Lord v. Hartford

Loring, J. The defendant’s first contention is that Pub. Sts. Co 192, §§ 10, 11, had not been enacted when Middlesex Bank v. Minot, 4 Met. 325, was decided, and that the rule applied in that case does not apply to a sale made under the provisions of the subsequent act. It is true that Pub. Sts. c. 192, §§ 10, 11, had not been enacted in 1842, when Middlesex Bank v. Minot was decided; those provisions were originally enacted in 1859; Gen. Sts. c. 151, §§ 9, 10; but a pledgee is just as much precluded from buying in at a foreclosure sale under the act, as in a foreclosure sale held under the contract of pledge, or otherwise. A pledgee is precluded from buying the property pledged at a foreclosure sale, on the ground that his duty to the pledgor is inconsistent with his interest as a purchaser. His duty to the pledgor is to get the highest price which he can reasonably get for the property pledged, and his interest as a purchaser would b.e to buy the property as cheaply as he could. The conflict between his duty and his interest is the same, whether he sells under the statute or otherwise. The other contention of the defendant is also not well founded. It- is true that in an action, in which the plaintiff pledgor seeks to follow the property bought in by the pledgee and to assert title to it in the hands of a third person, it has been held that the purchase is voidable, not void; Blood v. Hayman, 13 Met. 231; Burns v. Thayer, 115 Mass. 89; and •that the right to avoid the sale, if not exerciséd within a reasonable time, is lost. Learned v. Foster, 117 Mass. 365. These cases are based upon the regard which the law has for the intervening rights of the purchaser for value,- without notice or knowledge of any defect in the exercise by the pledgee or mortgagee of the power of sale given him ; Silva v. Turner, 325 166 Mass. 407; Rogers v. Barnes, 169 Mass. 179, 183, 184; and have no application to the action at law by the pledgor to recover from the pledgee damages caused by a wrongful sale of the property pledged. Middlesex Bank v. Minot, 4 Met. 325. Fletcher v. Dickinson, 7 Allen, 23. Exceptions overruled.