Hogan v. Hudson

Grant, J. (after stating the facts.) The validity of the sale was attacked for three reasons: ■ (1) Because there was a fraudulent collusion between Mr. Hudson and Mr. Gearing. (2) Because default in the payment of one note did not authorize a sale, and no foreclosure could be had until there was default in all the notes. (3) Because the sale was in bulk, and not in parcels. The mortgage was conceded to be valid, and the indebtedness secured thereby to be bona fide. Subsequently to the sale, McElroy sold and conveyed his interest in the property to the Delta Lumber Company; and the Delta Lumber Company and Mr. Hudson, after the failure of the creditors to accept the proposition of Mr. Gearing, sold and transferred the property to Julia Gearing, the wife of Mr. Gearing. Hpon the theory that the sale was void, the plaintiff seeks to hold Mr. Hudson liable for the value of the property, and without payment, tender, or offer to pay the indebtedness secured by the mortgage. 1. The record contains no evidence to show any fraud on the part of Mr. Gearing or Mr. Hudson, or any collusion between them for the purpose of defrauding Mr. Gearing’s other creditors. The sale was open, the proper notice given, and there was no other alternative left to Mr. Hudson and Mr. McElroy than to bid the property in, there being no other bidders. There was no effort to conceal anything from the unsecured creditors. Had they secured liens upon the property by attachments or otherwise, the law would have compelled them to pay the indebtedness secured by the mortgage. By the action of Mr. Hudson and Mr. Gearing they were given this opportunity after the sale. 2. The second point is not tenable. There was default in the payment of one of the notes. The mortgage provided that— “If said Gearing shall pay the promissory notes according to the tenor of said promissory notes, then the mortgage shall be void and of no effect, but, if lefault [57] shall be made in snch payment, said Hudson is hereby authorized to, and shall, sell at public auction.” No other lien then existed, and Mr. Gearing, the only party who then had any voice in the matter, recognized the right to foreclose, and assented to it. The other notes would have become due in a few days, and it was entirely competent for him to assent to a foreclosure, and that at that sale the other notes might be considered as due, and be included in the sale. Those who had no liens are not in position to attack the sale upon this ground. 3. What has already been said applies to the sale in bulk. The mortgagor and mortgagee considered it for the interests of all concerned that the property be sold in bulk. Gearing had the right to so assent. They were the only parties.who had the right-to speak, and, so long as they acted in good faith, others cannot complain. The mortgage did not provide for sale in parcels, and, in the absence of such provision, it is the duty of the mortgagee to sell in such lots as will command the highest price. Perkins v. Spaulding, 2 Mich. 157. We find no error, and the judgment is affirmed. The other Justices concurred.