Thompson v. Heywood

Soule, J. One who undertakes to execute a power of sale is bound to the observance of good faith, and to a careful regard for the interest of his principal. A mere literal compliance with the terms of the power is not enough. And though a stranger to his proceedings, finding them regular in form, and purchasing in good faith, and who has paid value for the premises, might not be affected by his unfaithfulness, no one who participated with him in attempting to execute the power, without regard to the interest of the principal, is entitled to reap any benefit from Such fraudulent conduct. Montague v. Dawes, 14 Allen, 369. Roche v. Farnsworth, 106 Mass. 509. Drinan v. Nichols, 115 Mass. 353. Upon the evidence in the case, the power of sale in the mortgage held by Loring was not executed in good faith, and Heywood, the purchaser at the sale, participated in the attempt to make the sale as private as possible, by publishing the notice [404] in a paper which did not circulate in the region about the mortgaged premises, by fixing the sale at an unreasonably early hour in the morning, and by going through the form of an auction sale, when the absence of bidders made it manifest that a due regard for the interest of the principal required a postponement, and further and more public notice. The decree, so far as it declared the attempted foreclosure of the Loring mortgage to be void, cannot, therefore, be disturbed. The decree was right, further, in ordering that the payment by Heywood of the amount of the Loring mortgage should be taken and regarded as an extinguishment of that mortgage. He was the owner of the equity of redemption of the plaintiff’s mortgage, under a conveyance in which he had undertaken to pay all the mortgages on the land. Any payment of either of the mortgages by him must be regarded as extinguishing such mortgage, without regard to the form of the instrument by which the mortgagee may have attempted to transfer his interest to the owner of the equity. McCabe v. Swap, 14 Allen, 188. Putnam v. Collamore, 120 Mass. 454. On the same principle, the mortgages which were paid by Johnson, while he held the equity of redemption under a deed in which he undertook to pay the mortgages, were extinguished, and cannot be set up against the plaintiff, by Heywood. The defendant Heywood was properly enjoined against removing gravel from the land. The fact that he was doing so was brought out in the evidence, and the prayer of the bill, which is not only that the sale be set aside, and that the defendant be restrained from making any conveyance of the premises or any assignment of the Loring mortgage, but for such other and further relief as may seem meet, is broad enough to be a foundation for this part of the decree. Decree affirmed, with costs.