People's Savings Bank v. Wunderlich

Loring, J. The mortgage in question provided that in case of default the mortgagee might “ sell the granted premises or such portion thereof as may remain subject to this mortgage in case of any partial release hereof.” There was a partial release of one of the four lots originally covered by the mortgage, on payment of $1,200, leaving $800 of the mortgage debt due. Under the circumstances existing at the date of the advertisement under which the sale in question took place, all the land, over which the assignee of the mortgage .had a power of sale, was the remaining three lots; but by mistake he advertised for sale all four lots. At the time of the sale the lot (which had been released from the lien of the mortgage two years and a half before) had a house on it worth $2,500, and the remaining three lots of land were vacant. Apparently this house had not been built when this lot was released. The sum paid for the release of the one lot released was three fifths of the mortgage debt, and the price which the remaining three lots brought at the auction sale in question was one half the mortgage debt. This is a case, therefore, where the mortgagee has included in the advertisement a lot over which he had no power of sale, in addition to three lots covered by the mortgage; further the lot, wrongfully included in the advertisement, when vacant, was worth more than the three lots rightfully included; and in addition it had on it a house worth more than three times the amount then due on the mortgage, while the three lots covered by the mortgage were vacant land. The natural effect of such an advertisement would be to induce the belief in those, who saw it, that at the sale either the lot, on which the house was, would be put up first and would bring more than the amount of the mortgage, or that, as is generally the case, the four lots would be put up in one parcel. Therefore the class of custom [457] ers, who are looking for vacant lots rather than for a dwelling, naturally would not care to attend the sale, and would not do so. The statement of the auctioneer would not help this, as there was no postponement and no new notice. The real estate advertised was substantially different from what the mortgagee sold or had a right to sell, and the sale was not a valid execution of the power given him. Fenner v. Tucker, 6 R. I. 551. Since the advertisement included all the land originally covered by the mortgage, while by the terms of the mortgage all the land, over which the mortgagee then had a power of sale, was the land remaining after the partial release, the defendants can get no support from cases like Colcord v. Bettinson, 131 Mass. 233, and Bell Silver & Copper Mining Co. v. First National Bank of Butte, 156 U. S. 470, where the advertisement follows the mortgage; but these cases make against them. Neither does the case of Pryor v. Baker, 133 Mass. 459, support this contention ; in that case the advertisement described what the defendant had a right to sell, what was in fact sold, and nothing more. The land was bought by the defendant “ Craig by his agent . Wunderlich,” who was the assignee of the mortgage and who was at the time, and since has continued, in the employ of Craig. On this evidence the court had a right to treat Craig as having no greater rights than Wunderlich. No new rights having intervened since the sale, the bill is well brought within six years after it took place. Decree affirmed.