Pliny Sabin v. Benjamin Stickney, 9 Vt. 155

The opinion ol the Court was delivered by Williams, Chief J. The pleadings have extended to a very unnecessary length; so much so, as to almost smother the controversy. The whole question, in issue, might have been presented on a plea of payment.

The controversy between the parties is, whether the bond in suit was paid' and satisfied, by the proceedings on the mortgage, had in the State of New York; and to this end, the defendant now contends, that, when the plaintiff entered into possession of the premises, mortgaged as collateral security for the bond- in suit, the bond itself was paid, if the premises were of sufficient value ; or that the jury would have been warranted in finding the sale of the mortgaged premises, a sale for five hundred dollars, and the plaintiff must be considered as having received that sum on the bond.

On the first position assumed by the defendant, it is sufficient to remark, that it is contrary to the whole law on the subject of mortgages. The mortgagee may enter in possession of the mortgaged premises, and continue in possession until his debt is satisfied. The authorities, which have been read, do not countenance the idea, that the law is any different in the State of New York, or that a mere taking possession of mortgaged premises, without foreclosure, subjects the mortgagee to account for the value.

On the second position assumed, it becomes necessary to consider the effect of a sale of mortgaged premises, under the statute of the State of New York, where the mortgagee becomes. the purchaser. The statute must intend something more than has been attributed to it, in the argument; i. e. merely to enable the mortgagee to pass the title, freed from the equity of redemption. It cannot be that, as between the parties, a sale under the statute is to be treated as a strict foreclosure.

The creditor cannot be held accountable for the value of the premises, when he sells under a power of sale, whether the value is realized or not. If the creditor is accountable for any thing more than the amount of the sale, even when he becomes a purchaser, it must be on the ground, that he is to be treated as a trustee for the mortgagor. There is, however, but very little similarity between the character of a trustee and mortgagee. The mortgagee, contrary to the general rule, holds in trust for himself until the debt is discharged; but, after that, he may be said tobe trustee for the mortgagor.

Whether, without the provisions of the statute of the State of New York, the mortgagee, who sold under a power of sale, could become a purchaser, without being held accountable for the value, or be subject to have the premises re-sold, may be questionable. From the case of Webb v. Roche, 2 Sch. & Lefr. 673, it was laid down in the first edition of Mad. Chancery 91, that the rule, which prohibited a trustee from becoming a purchaser of a part, or the whole of the estate, of which he was trustee, was not applied as between mortgagors and mortgagees.

But in the second edition, from the same case, as also from the case of Gubbins v. Creed, 218, of the same book, it was considered that it did apply. It is, however, certain that, under a decree of sale, as a sale in bankruptcy, the mortgagee may, under an order from the chancellor, obtain leave to bid at the sale and hold the mortgagor accountable for the sum not raised by the sale. Ex parte Marsh, 1 Madd. Rep. 148.

It appears to us that such must be the effect of a sale, under that part of the statute of the State of New York, which authorises the mortgagee to become a purchaser, and declares that the sale shall not be questioned in law or equity, on account of his being a purchaser. The interest of both the mortgagee and mortgagor are sufficiently protected, by requiring that public notice shall be given of the sale. Both of the parties may be present, and use all lawful endeavors to enhance the price. As to the extent of the debt, at least, both are interested that the sale should raise that amount.

We are fully satisfied, therefore, with the directions given by the County Court; — that the sale was not vitiated in consequence of the plaintiff being a purchaser, either in his own name or through another; nor was the plaintiff subject to account for the avails of the subsequent sale, provided the sale at auction was without collusion and bona fide.

It would result from this, that the other part of the direction was also correct, viz. “ that the circumstance, that those, who purchased the es- “ tate of the plaintiff at private sale, were present and did not “ bid, did not tend to show the sale collusive, unless they were “ prevented from bidding by the procurement of the plaintiff.” From an examination of the depositions, we can find nothing tending to shew the sale collusive, or that the plaintiff was guilty of any fraud, or used any endeavors to prevent either the defendant or any one else from bidding at the sale.

According to the opinion above expressed, he might become a purchaser, and, having purchased, was at liberty to dispose of the property, in such manner, or for such prices as he thought proper. In the absence of any fraud, he cannot be charged with any greater sum than was bid at the auction. The direction, therefore, that there was nothing in proof, which had a legal or legitimate tendency to shew collusion, was strictly correct. The judgment must, therefore, be affirmed.