Missisquoi Bank v. Sabin

The opinion of the court was delivered by Redfield, J. The facts in this case are stated in the report of the referee. Whether the respective mortgages of the parties on the property of La Grange, a bankrupt in Canada, werS valid, was in dispute and litigation. They had a common interest that said property should avail the most in payment of their claims against La Grange. The spirit of the written agreement seems to be, that Sabin or Saxe (a director of the bank) should attend and bid at the auction, to prevent a sacrifice of the property; and if “ struck off” to either, the avails of such property should enure' to the benefit of the parties in the order óf their respective mortgages, if held valid ; otherwise, in certain agreed proportions. The mortgages were both, held valid. Defendant sold the property, and plaintiff claims that defendant has, of the avails of such property after paying his debt, money which should, by force of such written agreement, be applied upon the plaintiff’s mortgage. The defendant claims that said agreement is void, for the want of any legal considei ation to uphold the promise. I. Mutual and concurrent promises afford a sufficient legal consideration for the promise of each. Chit. Cont. (10th ed.) 44, and notes ; Parsons Cont. 448. Mutual promises of submission to arbitration, have sufficient legal consideration to bind the parties. And this contract,if otherwise lawful, rests upon mutual [246] and concurrent promises, beneficial to each, and has adequate consideration for the promise. II. The defendant claims that the agreement' is void as against public policy ; that it was a conspiracy to obstruct the sale and depress the price of the property sold at public auction. It has been settled in this state, that a contract to forbear bidding at a public auction is illegal; and a note given for such consideration will not be enforced. Noyes v. Day, 14 Vt. 384. And Judge Story states the general rule, which is doubtless a sound rule of law, that “ agreements whereby parties engage not to bid against each other at a public auction, especially when such auctions are required or directed by law, as in cases of sales on execution, are held void.” 1 Story Eq. 292. But we*do not think that this contract comes within the mischief of that rule. They do not engage in the contract, not to bid against each other. But the defendant agrees that, in bidding against the world, if it is “struck off” to him, he will hold it in trust, sell it, and apply the avails, first, to pay his own mortgage on the property, if adjudged valid, and the residue to be applied on the plaintiff’s mortgage. And the action is brought, not to collect a compensation for refraining to bid, but to enforce the trust created by the contract. Nor is this a contract between parties stipulating that one shall bid upon property at a public sale for the common benefit of all, for purposes of speculation. The plaintiff had a special interest that the property should not be sold for less than its value, and that it plight avail something in payment of its mortgage. And we think it competent for the plaintiff to contract, that if the defendant bid in the property, the avails should be applied in payment of the mortgages in the order of their priority: in other words, that the defendant’s right to pay off the prior incumbrance should not, thereby, be extinguished. III. The defendant sold a portion of the land conveyed to him by the assignee to Krans, and the deed that he executed to Krans, contained more land than he purchased, and land that he did not own. That occurred by the laches of the scriv247 nor, .who, having the assignee’s deed before him, omitted to insert certain excepted parcels of land which were contained in the assignee’s deed. The defendant was at large expense, by a prcoeeding in equity, to reform this deed, and claims that he should be reimbursed such expenses, if required to account to the plaintiff. It would not seem to us unreasonable, but rather in accordance with the equity of the case, if the referee had found that the omissiqn in the deed to Krans was a mistake, and fault of the notary who made the conveyance ; and that the defendant, who stood in a quasi trust relation, was not guilty of. such negligence as to bar him from paying the cost of the proceeding to reform the deed, from the trust fund. But the referee has found the fact, that the expense of the litigation to reform said deed, accrued “ through the carelessness of the defendant.” The facts found by the referee must be held conclusive ; and the defendant cannot be allowed to deduct from the fund in his hands, cost and expenses that accrued through his own fault and “ carelessness.” The judgment of the County Court is reversed, and judgment on the report for the plaintiff to recover the larger sum.