Girard Life Ins. Co. v. Young, 8 Phila. 16, was one of distribution among creditors. The terms of sale are not given. There was no notice to the purchaser that he would be held liable for any deficiency in price, and the court held that in the absence of such notice and the failure of the sheriff to make any demand, there was a presumption that the sale was rescinded by consent of the parties. Neither of these cases supports the position taken by the defendant, as he admits his refusal to perform, and the receipt of notice that he would be held liable, and it is not pretended that he was a judgment creditor interested in the fund which might be realized by recovery of the deficiency. We are of the opinion therefore that a judgment should have been entered for the plaintiff on the rule. The judgment is therefore reversed and the record is remitted to the court below with direction to enter judgment against the defendant for such sum as to right and justice may belong, unless other legal or equitable cause be shown to the court below why such judgment should not be so entered.