Crane v. White

Rugg, C. J. The plaintiff is the trustee in bankruptcy of the owner of the equity of redemption in two parcels of real estate upon which the defendant held mortgages, and which he foreclosed. One of the terms of each foreclosure sale was stated to be that the property would be sold subject among other claims to the unpaid interest, the amount of which was announced. The property was purchased by the defendant, whose bid slightly exceeded the aggregate of the face of the mortgage and expenses and interest. The question is whether in this suit for an accounting the defendant is entitled to retain the unpaid interest out of the proceeds of the sale, or whether the plaintiff is entitled to the excess above the face of the mortgage and the expenses of foreclosure. It must be assumed in the absence of any finding to the contrary that the foreclosure sale was conducted fairly and that the price bid was the reasonable value of the property under all the conditions. The announcement that the purchaser must take the property subject to a stated amount of unpaid interest must be presumed to have produced its natural effect upon prospective 480 bidders and the price at which finally it was struck off may be assumed to have been the fair price. Taken according to its terms that price meant that the purchaser was willing to give it and in addition pay the interest up to the amount stated, as well as the taxes and the other claims announced at the sale. The defendant having become the purchaser and being bound to exercise the utmost good faith in making the foreclosure sale, cannot with justice be heard to say that the terms of the sale did not mean what they were announced to be. It cannot be presumed in his favor under these circumstances that others present would not have been bidders upon a literal interpretation of the publicly stated terms of sale, and that therefore he ought not to be held to them. The fair implication from all the facts is that he has become the owner of real estate fairly worth the sum stated as the interest, subject to which the sale was made, more than the face of the mortgage and expenses. Decree affirmed with costs.