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Full text of "A treatise on the law of mortgages of real property"

CJortif U Slatu Btl^cal IGibrata 



Cornell university Library 
KF 695.J77 1915 





Cornell University 
Library 



The original of tiiis book is in 
tine Cornell University Library. 

There are no known copyright restrictions in 
the United States on the use of the text. 



http://www.archive.org/details/cu31924018847529 



A TREATISE 



LAW OF MORTGAGES 



REAL PROPERTY 



BY 

LEONARD A. JONES, A. B., LL B. [Harv.] 

AUTHOR OF LEGAL TREATISES AND LATE JUDGfi OF THE COURT OF LAND REGISTRATION OF 

MASSACHUSETTS 



SEVENTH EDITION 

IN WHICH THE ORIGINAL TEXT IS THOROUGHLY REVISED BY 

THE PUBLISHERS' EDITORIAL STAFF 



IN THREE VOLUMES 
Volume III 



INDIANAPOLIS 

THE BOBBS-MERRILL COMPANY 

PUBLISHERS 



Copyright 1878, 1879, 1882, 1889, 1894 and 1904 
By Leonard A. Jones 



copyeigi-it 1915 
The Bobbs-Meeeill Company 



TABLE OF CONTENTS 

VOLUME THREE 



CHAPTEE XXXII 

FORECLOSURE BY EQUITABLE SUIT 

I. Jurisdiction, and the Olject of the Suit, §§ 1443-1450 
II. The Bill of Complaint, §§ 1451-1478 
III. The Answer and Defense, §§ 1479-1515 

I. Jurisdiction, and the Object of the Suit 
Section , , Page 

1443. Jurisdiction 1 

1444. Venue 3 

1445. Litigation of questions of title 6 

1446. Questions of removal of buildings, not investigation of title. . . 8 

1447. Improper use of remedy 8 

1447a. Injunction to restrain improper use of remedy 9 

1448. Inforcement of trust deed for creditors 10 

1449. Foreclosure of title bond 10 

1450. Tender to prevent foreclosure 11 

II. The Bill of Complaint 
Section Page 

1451. General principles 13 

1452. Essential requisites 13 

1453. Variance between allegations and proof 15 

1454. Allegations of execution and delivery — Copies and exhibits 15 

1455. Proof of execution 17 

1456. Allegations showing right to maintain bill 17 

1457. Assignee's title 18 

1458. Inclusion of several mortgages in one bill 19 

1459. Foreclosure for instalment 21 

1460. Bill by holder of one of several mortgage notes 24 

1461. Prayer for decree against mortgagor and personal judgment 

against other maker of note 24 

1462. Description of mortgaged property 25 

1463. Omission of parts of mortgaged premises 26 

1464. Reformation for mistake in description 27 

1465. Allegations of record 29 

1466. Allegations of debt 30 

1467. Reference to determine amount of debt 31 

1468. Allegations of renewal of note 32 

1469. Proof of note 32 

1469a. Production of note on bond 33 

1470. Proof of consideration 35 

iii 



IV TABLE OF CONTENTS 

Section Page 

1471. Allegations of accrual of action 36 

1472. Allegations of payment by surety 37 

1473. Averments as to liens 38 

1474. Allegations that defendant's interest is subject to mortgage ... 39 

1475. Prayer for relief 40 

1476. Averment of essential grounds of relief 41 

1477. Prayer for deficiency 41 

1478. Prayer for amount of debt before entry of final decree 42 

III. The Answer and Defense 
Section Page 

1479. In general 43 

1479a. Cross-bills 44 

1480. Answer generally 46 

1481. Denial must be explicit 47 

1481a. Disclaimer 48 

1482. Right to question title of mortgagee 48 

1483. Mortgagor estopped to deny his title 49 

1484. Estoppel of mortgagor to set up defense by reason of declara- 

tions and agreements 51 

1485. Defenses against assignee 52 

1486. Assignee for value 54 

1487. When assignee takes free from equities 54 

1488. Defense that complainant has parted with his interest 56 

1489. Indemnity 56 

1490. Defense of want of consideration 56 

1491. Defense of want of consideration by purchaser subject to mort- 

gage 58 

1492. Defense of fraud 60 

1492a. Defense of fraudulent alteration 61 

1492b. Fraud as against mortgagor's creditors 62 

1493. Usury is a defense 62 

1494. Defense of usury waived or lost 64 

1495. Defense of usury where mortgage made to be sold at discount. . 65 

1496. Set-ofE and counterclaim 66 

1497. Set-off vphere suit brought in name of person other than real 

owner 69 

1498. Set-of£ where suit regarded as proceeding in rem 69 

1499. Set-off of illegal interest paid 70 

1500. Defense of outstanding paramount title 70 

1501. Allegations of failure of title 72 

1502. Failure of title where mortgagor in undisturbed possession 72 

1503. Cases exceptional to general rule 74 

1504. Covenant broken at time suit is brought 75 

1505. Breach by mortgagee of independent covenant 77 

1506. Fraud of vendor as defense to purchase-money mortgage 77 

1506a. Mistake as to quantity of land conveyed 78 

1506b. Violation of law by mortgagee as defense 79 

1507. Defense of mistake as against assignee 79 

1507a. Assumption of mortgage by grantee of mortgagor 79 

1508. Validity of title as condition precedent to payment of mortgage 80 

1509. Statute of limitations 80 

1510. Insanity of mortgagor 81 

1511. Recovery of judgment on mortgage note as defense 81 

1511a. Defense of liability to creditor of plaintiff in garnishee process 82 

1512. Defense of satisfaction of mortgage — Payment — Tender 82 

1513. Defense of agreement of parties subsequent to the mortgage ... 84 

1514. Defense of defective service of process 85 

1515. Bill of interpleader 86 



TABLE OF CONTENTS V 

CHAPTEE XXXIII 

APPOINTMENT OE A KECEIVEE 

I. When a Receiver will be Appointed, §§ 1516-1534: 

II. Duties and Powers of a Receiver, §§ 1535-1537a 

I. When a Receiver will be Appointed 
Section Page 

1516. General principles 87 

1517. When appointed on application of mortgagor — Grounds for ap- 

pointment 91 

1518. Appropriate under leasehold mortgages 92 

1519. English rule as to appointment 92 

1520. Rules in states where legal title vested in mortgagee 93 

1521. Prevailing rule — States where legal title vested in mortgagor. . 94 

1522. The appointment as affected by statutes 97 

1523. In behalf of a subsequent mortgagee 99 

1524. Consent of prior mortgagee 100 

1525. Right of prior mortgagee to possession until paid 101 

1526. Time of appointing receiver 102 

1526a. Notice of application 103 

1527. Defenses to the application 104 

1528. Possession of defendant must be shown 105 

1529. Verification 105 

1530. Necessity for default or maturity of debt 106 

1531. Appointment after decree and after appeal 107 

1531a. Receiver during time allowed for redemption 108 

1532. Necessity for showing security inadequate, and insolvency of 

debtor 109 

1533. Other grounds for appointment of receiver 110 

1534. Tests of adequacy of security in respect to city property Ill 

II. Duties and Powers of a Receiver 

Section Page 

1535. Rights, powers, and duties of receiver in general 112 

1536. Receiver's claim to the rents 114 

1537. Discharge of receiver 116 

1537a. Responsibility for default of receiver 117 

CHAPTEE XXXIV 

DECREE OE STRICT FORECLOSURE 

I. Nature and Use of this Remedy, §§ 1538-1541 

II. In What States It Is Used, §§ 1543-1556 

III. Pleadings and Practice, §§ 1557-1568 

IV. Setting Aside and Opening the Foreclosure, §§ 1569-15'i'O 

I. Nature and Use of the Remedy 
Sectioit Page 

1538. Historical 119 

1539. Nature of the remedy 120 

1540. When remedy is proper 120 

1541. Land contract 121 



VI TABLE OF CONTENTS 

II. In What states It Is Used 
Section Page 

1542. Alabama 122 

1543. California 122 

1543a. Colorado 122 

1544. Connecticut 123 

1544a. Florida 123 

1545. Illinois 123 

1545a. Indiana 123 

1546. Iowa .124 

1547. Kentucky 124 

1547a. Massachusetts 124 

1547b. Michigan 125 

1548. Minnesota 125 

1549. Missouri 125 

1550. Nebraska 125 

1550a. New Jersey 126 

1551. New York 126 

1552. North Carolina 127 

1553. Ohio 127 

1553a. Pennsylvania 127 

1553b. Rhode Island 127 

1554. Tennessee 128 

1555. Vermont 128 

1555a. West Virginia 128 

1556. Wisconsin 128 

III. Pleadings and Practice 

Sectioit Page 

1557. Necessity that entire debt be due 128 

1558. Parties 129 

1559. Heirs at law as parties 130 

1560. Pleading and practice 130 

1561. Judgment 131 

1562. Delivery of possession 132 

1563. Redemption 132 

1564. Redemption by infant heir 133 

1565. Time for redemption fixed in decree 133 

1566. Dismissal of bill to redeem 134 

1567. Effect of strict foreclosure 134 

1568. Costs ,135 

IV. Setting Aside and Opening the Foreclosure 
Sbction- Page 

1569. Opening or setting aside decrees 135 

1570. Effect of defective service of process 138 

CHAPTEE XXXV 

DECEEE OF SALE 

I. A Svhstitute for Foreclosure, §§ ISTl-lSTS 

II. Form and Requisites of the Decree, §§ 1574r-1586b 

III. The Conclusiveness of the Decree, §§ 1587-1589e 

IV. The Amount of the Decree, §§ 1590-1601 
V. Costs, §§ 1603-1607 



TABLE OF CONTENTS Vll 

I. A Substitute for Foreclosure 
Section Page 

1571. Generally 139 

1572. Under English chancery practice 139 

1573. Jurisdiction of equity independent of statute 141 

II. Form and Requisites of the Decree 

SBCTioiiT Page 

1574. Scope of relief granted by decree — Generally 142 

1575. Decree and order in terms of mortgage — Description of mort- 

gaged premises 144 

1576. Order of sale 145 

1577. Decree when only part of debt or instalment of interest is due — 

Sale in parcels 147 

1577a. Decree where several mortgages on same property — Separate 

mortgages on different pieces of property 148 

1578. Relief should conform to pleadings 149 

1579. Interference with interests of persons not made parties 150 

1580. Decree where junior mortgagee forecloses when prior mortgage 

not due 151 

1580a. Nature of decree against grantee of mortgagor 152 

1581. After-acquired title 152 

1581a. Provision for reconveyance on foreclosure of deed as mortgage 152 

1581b. Allowance for waste committed by mortgagor 152 

1581c. Damages for breach of covenant in purchase-money mortgage . . 153 

1582. Apportionment of debt among cotenants 153 

1583. One decree for entire debt 153 

1583a. Finding to support decree 153 

1584. Death of mortgagor 154 

1585. Death of plaintiff 154 

1586. Allowance of day for payment before sale 155 

1586a. Amendment of decrees 156 

1586b. Opening or vacating decrees 156 

III. The Conclusiveness of the Decree 

Section Page 

1587. Collateral attack on decree 157 

1588. Parties concluded by decree directing sale 161 

1589. Prior and adverse rights 163 

1589a. Effect of decree of foreclosure of junior mortgage on senior 

mortgage 165 

1589b. Statutes making decrees conclusive 165 

1589c. Acceptance of proceeds by mortgagor as concluding him 165 

1589d. Conclusiveness dependent on service of process 165 

1589e. Conflict of laws 166 

IV. The Amount of the Decree 
Section Page 

1590. Decree should fix amount of indebtedness 166 

1591. Inclusion of instalments not due 168 

1592. Collateral mortgage 169 

1593. Decree for full amount of principal and interest due on bond. . . 170 

1594. Interest 171 

1595. Exchange 172 

1596. Insurance — Rent paid to protect estate 172 

1597. Taxes 173 

1598. Costs incurred in previous action 176 

1599. Disbursements in proceedings for foreclosure — ^Abstracts 176 



VIU TABLE OF CONTENTS 

Section Page 

1600. Final judgment 176 

1600a. Appeal 178 

1601. Stay of proceedings on account of controversy between subse- 

quent incumbrancers 179 

V. Costs 
Sbction Page 

1602. In general 179 

1603. Costs as dependent on statutes and practice of the several states 181 

1604. Costs -where subsequent incumbrancers unnecessarily appear 

and answer 181 

1605. Costs to defendants who properly appear and answer 182 

1606. Attorney's fees 183 

1606a. Stipulation for attorney's fee as usury — Miscellaneous matters 189 

1606b. Attorney's fees under statutes of other states 191 

1606c. Expenses provided in mortgage 191 

1607. Costs of irregular attempts at foreclosure 192 

CHAPTEE XXXVI 

FOKEOLOSUEE SALES UNDER DECEEE OF COUKT 

I. Mode and Terms of Sale, §§ 1608-1615 

II. Sale in Parcels, §§ 1616-1619 

III. Order of Sale, §§ 1620-1633a 

IV. Conduct of Sale, §§ 1633-1636 

V. Confirmation of Sale, §§ 1637-1641 

VI. Enforcement of Sale Against Purchaser, §§ 1642-1651 

VII. Deed and Title Conveyed, §§ 1653-1662 

VIII, Delivery of Possession to Purchaser, §§ 1663-1667 

IX. Setting Aside Sale, §§ 1668-1681 

I. Mode and Terms of Sale 
Section Page 

1608. Sale by the court through its officers 193 

1609. Estate and interest sold 195 

1610. Subsequent incumbrances 196 

1611. Determination of priorities before and after sale 197 

1611a. Appraisement for sale 198 

1612. Notibe of sale 201 

1613. Terms of sale 205 

1614. Deposit required 208 

1614a. Mortgagee purchasing at sale 209 

1615. Sale on credit 210 

II. Sale in Parcels 
Section Page 

1616. Sale in parcels under statute or decree 211 

1617. Preference of mortgagor considered 214 

1618. Mode of sale determined by court or officer 215 

1619. Sale in parcels for part of debt due 218 



TABLE OF CONTENTS IX 

III. Order of Sale 
Section Page 

1620. Sale in inverse order of alienation — Mortgagor's interest sold 

first 220 

1621. Rule of inverse order — Adoption and application 221 

1622. Rule applied to subsequent mortgages 225 

1623. Parts of property sold under judgment 226 

1624. Record and notice of subsequent deeds 227 

1625. Agreements charging certain parcels 229 

1626. Iowa and Kentucky rule — Contribution according to value .... 232 

1627. Time of valuation — Sale in parcels 233 

1628. Recourse to two funds 233 

1629. Mortgagee holding lien upon other property — Exoneration of 

surety 235 

1630. Mortgagee of two parcels securing same debt 237 

1630a. Mortgage by tenants in common securing debt of one — Partition 238 

1631. Deduction of value of parcel released before charging other por- 

tions 238 

1632. Homestead ,. 240 

1632a. Duty of mortgagor to assert homestead right 243 

IV. Conduct of Sale 
Section Page 

1633. Presence of officer conducting sale 243 

1634. Adjournment 245 

1635. Who may purchase at foreclosure sale — Right of mortgagee 247 

1636. Resale for failure or refusal to comply with bid 252 

V. Confirmation of Sale 
Section Page 

1637. Sale incomplete until confirmation — Defects — Ratification 254 

1637a. Objections to confirmation 256 

1638. Discretion of court in confirmation — ^Notice — Order 257 

1639. Resale upon application of party affected by fraud, unfairness 

or misconduct 259 

1640. Reopening sale on advanced bid before confirmation 261 

1641. Inadequacy of price as objection to confirmation 262 

VI. Enforcement of Sale Against Purchaser 

Section Page 

1642. Purchaser a quasi party — Rights and liabilities 264 

1643. Attachment against purchaser — Terms of resale 267 

1644. Forfeiture of deposit 269 

1645. Defect in title — Bidder reimbursed 270 

1646. Defects in title prior to mortgage — Notice 271 

1646a. Mistake or misrepresentation 272 

1647. Errors in decree or proceedings 274 

1648. Refusal to purchase justified by defect — Reference 275 

1649. Taxes 277 

1650. Estoppel and laches 277 

1651. Grounds for refusal to complete sale — ^Formal irregularities. . . . 278 

VII. Deed and Title Conveyed 

Section Page 

1652. Deed executed to third person 280 

1653. Delivery of deed 280 



x table of contents 

Section Page 

1654. Title conveyed — Intervening liens and incumbrances extin- 

guished 283 

1655. Errors in deed 288 

1656. After-acquired title 289 

1657. Fixtures 290 

1658. Emblements 292 

1659. Rents and profits 295 

1660. Mortgagee purchasing 297 

1661. Rights under certificate of purchase — Ejectment 297 

1662. Sale unaffected by subsequent appeal 298 

VIII. Delivery of Possession to Purchaser 

Section Page 

1663. Possession delivered to purchaser 300 

1663a. Writ of assistance 302 

1664. Possession as against persons entering pending suit 304 

1665. Possession under paramount title — Wife's homestead right 305 

1666. Payment and performance by purchaser prerequisite 306 

1667. Summary proceedings in addition to other remedies 307 

IX. Setting Aside Sale 
Section Page 

1668. Sale set aside for fraud — Rights of third persons 308 

1669. Application for resale by party in interest 311 

1669a. Estoppel of party whose misconduct caused Irregularity 312 

1670. Inadequacy of price and other grounds 313 

1670a. Sale set aside at instance of mortgagee 317 

1671. Reopening sale "when mortgagee purchases — Disaffirmance by 

mortgagor 318 

1672. Neglect of officer selling — Defects and irregularities 319 

1673. Insufficient grounds for resale — Rights of purchaser 321 

1674. Laches — Irregularity waived by delay 323 

1675. Mistake, surprise or accident, as ground for resale 325 

1675a. Mistake in quantity or location of land 327 

1676. Absence of parties from sale — Infants 327 

1676a. Insanity of mortgagor at time of sale 329 

1677. Few bidders 329 

1678. Invalid sale equivalent to assignment 331 

1679. Second foreclosure and sale — Supplemental bill 332 

1680. Redemption by satisfaction of prior mortgage 333 

1681. Effect of setting aside sale — Purchaser protected and reim- 

bursed for improvements 334 

CHAPTEE XXXVII 

APPLICATION OP PROCEEDS OF SALE 

I. Payment of the Mortgage Debt, §§ 1682-1683b 
II. Disposition of the Surplus, §§ 1684-1698 

III. Priorities Between Holders of Several Notes Secured, §§ 

1699-1707 

IV. Costs of Subsequent Mortgagees, § 1708 



TABLE OF CONTENTS XI 

I. Payment of the Mortgage Debt 

Section Page 

1682. In general 337 

1683. Taxes and other charges paid to preserve security — ^Prior liens 338 

1683a. Application according to equitable principles 339 

1683b. Provisions for election as to application of proceeds in mort- 
gage 340 

II. Disposition of the Surplus 

Section Page 

1684. Payment of surplus money into court 340 

1685. Appointment of master or refereee to ascertain rights of claim- 

ants to surplus — Costs of proving claims 341 

1686. Report of referee and exceptions thereto 342 

1687. Lien claimants 342 

1688. Payment of lien in order of priority 344 

1688a. Rights of junior mortgagees in surplus 345 

1688b. Priority of creditors where fraudulent conveyance of the mort- 
gaged premises is set aside 346 

1689. Simultaneous mortgages 347 

1690. Other claims due mortgagee 347 

1691. Equities of subsequent Incumbrances 348 

1691a. Application of doctrine of marshaling securities 348 

1692. Prior unrecorded mortgages 349 

1692a. Funds collected by receiver 350 

1693. Dower and homestead in surplus 350 

1694. Inchoate right of dower 352 

1695. Character of surplus of sale made after death of mortgagor .... 352 

1696. Rights of lessee for years of the mortgagor 353 

1696a. Rights of tenant for life and remaindermen 353 

1696b. Participation in surplus by equitable assignee 354 

1696c. Proceeds where purchaser holds as mortgagee in possession . . . 354 
1696d. Set-off for use and occupation 354 

1697. Attachment of proceeds of foreclosure sale 354 

1698. Surplus of sale under junior mortgage 355 

III. Priorities Between Holders of Several Notes Secured 

Section Page 

1699. Priority of maturity 356 

1700. Payment of notes not due 357 

1701. Priority of assignment 358 

1701a. Pro rata division 359 

1702. Right of parties to change order of priority 360 

1703. Preference in favor of note on which default is declared 360 

1704. Set-off against mortgage notes 361 

1705. Debts due different persons 361 

1706a. Priority as between principal and interest 361 

1706. Rights of sureties 362 

1707. Sale for instalment 363 

IV. Costs of Subsequent Mortgagees 

Section Page 

1708. In general 363 



Xll TABLE OF CONTENTS 

CHAPTEE XXXVIII 

JUDGMENT IN AN EQUITABLE SUIT FOE A DEFICIENCY 

Section Page 

1709. Statutory provisions for deficiency judgment 365 

1709a. Pleadings and proceedings prerequisite to deficiency judgment 367 

1709b. Rights of second mortgagee 372 

1709c. Persons liable 373 

1710. Third parties liable on mortgage debt 375 

1711. Jurisdiction of equity to decree payment of balance 377 

1712. Purchaser subject to debt 379 

1713. Assumption of mortgage by grantee 380 

1714. Conveyance as security 382 

1715. Note, bond, covenant or collateral obligation to pay 382 

1716. Judgment for deficiency against nonresident 384 

1717. Judgment against administrator of mortgagor 385 

1718. Personal judgment against wife of mortgagor 387 

1719. Judgment for parts of debt not due — (Limitations 388 

1719a. Amount of judgment — Deduction of taxes 389 

1720. tiien of judgment for deficiency 390 

1721. Remedy against one personally liable for mortgage debt 391 

CHAPTEE XXXIX 

STATUTOET PEOVISIONS EELATING TO POWEE OF SALE MOETGAGES 
AND TRUST DEEDS 

I. Introductory, § 1733 
II. Statutory Provisions in the Several States, §§ 1733-1763a 

I. Introductory 
Sbction- Page 

1722. Necessity of power of sale in English mortgages 393 

II. Statutory Provisions in the Several States 
SECTioiiT Page 

1723. Alabama 394 

1723a. Arizona !.".'..!!!.! 395 

1724. Arkansas 395 

1725. California Z96 

1726. Colorado 396 

1727. Connecticut '....'.'.'...... 397 

1729. Delaware .'.'.'.'.... 397 

1730. District of Columbia ..'". "397 

1731. Florida 397 

1732. Georgia 397 

1732a. Hawaii T 397 

1732b. Idaho 398 

1733. Illinois 398 

1734. Indiana 399 

1735. Iowa 399 

1736. Kansas 399 

1737. Kentucky 399 

1738. Louisiana 399 



table of contents xih 

Section Page 

1739. Maine 399 

1740. Maryland 400 

1741. Massachusetts 402 

1742. Michigan 404 

1743. Minnesota 407 

1744. Mississippi 413 

1745. Missouri 413 

1746. Montana 415 

1747. Nebraska 416 

1748. Nevada 416 

1749. New Hampshire 416 

1750. New Jersey 417 

1751. New York 417 

1752. North Carolina 425 

1752a. North Dakota 425 

1753. Ohio 425 

1754. Oregon 425 

1755. Pennsylvania 425 

1756. Rhode Island 426 

1757. South Carolina 426 

1757a. South Dakota 426 

1758. Tennessee 428 

1759. Texas 429 

1760. Vermont 429 

1761. Virginia 429 

1762. West Virginia 429 

1763. Wisconsin 431 

1763a. Wyoming 433 

CHAPTEE XL 

POWEE OF SALE MORTGAGES AND TRUST DEEDS 

I. The Nature and Use of Powers of Sale, §§ 1764-1773 

II. The Power of Sale Is a Cumulative Remedy, §§ 1773-1776 

III. Formalities in Creation of Powers, §§ 1777-1791 

IV. Revocation or Suspension of the Power, §§ 1793-1800 

V. When the Exercise of the Power May Be Enjoined, §§ 
1801-1820 

VI. Personal Notice of Sale, §§ 1831-1836 

VII. Publication of Notice, §§ 1837-1838 

VIII. What the Notice Should Contain, §§ 1839-1856 

IX. Sale in Parcels, §§ 1857-1860 

X. Conduct of Sale, Terms, and Adjournment, §§ 1861-1875 

XI. Who May Purchase at Sale, §§ 1876-1888 

XII. Deed and Title, §§ 1889-1903 

XIII. The Affidavit, §§ 1904-1905 

XIV. Setting Aside and Waiving Sale, §§ 1906-1933 
XV. Costs and Expenses, §§ 1933-1936b 

XVI. The Surplus, §§ 1937-1940 



XIV TABLE OF CONTENTS 

I. The Nature and Use of Powers of Sale 
Sectton Page 

1764. In general 435 

1765. Validity of power 437 

1766. Scope of powers In mortgages used in England 439 

1767. When power of sale mortgages first used in United States 440 

1768. How far a power of sale a necessary incident of a mortgage 442 

1769. Deeds of trust distinguished from mortgages with power to sell 443 

1770. Why deed of trust preferred to mortgage 445 

1771. Trustee the agent of both parties 446 

1771a. Effect of trustee's irregular sale and conveyance 448 

1772. Where trustee claims debt secured 449 

II. Power of Sale a Cumulative Remedy 
SECTioisr Page 

1773. Power of sale a cumulative remedy 450 

1774. New trustee 451 

1774a. What laws govern enforcement of deeds of trust 455 

1775. Sale is by power and not by decree where court enforces power 456 

1776. When debt is unliquidated 457 

III. Formalities in Creation of Power 
Section Page 

1777. Form of power 458 

1777a. Power conferred by married women 458 

1777b. Stipulating when power may be exercised 459 

1777c. Payment of taxes a condition 460 

1777d. Consent of grantor to exercise power 461 

1778. Form of power authorizing sale 461 

1779. What is a sufficient power 462 

1780. Acceptance of trust 462 

1781. Obvious error on face of power 463 

1782. Entry and possession under power 463 

1783. Foreclosure by mortgagee after he has taken rents and profits. . 464 

1784. Necessity for record of mortgage or power of sale 464 

1785. Who may exercise power 465 

1786. When power may be executed by executor or administrator of 

mortgagee 468 

1787. Effect of assignment of mortgage with power of sale 469 

1788. Rule applicable to assignment of deeds of trust 472 

1789. Equitable assignee 473 

1790. Power to two or more jointly 474 

1790a. Where power exercisable at request of beneficiary 476 

1791. First and second mortgagee — Mortgage of undivided halves. .. . 476 

IV. Revocation or Suspension of the Power 
Section Page 

1792. Death of mortgagor 477 

1793. Effect of insanity of mortgagor after giving mortgage 480 

1793a. Effect of barring action on debt 480 

1794. Power of sale revoked by death of mortgagor 481 

1795. Effect of modification and extension of power 482 

1796. Conveyance or release of part of premises by mortgagee 483 

1797. Exercise of power suspended by pendency of bill to redeem 484 

1798. Effect of tender upon sale — Massachusetts rule 485 

1799. Effect of tender before sale actually made 486 

1800. Where mortgagor an alien enemy 487 



TABLE OP CONTENTS XT 

Y. When the Exercise of the Power May Be Enjoined 
Section Page 

1801. Grounds for injunction In general 489 

1801a. Scope of action after equity has jurisdiction 491 

1802. Legitimate exercise of power 492 

1803. Use of power to obtain unfair advantage 493 

1804. . Alleging grounds for injunctive relief 494 

1805. Evidence in support of bill 495 

i805a. Parties to suit 497 

1806. Payment or tender 497 

1807. Fraud as a ground for enjoining sale 498 

1807a. Grounds for injunction arising after making of mortgage 498 

1807b. Ground that mortgage was made to defraud creditors 499 

1807c. Insanity of mortgagor at time of execution of mortgage as 

ground for injunction 500 

1807d. Sale enjoined pending controversy as to existence of default. . . 500 

1808. Usury 501 

1809. Unconscionable penalty 503 

1810. Want of notice as a ground for injunction 503 

1811. Not enjoined to allow set-ofe 504 

1812. Time for contribution to redeem 505 

1813. When amount of debt is in dispute 505 

1813a. Where mortgage has been satisfied 507 

1814. Purchaser of land Ignorant of power in mortgage 507 

1815. Clouding title 508 

1815a. Injunction pending suit throwing doubt on grantor's right to ex- 
ecute deed of trust 509 

1816. Insolvency of trustee or mortgagor as ground for injunction. . . 509 

1817. Scarcity of money or business depression 510 

1817a. Where trust deed covers both real and personal property 510 

1818. Master or referee associated with mortgagee in making sale. . . . 511 

1819. Recovery of money paid under duress 511 

1820. Mortgagee's damages and costs when wrongfully enjoined 511 

VI. Personal Notice of Sale 

Section Page 

1821. When notice necessary 513 

1821a. Personal notice to subsequent incumbrancers 515 

1822. Compliance with terms of power of sale 515 

1823. Notice to persons under disability 517 

1823a. Notice to occupant of premises 517 

1824. Waiver of notice by mortgagor 517 

1825. Promise to give notice 518 

1826. Neglect to give notice ground for setting aside sale 518 

VII. Publication of Notice 

Section Page 

1827. Notice by publication in general 519 

1828. Lex rei sitae 520 

1829. Fairness required 521 

1830. Burden of proof as to notice 522 

1831. Notice published before default 523 

1832. Effect of assignment of mortgage after first advertisement 524 

1833. Change of statute as to length of notice 525 

1834. How long after publication sale may be 525 

1835. Selection of newspaper 526 

1836. Place of publication 527 

1837. Posting in public places 528 

1838. Length of time of publication 529 



XVI TABLE OF CONTENTS. 

VIII. What the Notice Should Contain 
Section Page 

1839. Compliance with terms of power 533 

1840. Description of premises 535 

1841. Where distinct lots or parcels are to be sold 537 

1842. Short and incomplete description 539 

1843. Names of parties 540 

1844. Specifying owner of equity of redemption 541 

1845. Specifying time and place of sale 542 

1846. When mortgagee or trustee may exercise discretion in fixing 

time, place, and terms of sale 542 

1847. Sale fixed for Sunday or legal holiday 543 

1848. Sale at ruins of courthouse 544 

1849. Sale at temporary courthouse 544 

1849a. Sale in newly incorporated town or county 547 

1850. Sale at city hall 548 

1851. Mistake in advertisement 549 

1852. Effect of error in notice 549 

1853. Sale of equity of redemption 550 

1854. Unimportant omissions 552 

1855. Statement of amount due 553 

1856. Stating amount of first mortgage in notice of sale of second . . . 554 

IX. Sale in Parcels 
Section Page 

1857. Sale in parcels or en masse in general 554 

1858. Effect of request that sale be made in parcels 558 

1859. Duty and discretion of mortgagee or trustee 559 

1860. Sale of sufficient only to pay debt 562 

X. Conduct of Sale, Terms, and Adjournment 

Section Page 

1861. Mortgagee may act by attorney 563 

1862. Presence of trustee or mortgagee 564 

1863. Public or private sale 566 

1864. Terms of sale 567 

1865. Acquiescence of mortgagor in conduct of sale 569 

1866. Payment at time of sale 570 

1867. Time for examination of title 572 

1868. Giving credit , 572 

1869. When power does not prescribe terms of sale 574 

1870. Use of discretion by mortgagee 575 

1871. Mortgagee giving credit and assuming risk 576 

1872. Cash or credit 577 

1873. Adjournment 578 

1874. Notice on postponement or adjournment 580 

1875. No obligation to delay sale 582 

XI. Who May Purchase at Sale 
Section Page 

1876. Purchase by mortgagee 583 

1876a. Effect of purchase by mortgagee 586 

1877. When unnecessary to show fraud or unfairness in mortgagee's 

purchase 588 

1878. Purchase by mortgagee's solicitor 588 

1879. Mortgagee's agent 589 

1880. Purchase by trustee 590 



TABLE OF CONTENTS XVU 

Section Page 

1881. Purchase by mortgagee ■with mortgagor's knowledge and con- 

sent 592 

1882. Purchase by creditor at sale made by judicial process 593 

1883. Purchase by mortgagee under authorization in power 595 

1884. Purchase by subsequent mortgagee 597 

1885. Waiver of right to avoid sale to mortgagee 599 

1886. Where property has passed into hands of bona fide purchaser. . 600 

1887. Purchase by mortgagor 601 

1888. Purchase by wife of mortgagor 603 

XII. Deed and Title 

Section Page 

1889. Who may execute deed to purchaser 604 

1890. Deed by married woman 606 

1891. In whose name deed may be executed 606 

1892. Mortgagee executing deed to himself 607 

1893. In New York and Alabama deed to mortgagee purchaser not 

necessary 609 

1894. When title vests in purchaser 609 

1895. Recitals in the deed 611 

1896. Deed made to person other than purchaser 612 

1897. Title of purchaser 613 

1897a. Taxes and mechanic's liens 615 

1898. Bona fide purchaser 616 

1899. Agreement between parties as affecting bona fides of purchaser 619 
1899a. Doctrine of caveat emptor 620 

1900. Noninquiry clause 620 

1901. Covenant in deed 621 

1902. Invalid sale may operate as assignment of mortgage 621 

1902a. Remedy of purchaser for obtaining possession 623 

1903. Remedy on failure to comply with bid 624 

XIII. The Affidavit 

Section Page 

1904. Failure to make and file affidavit of sale 625 

1905. Affidavit presumptive evidence of facts stated therein 627 

XIV. Setting Aside and Waiving Sale 

Section Page 

1906. General considerations 629 

1906a. Military occupation of premises at time of sale ground for relief 632 

1907. Sale void or voidable for irregularity 632 

1908. Sale made without leave of bankrupt court 635 

1909. Allowing property to be sacrificed 636 

1910. Secret arrangement to prevent competition 637 

1911. Fraud and deceit 638 

1912. Conduct of purchaser 641 

1913. Purchaser with knowledge of validating circumstances 642 

1914. Purchase by agent without authority 643 

1914a. Effect of absence of competition in bids 643 

1915. Inadequacy of price 643 

1915a. Auctioneer without license 646 

1916. Sale waived by extending time of redemption 646 

1917. Promise to allow mortgagor to repurchase 647 

1918. Effect of suit for second instalment 648 

1919. Not waived by subsequent entry to foreclose 648 

1920. Waiver by agreement 648 

1920a. Ratification and estoppel 649 



XVlll TABLE OF CONTENTS 

Section Page 

1921. Relief in equity only 650 

1922. Delay 652 

1922a. Pleading and evidence 654 

XV. Costs and Expenses 
Section Page 

1923. Compensation to mortgagee or trustee 655 

1923a. Attorney's fees provided for in mortgage 656 

1923b. Stipulation for attorney's fee refers only to sale under power. . 659 

1924. Costs and expenses of sale where no provision made in power. . 660 

1925. Costs and expenses provided for in power 661 

1926. Costs and expenses where bankruptcy court orders sale 662 

1926a. Application of proceeds of sale 662 

1926b. Payment of prior liens upon the property 663 

XVI. The Surplus 
Section Page 

1927. Form of provision in power for disposal of surplus 664 

1928. Interest on surplus pending adjustment of adverse claims 666 

1929. Order in which surplus proceeds must be applied 667 

1930. Mortgagee entitled to notice of claims to surplus 669 

1931. Death of mortgagor 670 

1932. Insolvency or bankruptcy of mortgagor 672 

1933. Dower in surplus 672 

1934. When equity has been sold under execution or is attached 673 

1935. Judgment lien 675 

1936. When mortgage debt charged on portion of premises 676 

1937. When whole property sold to satisfy instalment 676 

1938. Payment of whole debt on a sale for an instalment 677 

1939. Where several debts are secured by same mortgage 678 

1940. Proceedings to recover surplus 680 



THE LAW OF MORTGAGES 
OF REAL PROPERTY 

CHAPTBE XXXII 

FORECLOSURE BY EQUITABLE SUIT 

I. Jurisdiction, and the Object of the Suit, §§ 1443-1450 
II. The Bill or Complaint, §§ 1451-1478 
III. The Answer and Defenses, §§ 1479-1515 

I. Jurisdiction, and the Object of the Suit 

Section Section 

1443. Jurisdiction. 1447a. Injunction to restrain im- 

1444. Venue. proper use of remedy. 

1445. Litigation of questions of title. 1448. Enforcement of trust deed for 

1446. Question of removal of build- creditors. 

ings, not investigation of 1449. Foreclosure of title bond, 
title. 1450. Tender to prevent foreclosure. 

1447. Improper use of remedy. 

§ 1443. Jurisdiction. — Courts of equity have inherent original 
jurisdiction of the subject of mortgages both for the foreclosure and 
redemption of them. Eedemption is purely a matter of equity, and the 
only remedy is here. Although other remedies are used for the fore- 
closure of mortgages under different systems of law and practice 
adopted in different states, yet generally courts of equity are not de- 
prived of jurisdiction by the existence of other remedies. In many 
states, as already seen, jurisdiction in equity of the foreclosure of 
mortgages is expressly conferred by statute.^ When provisions in de- 
tail are made on this subject, they are generally founded upon prin- 
ciples and rules of practice already established by courts of equity 
under the general jurisdiction they have always exercised of the sub- 
ject; and the powers of these courts are only enlarged and defined by 
the statutes. But even where systems of foreclosure not derived di- 
rectly from chancery courts have been adopted, courts of equity, where 
they have not been superseded by codes of practice, which do away 

^Fox V. Wharton, 5 Del. Ch. 200; Fort, 45 Miss. 355; Mississippi Val- 

State V. Florida Cent. R. Co., 15 Fla. ley Trust Co. v. McDonald, 146 Mo. 

690; State Bank v. Wilson, 9 111. 467, 48 S. W. 483; Verdier v. Eigne, 

57; Chase v. Palmer, 25 Maine 341; 16 Ore. 208, 19 Pac. 64; Byron v. 

Warehime v. Carroll Co. Bldg. May, 2 Chand. (Wis.) 103. See 

Assn., 44 Md. 512; McAllister v. ch. xxx. 
Plant, 54 Miss. 106; Champenois v. 

1 

1 — JoxEs Mtg. — Vol. III. 



§ 1443 rOEECLOSUEE BY EQUITABLE SUIT 2 

with all distinctions between actions at law and in equity, still have 
concurrent jurisdiction of the subject, and are resorted to, if not gen- 
erally, then in particular instances, for the reason that they aiiord a 
more complete and certain remedy." Even the peculiar statutory 
mortgage of Louisiana, which is a public act before a notary public, 
and imports a confession of judgment, and under the statutes o± that 
state is enforced at law by a writ of seizure and sale, may be fore- 
closed in a court of the United States having jurisdiction of the case 
by a bill in equity.' 

Although the mortgage contains a power of sale, courts of chan- 
cery are not generally deprived of their jurisdiction to foreclose it.* 
Neither is an abortive attempt to foreclose under a power of sale a 
bar to a foreclosure in equity.^ It has been stated, as a reason why 
jurisdiction in equity should be retained in such cases, that a mort- 
gagee may be incapable of purchasing at his own sale under the 
power,^ though he may at a sale made by an officer under a judgment 
or decree. Neither does the fact that there is a statutory remedy oust 
the jurisdiction of a court of equity.^ 

One result of the equitable character of the statutory processes 
for enforcing mortgages is, that the parties have no right as a matter 
of course to have the issues tried by a jury, even when judgment is 
asked for any deficiency and the execution of the note is denied;^ 

"Merchants' Nat. Bank v. Greene, 748. An action under the statute 

150 Mass. 317, 23 N. E. 103; Shep- for the foreclosure of a mortgage is 

ard V. Richardson, 145 Mass. 32, 11 one in law and not in equity. White 

N. E. 738; Shaw v. Norfolk County v. Black, 115 Mo. App. 28, 90 S. W. 

R. Co., 5 Gray (Mass.) 162; Ger- 1153. 

mania Life Ins. Co. v. Potter, 124 ° Benjamin v. Cavaroc, 2 Woods 

App. Div. 814, 109 N. Y. S. 435; Mc- (U. S.) 168. 

Curdy's Appeal, 65 Pa. St. 290; Mc- * Alabama Life Ins. &c. Co. v. 
Elrath v. Pittsburg &c. R. Co., 55 Pettway, 24 Ala. 544; Carradine v. 
Pa. St. 189; Hall v. Sullivan R. Co., O'Connor, 21 Ala. 573; Martin v. 
21 Law Rep. 138. City courts, in Ward, 60 Ark. 510, 30 S. W. 1041; 
New York, are without jurisdiction Warehime v. Carroll County BIdg. 
to foreclose mortgages on realty. Assn., 44 Md. 512; Green v. Gaston, 
Scott V. Hughes, 124 Ga. 1000, 53 56 Miss. 748, 751; Morrison v. Bean, 
S. E. 453. In Nebraska, the dis- 15 Tex. 267; Walton v. Cody, 1 Wis. 
trict court is without jurisdiction 420; Byron v. May, 2 Chand. (Wis.) 
to hear and determine at chambers 103. See post § 1773. 
an action to foreclose a mortgage. "Rogers v. Benton, 39 Minn. 39, 
Shold V. Van Treeck, 82 Nebr. 99, 38 N. W. 765, 12 Am. St. 613. 
117 N. W. 113. A county court, in "Marriott v. Givens, 8 Ala. 694; 
New York, has merely incidental McGowan v. Branch Bank at Mo- 
equitable powers, and may not pass bile, 7 Ala. 823. 

upon the validity of an assignment 'Benjamin v. Cavaroc, 2 Woods 

of the mortgage or set it aside. (U. S.) 168. But see Kollen v. 

Tonges v. Vanderveer Canarsie Im- Sooy, 172 Mich. 214, 137 N. W. 808. 

provement Syndicate, 148 N. Y. S. » Downing v. Le Du, 82 Cal. 471, 



3 JURISDICTION AND OBJECT §■ 1444 

although the court may in its discretion call in the aid of a jury in 
any case.' 

The foreclosure of a mortgage does not involve the title to land in 
the sense that suits involving title to land may be brought only in 
certain named courts.^" Jurisdiction is not defeated by the fact that 
a state or territory which has acquired a part of the mortgaged prem- 
ises refuses to be made a party to the suit.^^ A mortgagee secured by 
a collateral mortgage, where the collateral mortgage is to become void 
on the payment of the principal mortgage, is not bound to sue on the 
bond given with the principal mortgage for a deficiency, but may fore- 
close on the collateral mortgage instead.^^ 

§ 1444. Venue. — A foreclosure suit in its usual form is partly an 
action in rem, for the seizure and sale of the property, and partly an 
action in persomam, for the ascertainment of the debt of the mortgage 
debtor, and obtaining a personal judgment against him.^' When no 
personal judgment is sought the suit is essentially a proceeding in 
rem, and service by publication, when this is allowed by statute, is 
sufficient to give jurisdiction.^* Actions for foreclosure of mortgages 
are generally required by statute to be brought in the county where 
the mortgaged premises or some part thereof are situated.^" Such a 

23 Pac. 202; Van Valkenburgli v. 296, 9 S. E. 107; Batjer v, Roberts 

Oldham, 12 Gal. App. 572, 108 Pac. (Tex. Civ. App.), 148 S. W. 841; 

42; Lindsay v. Porter, 140 Ga. 249, State v. Superior Gourt of King 

78 S. E. 848; Carroll v. Deimel, 95 County, 63 Wash. 312, 115 Pac. 307, 

N. Y. 252. Ann. Gas. 1913 D, 1119. See also 

'Knickerbocker Life Ins. Co. v. Williams v. Ives, 49 111. 512; Wis- 

Nelson, 8 Hun (N. Y.) 21. See also dom v. Parker, 31 La. Ann. 52. 

Frye v. Hubbell, 74 N. H. 358, 68 " Martin v. Pond, 30 Fed. 15. 

Atl. 325, 17 L. R. A. (N. S.) 1197; "Hitchcock v. United States 

Elks V. Hemby, 160 N. Car. 20, 75 Bank, 7 Ala. 386; Staacke v. Bell, 

S. E. 854; New York Trust Co. v. 125 Gal. 309, 57 Pac. 1012; Rogers 

Langcliffe Coal Co., 227 Pa. 630, 76 v. Cady, 104 Gal. 288, 38 Pac. 81, 

Atl. 736; Neuweiler v. Biever, 227 43 Am. St. 100; Goldtree v. McAl- 

Pa. 547, 76 Atl. 247; Brownell v. lister, 86 Gal. 93, 24 Pac. 801; Hack- 

Oviatt, 215 Pa. 514, 64 Atl. 670; enhuU v. Westbrook, 53 Ga. 285; 

Hamilton v. Green (Tex. Civ. App.), Urmston v. Evans, 138 Ind. 285, 37 

101 S. W. 280. N. B. 792; Shields v. Tellman, 100 

^"Reynolds v. Atlanta Nat. Bldg. Ky. 655, 18 Ky. L. 1092, 39 S. W. 

&c. Assn., 104 Ga. 703, 30 S. B. 942. 30; Galloway v. Craig, 29 Ky. L. 

"Kawananakoa v. Polyblank, 205 1, 92 S. W. 320; Wipfler v. Warren, 

U. S. 349, 51 L. ed. 834, 27 Sup. Ct. 163 Mich. 189, 128 N. W. 178; Rich- 

526. ard v. Boyd, 124 Mich. 396, 83 N. 

"Wyckoff V. Holmes, 82 N. J. Bq. W. 106; Fraley v. March, 68 N. Car. 

536, 88 Atl. 832, 35 L. R. A. (N. S.) 160; Tryon v. Munson, 77 Pa. St. 

338. 250; Cole v. Ward, 79 S. Car. 573, 

"Whalley v. Bldridge, 24 Minn. 61 S. E. 108; Greenwood Loan &c. 

358; Moore v. Starks, 1 Ohio St. Assn. v. Williams, 71 S. Gar. 42L 

369; Wagner v. Skygert, 30 S. Car. 51 S. B. 272 (jurisdiction proper 



§ 1444 



FOEECLOSUEE BY EQUITABLE SUIT 



statute gives to a mortgagee whose mortgage covers several discon- 
nected tracts of land in different counties the right to foreclose as to 
all of them by a single suit, in any county where one tract is situated.^' 
But, aside from this requirement, this action is not local, but transi- 
tory, and a bill may be brought wherever there is jurisdiction of the 
parties.^'' Where, however, separate mortgages are given upon land 
in separate counties and each secures a part of the debt, there must be 
separate foreclosures in the separate counties.^* 

It is doubtful whether the parties may confer jurisdiction by eon- 
sent in any other county than that in which the statute says the action 
must be instituted.^' The titles to the land can not be investigated.^" 



though mortgagor a nonresident) ; 
Sherman v. Droubay, 27 Utah 47, 
74 Pac. 348. 

"Stevens v. Ferry, 48 Fed. 7; 
Boiling V. Munchus, 65 Ala. 558; 
Goldtree v. McAlister, 86 Cal. 93, 23 
Pac. 207, 24 Pac. 801; Holmes v. 
Taylor, 48 Ind. 169; Hendrix v. 
Nesbitt, 96 Ky. 652, 16 Ky. L. 746, 
26 S. W. 627; Strong v. Eighme, 41 
How. Pr. (N. Y.) 117; Wagener v. 
Swygert, 30 S. Car. 296, 9 S. E. 
107; Empire State Surety Co. v. 
Ballou, 66 Wash. 76, 118 Pac. 923. 
Even a suit to foreclose several 
mortgages made by one mortgagor 
to secure one debt of lands lying in 
several counties may be brought in 
any county in which the land in one 
of the mortgages is located. Lo- 
max V. Smyth, 50 Iowa 223. A court 
does not lose jurisdiction by rea- 
son of the fact that pending the 
suit a new county is created includ- 
ing the mortgaged land. Tolman v. 
Smith, 85 Cal. 280, 24 Pac. 743. An 
objection that the complaint does 
not show that the premises were so 
situated, will not prevail where the 
description in the mortgage, an- 
nexed to and made part of the com- 
plaint, shows that the mortgaged 
premises were, at the time the suit 
was commenced, in a legal subdivi- 
sion which the court judicially 
knows to have been within the 
boundaries of the county in which 
the suit was brought. Scott v. Sells, 
88 Cal. 599, 26 Pac. 350. 

"Phelps V. McDonald, 99 U. S. 
298, 25 L. ed. 473; Muller v. Dows, 
94 U. S. 444, 24 L. ed. 207; Reeves 
V. Brown, 103 Ala. 537, 15 So. 824; 



Harwell v. Lehman, 72 Ala. 344; 
Ashurst V. Gibson, 57 Ala. 584; Eat- 
on V. McCall, 86 Maine 346, 29 Atl. 
1103; Reed v. Reed, 75 Maine 264; 
Pingree v. Coffin, 12 Gray (Mass.) 
288; Penn v. Baltimore, 1 Ves. Sr. 
444; Seymour v. DeMarsh, 11 Ont. 
Prac. 472. 

"Citizens' Nat. Bank v. Abbott, 
72 "Wash. 73, 129 Pac. 1085. 

"Silcox V. Jones, 80 S. Car. 484, 
61 S. E. 948. But see Snyder v. 
Pike, 30 Utah 102, 83 Pac. 692. 

=» Palmer v. Mead, 7 Conn. 149, 
157; Broome v. Beers, 6 Conn. 198- 
207; Finnagan v. Manchester, 12 
Iowa 521; Cole v. Conner, 10 Iowa 
299; Caufman v. Sayre, 2 B. Mon. 
(Ky.) 202; Owings v. Beall, 3 Litt. 
(Ky.) 103; Grace v. Hunt, Cooke 
(Tenn.) 341; Kinney v. McCleod, 9 
Tex. 78; Paget v. Ede, L. R. 18 Eq. 
118; Toller v. Carteret, 2 Vern. 494. 
If the statute of the state also pro- 
vides that, "if the county desig- 
nated in the complaint be not the 
proper county, the action may not- 
withstanding be tried therein, un- 
less the defendant, before the time 
of answering expires, demands in 
writing that the trial be had in the 
proper county," the latter provision 
Is a qualification of the former, and 
the defendant simply has a personal 
right to have the action tried in the 
county in which the land is situ- 
ated, and may waive this right by 
not insisting upon it or by default. 
Territory v. Judge, 5 Dak. 275, 38 
N. W. 439; O'Neil v. O'Neil, 54 Cal. 
187; Gill V. Bradley, 21 Minn. 15; 
March v. Lowry, 16 How. Pr. (N. 
Y.) 41; Lane v. Burdick, 17 Wis. 



5 JUEISDICTIOK AXD OBJECT § 1444 

The courts in England regard the right to redeem as a mere personal 
right, and not as an estate in a proper technical legal sense, and on 
this ground take jurisdiction of the foreclosure of land situated in the 
colonies, when they have jurisdiction of the parties. ^^ A court of 
chancery, acting primarily in personam and not merely in rem, may, 
by virtue of its jurisdiction of the parties, make a decree respecting 
property situated out of the jurisdiction, and may enforce the decree 
by process against the defendant of whom it has jurisdiction.^^ 

The court may decree the foreclosure of a mortgage which embraces 
property out of the state as well as within it, such, for instance, as a 
railroad existing in two or more states.^' But neither the decree nor 
the conveyance under it, except this be by the person in whom the 
title is vested, can operate beyond the jurisdiction of the court.^* 
Thus, if a decree of foreclosure be entered in New York of a mortgage 
upon land in Connecticut, and a referee appointed by the court sells 
the land and gives a deed to the purchaser, the deed will be held to 
convey no title to the land in Connecticut, and the rights of the par- 
ties in respect to such land vidll remain unaffected by the proceedings 
had in New York.^=' 

In those states in this country where the mortgage is considered a 
mere lien, and the legal estate as remaining in the mortgagor, the 
decree operates either to deprive the mortgagor of that estate, by vest- 
ing it in the mortgagee as by strict foreclosure, or by sale to convey 
it to the purchaser, and therefore would be regarded as a local action. 
If a sale of the property is asked for, as this operates in rem, juris- 
diction is restricted to the local court of the county in which the land 

92. In Iowa the code is not im- of process is by publication only, 

perative in directing the suit to be the suit must be in the county 

brought in the county where the where the land is. Iowa Loan &c. 

land is situated. It may be brought Co. v. Day, 63 Iowa 459, 19 N. W. 

in another county if personal serv- 301; Equitable Life Ins. Co. v. 

ice of the process is had, so that the Gleason, 56 Iowa 47, 8 N. W. 790. 
court in such other county acquires ^ Paget v. Ede, L. R. 18 Eq. 118. 
jurisdiction of the defendant, and ^ Eaton v. McCall, 86 Maine 346, 

can render a personal judgment 29 Atl. 1103; Union Trust Co. v. 

against him; and having acquired Olmsted, 102 N. Y. 729, 7 N. E. 822; 

such jurisdiction and rendered per- Dickson v. Loehr, 126 Wis. 641, 106 

sonal judgment, the court will not N. W. 793, 4 L. R. A. (N. S.) 986. 
require him to institute another '^ Mead v. N. Y., Housatonic &c. R. 

suit to obtain a decree of foreclo- Co., 45 Conn. 199; Jones On Corp. 

sure, but will render such decree al- Bonds & Mtg., § 360. 
though the land is in another coun- ^'Watkins v. Holman, 16 Pet. (U. 

ty. But the action, so far as the S.) 25, 10 L. ed. 873; Booth v. Clark, 

enforcement of the mortgage Is con- 17 How. (TJ. S.) 322, 15 L. ed. 164. 
cerned, is strictly in rem, and as '^ Farmers' Loan &c. Co. v. Postal 

such must be brought in the county Tel. Co., 55 Conn. 334, 11 Atl. 184, 

where the land lies. If the service 3 Am. St. 53. 



§ 1445 



FOEECLOSUKE BY EQUITABLE SUIT 



lies.^° Under the Louisiana code, a party holding a mortgage en- 
titling him to executory process may proceed against the mortgagor, 
either in the parish of his domicil or in the parish where the property 
is sitnated.^^ 

§ 1445. litigation of questions of title. — It is not proper in a fore- 
closure suit to try a claim of title paramount to that of the mort- 
gagor. The only proper object of the suit is to bar the mortgagor and 
those claiming under him.^^ A third party claiming title to the land 
may not intervene in the foreclosure proceedings.^* Whether the 
claim of title be made under a conveyance by a third party prior to 
the mortgage or subsequent to it, it is not a proper subject of deter- 
mination in a foreclosure suit; nor is a claim under a conveyance by 
the mortgagor made prior to the mortgage.^" Such adverse claims of 
title are generally matters of purely legal jurisdiction. A claim under 
a tax title is one which can not be considered in a foreclosure suit. 



"Campbell v. West, 86 Cal. 197, 
24 Pac. 1000; Caufman v. Sayre, 2 
B. Mon. (Ky.) 202. "A mortgagee 
may either compel the sale of the 
estate, in order to get the whole of 
his money immediately, or else call 
upon the mortgagor to redeem his 
estate presently, or in default there- 
of to be forever foreclosed from re- 
deeming the same; and though in 
the latter case the decree might be 
supposed to properly act on the per- 
son of the mortgagor, in the former 
case it acts emphatically on the 
thing mortgaged. Stevens v. Ferry, 
48 Fed. 7; Owings v. Beall, 3 Litt. 
(Ky.) 103; Wood v. Mastick, 2 
Wash. T. 64, 3 Pac. 612. See also 
Chadbourne v. Oilman, 29 Iowa 181. 

"Fulton V. Oertling, 131 La. 768, 
60 So. 238; Gantt v. Eaton, 25 La. 
Ann. 507; Generes v. Simon, 21 La. 
Ann. 653; Scott v. Turner, 15 La. 
Ann. 346. 

^Grosscup T. German Sav. &c. 
Soc, 162 Fed. 947; Sielbeck v. 
Grothman, 248 111. 435, 94 N. B. 67; 
Hekla F. Ins. Co. v. Morrison, 56 
Wis. 133, 14 N. W. 12; Palmer v. 
Yager, 20 Wis. 91; Pelton v. Farm- 
In, 18 Wis. 222. Summers v. Brom- 
ley, 28 Mich. 125, per Graves, J. "A 
court of equity is not the appropri- 
ate tribunal, nor is a foreclosure 



suit a suitable proceeding for the 
trial of claims to the legal title 
which are hostile and paramount to 
the interests and rights and title of 
both mortgagor and mortgagee. 
Such a trial will neither fall in 
with the nature of the jurisdiction, 
or the genius or frame of the par- 
ticular remedy." See further Equi- 
table Mtg. Co. V. Finley, 133 Ala. 
575, 31 So. 985; Boiling v. Pace, 99 
Ala. 607, 12 So. 796; Rathbone v. 
Hooney, 58 N. Y. 463; Merchants' 
Bank v. Thomson, 55 N. Y. 7; Corn- 
ing V. Smith, 6 N. Y. 82; Brundage 
V. Missionary Society, 60 Barb. (N. 
Y.) 204. In Connecticut, under § 12 
of the Practice Act, any person may 
be made a defendant who claims an 
interest adverse to the plaintiff, or 
whom it is necessary to bring in 
for a complete determination of any 
matters involved in the suit. An 
adverse claimant may therefore be 
made a party defendant to a fore- 
closure suit. De Wolf V. Sprague 
Mfg. Co., 49 Conn. 282, 304, 308; 
Hazeldine v. McVey, 67 N. J. Eq. 
275, 63 Atl. 165. See ante §§ 1439, 
1440. 

" Smith V. Redmond, 134 Iowa 70, 
108 N. W. 461. 

'°San Francisco v. Lawton, 18 
Cal. 465, 79 Am. Deo. 187. 



7 JDEISDICTIOlSr AND OBJECT § 1445 

unless it affects the equity of redemption.^^ Even if a party having 
paramount title is made a party and a judgment is entered after a 
hearing, it -will not bind his interest, but will be set aside on applica- 
tion.'^ 

A tax title claimed to be adverse and paramount to the rights of 
both mortgagor and mortgagee, is not subject to adjudication in a suit 
to foreclose a mortgage on real estate.^' The rule is the same as to the 
claim of a third party to an easement in the mortgaged property.'* 
Investigation into title is only permissible when it is incidental to the 
main object of the proceeding.'" It is proper to try the question 
whether the property is community or separate property.'" Questions 
of priority of lien as between two mortgages by the same mortgagor 
may properly be determined in a foreclosure of one of them.'^ Thus 
a junior mortgagee may show that the senior mortgage has been paid." 
Questions, too, of priority between the owners of different parcels of 
land mortgaged together may be determined and the order in which 
they shall be sold iixed.'" 

There are cases, however, which hold that when the plaintiff in a 
foreclosure action makes any person defendant, alleging "that he 
claims to have some interest or lien upon the mortgaged premises, or 
some part thereof, which lien, if any, has accrued subsequently to the 
time of said mortgage," such defendant may by his answer set up a 
paramount claim to the mortgaged premises, or to some part thereof, 
and that such right may be tried and adjudged in the foreclosure ac- 
tion. The only way the plaintiff can avoid the trial of the right of 
the defendant so brought into court by him, as to his paramount title, 
is to discontinue his case as to such defendant, so that he may not be 
prejudiced by the judgment to be entered in the foreclosure action.*" 

If a claim paramount to the mortgage is set up by a defendant, and 

«Kelsey v. Abbott, 13 Cal. 609. "Tolman v. Smith, 85 Cal. 280, 24 

See ante § 1440. Pac. 743; Graham v. Smart, 42 

" Emigrant Industrial Sav. Bank Wash. 205, 84 Pac. 824. 

V. Goldman, 75 N. Y. 127; Lewis v. "'Bell v. Pate, 47 Mich. 468, 11 N. 

Smith, 9 N. Y. 502, 61 Am. Dec. W. 275; Iowa County v. Mineral 

706; Corning v. Smith, 6 N. Y. 82; Point R. Co., 24 Wis. 93. 

Adams v. McPartlin, 11 Abb. N. Cas. '^ McGillivray v. McGillivray, 9 S. 

(N. Y.) 369; Eagle Fire Co. v. Lent, Dak. 187, 68 N. W. 316. 

6 Paige (N. Y.) 635. ™New York Life Ins. &c. Co. v. 

== Pearson v. Helvenston, 50 Fla. Milnor, 1 Barb. Ch. (N. Y.) 353. 

590, 39 So. 695. -" Lego v. Medley, 79 Wis. 211, 48 

''Mayer v. Margolies, 47 Misc. 24, N. W. 375; Newton v. Marshall, 62 

95 N. Y. S. 204. Wis. 8, 21 N. W. 803; Wickes v. 

^Pettus V. Gault, 81 Conn. 415, 71 Lake, 25 Wis. 71; Roche v. Knight, 

Atl. 509. 21 Wis. 324. 



§ 1446 FORECLOSUEE BY EQUITABLE SUIT 8 

this question is litigated, both parties will be bound by the decree. 
Thus, where a bill alleges that defendant asserts some claim to or in- 
terest in the property, but that whatever interest he has is subordinate 
to the mortgage, and prays only that all claims under the mortgagor 
be foreclosed, and such defendant sets up in his answer a paramount 
claim, and the same is litigated without objection and decided in his 
favor, the decree can not be attacked on appeal on the ground that the 
question could not properly be litigated in that action.*^ 

A prior mortgagee may elect for himself the time and manner of 
enforcing his security, and can not be compelled to enforce it by being 
made a party to a suit by a junior incumbrancer to foreclose his lien. 
A junior mortgagee who has brought a suit to enforce his own mort- 
gage, to which he has made the prior mortgagee a party, can not set 
up in answer to a suit of foreclosure by the prior mortgagee that he 
had already commenced a foreclosure suit, and had made the prior 
mortgagee a party defendant. Such a defense is frivolous. ^^ 

§ 1446. Question of removal of buildings, not investigation of title. 

— It is proper in a foreclosure suit to determine the right of the 
mortgagor to remove a building erected by him on the land, and to 
direct that the land be sold subject to such right. If the building has 
been removed and sold, the court may determine the ownership of the 
building. This is not a litigation of the title to the mortgaged prop- 
erty.*^ This is incident to the general power and authority of the 
court to define and describe in its judgment the property to be sold. 
Such a question should be settled before the sale, so that the sherifE 
may know what he is selling and the purchaser may know what he 
is buying. In the meantime the mortgagor may be enjoined from 
impairing the security by removing the building, which is presumably 
a part of the freehold.** 

§ 1447. Improper use of remedy.— A court of equity will prevent 
an improper use of its process, even in a legal way, as, for instance, 
when it is apparent that the object of the foreclosure suit is not to 
procure the satisfaction of the debt, but to obtain a different end by 
coercing the owner of the equity of redemption. This was done in a 

"Boiling V. Pace, 99 Ala. 607, 12 Cas. (N. Y.) 369. See also Torpe 

So. 796; Helck v. Reinheimer, 105 v. Letts, 177 111. App 288 

N. Y. 470, 12 N. E. 37; Barnard v. "Partridge v. Hemenway, 89 

Onderdonk, 98 N. Y. 158, 163; Jor- Mich. 454, 50 N. W. 1084 Morse J 

dan V. Van Epps, 85 N. Y. 427, 435. dissenting. 

" Adams v. McPartlin, 11 Abb. N. " Brown v. Keeney Assn 59 N Y. 

242. 



9 JUEISDICTION AND OBJECT § 1447a 

case where a wife who owned the fee tendered the mortgagee the 
amount of his debt, and asked for an assignment of the mortgage, 
which he refused to make, and the evidence showed that the mortgage 
was being foreclosed in the interest of the husband, in order to force 
her to settle a suit by her to annul the marriage, and litigation was 
then pending about other property. As a new mortgage could not be 
obtained on account of the litigation, the court ordered that if the 
mortgagee refused to assign it the proceedings should be stayed.*^ 

Of course there can be no decree of foreclosure or suit to foreclose 
until the mortgage debt or some part of it is due, or there is some pro- 
vision enabling the mortgagee to foreclose for some other default.*" 
The holder of a note secured by mortgage may be foreclosed by him 
without his first having set aside an unauthorized release by the holder 
of a fraudulent duplicate of the note.*' 

§ 1447a. Injunction to restrain improper use of remedy. — The 

prosecution of an action for the foreclosure of a mortgage may be re- 
strained by a court of equity, where foreclosure is improperly invoked, 
and its successful prosecution would place a cloud on a title.*^ It may 
be enjoined where the mortgagee uses the remedy to coerce the pay- 
ment of another claim,*" or where the debt secured by the mortgage 
has been satisiied,"" or there has been a mistake in satisfaction of the 
mortgage.^^ It is necessary to jurisdiction that irreparable injury will 
result if the writ is denied.''^ 

The writ should not be granted where the party asking it has an 

« Foster v. Hughes, 51 How. Pr. lote v. Morrison, 8 Minn. 87 ; Ben- 

(N. Y.) 20. See also Struve v. nett v. Stevenson, 53 N. Y. 508. An 

Chllds, 63 Ala. 473; Geuda Springs injunction may be sued out to ar- 

Town &c. Co. V. Lombard, 57 Kans. rest executory proceedings on a 

625, 47 Pac. 532; Weis v. Levy, 106 mortgage before the seizure of the 

App. Div. 496, 94 N. Y. S. 857. See property. Roberson v. Goldsmith, 

post § 1801. 125 La. 571, 51 So. 646. 

"= Kirk V. Van-Petten, 38 Fla. 335, « McCalley v. Otey, 90 Ala. 302, 8 

21 So. 286. So. 157. 

"Pouder v. Colvin, 170 Mo. App. °°Matheson v. Thompson, 20 Fla. 

55, 156 S. W. 483. 790; Long v. Little, 119 111. 600, 8 

^Farmers' Sav. &c. Assn. v. Kent, N. E. 194; Bakle v. Hagan, 101 Md. 

117 Ala. 624, 23 So. 757; McCalley 22, 60 Atl. 615; Brown v. Miller, 63 

V. Otey, 90 Ala. 302, 8 So. 157; Prall Mich. 413, 29 N. "W. 879; Gray v. 

V. Richards, 97 Ark. 135, 133 S. W. Bryson, 87 Miss. 304, 39 So. 694. 

595; Hollingsworth V. North Amer- " Stoeckle v. Rosenheim (Del.), 

ican Deposit &c. Co., 97 Ga. 391, 24 87 Atl. 1006. But see Clark v. Sip- 

S. E. 35; Mayer v. Coley, 80 Ga. pie (Del.), 87 Atl. 1005. 

207, 7 S. E. 164; Colesburg v. Dart, °^ Melze-Alderton Shoe Co. v. First 

59 Ga. 839; Hackemuller v. Fig- State Sav. Bank, 171 Mich. 26, 137 

ueroa, 125 La. 307, 51 So. 207; Be- N. W. 208. 



§ 1448 FOEECLOSUKE BY EQUITABLE SUIT 10 

adequate remedy at law,"*' or where the grounds on which it is asked 
are properly matters of defense in the foreclosure suit.'* So, injunc- 
tion will not lie to restrain foreclosure for default in the payment of 
an instalment where the mortgage authorizes foreclosure on this 
ground.^' As a general rule injunction should be applied for in the 
court where the foreclosure suit is pending.°° 

The suit, where authorized, may be maintained by the mortgagor or 
any owner of the equity of redemption, who derives title from him." 
It has been held not ground to enjoin foreclosure that some of the 
land included in the mortgage was not the individual property of the 
mortgagor, but belonged to a firm of which he was a member.'^^ 

§ 1448. Enforcement of trust deed for creditors. — A trust deed 
made for the security of all the creditors of the grantor who are not 
named, and providing for a sale by the trustee only upon request 
made by a majority of the creditors, should be enforced by a bill in 
equity, under which the necessary parties can be convened, and their 
rights ascertained and adjusted."" The court will in any case under- 
take the supervision of the execution of the trust. The decree of sale 
should embody the provisions of the deed in regard to the sale; but 
these provisions may be altered when necessary, and in such case the 
sale must be in accordance with the terms of the decree."" 

§ 1449. Foreclosure of title bond. — In the foreclosure of a title 
bond the purchaser is treated as a mortgagor for all the purposes of 
the suit. The rights of the parties are the same as those of the parties 
to a formal mortgage."^ Persons interested in the property not made 
parties to the suit are not affected by the decree.*^ As in the case of 

■^Bergan v. Jeffries, 80 Ala. 349. Sheldon v. Hotter (Kans.), 53 Pac. 

"Matthews v. Warner, 6 Fed. 89; Clark v. Fontaln, 135 Mass. 464; 

461; "Wolfe v. Titus, 124 Cal. 264, Dederick v. Den Bleyker, 85 Mich. 

56 Pac. 1042; Waymlre v. San Fran- 475, 48 N. W. 633; State v. Security 

Cisco &c. R. Co., 112 Cal. 646, 44 Bank, 21 N. Dak. 540, 131 N. W. 

Pac. 1086; Myers v. Pierce, 86' Ga. 241. 

786, 12 S. E. 978; Citizens' Bank v. "»Furr v. Bank of Fairmount, 139 

Cook, 61 Ga. 177; Williams v. Doug- Ga. 815, 78 S. E. 181. 
lass, 47 La. Ann. 1277, 17 So. 805; "Hudgins v. Lanier, 23 Grat. 

Snow V. Trotter, 3 La. Ann. 268; (Va.) 494. 
Bushnell v. Avery, 121 Mass. 148. " Michie v. Jeffries, 21 Grat. 

■'» Knisell v. Brunet, 60 Wash. 610, (Va.) 334. 
Ill Pac. 894. " Jones v. Bowling, 117 Mich. 288, 

" Waymire v. San Francisco &c. R. 75 N. W. 611 ; Field v. Ashley, 79 

Co., 112 Cal. 646, 44 Pac. 1086; Kil- Mich. 231, 44 N. W. 602; First Nat. 

born v. Robbins, 8 Allen (Mass.) Bank v. Pearson, 119 N. Car. 494, 

466. 26 S. E. 46. 

■"Hubbard v. Jasinski, 46 111. 160; »=' Dukes v. Turner, 44 Iowa 575. 



11 JUEISDICTION AND OBJECT § 1450 

the foreclosure of a mortgage, the plaintiff may have judgment for 
foreclosure, and for the amount due on the bond at the same time.*^ 
A decree of foreclosure may be entered under a prayer for general 
relief, although not specifically asked for."* A decree for the sale of 
the land described in the bond, and payment of the proceeds upon the 
judgment, may further provide that upon full payment the vendor 
shall convey the property to the purchaser, by a deed containing all 
covenants stipulated for in the bond-'^ 

If the vendor retaining the legal title assigns a promissory note re- 
ceived in consideration of the sale, the assignee upon nonpayment of 
it may proceed to foreclose in his own name, as if it were a mortgage 
note.^" A mortgage of a lease may be foreclosed by a sale of the lease. 
The purchaser in such case becomes an assignee of the lease and term, 
and takes subject to the obligation to pay rent.°^ The vendee is usually 
held to be a necessary party though he has conveyed his interest,"* 
but not the lessees of the property, unless a decree is sought affecting 
their rights.''^ 

§ 1450. Tender to prevent foreclosure. — A tender of payment not 
accepted does not prevent the mortgagee's proceeding with a bill to 
foreclose.'" There may be questions as to the amount due on the mort- 
gage, and these can be settled and the mortgage enforced for what is 
actually due only by a foreclosure suit. Even the pendency of a bill 
by the mortgagor to redeem does not suspend the right to foreclose. 
The mortgagor, notwithstanding a decree for redemption, may make 
default when the actual time for payment arrives.''^ In a foreclosure 
suit, however, the mortgagor is bound to pay the sum that shall be 

"Kiernan v. Blackwell, 27 Ark. "See ante §§ 886-893. In a case 

235; Merritt v. Judd, 14 Cal. 59; where the interest on a mortgage 

Hartman v. Clarke, 11 Iowa 510; debt was not paid when due, and 

Mullin V. Bloomer, 11 Iowa 360. the mortgagor informed the mort- 

See also Lewis v. Boskins, 27 Ark. gagee the next day that he was 

61. ready to pay it, but made no ten- 

" Herring v. Neely, 43 Iowa 157. der, and the mortgagee directed his 

""Wall V. Ambler, 11 Iowa 274. solicitor to foreclose, but the solic- 

See ante § 235. itor before doing so notified the 

"■ Blair v. Marsh, 8 Iowa 144. mortgagor, and waited several days 

•'People V. Dudley, 58 N. Y. 323; before filing the bill, it was held 

Catlin V. Grissler, 57 N. Y. 363; that the bill was properly brought, 

Graham v. Bleakie, 2 Daly (N. Y.) and that there was no hardship of 

55; Pardee v. Steward, 37 Hun (N. which the mortgagor could com- 

Y.) 259. plain. Probasco v. Vaneppes (N. 

'"Tunstall v. Withers, 86 Va. 892, J.), 13 Atl. 598. 

11 S. B. 565. "Grugeon v. Gerrard, 4 Young & 

<®Brisco V. Minah Consol. Min. C. 119. 
Co., 82 Fed. 952. 



§ 1450 FOKECLOSUEB BX EQUITABLE SUIT 13 

found due, or else to stand foreclosed of his right of redemption. 
Until the mortgage debt is actually paid o3, the mortgagee retains 
all the rights and remedies incident to his mortgage. By statute, 
however, in some states, a bill must be dismissed upon the defendant's 
bringing into court at any time before the decree of sale the principal 
and interest due with costs.'^ Should there be a disagreement as to 
costs, the party making the tender may apply to the court for direc- 
tions as to the amount of them.'* Although the tender should prop- 
erly be brought into court, an irregularity in this respect will be con- 
sidered waived if the answer of the defendant making the tender be 
accepted and acted upon without objection.''* 

It has been observed in a former chapter that in several states a 
tender of the amount due on a mortgage discharges the lien, but does 
not discharge the debt. The consequence of this doctrine is, that upon 
proof of a tender of the debt, together with any costs incurred at the 
time, an action for foreclosure will be defeated ; but as the debt is not 
discharged a judgment for that may still be entered and enforced;'''* 
or, where the law and equity systems are distinct, an action at law may 
be maintained upon the debt.'" 

II. The Bill or Complaint 

Section Section 

1451. General principles. 1461. Prayer for decree against 

1452. Essential requisites. mortgagor and personal 

1453. Variance between allegations judgment against other 

and proof. maker of note. 

1454. Allegations of execution and 1462. Description of mortgaged 

delivery — Copies and ex- property. 

hibits. 1463. Omission of parts of mort- 

1455. Proof of execution. gaged premises. 

1456. Allegations showing right to 1464. Reformation for mistake in 

maintain bill. description. 

1457. Assignee's title. 1465. Allegations of record. 

1458. Inclusion of several mort- 1466. Allegations of debt. 

gages in one bill. 1467. Reference to determine 

1459. Foreclosure for Instalment. amount of debt. 

1460. Bill by holder of one of sev- 1468. Allegations of renewal of 

eral mortgage notes. note. 



" Kortright v. Cady, 21 N. Y. 343, Bartow v. Cleveland, 16 How. Pr. 

78 Am. Dec. 145; Allen v. Malcolm, (N. Y.) 364; Pratt v. Ramsdell, IG 

12 Abb. Pr. (N. S.) (N. Y.) 335; How. Pr. (N. Y.) 59. 

Hartley v. Tatham, 1 Keyes (N. Y.) "Roosevelt v. N. Y. &c. R. Co., 30 

222. Foreclosure not maintainable How. Pr. (N. Y.) 226, 45 Barb. 554. 

where interest only is due and this '"McCoy v. O'DonneU, 2 Thomp. 

has been tendered and refused. & C. (N. Y.) 671. 

Bensley v. Bartholf, 137 111. App. ™As in New York before the 

420. Code: Mann v. Cooper, 1 Barb. Ch. 

"Morris V.Wheeler, 45 N. Y. 708; 185. See ante § 893. 



13 THE BILL OE COMPLAINT § 1453 

Section Section 

1469. Proof of note. 1474. Allegations that defendant's 
1469a. Production of note and bond. Interest is subject to mort- 

1470. Proof of consideration. gage. 

1471. Allegations of accrual of ac- 1475. Prayer for relief. 

tion. 1476. Averment of essential 

1472. Allegations of payment by grounds of relief. 

surety. 1477. Prayer for deficiency. 

1473. Averments as to liens. 1478. Prayer for amount of debt be- 

fore entry of final decree. 

§1451. General principles. — ^It is not proposed. to set forth, ex- 
cept quite briefly, the rules and principles upon which a bill in equity 
to foreclose a mortgage is to be drawn, prosecuted and defended. 
Although the more important features of the pleadings are the same 
wherever this remedy is used, yet in matters of practice there is much 
diversity in the different states arising from enactments of different 
systems of procedure, and the adoption of different rules of practice 
by the courts. As already noticed when treating of the parties to an 
equitable action for foreclosure, several states^ have adopted and 
made applicable to all civil actions alike codes of procedure in which 
the equity method of pleading and practice in a simple form is pre- 
served. The special provisions of these codes relating to mortgages are 
there given. The general theory and form of the pleadings as a whole 
are determined by provisions that the complaint or petition shall con- 
tain "a plain and concise statement of the facts constituting the cause 
of action without unnecessary repetition," and "a demand of the relief 
to which the plaintiff supposes himself entitled. If a recovery of 
money be demanded, the amount thereof shall be stated."^ The an- 
swer must contain: "1. A general or specific denial of each material 
allegation of the complaint (or petition) controverted by the defend- 
ant, or of any knowledge or information thereof sufiicient to form a 
belief; 2. A statement of any new matter constituting a defense or 
counterclaim (or set-off), in ordinary and concise language, without 
repetition."^ These provisions are merely the essential requisites of 
a bill and answer in equity; and therefore the more important de- 
cisions relating to the substance of the pleadings apply in those states 
in which foreclosure is by a formal bill in a chancery court, and equally 
La those having these codes of procedure. 

§ 1452. Essential requisites. — The general requisites of the com- 
plaint are, that it shall allege the execution and delivery of the mort- 

^ See ante § 1367. = See Pomeroy's Remedies, § 583. 

"See Pomeroy's Piemedies, § 433. 



§ 1453 



FOEECLOSUKE BY EQUITABLE SUIT 



14 



gage and of the note or bond secured by it ;* the names of the parties 
to it; the date and amount of itf the title of the mortgagor in the 
mortgaged premises;* when and where recorded; a description of the 
premises ; the amount claimed to be due ; and the default upon which 
the right of action has accrued.'' It must show also that the complain- 
ant is entitled to maintain the action, and that the defendants have, or 
claim to have, certain interests in the premises, or liens upon them. 
If the plaintiff is not the mortgagee, his right to maintain the action, 
by virtue of an assignment, bequest, or otherwise, must be set forth 
with reasonable fulness and certainty. The terms and conditions of 
both the mortgage and of the bond or note secured by it should be set 
out. This may be done by proper recitals in the complaint itself, or 
by annexing copies of these instruments, which are referred to in the 
complaint and made part of it.^ The relief which is sought should 
be fully and explicitly stated.^ A decree of foreclosure of a mortgage 
should not be denied for want of proper prayer for relief, if such re- 
lief is embraced within the issue made by the pleadings.^" 

In those states in which a personal judgment may be rendered for 
the debt, though there is no judgment for foreclosure and sale, a com- 



' Laurent v. Lanning, 32 Ore. 11, 
51 Pac. 80. 

° If the true date of the mortgage 
is different from that stated in the 
mortgage, the actual date may be 
proved. McFall v. Murray, 4 Kans. 
App. 554, 45 Pac. 1100. 

•Sielbeck v. Grothman, 248 111. 
435, 94 N. B. 67; Ashcraft v. Mof- 
fett (Okla.), 144 Pac. 1041; Davis 
V. Mofeett (Okla.), 144 Pac. 607. 

' Coulter V. Bower, 64 How. Pr. 
(N. Y.) 132. As to sufficiency of 
description: Stevenson v. Kurtz, 98 
Mich. 493, 57 N. W. 580. As to al- 
legation of default: Ryan v. HoUi- 
day, 110 Cal. 335, 42 Pac. 891. As 
to amending description: Keys v. 
Lardner, 55 Kans. 331, 40 Pac. 644. 
A copy of the mortgage may be re- 
ferred to and made part of the 
complaint, for a description of the 
premises, Krathwohl v. Dawson, 
140 Ind. 1, 39 N. E. 496. 

*The mortgage need not be set 
out in full, if the debt, Its own- 
ership and default are fully de- 
scribed. Berry v. King, 15 Ore. 
165, 13 Pac. 772. "In an action 
to foreclose a mortgage given 
to secure a debt or obligation it 



must be made to appear by proper 
averments that there Is an existing 
obligation to pay, precisely the 
same as though the action were in- 
stituted to obtain a personal judg- 
ment merely. Where there is no 
right to a personal judgment In the 
case the mortgage is given as se- 
curity for the payment of money 
only; there can be no right to fore- 
close or subject the property to the 
payment of the alleged debt or ob- 
ligation until the right to a judg- 
ment In law is made to appear 
from the complaint." Chesney v. 
Chesney, 33 Utah 503, 94 Pac. 989. 

' See post § 1578. 

"Johnson v. Polhemus, 99 Cal. 
240, 33 Pac. 908. In this case the 
complaint alleged the payment of 
the contract, and that there was a 
balance due on the note, and asked 
judgment on the note and fore- 
closure of the mortgage. The an- 
swer alleged the payment of the 
note, and that the contract had been 
canceled by agreement of the mort- 
gagee. The court found that the 
note had been paid, but that the 
contract was in force and unpaid. 
Held, that plaintiffs were entitled to 



13 THE BILL OR COMPLAINT § 1454 

plaint which fails to allege the facts essential to a foreclosure, but 
does sufficiently set out the note secured, is not demurrable, since 
plaintiff is entitled to a personal judgment on the note.^^ Where no 
personal judgment is asked in the case of a mortgage securing several 
different notes, it is not necessary that each note be made the subject 
of a separate count.^^ Where the right to foreclose is given by a con- 
temporaneous agreement between the parties, this agreement should 
be set out in the petition or complaint.^^ The complaint in the names 
of several should show a cause of action in favor of all or it will be 
subject to demurrer for want of facts.^* 

§ 1453. Variance between allegations and proof. — Facts not in- 
consistent with the bill may be proved. The evidence may in some 
respect show a different state of facts from that alleged in the bill; 
and yet this will be sufficient if the facts shown are not inconsistent 
with the allegations; as, for example, the amount actually due may 
be shown to be less than the amount alleged to be due.^° Among other 
things it has been held that there was no material variance between an 
allegation of a direct and absolute liability on a note and mortgage 
and proof of a collateral and indirect liability ;^° between an allega- 
tion that a mortgage was given to secure an existing indebtedness 
and proof that it was given as indemnity ;^^ between an allegation that 
plaintiff ovmed the note and proof that he held it as collateral ;'^* be- 
tween an allegation describing a mortgage as made to secure a note 
of a specific amount and a mortgage introduced in evidence which de- 
scribes the note without specifying the amount.^* 

§ 1454. Allegations of execution and delivery — Copies and ex- 
hibits. — ^An allegation of the execution and delivery of the mortgage 
is a sufficient allegation of its proper execution and of its validity.^" 
An allegation of the execution of the mortgage is also sufficient 
without any averment of title in the mortgagor. He is estopped by his 

decree of foreclosure for the amount ^^ Collins v. Carllle, 13 111. 254. 

due on the contract. "Powell v. Huey, 241 111. 132, 89 

" Taylor v. Hearn, 131 Ind. 537, N. E. 299. 

31 N. E. 201. See also Vancleef v. "Cooper v. Parker, 176 Ala. 122, 

Britton, 45 Ind. App. 388, 90 N. E. 57 So. 472. 

1034. "French v. Haltenhoff (Ore.), 144 

" McCauley v. Brady, 123 Mo. Pac. 480. 

App. 558, 100 S. W. 541. "First Nat. Bank v. Davis, 146 

" Thompson-Starrett Co. v. E. B. 111. App. 462. 

Ellis Granite Co., 86 Vt. 282, 84 Atl. " Moore v. Titman, 33 111. 358j 

1017. McAllister v. Plant, 54 Miss. 106"; 

" Brunson v. Henry, 140 Ind. 455, Laurent v. Lannlng, 32 Ore. 11, '51 

39 N. E. 256. Pac. 80. 



§ 1454 FOEECLOSUEE BY EQUITABLE SUIT 16 

deed from denying his title ; and, wliatever his title may be, the mort- 
gage may be foreclosed against him.^^ An allegation in the petition 
that the defendant executed the mortgage sued upon will put in issue 
the allegation of the defendant that he did not sign the mortgage.^^ 
The possession of the mortgage by the mortgagee, duly executed, 
acknowledged, and recorded, is presumptive evidence of delivery.^^ 
The witnessing and acknowledgment of the mortgage, where made 
essential to the validity of it, should be alleged; but, if the plaintiff 
be an assignee of the mortgage, these facts are not presumably within 
his knowledge, and he may properly aver them upon information and 
belief only.^* 

The mortgage and the note or bond secured by it are usually in some 
manner made part of the complaint. Copies of them may be set out 
in the complaint or annexed to it. It is not sufficient merely to file the 
originals or copies with the complaint without referring to them and 
making them part of it.^° But it is sufficient if the bill sets out the 
substance of the mortgage.^° The objection that exhibits were not at- 
tached or filed is too late if made after judgment.^'' 

If properly set forth in the complaint, the production of the note 
and mortgage, and proof of service of the summons, is sufficient to 
justify a decree where no defense is interposed.^' If the answer ad- 
mits the execution of the mortgage and note, and does not deny that 
the amount claimed in the petition is due, there is nothing for the 
plaintiff to prove.^' 

"■ Shed V. Garfield, 5 Vt. 39. 180. A copy of the note need not 

^ May V. May, 150 Ky. 522, 150 S. be set out when the action is only 

W. 685. See also Clokey v. Loan for the foreclosure of the mortgage. 

&c. Assn., 120 111. App. 214. Shin v. Bosart, 72 Ind. 105. See 

"» Andrews v. Reed (Kans.), 48 also Bruce v. Wanzer, 20 S. Dak. 

Pac. 29; Greeley State Bank v. 277. 105 N. W. 282. 

Line, 50 Nebr. 434, 69 N. W. 966; =» Cecil v. Dynes, 2 Ind. 266. The 

Commercial Bank v. Reckless, 5 N. acknowledgment being no part of 

J. Eq. 650. the cause of action, a copy of the 

"^ Fairbanks v. Isham, 16 Wis. certificate need not be set out. 

11^- Sturgeon v. Daviess Co., 65 Ind. 

^-Hiatt V. Goblt, 18 Ind. 494; Her- 302; Jocelyn v. White, 201 111. 16, 66 

ren v. Clifford, 18 Ind. 411. A com- N. E. 327. See also McKelvey V. 

plamt which seeks only to foreclose Wagy, 157 Cal. 406, 108 Pac. 268. 

a mortgage and not judgment on '^ James v. Webb, 24 Ky. L. 1382, 

the note secured need not exhibit 71 S. W. 526. 

it. Tracey v. Crepin (Okla.), 138 =» Woodward v. Brown, 119 Cal. 

Pac. 142; Wagner v. Philadelphia 283, 51 Pac. 2, 63 Am. St. 108; Whit- 

&c. St. R. Co., 233 Pa. 114, 81 Atl. ney v. Buckman, 13 Cal. 536; Har- 

944, Ann. Cas. 1913 B, 536. See Ian v. Smith, 6 Cal. 173; Mickle v. 

also Dumell v. Terstegge, 23 Ind. Maxfield, 42 Mich. 304, 3 N. W. 961; 

397; Brown v. Shearon, 17 Ind. 239; Omaha Loan &c. Co. v. Luellen, 3 

J/i'^lr","^- ^^'^^^' ^ ^^°^ (^y-) Nebr. (Unoff.) 709, 92 N. W. 734. 

590; Harlan v. Murrell, 3 Dana (Ky.) =° Cooley v. Hobart, 8 Iowa 358. 



17 THE BILL OK COMPLAINT § 1456 

§ 1455. Proof of execution. — The mortgage and the personal obli- 
gation accompanying it, unless admitted, must be produced and proved 
by competent evidence.^" Proof is generally dispensed with where 
execution is. not denied in the plea or answer.^^ If these instruments 
be attested by a witness, the execution must be proved by him, unless 
his attendance can not be procured, or other circumstances make other 
evidence, such as proof of the handwriting, competent. When the 
execution is contested by a person who is not a party to the deed, the 
admission of the mortgagor is not sufficient if the securities are at- 
tested by a witness.^^ 

The mortgagee's possession of the mortgage and the note or bond 
secured by it is strong evidence of their delivery, and the defendant's 
answer under oath alleging that they had not been delivered is not 
enough to overcome the presumption of delivery arising from the 
mortgagee's possession.^^ 

In an action upon a bond and mortgage executed by one as executor 
and trustee in his representative capacity, it is not necessary to allege 
and prove that the mortgagor was in fact such executor and trustee, 
and the facts relating to his appointment.''* 

§. 1456. Allegations showing right to maintain bill. — The com- 
plainant must show by his bill either that he is the mortgagee, or that 
he has legal title to the security by assignment or otherwise. It is 
not necessary in so many words to aver that the complainant has title 
to the mortgaged premises; it is sufficient to aver the making of the 
mortgage.^^ The estate or interest in the land is not in issue. The 

=» Field V. Anderson, 55 Ark. 546, ==Bull v. Meloney, 27 Conn. 560. 

18 S. W. 1038; Buokmaster v. Kelly, The allegation in this case was that 
15 Fla. 180; Ward v. Munson, 105 the respondent, to secure the debt 
Mich. 647, 63 N. W. 498; George v. described, "did execute to the pe- 
Ludlow, 66 Mich. 176, 33 N. W. 169; titioner a deed of a certain piece of 
Matteson v. Morris, 40 Mich. 52; land," described, with the condition. 
Bergen v. Urbahn, 83 N. Y. 49; In Frink v. Branch, 16 Conn. 260, 
Wagener v. Kirven, 47 S. Car. 347, 268, Church, J., says: "It is not 
25' S. E. 130; Butler v. Washington, often, in proceedings of foreclosure, 
28 S. Car. 607, 5 S. E. 601. that the title of the mortgage is di- 

^^ Marx v. District Grand Lodge rectly put in Issue, or constitutes 

No. 7, 157 Ala. 107, 47 So. 207; Pet- the principal subject of contro- 

tus V. Gault, 81 Conn. 415, 71 Atl. versy; although the entire purpose 

509. of the plaintiff is, in default of pay- 

"- Leigh V. Lloyd, 35 Beav. 455; ment, to make a perfect title, which 

Inman v. Parsons, 4 Madd. 271. before was qualified; and the 

^ Ashley Wire Co. v. Illinois Steel ground of his application is, that he 

Co., 164 111. 149, 45 N. E. 410; Long has a mortgage title; and without 

v.. Kinkel, 36 N. J. Eq. 359. an averment of facts constituting 

'"Kingsland v. Stokes, 25 Hun such title, his bill would be defect- 

(N. Y.) 107. Ive. It may not be necessary either 

2 — Jones Mtg. — Vol. III. 



§ 1457 FORECLOSURE BY EQUITABLE SUIT 18 

only questions are whether the mortgage has been properly executed, 
and the complainant rightfully holds it and may enforce it. The 
complainant showing prima facie title, it is for the defendant to allege 
and prove that he has no title; that, for instance, the mortgage has 
been discharged. The complainant need not anticipate the defense, 
and set out in his bill the facts which would invalidate the discharge.'^ 
The plaintiff need not prove title in the mortgagor as against such 
mortgagor and his privies.'^ 

§ 1457. Assignee's title. — If the bill be brought by an assignee of 
the mortgage, the assignment to him should be fully and distinctly 
alleged. The same technicality in pleading required at law is not 
necessary in a court of equity; and accordingly, where the bill alleges 
an assignment of the mortgage, but not of the note or bond, it is suffi- 
cient if it appears substantially from the bill that the debt belongs to 
the complainant."* But if it does not so appear, a failure to aver that 
the bond or note was assigned to the plaintiff, or that he is the holder 
or owner of it, has been held a fatal defect."® It is held, however, that 
if the bill alleges an assignment of the mortgage, an omission to al- 
lege an assignment of the bond does not invalidate the judgment, 
where the assignment of both the bond and mortgage appears of rec- 
ord, and the referee's report of the amount due refers to such record.*" 

to allege or prove the precise condi- '"Frink v. Branch, 16 Conn. 260, 

tion of the title, whether It be in lee 268; Palmer v. Mead, 7 Conn. 149, 

or in tail, for life or for years; but 157; Spear v. Hadden, 31 Mich. 265; 

it seems to us, as the right of the Cornelius v. Halsey, 11 N. J. Bq. 27. 

plaintiff to ask the interference of '" Bazelman Lumber Co. v. Hin- 

the court depends upon some title ton, 79 Nebr. 313, 112 N. W. 603. . 

in himself to the land mortgaged, **Buckner v. Sessions, 27 Ark. 

either legal or equitable, that it is 219; Cornelius v. Halsey, 11 N. J. 

incumbent upon him to establish it Eq. 27; Gill v. Truelsen, 39 Minn, 

at least prima facie; and of course 373, 40 N. "W. 254. A description of 

the defendant must have a corre- the plaintiff "as assignee" of the 

spending right to attack it." In an mortgagor is not sufficient. The as- 

action by Edward H. Andrews to signment of the estate can not be 

foreclose a mortgage, an allegation implied from this. But see Brcan- 

that the defendant made a mort- brack v. Rich, 2 Chand. (Wis.) 100; 

gage and note to E. H. Andrews, Babbitt v. Bowen, 32 Vt. 437. A 

without alleging that the plaintiff copy of the assignment need not be 

and said E. H. Andrews are the set out. Stanford v. Broadway Sav. 

same person, or that the plaintiff Co., 122 Ind. 422, 24 N. E. 154; Keith 

Is the holder and owner of the mort- v. Champer, 69 Ind. 477. But see 

gage, does not state a cause of ac- Smith v. Thompson, 118 App. Div. 

tion. This court can not take judi- 6, 103 N. Y. S. 336. 

cial notice that Edward H. and B. " Hays v. Lewis, 17 Wis. 210. See 

H. are one and the same person, also Pattie v. Wilson, 25 Kans. 326. 

Andrews v. Wynn, 4 S. Dak. 40, 54 "Preston v. Loughran, 12 N. Y. 

N. W. 1047; Harris v. Barrett, 75 S. 313. 
N. J. Eq. 386, 72 Atl. 956. 



19 THE BILL OK COMPLAINT § 1458 

If the mortgage was given without a bond or other extrinsic written 
evidence of the debt secured, an assignment of the mortgage passes 
the title to the debt ; and a complaiat which alleges that the mortgage 
was given for a part of the purchase-money, and sets out the assign- 
ment of it to the plaintiff, is sufBcient.*^ The bill need not aver the 
record of the aBsignment,*^ for there is no legal necessity for it.*' The 
fact that the assignee holds the mortgage merely as security does not 
affect his right to recover, but goes only to limit his interest in the 
proceeds.** An assignee who files a bill to foreclose one of several 
mortgage notes should account for the other notes, but upon the hear- 
ing, if he proves the payment of such other notes, the defect in his 
bill may be disregarded.*' 

Other liens which the plaintiff may have upon the property he may 
set out in his complaint and establish beforehand, or may present and 
establish a claim to the surplus in the same manner as any other per- 
son.** An averment that the note and mortgage was assigned by the 
mortgagee to the complainant by an instrument in writing has been 
held a sufficient averment of an equitable assignment, particularly 
where the mortgagee was made a party to the suit.*'' So, an allegation 
that the executors of the payee of a secured note, by virtue of the au- 
thority vested in them, assigned the note to the plaintiff for a full and 
valuable consideration, has been held a sufficient allegation of a legal 
sale, and raises the presumption that all steps necessary to invest the 
executors with power to sell have been taken.*^ 

It is not necessary that the bill should allege in terms that the se- 
cured note was actually delivered to the mortgagee and duly assigned 
by him to the complainant.*" 

§ 1458. Inclusion of several mortgages in one bill. — A mortgagee 
having two or more mortgages upon the same premises may, under the 
several codes, include them in one bill for foreclosure. Several suits 

•1 Coleman v. Van Rensselaer, 44 ** McKinney v. Miller, 19 Mich. 

How. Pr. (N. Y.) 368; Caryl v. "Will- 142. 

iams, 7 Lans. (N. Y.) 416; Sever- "Cooper v. Smith, 75 Mich. 247, 

ance v. Griffith, 2 Lans. (N. Y.) 38, 42 N. W. 815. 

and cases cited. "Field v. Hawxhurst, 9 How. Pr. 

"King V. Harrington, 2 Aik. (N. Y.) 75; Tower v. White, 10 

(Vt.) 33, 16 Am. Dec. 675. Paige (N. Y.) 395. 

*" Terry v. Durand Land Co., 112 ■" Buckheit v. Decatur Land Co., 

Mich. 665, 71 N. W. 525; Gray v. 140 Ala. 216, 37 So. 75. 

Waldron, 101 Mich. 612, 60 N. W. "Guthrie v. Treat, 66 Nebr. 415, 

288; Fryer v. Rockefeller, 63 N. Y. 92 N. W. 595, 103 Am. St. 718. 

268. """Worth v. Knickerbocker Trust 

Co., 171 Ala. 621, 55 So. 144. 



§ 1458 FOEECLOSUEE BY EQUITABLE SUIT 20 

being unnecessary, he will be allowed costs in one only."* If one 
mortgage covers only a part of the premises included in the other, suit 
should be brought in the first place for the foreclosure of the mortgage 
covering the entire premises, as then a second suit will be unneces- 
sary.^^ 

One having two mortgages on the same property may file his bill 
for the foreclosure of both, although the second of them be not due. 
If the second mortgage becomes due before the decree, the defendant 
can not defeat the action as to this mortgage by tendering the amount 
due on the first mortgage after the maturity of the second.^^ If the 
last mortgage be due, but only a part of the first is due, the plaintiff 
is entitled to a decree for the sale of enough of the mortgaged premises 
to pay both mortgages, unless the defendant pay the second mortgage 
and all that has become due of the first.^'' 

One having two mortgages made by one mortgagor upon the same 
property, may foreclose the senior mortgage and purchase the property 
thereunder, when his senior mortgage will merge in the title then 
acquired and his title will be complete."^* If such mortgagee brings a 
suit to foreclose the first mortgage, he may after judgment, and before 
a sale, consolidate this action with another on the second mortgage, 
and have a judgment and sale for both.^'' A bill to foreclose four dis- 
tinct mortgages of different dates, given by the same person, and 
owned by the complainant, personal judgment being asked only 
against the mortgagor, is not multifarious.'^'^ 

If the mortgages do not cover precisely the same land, a consolida- 

" Key "West Wharf &c. Co. v. For- 159, 54 N. "W. 634. "Here all of the 
ter, 63 Fla. 448, 58 So. 599, Ann. Cas. defendants are proper parties to the 
1914 A, 173; Pierce v. Balkam, 2 foreclosure of the first mortgage. 
Cush. (Mass.) 374; Roosevelt v. El- The ownership of all the mortgages 
lithorp, 10 Paige (N. Y.) 415; Woo- is in complainant. The claims are 
ster V. Case, 12 N. Y. S. 769; Oconto of the same character. The pro- 
County V. Hall, 42 Wis. 59. See ceeding as to all of the defendants 
also McDonald v. Second National except the mortgagor is one against 
Bank, 106 Iowa 517, 76 N. W. 1011; property. * * * The interests 
Thompson v. Skeen, 4 Utah 209, 46 of all the defendants are best sub- 
Pac. 1103. See ante § 1083. served by avoiding a multiplicity 
" Demarest v. Berry, 16 N. J. Eq. of suits, and the equities of each 
}■„ , . „.„ and all can be as well, if not more 
"^Hawkins V. Hill, 15 Cal. 499, 76 effectually, protected in this pro- 
^■t.t?i°' V, ,, ,„ ceeding as in four separate fore- 
vT^q^R ^- Bamber, 10 Paige (N. closure suits. Whatever complica- 
i.^T 1^ 1^ ,. ■ , ^^°^^ ^^^st are not incident to the 
«77 ^« r^w oL ^^^''''' ^^ ^°^ consolidation, and they can be best 
I'Th.^; a, . . „ adjusted in a single proceeding, 
209 4fi pi^. ?in^- ^^''''' ^^ ^^^^ where the court has before it all the 
«.'TnLott I u =,. «r parties and all the claims." Per 
-Torrent v. Hamilton, 95 Mich. McGrath, C. J. See post § 1460. 



31 THE BILL OR COMPLAINT § 1459 

tion of actions for foreclosure is not proper." But the holder of a 
second mortgage in a foreclosure suit upon that is not obliged to bring 
forward and include in the decree the filrst mortgage which he has 
acquired by assignment. ^^ The purchaser under a sale in such suit 
acquires an interest subject to the first mortgage. 

§ 1459. Foreclosure for instalment. — ^When the debt is payable by 
instalments, action to foreclose may be brought when the first instal- 
ment falls due and is not paid.'^' If the mortgage secures the pay- 
ment of several notes, it may be foreclosed upon the nonpayment 
when due of any of them."" Foreclosure may be had for any part of 
the mortgage debt, whether principal or interest, due at that time, and 
no more ; and when the mortgagee elects to sell under a power in the 
mortgage, or to foreclose in chancery, he can only sell or foreclose for 
the amount then due according to the terms of the mortgage ; and if 
he sells the entire estate, that of necessity operates to release the se- 
curity for the amount not due."'- If after a foreclosure sale for an in- 
stalment, and before the foreclosure has become complete by the ex- 
piration of the time allowed for redemption, the owner redeems, then 
the foreclosure sale is in effect annulled, and the same land may be sold 
for the satisfaction of the other instalments of the mortgage debt."^ 
For stronger reasons a foreclosure for a part only of a mortgage debt, 
when it is all due, operates as a release of the portion not embraced in 
the foreclosure. The mortgage of record showing that the entire debt 
is due, and a portion only foreclosed, all persons have a right to con- 

" Wooster v. Case, 12 N. Y. S. 769. time and remains more than thirty 

But see Van Laer v. Kansas &c. days unpaid. First Nat. Bank v. 

Brick Works, 56 Kans. 545, 43 Pac. Citizens' State Bank, 11 Wyo. 32, 

1134. 70 Pac. 726, 100 Am. St. 925. 

«Wahl V. Zoelek, 178 III. 158, 52 ™ Miller v. Remley, 35 Ind. 539; 

N. E. 870. Arnett v. Willoughby (Ala.), 67 So. 

^»Grattan v. "Wiggins, 23 Cal. 16; 426. 
F. B. Collins Inv. Co. v. Sanner ""^ Johnson v. Buckhaults, 77 Ala. 

(Okla.), 142 Pac. 318. Where a 276; McLean v. Presley, 56 Ala. 

note given in renewal of a pre-ex- 211; Hatcher v. Chancey, 71 Ga. 

isting note, which was secured by 689; Smith v. Smith, 32 111. 198; 

a mortgage is by its terms due two Cleveland v. Booth, 43 Minn. 16, 44 

years after date, but provides for N. W. 670; Standish v. Vosberg, 27 

annual payments of interest, and Minn. 175, 6 N. W. 489; Fowler v. 

that the failure to pay any interest Johnson, 26 Minn. 338, 3 N. W. 986, 

within thirty days after date shall 6 N. W. 486; Probasco v. Vaneppes 

cause the whole note to become due (N. J.), 13 Atl. 598; Scheibe v. Ken- 

at once at the option of the holder, nedy, 64 Wis. 564, 25 N. W. 646. 

he is entitled, as against a junior See ante § 1378. 
mortgagee, to foreclose before the "^ Standish v. Vosberg, 27 Minn, 

expiration of the two years if the 175, 6 N. W. 489. 
interest becomes due within that 



§ 1459 FOEEOLOSUEB BY EQUITABLE SUIT 22 

elude that the other part of the debt has been paid. The lien of the 
mortgage is released as to creditors, and as to parties holding the land 
under the prior foreclosure and sale.°^ 

But by statute in several states a portion of the property, if it be 
divisible, may be sold to pay the instalment due ; and then, upon the 
happening of another default, a further order of sale may be obtained. 
If the premises can not be divided the whole may be sold and the pro- 
ceeds paid to the mortgagee, subject to a proper rebate of interest, or 
the balance, after paying the amount due, may be paid into court.** 

When a decree of foreclosure to satisfy a part of the mortgage debt 
expressly declared that the property should be sold subject to a lien 
to secure the payment of the notes not then due, and at the sale the 
premises were purchased by the mortgagee, it was held that this oper- 
ated as a satisfaction of the entire debt, as well the portion not due 
as that which was. The purchaser virtually became a mortgagor to 
the extent of the balance of the mortgage debt. ISTo action at law can 
afterward be maintained on the notes. "' But the mortgage may be 
foreclosed for an instalment of the interest due without waiting for 
the jnaturity of the note, and a sale may be had of so much of the 
mortgaged premises as will be necessary to pay this with costs of suit."' 
Interest falling due yearly on a note secured by mortgage, is an ia- 
stalment of the debt for which the mortgage may be foreclosed in 
equity. It is due and payable as much as if a separate note had been 
given for it. Failure to pay interest is a breach of the condition of the 
mortgage for which it may be foreclosed, although the mortgage does 
not expressly provide for such foreclosure.®' An action at law may 
also be maintained for the interest as it falls due.'* 

It is also sometimes provided that when the foreclosure suit is for 
an instalment of principal or interest, and there are other instalments 
not due, the defendant may pay into court the principal and interest 

*= Rains v. Mann, 68 111. 264. See debt on default in the payment of 

also Hughes v. Frisby, 81 111. 188. interest, then foreclosure may be 

" See Statutes, §§ 1322-1366; also had as to the amount due only, and 

Allen V. Wood, 31 N. J. E3q. 103. See the decree stands as security for 

post §§ 1616-1619. the balance to be sold as the debt 

"^ Hughes V. Frisby, 81 111. 188; matures. Arnett v. Willoughby 

Mines v. Moore, 41 111. 273; Weiner (Ala.), 67 So. 426. 

V. Heintz, 17 111. 259. «' Scheibe v. Kennedy, 64 Wis. 

•"Copper Belle Min. Co. v. Cos- 564, 25 N. W. 646; Walton v. Cody, 

telle, 12 Ariz. 318, 100 Pac. 807; 1 Wis. 420, 431; Brodrlbb v. Tib- 

Morgenstern v. Klees, 30 111. 422; bets, 58 Cal. 6, to the contrary, is 

F. B. Collms Inv. Co. v. Sanner unsupported by authority or reason. 

(Okla.), 142 Pac. 318. Where there «» Morgenstern v. Klees, 30 111. 

Is no provision in the mortgage au- 422. 
thorizing foreclosure for the whole 



33 THE BILL OE COMPLAINT § 1459 

due with costs, and proceedings shall then be stayed until a subsequent 
default.^' Although a mortgagee holding several notes maturing at 
different times may, by stipulation in the mortgage or by statute, fore- 
close as to all when one of them is due, yet he may institute his suit 
to foreclose that note alone, and a judgment upon this and a fore- 
closure sale of a part of the land are no bar to a subsequent suit to 
enforce payment of another note afterward maturing, upon which 
more land, or the rest of it, may be sold. The several notes are con- 
sidered as so many successive mortgages.'" A mortgage given to se- 
cure several notes payable at different times is not, it would seem, so 
far divisible that the holder of all the notes may, after they have all 
matured, have separate actions upon each note. All the notes should 
in such case be included in one action; and if the holder obtains a 
decree and sale upon one note, it is probable that he would not be 
allowed to maintain a subsequent action upon either of the other 
notes.'^ At any rate it has been held that, when such holder has 
foreclosed for the note last due only, a subsequent purchaser, without 
notice that the other notes remain unpaid, has a right to presume that 
they have already been paid,'^ although in his deed of purchase he 
assumed the amount of the mortgage as part of the purchase-money.'* 
When the whole mortgage debt becomes due upon a default in the 
payment of interest, and thereupon the mortgagee forecloses for the 
principal and a part of the interest, such foreclosure exhausts the 
lien.'* 

While the acceptance by the lender of past due interest may operate 
as a waiver of that default, it does prevent foreclosure for the failure 
of the mortgagee to keep the property insured as required by the 
mortgage." So, an extension of time for the payment of the prin- 
cipal of a mortgage debt will not preclude a foreclosure of the mort- 
gage for the whole debt on a failure to pay interest and taxes, where 
such failure renders the whole indebtedness due under the terms of 
the mortgage.'" And so, the acceptance of a draft for interest has 

"Bank v. Doherty, 29 Wash. 233, "Rains v. Mann, 68 111. 264. 

69 Pac. 732; Bal. Washington Code, "Minor v. Hill, 58 Ind. 176, 26 

§ 6894. Am. Rep. 71. 

"Bressler v. Martin, 133 111. 278, "Loomis v. Clambey, 69 Minn. 

24 N. B. 518; Moflit v. Roche, 76 469, 72 N. W. 707; Hanson v. Dun- 

Ind. 75; Grouse v. Holman, 19 Ind. ton, 35 Minn. 189, 28 N. W. 221; 

30; Studebaker Mfg. Co. v. McCar- Dick v. Moon, 26 Minn. 30, 4 N. W. 

gur, 20 Nebr. 500, 30 N. W. 686. See 39. 

ante § 606, and post §§ 1577, 1591, '= Mechanics' Realty &c. Co. v. 

1700. Leva (Ga. App.), 84 S. B. 222. 

" Minor v. Hill, 58 Ind. 176, 26 " Iowa Loan &c. Co. v. Haller, 119 

Am. Rep. 71, per Worden, J. Iowa 645, 93 N. W. 636. 



§ 1460 FOEECLOSUEE BY EQUITABLE SUIT 24 

been held not to operate as ■waiver of the right of the plaintiif to fore- 
close the mortgage for default in the payment of an instalment of 
principal.'^'' A provision in a mortgage allowing foreclosure for de- 
fault on any of the notes secured or on the sale of any of the crops 
raised on the land has been construed as a provision for the payment 
of instalments in cash and that foreclosure may not be had for the 
sale of a part of the crop where the proceeds of the sale were used to 
pay the instalment due at the time.'^ 

§ 1460. Bill by holder of one of. several mortgage notes. — ^When 
the bill is filed by the holder of one of several mortgage notes it should 
state whether the other notes have been paid, and, if not paid, by 
whom they are held and the dates of their maturing, so that the rights 
of the holders of the other notes may be determined and protected.''* 
But if the complainant holds all the notes he is not obliged to fore- 
close for all of them. He may take judgment in the foreclosure suit 
for part of them, and for those not included in the decree of fore- 
closure he may recover in a suit at law.*" 

When the notes secured by a mortgage are held by different per- 
sons and each brings a foreclosure suit, the actions may be consoli- 
dated, and the holders of the notes may have separate judgments. ^^ 

§ 1461. Prayer for decree against mortgagor and personal judg- 
ment against other maker of note. — ^When one mortgagor is not liable 
for the debt, as, for instance, when only one of two or more persons 
who have joined in the execution of the mortgage has executed the 
note, or incurred any personal liability for the payment of the debt, 
or when a wife has mortgaged her land to secure her husband's note, 
the bill should properly pray for a decree of sale against the persons 
who executed the mortgage, and for a personal judgment only against 
the debtor.«2 j^ complaint which alleged that one of the defendants 
executed notes personally and thereafter he and others executed a 
mortgage to secure the notes and that the notes have not been paid 
and the amount is due, has been held to state a cause of action against 

"Doolittle V. Nurnberg (N. ^ Benton v. Barnet, 59 N. H 249 

^^^^r' ^f f • "^^ ^"*'- Otherwise in California, unless the 

AK^'^f7 ^' ' ^^^ ■*■'''• ^*''' mortgage provides for the fore- 

45 So. 647. closure upon nonpayment of the in- 

.A, ?Tq S ^^^;^°°^-^ Port, terest. Brodribh v. Tibbetts, 58 

(Ala.) 79; Hartwell v. Blocker, 6 Cal. 6. See ante § 1458 

Ala. 581. See also Jackson v. "= Rollins v. Forbes, 10 Cal 299 
Grosser, 218 111. 494, 75 N. E. 1032. 

™Langdon v. Paul, 20 Vt. 217. 



25 THE BILL OK COMPLAINT § 1463 

the maker of the notes personally and against the others for fore- 
closure of the mortgage.*^ 

§1462. Description of mortgaged property. — The bill should so 
describe the mortgaged property that if a sale is ordered the officer 
may know on what land to execute the order of court.** A bill which 
contains no sufficient description of the property, and refers to a mort- 
gage annexed which in turn contains no sufficient description, but 
itself refers therefor to another instrument, is fatally defective.^^ A 
reference to the record of another deed in which the property is cor- 
rectly described is sufficient.*' A cross-complaint seeking foreclosure 
of a mortgage is sufficient, though it refers to the complaint for a 
description.*^ It is generally sufficient, however, to describe the prem- 
ises as they appear in the mortgage itself.** 

And though the description in the mortgage be erroneous in some 
particular, yet, if the rest of the description is enough to enable the 
land to be located, the foreclosure will not be invalid on account of 
the description.*" The uncertainty of that description is no ground 
for refusing a decree of sale, though it may affect the title to the 
premises when sold."" If the description be correct in the bill, a de- 
cree entered by default can not be avoided by showing that the mort- 
gage as recorded misdescribed the premises."^ If a bill to foreclose 
a mortga_ge upon several tracts of land describe some of them suf- 
ficiently, though others be insufficiently described, there is no ground 
for demurrer to the entire bill."^ 

A description in the mortgage may be sufficient to convey the prop- 

«= McCormick v. Brown, 22 Idaho " Loeb v. Tinkler, 124 Ind. 331, 24 

52, 125 Pac. 197. N. E. 235. 

« Struble v. Neighbert, 41 Ind. ^ Graham v. Stewart, 68 Cal. 374; 

344; White v. Hyatt, 40 Ind. 385; German Loan Soc. v. Kern, 38 Ore. 

Nolte V. Libert, 34 Ind. 163; Magee 232, 62 Pac. 788, 63 Pac. 1052. 

V. Sanderson, 10 Ind. 261; Davis v. *° Schoenwald v. Rosenstein, 5 N. 

Cox, 6 Ind. 481; Cecil v. Dynes, 2 Y. S. 766. 

Ind. 266; Whittlesey v. Beall, 5 »° Whitney v. Buckman, 13 Cal. 

Blackf. (Ind.) 143; Lindsey v. De- 536; Tryon v. Sutton, 13 Cal. 490; 

lano, 78 Iowa 350, 43 N. W. 218; German Loan Soc. v. Kern, 38 Ore. 

Triplett v. Sayre, 3 Dana (Ky.) 232, 62 Pac. 788, 63 Pac. 1052; Howe 

590; Howe v. Towner, 55 Vt. 315. v. Towner, 55 Vt. 315. As to what 

® Emeric v. Tams, 6 Cal. 155; is a suflBcient description, see Hurt 
Struble v. Neighbert, 41 Ind. 344. v. Blount, 63 Ala. 327; Hurt v. Free- 
See also PInckney v. Young (Tex. man, 63 Ala. 335. For a case of in- 
Civ. App.), 107 S. W. 622. compatible description, see Schmidt 

»° Sepulveda v. Baugh, 74 Cal. 468, v. Mackey, 31 Tex. 659. ^ 

16 Pac. 223, 5 Am. Rep. 455, over- »' Dietrich v. Lang, 11 Kans. 636. 

ruling Crosby v. Dowd, 61 Cal. 557; "^Rapp v. Thie, 61 Ind. 372. 
Bailey v. Fanning Orphan School, 
12 Ky. L. 644, 14 S. W. 908. 



§ 1463 rOEECLOSURE BY EQUITABLE SUIT 26 

erty as against the mortgagor, and yet be insufficient, unaided by 
proper averments in the complaint, to authorize a decree of foreclosure 
and sale. Such averments can not aid a description which is so in- 
definite as to render the mortgage void; but they will cure a descrip- 
tion which is merely insufficient, and proper evidence being introduced 
to support such averment, the decree may specify the true boundaries."' 
In a bill to foreclose a mortgage upon certain real estate, with two 
mills, and all "appurtenances thereunto belonging," an allegation that 
a certain milldam and water-power are appurtenant to said mills and 
real estate, sustained by admissions by the defendant, will support a 
judgment that the mortgage is a lien upon said dam and water-power 
as well as upon the real estate more particularly described."* 

But a complaint upon a promissory note, and also upon the mort- 
gage, may be sustained for the purpose of a judgment upon the note, 
although the description in the mortgage be insufficient to sustain a 
judgment for foreclosure and sale."' The mortgagor may not com- 
plain of a defective description in the complaint which follows the 
description set out in the mortgage."" 

§ 1463. Omission of parts of mortgaged premises. — Although a 
mortgage can not be the subject of several different foreclosure suits 
with reference to different tracts embraced in it, yet if part of the 
land has been sold under a prior mortgage, or the mortgagor's title 
to a part of it fails from any cause, or he has released a part from the 
operation of the mortgage, he may omit such part from his bill."^ In 
like manner when a part has not been released, but the mortgagee 
enforces his mortgage upon one piece only, he thereby waives the lien 
upon the remainder though the omission was unintentional."' The 
mortgage can not be foreclosed piecemeal. The mortgagor, however, 
if he still owns the equity of redemption, can not complain of the 
omission, although there be a deficiency for which a personal judg- 
ment is rendered against him."" 

The mortgagee may also foreclose upon a part or one parcel of the 
mortgaged property if he seeks for no judgment against the mort- 

^Hannon v. Hllllard. 101 Ind. « German Savings &c. Soc. v. 

310; Halstead v. Lake County, 56 Kern, 38 Ore. 232, 62 Pac. 788. 

Ind. 363; Shepard v. Shepard, 36 "'Sedam v. Williams, 4 McLean 

Mich. 173; Slater v. Breese, 36 (U. S.) 51; Watson v. Dundee M. 

^l^"-- '^'^- &c. Co., 12 Ore. 474, 8 Pac. 548. 

■"Lanoue v. McKinnon, 19 Kans. »» Dooly v. Eastman, 28 Wash. 

408- 564, 68 Pac. 1039. 

.r^'L"^- JJ^'"^^™^' ^^° ^^^- 234, 11 » Mascarel v. Raffour, 51 Cal. 242; 

N. E. 36; Bayless v. Glen, 72 Ind, 5. Barley v. Roosa, 13 N. Y. S. 209. 



27 THE BILL OK COMPLAINT § 1464 

gagor for a deficiency ; but the effect of his so doing would be to -waive 
his security upon the omitted part of the property.^ 

§ 1464. Eeformation for mistake in description. — ^Where by mis- 
take a piece of land not intended to be mortgaged is included in the 
description, the mortgage may be foreclosed as to the other land with- 
out first reforming the deed.^ But if the premises are misdescribed, 
so that the instrument must be reformed before proceeding, the equity 
jurisdiction of the court is broad enough to accomplish this in the 
same suit, which may afterward proceed to foreclosure.' A bill ask- 
ing for reformation and foreclosure may be amended so as to ask for 
reformation, and the removal of a cloud on complainant's title as 
mortgagee.* The mortgage may be reformed not only in the matter 
of the description, but in any other way,^ such as supplying the omis- 
sion of words of inheritance, so that the estate shall be one in fee 
instead of a life estate;^ or such as a mistake in the condition, the 
mortgage containing a provision making it subject to foreclosure on 
a failure to pay interest annually, when the parties had agreed that 
the mortgage should not be foreclosed for any default in interest.'' In 
New Jersey, however, it is held that a mortgage can not be reformed 
or corrected in a foreclosure suit, but that the only remedy is by a 
cross-bill for that purpose.* A mistake in the description first made 
in the mortgage, and afterward carried all through the proceedings 
and into the sherifPs deed, may afterward, by a proceeding in equity, 
be reformed in all the instruments so as to make them conform to 
the intention of the parties.® A mistake in the mortgage carried into 

^Bull V. Coe, 77 Cal. 54, 18 Pac. 6 Ind. 481; Keys v. Lardner, 59 

S08. Kans. 545, 53 Pac. 758, 55 Kans. 331, 

^ Conklin v. Bowman, 11 Ind. 254. 40 Pac. 644; Palmer v. Wlndrom, 12 

See also Andrews v. Gillespie, 47 N. Nebr. 494. See ante §§ 97-99. 
Y. 487; Gillespie v. Moon, 2 Johns. * Hawkins v. Pearson, 96 Ala. 369, 

Ch. (N. Y.) 585, 7 Am. Dec 559. 11 So. 304. 

= Bright V. Buckman, 39 Fed. 243; "Hendon v. Morris, 110 Ala. 106, 

Hendon v. Morris, 110 Ala. 106, 20 20 So. 27. 

So. 27; Clement V. Draper, 108 Ala. "Durant v. Crowell, 97 N. Car. 

211, 19 So. 25; Clement v. Pearce, 367, 2 S. E. 541. 
63 Ala. 284; Alexander v. Rea, 50 'Gassert v. Black, 11 Moiit. 185, 

Ala. 450; San Jose Ranch Co. v. 27 Pac. 791. See also Wemple v. 

San Jose L. &c. Co., 132 Cal. 582, 64 Stewart, 22 Barb. (N. Y.) 154; Bar- 

Pac. 1097; McCrary v. Austell, 46 ton v. Sackett, 3 How. Pr. (N. Y.) 

Ga. 450; Citizens' Nat. Bank v. Day- 358. 

ton, 116 111. 257; Noland v. State, * Graham v. Berryman, 19 N. J. 

115 Ind. 529, 18 N. E. 26; Axtel v. Eq. 29; French v. Griffin, 18 N. J. 

Chase, 83 Ind. 546; McKay v. Wake- Eq. 279. 

field, 63 Ind. 27; Halstead v. Lake "Qulvey v. Baker, 37 Cal. 465; 

County, 56 Ind. 363; Barnaby v. Zingsem v. Kidd, 29 N. J. Eq. 516. 
Parker, 53 Ind. 271; Davis v. Cox, 



§ 1464 FOEECLOSUEB BY EQUITABLE SUIT 38 

the decree of foreclosure may be corrected by reforming the mortgage 
and foreclosing anew.^" When reformed, the lien attaches to the prop- 
erty intended to be covered by it from the date of the execution of 
the mortgage, and not merely from the date of the reformation.^^ If 
the description in the mortgage deed contains a latent ambiguity as 
to the boundaries, the court may in the foreclosure suit determine 
them.^^ 

A mistake in a mortgage may be corrected, and the mortgage re- 
formed and foreclosed anew, after a foreclosure decree, and even after 
a sale under the decree." But where the mistake consists in describ- 
ing other land than that which the owner intended to mortgage, 
though the land described belonged to him and the mortgage is fore- 
closed and the land sold for a sum sufficient to pay the debt, the mort- 
gage will not be reformed for the purpose of a new foreclosure, in 
order to include the land originally intended, since, the debt being 
satisfied, there is no ground for such relief.^* 

A mortgagee who has purchased the property at the foreclosure sale 
can not ask for a reformation of the mortgage after he has assigned his 
certificate of purchase, for such assignment passes all his title to the 
mortgaged land and to the debt secured.^^ 

Where a bill to foreclose a mortgage alleges a mistake in the trans- 
position of the names of the parties in the commencement, but does 
not ask specifically for its reformation, and the decree finds the fact of 
the mistake, but does not in express terms order its correction, but 
orders a sale, the mortgage is thus treated as already corrected; and 

" McGehee v. Lehman, 65 Ala. tion that when, by reason of the mu- 

316; McCasland v. ^tna L. Ins. Co., tual mistake of the parties, the de- 

108 Ind. 130, 9 N. E. 119; Burkham scription of the mortgaged prem- 

V. Burk, 96 Ind. 270; Sanders v. ises is so defective that no title 

Farrell, 83 Ind. 28; Jones v. Sweet, would pass under sale, or when, by 

77 Ind. 187; Conyers v. Mericles, 75 such mutual mistake, land is de- 

Ind. 443. scribed which does not belong to 

^ Adams v. Stutzman, 6 Ohio Dec. the mortgagor, instead of land 

612. which does, there may be a refor- 

"Doe V. Vallejo, 29 Cal. 385. mation even after sale. In such a 

" McCasland v. ^tna L. Ins. Co., case there is no merger of the mort- 

108 Ind. 130, 9 N. B. 119; Curtis v. gage, and it certainly can not be 

Gooding, 99 Ind. 45; Armstrong v. said there is any satisfaction of the 

Short, 95 Ind. 326; Jones v. Sweet, debt, for the purchaser acquires 

77 Ind. 187; Conyers v. Mericles, 75 nothing by the sale. Indeed the 

Ind. 443; Ray v. Terrell, 127 Ind. sale is a mere nullity." 

570, 27 N. B. 159. In this case last "Ray v. Ferrell, 127 Ind. 570, 27 

cited, McBride, J., said: "These N. B. 159. 

authorities, and many others that "Whipperman v. Dunn, 124 Ind. 

might be cited, settle the proposi- 349, 24 N. E. 166. 



29 THE BILL OR COMPLAINT .§ 1465 

this correction may be done under the general prayer.^® A clerical 
error in a name does not require reformation.^^ 

Under a bill to reform the description of mortgaged property and 
to foreclose the mortgage the petitioner may abandon the demand for 
reformation and prove the facts entitling him to foreclosure only.^* 

§ 1465. Allegations of record. — In a bill against the mortgagor it 
is not necessary to aver that the mortgage is recorded, for he is liable 
without any record ;^° or to aver that he has not conveyed away the 
land, for he is a proper party in that case.^° But if it be against a 
purchaser from the mortgagor, according to the practice in some 
states, the bill should allege either that the mortgage was duly re- 
corded, or that the purchaser bought with notice of it,^^ or assumed 
the payment of it;^^ but in others it is held that this is unnecessary; 
that it is purely a matter of defense; that the defendant purchased 
in good faith without notice, and he must set this up for himself.^^ 

An averment that the mortgage was recorded within ninety days 
after its execution, without any further averment that it was properly, 
duly, or legally recorded, or statement where it was recorded, is in- 
sufficient; and the memorandum or certificate of the recorder on the 
copy of the mortgage filed with the complaint and therein referred to, 
being no part of the complaint, does not cure the defect.^* But a 
failure to allege the recording of the mortgage, or a notice to the pur- 
chaser of its existence, is cured by proof made of the one fact or the 
other without objection.^" The failure to copy the record in haee 
verba has been held not to have misled defendants where the com- 
plaint correctly set out the volume and page where the mortgage was 
recorded.^" It has been held unnecessary to allege that the recording 
tax on a mortgage has been paid.^^ 

1" Beaver v. Blanker, 94 111. 175, Peru Bridge Co. v. Hendricks, 18 

177. Ind. 11; Culpli v. Phillips, 17 Ind. 

"Germantown Ins. Co. v. Dhein, 209; Lyon v. Perry, 14 Ind. 515; 

57 Wis. 521, 15 N. "W. 840. Magee v. Sanderson, 10 Ind. 261. 

" Marx V. District Grand Lodge ^^ Scarry v. Bldridge, 63 Ind. 44. 
No. 7, 157 Ala. 107, 47 So. 207. '' Stacy v. Barker, 1 Sm. & M. Ch. 

"Downing v. Le Du, 82 Cal. 471, (Miss.) 112; Gallatian v. Cunning- 

23 Pac. 202; Mann v. State, 116 Ind. ham, 8 Cow. (N. Y.) 361, 374. 
383, 19 N. E. 181; Hoes v. Boyer, "Faulkner v. Overturf, 49 Ind. 

108 Ind. 494; Snyder v. Bunnell, 64 265. 
Ind. 403. ^ Lyon v. Perry, 14 Ind. 515. 

=" Faulkner v. Overturf, 49 Ind. ^ Kelsay v. Taylor, 56 Ore. 13, 107 

265; Perdue v. Aldridge, 19 Ind. Pac. 609. See also Pinckney v. 

290. Young (Tex. Civ. App.), 107 S. W. 

^Hiatt V. Renk, 64 Ind. 590; 622. 
Faulkner v. Overturf, 49 Ind. 265; "Moore v. Lindsay, 61 Misc. 176, 

Stevens v. Campbell, 21 Ind. 471; 114 N. Y. S. 684. 



§ 1466 FORECLOSURE BY EQUITABLE SUIT 30 

§ 1466. Allegations of debt. — The debt secured by the mortgage 
must be set out and described. An indebtedness must be alleged as 
the foundation of the mortgage.^^ If the note or bond secured by the 
mortgage be set forth, it is not necessary to allege, or if alleged to 
prove, the consideration or debt for which this was given.^» There 
is a presumption that the mortgage has not been satisfied or released.^" 
Although the note does not correspond with that described in the 
mortgage, as where this refers to a note payable in one year, whereas 
the note was payable in sixty days, under an agreement for renewals 
for a year, if the complaint fully explains this misdescription, and 
that the mortgage was really designed to secure this note, it states a 
good cause of action.^^ A complaint which set out an indebtedness of 
the mortgagors upon certain notes indorsed by them and discounted 
by the plaintiffs, and alleged that the mortgage was given to secure 
the payment of a bond for the amount of the indebtedness, the pay- 
ment of which was thereby considerably extended, and that the mort- 
gagors had failed to comply with the conditions of the bond, was held 
to allege a sufficient cause of action.^^ 

If the condition of a mortgage be that a third person shall account 
to the mortgagee for all goods sold by such third person as the mort- 
gagee's agent, a bill to foreclose the mortgage alleging that the agent 
had sold goods and had not accounted for the proceeds, and was in- 
debted to the mortgagee in a certain amount which the mortgagor had 
not paid, is good, without first establishing by suit at law the amount 
of the agent's indebtedness.^' 

If the indebtedness is one resting upon mutual accounts, or is an in- 
debtedness which it is understood the mortgagor is to pay by his labor, 
the account of which is kept by the mortgagee's agent, the complain- 
ant should make out a clear case of indebtedness, and should in 
evidence of this make a full statement of the accounts, especially if 
considerable time is allowed to pass without attempting to enforce 
payment.** An objection that the amount of the debt is not definitely 

'-^Bank v. Navarro, 22 Fla. 474; '^ Merchants' Nat. Bank v. Ray- 
Nye V. Gribble, 70 Tex. 458, 8 S. W. mond, 27 Wis. 567. 
608; Chesney v. Chesney, 33 Utah '"Troy City Bank v. Bowman, 43 
503, 94 Pac. 989. Barb. (N. Y.) 639, 19 Abb. Pr. 18; 

^ Brown v. Kahnweiler, 28 N.' J. Matteson v. Matteson, 55 Wis. 450, 

Eq. 311; Farnum v. Burnett, 21 N. 13 N. W. 463. 

J. Eq. 87; Day v. Perkins, 2 Sandf. '^ Haskell v. Burdette, 32 N. J. Eq. 

Ch. (N. Y.) 359. 422. 

»°Murto v. Lemon, 19 Colo. App. « Weber v. Ryan, 54 Mich. 70, 19 

314, 75 Pac. 160. N. W. 751; Lashbrooks v. Hathe- 

way, 52 Mich. 124, 17 N. W. 723. 



31 THE BILL OR COMPLAINT § 1467 

and accurately set out is usually held waived if not raised by special 
demurrer.*'* 

When a judgment is taken on a secured note, the note becomes 
merged in the judgment and the note can not thereafter become the 
basis of a suit. The mortgage thereafter stands as security for the 
judgment and not the note and must be declared on to have it in- 
cluded in the decree.*" Where the prayer is for interest on the note, 
according to its terms, from its date, it is unnecessary to make a sepa- 
rate allegation demanding interest from the date of filing the com- 
plaint to the entry of judgment.*' The mortgagee has the burden of 
proof of the particular indebtedness for which the mortgage is given, 
where the mortgage is indefinite in this respect and both parties are 
equally at fault for the lack of definiteness.** An incorrect allegation 
as to the time the interest is due is cured by the correct recital in the 
note attached as an exhibit.*' 

§ 1467. Beference to determine amount of debt. — It is the practice 
for the courts, in New York, in case the bill is taken as confessed, 
or the right of the plaintiff is admitted by the answer, to order a refer- 
ence as a matter of course to determine the amount due upon the 
mortgage debt.^° General Practice Eule 60 provides for a compulsory 
order of reference where some of the defendants are infants or ab- 
sentees.*^ According to the practice of some courts, such a reference 
may be had whether the defendant has answered or not.*^ The refer- 
ence generally embraces other matters also, as whether the premises 
can be sold in parcels, or whether there are equities requiring the 
sale to be made in a particular order; but the referee is always lim- 
ited in his examination to the subjects specified in the order.** He 

''San Gabriel Valley Bank v. ■"Godwin v. Liberty-Nassau Bldg. 

Lake View Town Co. (Cal.), 86 Pac. Co., 144 App. Div. 164, 128 N. Y. S. 

727. 791. See also Ames v. Danzilo, 158 

» Jocelyn T. White, 201 111. 16, 66 App. Div. 232, 143 N. Y. S. 75; 

N. E. 327; Dumont v. Taylor, 67 Franklin v. Di Clemente, 123 App. 

Kans. 727, 74 Pac. 234. Div. 664, 108 N. Y. S. 123. 

" Thrasher r. Moran, 146 Cal. 683, « Guy v. Franklin, 5 Cal. 416; 

81 Pac. 32. Seville v. Mcintosh, 41 Miss. 516; 

''Hubbard v. Hanje, 52 Ind. App. Blackledge v. Nelson, 1 Dev. Eq. 

611, 98 N. E. 314. (N. Car.) 422; Bassett v. McDonel, 

" Dorn V. Bissell, 180 111. 73, 54 N. 13 Wis. 444. As to duties of referee 

E. 167. See also Armstrong v. generally, see Wolcott v. Weaver, 3 

Douglas Park Bldg. Assn., 176 111. How. Pr. ('N. Y.) 159; Gregory v. 

298, 52 N. E. 886. Campbell, 16 How. Pr. (N. Y.) 417; 

"Corning v. Baxter, 6 Paige (N. Kelly v. Searing, 4 Abb. Pr. (N. 

Y.) 178; Chamberlain v. Dempsey, Y.) 354. 

36 N. Y. 144; Anon., 3 How. Pr. (N. "McCrackan v. Valentine, 9 N. Y. 

Y.) 158. 42. 



§ 1468 JOEECLOSUEE BY EQUITABLE SUIT 32 

should report the facts, and not merely his eonclusions.^* Fpon the 
coming in of the report, exceptions may be taken to it,'otherwise it is 
confirmed.*^ A final order of sale before the filing of the report is 
erroneous ;*" as it is also when made after the filing of it, and before 
it is confirmed or set down for hearing.*^ The decree is founded 
upon the report.*^ No notice of reference is necessary where defend- 
ant is in default.*^ The allowance to the referee is properly taxed as 
part of the costs in the decree of foreclosure.^" 

§ 1468. Allegations of renewal of note. — A renewal of the note 
should be alleged. The bill should contain all the allegations neces- 
sary to cover the facts intended to be introduced in evidence, other- 
wise the evidence will be inadmissible. Therefore, where a bill to 
foreclose a mortgage given to indemnify an indorser of a note alleged 
the indorsement of a note of a certain date and amount for the mort- 
gagor, under the mortgage, but did not allege that the note was a 
renewal of a former one, it was held that, although the mortgage se- 
cured the liability on the renewed note in the same manner as it 
secured the liability on the original one, yet, without amending the 
bill, evidence to prove the note described in the bill to have been given 
in renewal of a former one was inadmissible. °^ 

§ 1469. Proof of note. — It is no objection to the introducing of a 
note in evidence that it was not fully or perfectly described in the 
mortgage, the words "or order" in the note being omitted in the de- 
scription.^2 Although the mortgage note be imperfectly described in 
the complaint, if it be filed with the complaint, and alleged to be the 
same note mentioned in the mortgage, and on the trial it be proved 
to be such, the defective description is cured.^^ The fact that the 
note offered in evidence corresponds in date, names, and amount with 
that recited in the mortgage deed, is prima facie evidence that it is the 

"Anon. Clarke, 423; Security "Boswell v. Goodwin, 31 Conn. 

Fire Ins. Co. v. Martin, 15 Abb. Pr. 74, 81, 81 Am. Deo. 169. See also 

(N. Y.) 479. Schumpert v. Dillard, 55 Miss. 348. 

^' Swarthout v. Curtis, 4 N. Y. 415, ^^ Hougli v. Bailey, 32 Conn. 288; 

5 How. Pr. 198. Dorsch v. Rosenthall, 39 Ind. 209; 

« Graham v. King, 15 Ala. 563. Boyd v. Parker, 43 Md. 182. But 

"Dean v. Coddington, 2 Johns, see Kreher v. Theisman's Estate, 

Cli- (N. Y.) 201. 125' La. 600, 51 So. 656; Hackemul- 

«Pogue v. Clarke, 25 111. 351; ler v. Flgueroa, 125 La. 307, 51 So. 

Sims v. Cross, 10 Yerg. (Tenn.) 207. 

^^l'^. ,, ^ »=Cleavinger v. Beath, 53 Ind. 

.c'Ti''S^^°J?'^ "*"• ^^^^^' 1^^ ^1^- l'^2. See also Hadley v. Chapin, 11 

481' ^2 So 411. Paige (n. Y.) 245. 

"Sanford v. Dickinson, 124 111. 
App. 77. 



33 THE BILL OK COMPLAINT § 1469a 

note secured."* Where one seeks as assignee to foreclose a mortgage 
securing a non-negotiable note, he should give evidence of title beyond 
that derived from the mere possession of the note."" Where fore- 
closure is sought by the original payee against the mortgagor it is not 
necessary specifically to allege that complainant is the owner of the 
note and mortgage."" 

§ 1469a. Production of note and bond. — The note or bond must be 
produced, or a good reason given for its nonproduction."^ Failure to 
produce the note or bond where one was given is evidence of the non- 
existence or discharge of the mortgage debt, and when unexplained 
is conclusive against the mortgagee's right to recover."* If the mort- 
gage does not recite any note or bond, and the mortgagor testifies he 
has it in his possession, but fails to produce it, the inference that no 
bond or note was given is justified."' The plaintiff need not give evi- 
dence of a fact alleged in his pleading, and not denied in the answer; 
and therefore, if the answer does not deny the execution of the bond 
and mortgage, but simply pleads payment, plaintiff is not obliged to 
produce the bond in order to entitle him to recover.''" The possession 
of the mortgage alone furnishes no conclusive evidence of the owner- 
ship of the bond or note which represents the debt secured, as this 
may have been transferred to another, who would be entitled to the 
mortgage security. But although the mortgage may recite the exist- 
ence of a bond or note, it may be shown that no bond or note was ever 
given; and if the mortgage itself expressly admits the indebtedness 
and contains a covenant to pay it, the nonproduction of the bond or 
note is then sufficiently accounted for, and furnishes no ground for de- 

" Cowley V. Shelby, 71 Ala. 122; N. W. 169; Hungerford v. Smith, 34 

Mixer v. Bennett, 70 Iowa 329; Bai- Mich. 300; Schumpert v. Dlllard, 55 

ley v. Fanning Orphan School, 12 Miss. 348; Burgwin v. Richardson, 

Ky. L. 644, 14 S. W. 908; Steinbeck 3 Hawlcs (N. Car.) 203; Armstrong 

V. Stone, 53 Tex. 382. v. Painter (W. Va.), 83 S. E. 1027. 

"'Lashbrooks v. Hatheway, 52 A complaint which recites the full 

Mich. 124, 17 N. W. 723. names of the makers of the note 

"Graham v. Fitts, 53 Fla. 1046, secured suflSciently identifies notes 

43 So. 512. which are signed by makers' inl- 

" Field V. Anderson, 55 Ark. 546, tials for their given names, Hum- 

18 S. W. 1038; Norris v. Kellogg, 7 boldt Sav. &c. Soc. v. Burnham, 111 

Ark. 112; Beers v. Hawley, 3 Conn. Cal. 343, 43 Pac. 971. 

110; Dowden v. Wilson, 71 111. 485; ■» Bergen v. Urbahn, 83 N. Y. 49; 

Moore v. Titman, 35 111. 310; Lucas Merritt v. Bartholick, 36 N. Y. 44. 

V. Harris, 20 111. 165; Lauf v. Ca- ™Parkhurst v. Berdell, 24 N. Y. 

hill, 231 111. 220, 83 N. E. 155; Gib- St. 430, 5 N. Y. S. 328. 

son V. Rea (Kans.), 140 Pac. 893; "Anderson v. Culver, 127 N. Y. 

George v. Ludlow, 66 Mich. 176, 33 377, 28 N. E. 32, affg. 6 N. Y. S. 181. 



3 — Jones Mtg. — ^Vot. III. 



§ 1469a FOEECLOSUKE BY EQUITABLE SUIT 34 

nying a decree of foreclosure,"^ especially if no exception is taken to 
the absence of the bond.®" Although the note representing the debt be 
declared void, because of a material alteration of it by the holder, the 
mortgage may nevertheless be enforced if the terms and amount of 
the debt sufficiently appear in that instrument."* The fact that the 
note is in the possession of the defendant is a good reason why the 
plaintiff should not produce it in evidence. If in such case it con- 
tains, by way of indorsement or otherwise, anything to the advantage 
of the defendant, he may avail himself of it by offering the note in 
evidence."* If no personal judgment is sought, the recitals in the 
mortgage, without producing the note, are sufficient to authorize a 
foreclosure of the mortgage simply, according to some authorities,"' 
though by others recitals without the note are not sufficient unless the 
absence of the note is accounted for."" In a suit against a subsequent 
purchaser, after the death of the mortgagor, and nearly twenty years 
after the maturity of the mortgage, a very satisfactory showing of a 
continuing obligation is required, in the absence of the securities 
themselves."' 

Secondary evidence of the contents of the note and mortgage is in- 
admissible until proof is made of the loss or destruction of the orig- 
inals."^ 

Usually the introduction and proof of the mortgage and the note or 
bond secured makes a prima facie case for the complainant, and the 
burden is upon the defendant to prove the defenses set up in his 
answer."* So, the production by the holder, but not the party named 
as payee, of a negotiable promissory note, duly indorsed to such holder, 
raises a presumption that it was acquired by him for value before due, 
with all the then incidents thereof, such as a mortgage securing the 
same or coupons for future instalments of interest. ''° 

If the party produces the notes secured by the mortgage and it 
appears that he has contracted and had undisputed possession of the 

^ Munoz V. Wilson, 111 N. Y. 295, ™ See cases cited above, and Ben- 

18 N. E. 855, affg. 42 Hun 656; nett v. Taylor, 5 Cal. 502. The rea- 

Goodhue v. Berrien, 2 Sandf. Ch. son is that the mortgage is a mere 

(N. Y.) 630; Vaughn v. Tate incident to the debt. 

(Tenn.), 36 S. W. 748. "Hungerford v. Smith, 34 Mich. 

""Moffltt V. Maness, 102 N. Car. 300. 

457, 9 S. B. 399. ««Dowden v. Wilson, 71 111. 485. 

■^ Smith v. Smith, 27 S. Car. 166, ™ Boudinot v. Winter, 190 111. 394, 

3 S. B. 78; Plyler v. Elliott, 19 S. 60 N. E. 553; Cahill v. Lauf, 133 111. 

Car. 257. App. 607. 

" Hawes v. Rhoads, 34 Ind. 79. " Milwaukee Trust Co. v. Van 

"Hawes v. Rhoads, 34 Ind. 79; Valkenburgh, 132 Wis. 638, 112 N. 

Arnold v. Stanfield, 8 Ind. 323. W. 1083 



35 THE BILL OR COMPLAIITT § 1470 

instrumeiits for many years, under claim of title thereto, these facts 
will sustain a finding that he is the owner thereof, though they may 
be indorsed payable to the order of a third person.'^ Where the mort- 
gage is without a note or a note clause the contract is an implied con- 
tract to pay the amount recited with interest and the introduction of 
the mortgage is held to make a prima facie case, without evidence of 
nonpayment.'^ 

"Where it is provided that no proceedings to foreclose a mortgage by 
equitable suit shall be had, in case proceedings at law have been com- 
menced to collect the mortgage debt, the introduction of the note and 
mortgage in evidence is not sufficient to sustain an allegation to that 
effect.'^ Where the notes and mortgage do not disclose on their face 
that one of the signers was a surety, their introduction makes out a 
prima facie case for the complainant as against a defense that signer 
in question was only a surety.'* 

§ 1470. Proof of consideration. — It is not generally necessary to 
prove payment of the consideration money, unless this is put in issue by 
the pleadings, as the deed itself is sufficient evidence of it."^ It is not 
necessary that the complaint should allege the origin of the debt and 
the nature of the consideration.'" Where there is no proof of con- 
sideration beyond the presumption arising from the sealing of the 
instrument, evidence is usually held admissible to show that the mort- 
gagee had not paid any money to the mortgagor." 

A mortgage made without consideration, and under a promise never 
performed, is void for all purposes as against the mortgagor, whether 
in the hands of the mortgagee or of a third person who has taken it as 
security without' notice of the want of consideration.'* The assignee 
could only take what the mortgagee could give him, and that was 
nothing at all. He can stand in no better situation than the mort- 
gagee himself; and his only remedy is against the mortgagee. An 
allegation in the complaint that the grantee of the mortgagor assumed 
the payment of the mortgage debt in writing as a consideration for 

" Smith V. Potter, 90 Nebr. 298, Minot v. Eaton, 4 L. J. Ch. 134. See 

133 N. W. 437. ante §§ 610, 613. 

"Gamble v. Lewis, 151 N. Y. S. "Palmer v. Sulzby (Ala.), 64 So. 

778. 368. 

'= ■Woolworth v. Sater, 63 Nebr. "Schlitz v. Koch, 138 App. Div. 

418, 88 N. W. 682. 535, 123 N. Y. S. 302. 

'"Campbell v. Hughes, 155 Ala. "Parker v. Clarke, 30 Beav. 54. 

591, 47 So. 45. The mortgage in this case was 

"Chambers v. Powell (Ala.), 39 given by a person in prison, under 

So. 919; Powell v. Huey, 145 111. promises to release him, which 

App. 477, 485; Heintz v. Klebba, 5 were never realized. 
Nebr. (Unof.) 289, 98 N. W. 431; 



§ 1471 FOKECLOSUEE BY EQUITABLE SUIT 36 

the deed will be taken as true and confessed where such grantee does 
not deny the allegation.^' 

§ 1471. Allegations of accrual of action. — The bill must show that 
a right of action has accrued.*" The right of -action to foreclose a 
mortgage, in general, accrues upon any breach of the condition. If 
there are several breaches, it is necessary to allege and prove only 
one; and if several are alleged, it is only necessary to prove one to 
be entitled to a decree.*^ If the mortgagee's right to the money se- 
cured by the mortgage is expressly made dependent upon his comply- 
ing with a certain requirement, as, for instance, the perfecting of the 
title in some particular, the bill to foreclose the mortgage must dis- 
tinctly allege the performance of such condition precedent.*^ If the 
mortgage debt is payable upon demand, the mortgagee may proceed 
at any time to foreclose, and need not make or allege a previous de- 
mand ;*' and although the interest has been regularly paid,** if no 
time of payment be limited in a mortgage, it is payable within a rea- 
sonable time,*" and generally would be regarded as due upon demand. 
If the mortgage secures a debt already due, and it specifies no time of 
payment, it may be foreclosed at any time.** Generally no demand 
would be required where the note secured by the mortgage is due.*' 

It is no valid defense to the foreclosure of a mortgage containing a 
clause making the principal sum due in case of default in paying the 
interest for a certain time after it is due, that the defendant was un- 
able to find the holder of the mortgage until after the time for pay- 
ing the interest had passed, unless the answer alleges fraud on the 
part of the plaintiff to prevent the payment of interest.** The court 
will not stay the suit when such default of the whole debt occurs 
through the mere negligence of the mortgagor.*' It is not required 
that plaintiff allege that there has been no waiver of the conditions in 
the mortgage. It is enough to allege that the mortgagor has broken 

™Kenney V. Streeter, 88 Ark. 406, "Austin v. Burbank, 2 Day 

114 S. W. 923. ■ (Conn.) 474, 2 Am. Dec. 119. 

™ What averments sufficient, Lud- *> Triebert v. Burgess, 11 Md. 452. 

dy V. Pavkovitch, 137 Cal. 284, 70 «= Wright v. Shumway, 1 Diss. (U. 

Pac. 177. S.) 23. 

^Beckwith v. Windsor Mfg. Co., "Henry v. Hodge, 171 111. App. 

14 Conn. 594, 602; Canandarqua 10. 

Academy v. McKechnle, 90 N. Y. »»Dwight v. Webster, 32 Barb. 



(N. Y.) 47, 10 Abb. Pr. 128, 19 How. 



618, 

»» Curtis v. Goodenow, 24 Mich. Pr.349'. 'Se6'a"lso"iH.osseei"v.^Jarvi's; 

18- 15 Wis. 571. 

"■Gillett V. Balcom, 6 Barb. (N. »»Noyes v. Clark, 7 Paige (N. Y.) 

Y.) 370; Bolman v. Lohman, 79 Ala. 179, 32 Am. Dec. 620 
63; see ch. xxv. 



37 THE BILL OR COiMPLAINT § 1473 

the conditions and the facts on which the allegation is based.*" The 
petition should set out both the conditions of the mortgage and the 
breach of the conditions, and it has been held that the omission is not 
cured by the filing of the mortgage with the petition."^ The matter 
of nonpayment has been held sufficiently covered by an allegation that 
the note is "wholly owing and unpaid,"'^ or that the debt nor any part 
thereof has been paid.'^ So, a complaint was held sufficiently to allege 
that the principal sum of the note was due, which set out the note and 
mortgage, showing on their face that the principal was due and pay- 
able two years before commencement of the action, averring that no 
part of the principal mentioned in the note and mortgage has been 
paid, and that the principal sum is unpaid, and is owing by the de- 
fendant to the plaintiff.** A petition which sets out a copy of a mort- 
gage with a condition that it may become due on failure to keep a 
covenant as to insuring the property and alleges a failure to keep the 
covenant, has been held to state a cause of action although there is 
nothing then due on the note according to its terms.*' 

An election of the mortgagee to avail himself of an option to declare 
the entire sum due for default in the payment of interest was held 
sufficiently alleged by an averment, that the complainant exercises the 
option given by the note and declares the interest and principal due 
and payable at once.*" The election must occur before the commence- 
ment of the suit. A party can not be said to have exercised his option 
until such exercise is shown by some outward act beyond a mere mental 
determination to that effect.*' 

§ 1472. Allegations of payment by surety. — A bill to foreclose a 
mortgage given to indemnify a surety must allege a payment by the 
surety on account of the liability,** and also the precise amount 

«■ Salomon v. Stoddard, 107 111. Pac. 296; San Gabriel Valley Bank 

App. 227. v. Lake View Town Co., 4 Cal. App. 

°' Miller v. McConnell, 118 Ky. 630, 89 Pac. 360. 
293, 80 S. W. 1103. " Trinity County Bank v. Haas, 

"^Tomlinson v. Ayres, 117 Cal. 151 Cal. 553, 91 Pac. 385. 
568, 49 Pac. 717. See also Hardin ""Lathrop v. Atwood, 21 Conn, 

v. Helton, 50 Ind. 319. 117; Shepard v. Shepard, 6 Conn. 

»'' Durland v. Durland, 62 Nebr. 37; Stout v. Folger, 34 Iowa 71, 74, 

813, 87 N. W. 1048. 11 Am. Rep. 138; Collier v. Brvin, 

"Luddy V. Pavkovich, 137 Cal. 2 Mont. 335; Forbes v. McCoy, 15 

284, 70 Pac. 177. Nebr. 632, 20 N. W. 17; Gregory v. 

»= Porter v. SchroU (Kans.), 144 Hartley, 6 Nebr. 356. In South Car- 

Pac. 216. olina it is well settled that, after 

■^Graham v. Fitts, 53 Fla. 1046, the principal debtor has made de- 

43 So. 512. See also Baxter v. Ft. fault of payment, the surety may 

Payne Co. (Ala.), 62 So. 42; Patten enforce payment of a mortgage 

V. Pepper Hotel Co., 153 Cal. 460, 96 given to secure him, and have the 



§ WtS FOEECLOSUEE BY EQUITABLE SUIT 38 

paid;°» though, if the aggregate 'sum paid be stated, it is not necessary 
that the several sums constituting this should he set out in detail.* 
The contract of indemnity is, however, sometimes broken when there is 
a failure to do a specific act, or when a liability is incurr^d.^ Where 
the indemnifying mortgage contains an express agreement of the 
mortgagor to pay the debt described, upon his failure to do so when 
his liability is ascertained and the debt is due, the mortgagee may at 
once, without having paid the debt, maintain an action for the fore- 
closure of the mortgage, and recover as damages the total probable 
loss.^ A mortgage given to an indorser to secure him may not be 
foreclosed until the indorser is charged with liability on the note.* 

§ 1473. Averments as to liens. — An allegation in the bill that a 
person made a defendant has, or claims to have, a lien on the premises, 
which, if it exists, is subsequent to the plaintifE's mortgage, sufficiently 
shows that he is a proper party; and such allegation is not bad on 
demurrer as stating no cause of action against him.° It is not neces- 
sary to describe the interest which each defendant has or claims to 
have in the mortgaged property." "What his interest in the property 
may be is only important in determining the rights to the surplus.'' 
Though this general allegation of interest is held sufficient, it is also 
the practice to allege the nature of the interest of each subsequent 
incumbrancer, as that he claims to have an incumbrance by mortgage, 

money applied to the debt. Hal- 467; Hoes v. Boyer, 108 Ind. 494, 9 

lams V. Abercrombie, 15 S. Car. N. B. 427; Bowen v. Wood, 35 Ind. 

110; McDanlel v. Austin, 32 S. Car. 268; Short v. Nooner, 16 Kans. 220; 

601, 11 S. E. 350; Norton v. Reid, 11 Drury v. Clark, 16 How. Pr. (N. Y.) 

S. Car. 593; Bellune v. Wallace, 2 424; Aldrich v. Lapham, 6 How. Pr. 

Rich. L. (S. Car.) 80. See ante (N. Y.) 129; Constant v. American 

§§ 379-387. Baptist &c. Soc, 21 Jones & S. (N. 

»»Seely v. Hills, 44 Wis. 484. Y.) 170; Carpenter v. Ingalls, 3 S. 

1 Dye V. Mann, 10 Mich. 291. But Dak. 49, 51 N. W. 948, 44 Am. St. 

see Shepard v. Shepard, 6 Conn. 37. 753; Dexter v. Long, 2 Wash. St. 

"Gilbert v. Wiman, 1 N. Y. 550, 435, 27 Pac. 271. 

49 Am. Dec. 359; Brewer v. Buxton, «Sichler v. Look, 93 Cal. 600, 29 

101 N. Car. 419, 8 S. E. 116. Pac. 220; Anthony v. Nye, 30 Cal. 

"Catterlin v. Armstrong, 101 Ind. 401; Poett v. Stearns, 28 Cal. 226; 

258; Reynolds v. Shirk, 98 Ind. 480; McCoy v. Boley, 21 Pla. 803; Hoes 

Malott V. Goff, 96 Ind. 496; Loehr v. Boyer, 108 Ind. 494, 9 N. E. 427; 

V. Colborn, 92 Ind. 24; Durham v. Daniel v. Hester, 24 S. Car. 301. 

Craig, 79 Ind. 117; Bodkin v. Merit, Such an averment is not an issu- 

86 Ind. 560; Wilson v. Stilwell, 9 able fact. Elder v. Spinks, 53 Cal. 

Ohio St. 467, 75 Am. Dec. 477. 293. 

■" First Nat. Bank v. Baker, 148 ' Drury v. Clark, 16 How. Pr. (N. 

N. Y. S. 372. Y.) 424. See also Frost v. Koon, 30 

= Anthony v. Nye, 30 Cal. 401; N. Y. 428, 448 
Kehm v. Mott, 187 111. 519, 58 N. E. 



39 THE BILL OK COMPLAINT § 1474 

the date and record of which are given, or by judgment entered at 
such a date.' 

If, in an action hy a junior mortgagee against several defendants, 
the complaint contains such general allegation of interest, and one of 
the defendants is a senior mortgagee who also holds a judgment lien 
junior to the plaintiff's mortgage, and the complaint further alleges 
"that if any such interest, lien, or claim exists, * * * it is junior 
and subordinate to the lien of said mortgage," and the senior mort- 
gagee fails to plead his prior mortgage, and it is adjudged that the 
mortgage sued on is senior to any lien held by any of defendants, such 
judgment estops the senior mortgagee subsequently to assert his right 
under his mortgage.' 

Where one made a defendant in a foreclosure suit, as claiming some 
interest in the land which accrued subsequently to the lien of the 
mortgage, answers and proceeds to trial, he can not, after the plaintifE 
has made out a prima facie case for foreclosure and rested, for the 
first time raise the objection that defendant's title was paramount to 
plaintiff's mortgage, and demand that the complaint be dismissed. It 
is too late at such stage of the proceedings for the defendant to claim 
that he had been improperly made a party defendant.^" If any one 
of the defendants is an infant, this fact should appear, with a state- 
ment of his interest in the premises, so that a guardian may be ap- 
pointed. 

Where the holder of a first mortgage brings a suit for foreclosure, 
making all junior lienholders defendants, the court may properly 
continue the case after a decree for plaintiff, in order to determine the 
priorities of the defendants.^^ 

§ 1474. Allegations that defendant's interest is subject to mort- 
gage. — The bill must show that defendant's interest is subject to the 
mortgage. Unless the bill discloses that the interest of a person 
named as a defendant is an interest junior or inferior to the mort- 
gage lien of the plaintiff, it is insufficient to support a judgment 
against him. It should allege that his claim is subject to the lien of 
the mortgage.^^ It is generally sufficient to allege that the defendants 
other than the mortgagors, had or claimed some interest in or claim 

"Clay V. Hildebrand, 34 Kans. "Luken v. Fickle, 42 Ind. App. 

694; 1 Crary, N. Y. Prac. 289. 445, 84 N. B. 561. 

"English V. Aldrich, 132 Ind. 500, "Nooner v. Short, 20 Kans. 624; 

31 N. E. 456. Neitzel v. Hunter, 19 Kans. 221; 

" Cromwell v. MacLean, 123 N. Short v. Nooner, 16 Kans. 220. See 

Y. 474, 25 N. E. 93i,. ante § 1440. 



§ 1475 FOEECLOSUEE BY EQUITABLE SUIT 40 

on the mortgaged premises, but that the same is subsequent and sub- 
ject to plaintiff's mortgage, and praying that the defendants be 
required to answer and set forth their claims to the mortgaged prop- 
erty or be forever barred.^' No decree should be rendered against a 
defendant unless the pleadings show that defendant's rights are sub- 
ordinate to those of the complainant.^* If, however, a defendant be 
joined upon the allegation that he has or claims some interest adverse 
to the plaintifl, the nature and amount of which the latter is ignorant 
of, and desires that the defendant may be compelled to disclose, and 
such defendant answers by a general denial, he is in no condition to 
question a judgment foreclosing the defendant of all right, title, and 
interest in the premises adverse to the plaintiff, because his answer 
denies that he has any claim or interest therein.^^ 

The bill need not define the nature of the interests which the de- 
fendants have in the mortgaged estate, when the peculiar nature of 
those interests is unimportant to the relief sought by the complain- 
ant.^° An averment that the respondent had purchased the equity of 
redemption of the mortgagors or claimed some interest in the lands 
has been held to render a biU for foreclosure sufficient as against a 
demurrer for misjoinder of parties.^' 

§ 1475. Prayer for relief. — All the relief sought for in the action 
should be prayed for in the bill, inasmuch as the court will not gen- 
erally grant any relief not demanded in the complaint, especially 
when no answer is interposed.^* As will be noticed in a subsequent 
chapter, a judgment for the deficiency may be had in most of the 
states where foreclosure is obtained by an equitable action, at the same 
time that a decree for a sale of the property is entered ; but if both of 
these remedies are desired, the complaint must ask for them; for 
otherwise, after default, no judgment for a deficiency can be ren- 

" Foster v. Bowles, 138 Cal. 449, the defendant purchased the prop- 

71 Pac. 495. See also Wardlow v. erty subsequent to the mortgage, 

Middleton, 156 Cal. 585, 105 Pac. and assumed payment of it. Pettys 

738; International Kaolin Co. v. v. Comer, 34 Ore. 36, 54 Pac. 813. 

Vause, 55 Pla. 641, 46 So. 3; Brad- "Selph v. Cobb, 47 Fla. 292, 36 

ford V. Russell, 79 Ind. 64; United So. 761. 

States Mtg. &c. Co. v. Anderson, 30 "Kehm v. Mott, 187 111. 519, 58 

Ohio Cir. Ct. 553; Horton v. Haines, N. E. 467 (quoting text); Bradley 

23 Okla. 878, 102 Pac. 121; Wright v. Parkhurst, 20 Kans. 462; Blandin 

V. Conservative Inv. Co., 49 Ore. v. Wade, 20 Kans. 251. 

177, 89 Pac. 387. Allegation suffl- "Doremiis v. Dunham, 55 N. J. 

cient against demurrer which avers Eq. 511, 37 Atl. 62. 

that defendant claims some inter- " Shockley v. Christopher (Ala.), 

est in the property, but that it was 60 So. 317. 

acquired with notice of the mort- "Bullwinker v. Ryker, 12 Abb. 

gage, and is subject to it, and that Pr. (N. Y.) 311. See also Grant v. 



41 THE BILL OK COMPLAINT § 1477 

dered;^' and the omission of a prayer for a sale of the property is 
ground for demurrer.^" 

As a general rule a prayer for excessive relief does not render a 
complaint for foreclosure demurrable if plaintiff is entitled to some of 
the relief demanded.^^ 

§ 1476. Averment of essential grounds of relief. — ^The essential 
grounds for relief or decree asked for must be set out in the bill; as, 
for instance, if the priority of the mortgage depends upon the fact that 
it "was given for purchase-money, or upon the fact that subsequent 
mortgagees had notice of the mortgage before they took their liens 
upon the property, no relief founded on these facts can be given imless 
they are stated in the bill; though being formal defects the bill may 
be amended.^^ The bill is not demurrable, however, because the relief 
demanded is greater than or different from that which the facts entitle 
the plaintiff to.^^ 

§ 1477. Prayer for deficiency. — A personal judgment for a defi- 
ciency can not be entered against a defendant unless it is asked for 
in the complaint.^* But such a judgment may be entered upon a com- 
plaint which asks that the mortgage shall be foreclosed, that the mort- 
gaged property shall be sold to pay the debt evidenced by the note, 
and to pay the costs, attorney's fees, etc., and that execution shall be 
issued for the balance. A petition no more defective than this may 
be amended at any time, without costs, so as to make it formal.^" If 
a personal judgment is sought against a purchaser from the mort- 
gagor, the ground of his liability must be set forth.^" Where, after 
an action of foreclosure is commenced against the mortgagor, he an- 
swers alleging that he has sold the land to a purchaser who assumed 

Vandercook, 8 Abb. Pr. (N. S.) (N. Eq. 109; Iowa County v. Mineral 

Y.) 455, 57 Barb. 165. Point R. Co., 24 Wis. 93. 

^ Hansford v. Holdam, 14 Bush == Scheibe v. Kennedy, 64 Wis. 

(Ky.) 210; Simonson v. Blake, 20 564, 25 N. W. 646. 

How. Pr. (N. Y.) 484, 12 Abb. Pr. '^^ Simonson v. Blake, 12 Abb. Pr. 

331. (N. Y.) 331, 20 How. Pr. 484; Bull- 

" Santacruz v. Santacruz, 44 Miss, winker v. Ryker, 12 Abb. Pr. (N. 

714. Y.) 311; French v. New, 20 Barb. 

=^ Citizens' Loan & Trust Co. v. (N. Y.) 481,484. 

Witte, 110 Wis. 545, 86 N. W. 173. ==Foote v. Sprague, 13 Kans. 155. 

See also Rahn v. Milwaukee Elec. =»Hammons v. Bigelow, 115 Ind. 

Light Co., 103 Wis. 467, T9 N. W. 363, 17 N. E. 192. In South Caro- 

747; Scheibe V. Kennedy, 64 Wis. Una a personal judgment for a de- 

564, 25 N. W. 646; Moritz v. Splitt, ficiency can not be rendered until 

55 Wis. 441, 13 N. W. 555. a report of the sale has been made. 

^^ Armstrong v. Ross, 20 N. J. Parr v. Lindler, 40 S. Car. 193, 18 

S. E. 636. 



§ 1478 FOEECLOSUEE BY EQUITABLE SUIT 43 

the payment of the mortgage, and such purchaser is thereupon served 
with a summons requiring him to answer, it is error for the court, in 
his absence, and without any pleadings having been filed by him, to 
render against him a personal judgment, when the petition does not 
state any cause of action against him, or mention or refer to him.^' 

§ 1478. Prayer for amount of debt before entry of final decree. — 

When the mortgage secures several notes some of which are not due 
when the bill is filed, the complainant should ask in his bill that so 
much of the debt as may become due before final decree should be 
included in it.^* It is irregular to include in the judgment a note 
which matured after the filing of the bill, unless some foundation is 
laid for it in the pleadings. If this is not done a supplemental bill 
should be filed, praying that the note which has matured since the 
filing of the bill should be included in the decree.^" The action, how- 
ever, can not be commenced before anything is due, and then be made 
good by a supplemental complaint after a portion of it has matured f 
but the action being properly begun, additional relief may in this way 
be had for rights that have since accrued.^^ 

III. The Answer and Defenses 

Section Section 

1479. In general. 1488. Defense that complainant has 
1479a. Cross-bills. parted with his interest. 

1480. Answer generally. 1489. Indemnity. 

1481. Denial must be explicit. 1490. Defense of want of considera- 
1481a. Disclaimer. tion. 

1482. Right to question title of 1491. Defense of want of considera- 

mortgagee. tion by purchaser subject to 

1483. Mortgagor estopped to deny mortgage. 

his title. 1492. Defense of fraud. 

1484. Estoppel of mortgagor to set 1492a. Defense of fraudulent altera- 

up defense by reason of dec- tion. 

larations and agreements. 1492b. Fraud as against mortgagor's 

1485. Defenses against assignee. creditors. 

1486. Assignee for value. 1493. Usury is a defense. 

1487. When assignee takes free 1494. Defense of usury waived or 

from equities. lost. 



" Beecher v. Ireland, 46 Kans. 97, (Ky.) 149; Williams v. Creswell, 51 

26 Pac. 448; Kimball v. Connor, 3 Miss. 817; Manning v. McClurg, 14 

Kans. 414, distinguished. Wis. 350. 

^McLane v. Piaggio, 24 Fla. 71, "McCullough v. Colby, 4 Bosw. 

3 So. 823; Malcolm v. Allen, 49 N. (N. Y.) 603. 

Y. 488; Dan Hartog v. Tibbitts, 1 " Bostwick v. Menck, 8 Abb. Pr. 

Utah 328. See ante §5 60G, 1439, fN. S.) (N. Y.) 169; Candler v. 

and post §§ 1577, 1591, 1700. Pr-ttit, 1 Paige (N. Y.) 168, 19 Am. 

"McLane v. Piaggio, 24 Fla. 71, Dec. 399. 
3 So. 823; Adams v. Essex, 1 Bibb 



43 



THE ANSWER AND DEFENSES 



1479 



Section 

1495. Defense of usury where mort- 

gage made to be sold at dis- 
count. 

1496. Set-off and counterclaim. 

1497. Set-off where suit brought in 

name of person other than 
real owner. 

1498. Set-off where suit regarded as 

proceeding in rem. 

1499. Set-off of Illegal interest paid. 

1500. Defense of outstanding para- 

mount title. 

1501. Allegations of failure of title. 

1502. Failure of title where mort- 

gagor in undisturbed pos- 
session. 

1503. Cases exceptional to general 

rule. 

1504. Covenant broken at time suit 

is brought. 

1505. Breach by mortgagee of inde- 

pendent covenant. 

1506. Fraud of vendor as defense to 

purchase-money mortgage. 
1506a, Mistake as to quantity of 
land conveyed. 



Section 

1506b. Violation of law by mort- 
gagee as defense. 

1507. Defense of mistake as against 

assignee. 
1507a. Assumption of mortgage by 
grantee of mortgagor. 

1508. Validity of title as condition 

precedent to payment of 
mortgage. 

1509. Statute of limitations. 

1510. Insanity of mortgagor. 

1511. Recovery of judgment on 

mortgage note as defense. 
1511a. Defense of liability to cred- 
itor of plaintiff in garnishee 
process. 

1512. Defense of satisfaction of 

mortgage — Payment — Ten- 
der. 

1513. Defense of agreement of par- 

ties subsequent to the mort- 
gage. 

1514. Defense of defective service 

of process. 

1515. Bill of interpleader. 



§ 1479. In general. — Besides the special defenses arising out of 
the circumstances of the particular case, there may of course be as 
many general defenses as there are general allegations in the bill or 
complaint, as well as the defenses applicable to contracts generally. 
There may be a denial of the execution and delivery of the mort- 
gage, and of the plaintiff's right to maintain the action; a denial of 
personal liability ; a denial of any title in the mortgagor at the time 
of giving the mortgage ; an allegation of want of consideration, usury, 
or the statute of limitations; an allegation of payment, or that the 
debt is payable upon an event which has not happened;^ an allega- 
tion of a counterclaim or set-off; of nonjoinder of defendants; of a 
discharge; of an equity of redemption in a part of the premises, and 
an equitable right to require the sale of the residue of them first; and 
finally, a disclaimer of title or interest. Some of these defenses will 
be illustrated with such citations of cases as seem of general impor- 
tance and application.^ It may be said generally that pleas in avoid- 



'Prez V. Bank of Key West, 36 
Fla. 467, 18 N. E. 74; Manley v. 
Felty, 146 Ind. 194, 45 N. E. 74; 
Lucas V. Hendrix, 92 Ind. 54. One 
may not urge as a defense a mat- 



215 111. 100, 74 N. E. 89; Green v. 
Frick, 25 S. Dak. 342, 126 N. W. 
579. 

^For a case where the matters 
set up in defense were pronounced 



ter which is available as defense to frivolous, see Weil v. Uzzell, 92 N. 
another person only. King v. King, Car. 515. 



§ 1479a FOKECLOSUEE BY EQUITABLE SUIT 44 

ance of the mortgage are not limited to those which show it to be 
void, but include special pleas which go to avoid its effect.^ 

If the default for which foreclosure is had consists in the nonpay- 
ment of the principal, interest or taxes, or a like default, payment or 
tender of payment after the action is brought is no defense.* 

As a general rule, one defendant can not by his answer impeach the 
mortgage of a codefendant; although he alleges in his answer that 
such mortgage was fraudulent and void, his codefendant, to whom it 
belongs, is not bound to put in any defense. Such answer can not be 
taken as confessed against him. One defendant can have relief against 
another only upon a cross-bill.^ It is not a defense to foreclosure for 
nonpayment of taxes that the description of the property on the assess- 
ment roll was defective.* 

As a general rule the mortgagor may not set up a claim or defense 
which existed in his favor and of which he knew at the time he gave 
such note and mortgage.' The burden of proof is on the person who 
executed the note to prove affirmatively every defense set up by him 
in a suit to foreclose.^ It is held that a practical provision that no 
person shall be permitted to deny on trial the execution of any instru- 
ment in writing on which an action may be brought, unless the person 
denying the same shall verify his plea by affidavit, does not apply to 
a suit in chancery to foreclose a mortgage." 

§ 1479a. Cross-bills. — Properly speaking, a cross-bill is a bill 
brought by a defendant against the complainant in the same suit or 
against the other defendants in the same suit or against both, touch- 
ing the matters in question in the original bill ; and thus defined and 
understood, new parties can not be introduced into a cause by cross- 
bill." The cross-bill is confined to matters within the scope of the sub- 
ject-matter of the bill for foreclosure," and this has been held to pre- 
vent a cross-bill by bondholders demanding a discovery and accounting 
by the trustees based on malfeasance or misfeasance in office.^^ A 

»Malsberger t. Parsonsi 24 Bel. 'Applegate v. Moore, 146 Ky. 267, 

254, 75 Atl. 698. 142 S. W. 381. 

*Plummer v. Park, 62 Nebr. 665, 'Clokey v. Loan &c. Assn., 120 

87 N. W. 534. 111. App. 214. But see Malsberger 

"Davis v. Cook, 65 Ala. 617; v. Parsons, 24 Del. 254, 75 Atl. 698. 

Brinkerhoff v. Franklin, 21 N. J. " Newton v. Gage, 155 Fed. 598. 

Eq. 334; Vanderveer V. Holcomb, 21 "Tracey v. Crepin (Okla.), 138 

N. J. Eq. 105. Pac. 142. 

« Farmers' Security Bank v. Mar- "Wood v. Haddonfleld &c. Co., 81 

*'^i^T ?t^-)' 150 N. W. 572. N. J. Eq. 239, 86 Atl. 956. 

' McLeish r. Hanson, 157 111. App, 
605. 



45 THE ANSWER AND DEFENSES § 1479a 

cross-bill is not proper for the litigation of adverse claims.^^ The cross- 
bill should set forth the cause of action with the same care and exact- 
ness that would be employed if the cross-bill were the original bill.^* 
A cross-complaint may refer to the complaint for a description of the 
real estate on which the mortgage is sought to be f oreclosed.^^ A cross- 
complaint demanding the foreclosure of another mortgage on the 
same premises is treated, as to the mortgagor, as though the cross- 
complainant had instituted a separate and independent action to fore- 
close his mortgage.^* If the answers of the various parties claim liens 
the court has power, without the filing of a cross-bill, to determine the 
existence and priority of the various liens, and to order the premises 
sold and the proceeds distributed in discharge of such liens according 
to their priority.^^ A mechanic's lien may be set up by answer with- 
out a cToss-bill,^^ and when so confined the summons issued on the 
bill is sufiicient notice to sustain a judgment on the cross-bill.^* It is 
proper whenever it is necessary to adjust all the equities between the 
parties connected with the subject-matter of the original bill. Though 
matters wholly foreign to the original bill can not be introduced, new 
issues in relation to the matters contained in that bill may be brought 
up by the cross-bill. ^° A cross-bill by some of the several defendants 
may be germane to the original bill, though it puts in issue matters 
in which only they and the complainants are interested.^^ On fore- 
closure of a piirchase-money mortgage equity may take jurisdiction 
of a cross-bill to rescind the contract of purchase for fraud of the 
complainant in inducing it.^^ 

As a general rule a defendant in foreclosure who seeks affirmative 
relief should file a cross-bill, since such relief may not, ordinarily, be 

^Farmers' Loan &c. Co. v. San Equitable Trust Co. V. Standard 

Diego Street Car Co., 40 Fed. 105. Cordage Co. (N. J. Eq.), 84 Atl. 

"Johnson v. Meyer, 54 Ark. 437, 207. 

16 S. W. 121; Van Loben Sels v. " Gardner v. Cobn, 191 111. 553, 61 

Bunnell, 131 Cal. 489, 63 Pac. 773; N. E. 492; Boone v. Clark, 129 111. 

Handly r. Munsell, 109 111. 362; 466, 21 N. E. 850; Soles v. Shep- 

Smith V. Billings, 62 111. App. 77; pard, 99 111. 616. 

Webb V. John Hancock Mut. Life " Blatchford v. Blanchard, 160 111. 

Ins. Co., 162 Ind. 616, 69 N. E. 1006, 115, 43 N. E. 794. 

66 L. R. A. 632; Wright v. Bachel- "'Southward v. Jamison, 66 Ohio 

ler, 16 Kans. 259; American Exch. St. 290, 64 N. E. 135. 

Nat. Bank v. Fockler, 49 Nebr. 713, '^ Davis v. Cook, 65 Ala. 617. 

68 N. W. 1039. « Powell v. Sampson, 107 111. App. 

« Loeb v. Tinkler, 124 Ind. 331, 24 230. 

N. E. 235. 2= Redrew v. Sparks, 75 N. J. Eq. 

*°Webb V. John Hancock Mut. 396, 72 Atl. 442. See also Richard- 
Life Ins. Co., 162 Ind. 616, 69 N. B. son v. Lowe, 149 Fed. 625, 79 C. C. 
1006, 66 L. R. A. 632. See also A. 317. 



§ 1480 FOEECLOSURE BY EQUITABLE SUIT 46 

decreed upon the answer except in matters of accounting. ^^ A cross- 
bill is a proper remedy to reform a mortgage where it does not express 
the true contract of the parties in consequence of fraud or mistake/* 
or to have notes and mortgage declared void and unenforcible because 
based on gambling contract.^^ The mortgagor may set up usury by 
way of cross-bill in the foreclosure by the second mortgagee.^" So, 
the mortgagor may seek by way of cross-bill to set aside a conveyance 
by him of the mortgaged premises to another defendant.^^ If the 
defendant is entitled to affirmative relief against the plaintiff, as, for 
instance, in case he has overpaid the mortgage, he should file a cross- 
bill.^* If a cross-bill is filed by one who has a junior title of record, 
insisting that he nevertheless has a prior equity, he must allege all 
the facts necessary to show his prior right.^' If a junior mortgagee 
of record files a cross-bill alleging the superiority of his mortgage, his 
bill should not be dismissed upon a finding that his mortgage is sub- 
ject to the complainant's mortgage. He may retain his bill to claim a 
surplus.^" 

On a cross-bill filed in answer to a bill to cancel a mortgage, the. 
execution and amount of which is admitted and its validity estab- 
lished, a decree of foreclosure may be granted.^ ^ A cross-bill by one 
who claims priority over the mortgage must allege a title or lien on 
the mortgaged land at the time of the execution of the mortgage.''' 
In an action to foreclose a purchase-money mortgage the mortgagor 
may file a cross-bill setting up his grantor's breach of a covenant 
against incumbrances.^' A cross-complaint to reform a mortgage 
should set forth the instrument or a copy of it.'* The failure to give 
notice of a cross-bill may be waived. 

§ 1480. Answer generally. — An answer founded upon a release or 
any written instrument may set it out at length with proper aver- 

» Mitchell V. Mason, 65 Fla. 208, " Porter v. Grady, 21 Colo. 74, 39 

61 So. 579. But see Gouwens v. Pac. 1091; Phillips v. Anthony, 47 

Gouwens, 222 111. 223, 78 N. B. 597. S. Car. 460, 25 S. E. 294. 

=" Commonwealth Title Ins. &c. '^ Newaygo County Mfg. Co. T. 

Co. V. Cummings, 83 Fed. 767; Stevens, 79 Mich. 398, 44 N. "W. 852; 

French v. Griffin, 18 N. J. Eq. 279. Smith v. Atkins, 27 Nebr. 248, 42 

^ Kuhl V. M. Gaily Universal N. "W. 1043. 

Press Co., 123 Ala. 452, 26 So. 535, '' Dudenhofer v. Johnson, 144 Ind. 

82 Am. St. 135. 631, 43 N. E. 868. 

^ Davis V. Cook, 65 Ala. 617. ^ Duroe v. Stephens, 101 Iowa 

'''Dawson v. Vickery, 150 111. 398, 358, 70 N. W. 610; Kuhnen v. Park- 

37 N- E. 910. er, 56 N. J. Eq. 286, 38 Atl. 641. 

^Hathway v. Hagan. 59 Vt. 75, 8 "Cottrell v. .^tna Life Ins. Co., 

t^, ■ o. T ■ „ „ ^'7 I°d. 311; Sanford v. Anderson, 

or, ■,?'?''■. J; ^'^- ^°'''^' ^- ^^- ^- ^°- 2 Nebr. (Unof.) 315, 96 N. W. 486. 
^7 b ed. i7d. 



47 THE ANSWER AND DEFENSES § 1481 

ments, or may give a brief description of it, with averments of the 
facts connected therewith. An answer which states merely a conclu- 
sion of law, without facts to support it, as, for instance, that there is 
nothing due on the debt or that the mortgage is of no binding effect, 
and no lien upon the premises described, is unavailing.'^ 

The waiver of a right to foreclose a mortgage for breach of a cove- 
nant or conditions can not be taken advantage of unless pleaded.'^ A 
general denial has been held sufficient to require proof of the execution 
of the mortgage, where it was alleged in the pleadings and shown by 
the evidence that the original had been lost or destroyed.'^ Under 
the Indiana code, it has been held that a defendant joined in a fore- 
closure proceeding and alleged to claim some interest in the property 
may, under a general denial prove any title he may have.^* 

If the mortgage is set out by copy in the complaint it is unneces- 
sary to repeat it in the answer but it will suffice if it is referred to 
therein.*" 

Generally, it is not necessary to prove the execution of an extension 
agreement which the defendant neither denies in his answer nor under 
oath while on the witness stand.*" 

§ 1481. Denial must be explicit. — The denial of an allegation must 
be explicit and not be left to be inferred.*^ Where a complaint sets 
forth the condition of a bond, and avers that a mortgage securing it 
was executed "with the same condition as said bond," an answer which 
merely repeats the words of the condition as stated in the complaint, 
and avers that it is not contained in the mortgage, is not a denial that 
such was in substance the condition of the mortgage. The answer, 
to avail anything, should at least show that there was nothing on the 
face of the mortgage to connect it with the bond.*^ No defense can 

== Baldwin v. Burt, 43 Nebr. 245, vesting Co. v. Twenty-Eighth St. &c. 

61 N. W. 601; Caryl v. Williams, 7 Realty Co., 148 N. Y. S. 560. 

Lans. (N. Y.) 416. ■"Dimon v. Dunn, 15 N. Y. 498, 

*■ Moore v. Crandall, 146 Iowa 25, revg. Dimon v. Bridges, 8 How. Pr. 

124 N. "W. 812, 140 Am. St. 276. (N. Y.) 16. "It simply pleads the 

=" Blair v. Breeding, 57 Tex. Civ. existence of certain language, with- 

App. 147, 121 S. W. 869. out denying the substance of the 

^ Covington v. Ferguson, 167 Ind. contract as set out in the complaint, 

42, 78 N. E. 241. and without setting out the con- 

^Battison v. Vaughan, 40 Ind. tract itself, so that the court may 

253. see what it is. It may be well that 

"Bourke v. Hefter, 104 111. App. nothing is said, in terms, in the 

126. mortgage, as to the effect of the 

■■^Lockhaven Trust &c. Co. v. nonpayment of interest and yet it 

United States Mtg. &c. Co., 19 Colo, may refer to the bond in such a 

App. 294, 74 Pac. 793; Torpe v. manner as to adopt its provisions." 

Letts, 177 111. App. 288; Oceanic In- Per Chief Justice Denio. An ad- 



§ 1481a FOEECLOSUEE BX EQUITABLE SUIT 48 

be availed of which is not set up in the answer.*' In like manner any 
defense set up by the answer must be set forth by averments which 
make a complete defense.** "Where the mortgage, containing an ex- 
press promise to pay, is made a part of the complaint, an answer 
should deny both the execution of the mortgage and the note. A denial 
of the execution of the note only is insufficient.*' 

Where the complaint alleges that the defendant is in possession of 
the premises as tenant of the mortgagor, and elsewhere contains the 
general allegation that he claims some interest accrued subsequently 
to the lien of the mortgage, an answer denying such tenancy and alleg- 
ing ownership, but stating facts from which it appears that his inter- 
est, whatever it may be, is subsequent to such lien, has been held to 
tender no material issue and states no defense.** 

§ 1481a. Bisclaimer. — A defendant made such as claiming some 
interest subsequent to the mortgage, but who claims no such in- 
terest should disclaim.*^ An answer to be construed as a disclaimer 
of interest in mortgaged property in a suit for foreclosure must ex- 
press an unequivocal intent to disclaim. But an unqualified denial by 
defendants, who are strangers to a mortgage in suit for foreclosure, 
will ordinarily, in the absence of any other ground of defense, be 
construed as a disclaimer.*' 

§ 1482. Right to question title of mortgagee. — The mortgagee's 
title can not be questioned in defense to the bill.*° This can only be 
investigated at law.'" If he took, by virtue of his mortgage, any estate 
whatever which is still subsisting, he is entitled to a decree; and the 
court will not inquire what interest he has in the mortgaged estate, or 

mission by the mortgagor that he ry, 93 111. 176; Fergus Falls v. Fer- 

made "some such bond and mort- gus Falls Hotel Co., 80 Minn. 165, 

gage" obviates necessity of proof. 83 N. W. 54. See also Montgomery 

Wills V. McKinney, 30 N. J. Eq. 465. v. King, 125 Ga. 388, 54 S. E. 135. 

■^Higman v. Stewart, 38 Mich. In this case the respondent having 

513. set up an adverse title, the decree 

"Mann v. State, 116 Ind. 383, 19 was modified so as to provide that 

N. B. 181. the decree and sale thereunder 

■"King V. "Wright, 27 Ind. App. should be without prejudice to the 

600, 61 N. B. 796. See also Walker respondent's right to contest the 

V. Walker, 150 Ind. 317, 50 N. E. 68. title in an action at law. Chapin 

"Kay V. Whlttaker, 44 N. Y. 565. v. Walker, 6 Fed. 794. See ante § 

" Pelton v. Farmin, 18 Wis. 222. 1440. 

«De Watteville v. Sims (Okla.), "Bull v. Meloney, 27 Conn. 560; 

146 Pac. 224. Palmer v. Mead, 7 Conn. 149; 

«Waughop V. Bartlett, 165 111. Broome v. Beers, 6 Conn. 198; An- 

124, 136, 46 N. E. 197; Bozarth v. derson v. Baxter, 4 Ore. 105. 
Landers, 113 111. 181; Gage v. Per- 



49 THE ANSWEE AND DEFENSES § 1483 

whether he has any interest at all in some part of it.°^ If the mort- 
gage was given by the heir on land to which he had title by descent, 
the rights of decedent's creditors can not be tried on a bill by the mort- 
gagee to foreclose such mortgage, though no administrator has ever 
been appointed.^^ 

An exception is apparently made to this rule that the title is not 
in issue, in cases where usury may be shown in defense under statutes 
which would make the deed absolutely void, and usury in the loan is 
established. This, however, is not strictly an investigation of the title, 
but rather of the validity of the instrument ; just as this is the inquiry 
when it is claimed that the maker of it was not of sound mind, or that 
he made it under duress, or that he did not make it at all.^* It is also 
held that where there is no warranty in the mortgage, the mortgagor 
is not precluded from setting up a subsequently acquired title.^* 

The owner of the equity of redemption subject to two mortgages 
can not object that the senior mortgagee yields his priority of lien to 
the junior mortgagee."^ 

It is no defense that the mortgage was executed by the heirs of the 
owner after his death, and that he left debts which remain unpaid, and 
that the estate is under administration in the probate court.^" 

§ 1483. Mortgagor estopped to deny his title. — A mortgagor is 
estopped to deny his title.^^ He can not set up as a defense for liimself 
against the mortgagee, that the property so mortgaged is trust prop- 
erty which he had no right to mortgage. He can not claim adversely 
to his deed, but is estopped by it.°^ "Whether this estoppel arises from 
the making of the mortgage deed, or from the relation of the mort- 
gagor at common law as a quasi tenant of the mortgagee, or from 

"Hill V. Meeker, 23 Conn. 592; way Sav. Co., 122 Ind. 422, 24 N. 

Wooden v. Havlland, 18 Conn. 101; W. 154; Herber v. Christopherson, 

Williams v. Robinson, 16 Conn. 517. 30 Minn. 395, 15 N. W. 676; Carson 

==' Lebanon Sav. Bank v. Water- v. Cochran (Minn.), 53 N. W. 1130; 

man, 65 N. H. 88, 19 Atl. 1000, 17 Joslin v. Williams, 61 Nebr. 859, 86 

Atl. 577. N. W. 473; State Mut. Bldg. &c. 

■^Cowles T. Woodruff, 8 Conn. 35. Assn. v. Batterson, 65 N. J. Eq. 610, 

"Vary v. Smith, 162 Ala. 457, 50 56 Atl. 703; Dime Sav. Bank v. 

So. 187. Crook, 29 Hun (N. Y.) 671; Town- 

« Mobile & Cedar Point R. Co. v. send v. Boyd, 217 Pa. 386, 66 Atl. 

Talman, 15 Ala. 472. 1099; Krupp v. Krugel, 12 Phila. 

™Cook V. De la Guerra, 24 Cal. (Pa.) 174. 

237. "^Usina v. Wilder, 58 Ga. 178; 

■"Bush V. Marshall, 6 How. (IT. Strong v. Waddell, 56 Ala. 471; 

S.) 284, 12 L. ed. 440; Strong v. Boisclair v. Jones, 36 Ga. 499; Mc- 

Waddell, 56 Ala. 471; Usina v. Wil- Loon v. Smith, 49 Wis. 200, 5 N. W. 

der, 56 Ga. 178; Stanford v. Broad- 336. See ante §§ 682, 683. 

4 — Jones Mtg. — Vol. III. 



§ 1483 rOEECLOSUEE BY EQUITABLE SUIT 50 

express or implied covenants for title, has been an unsettled question. 
But at the present time, and especially where a mortgage is merely a 
lien and not a title, this estoppel must be regarded as arising only 
from a covenant for title, express or implied. In the absence of such 
a covenant, the mortgagor may therefore show what his interest in the 
mortgaged land was at the time of the delivery of the mortgage, and 
may show that a subsequently acquired title does not inure to the 
benefit of the mortgagee.'" A wife joining her husband in a deed of 
his land, but not making any covenants, is not estopped to claim title 
to the land under a mortgage held by her.^" The decree binds his in- 
terest, whatever that may be and nothing more.*'^ A mortgage made 
by the heirs of a deceased owner, before the settlement of the estate, 
can not be objected to by them on the ground that the creditors and 
legatees of the estate have not been paid.^^ A mortgagor may, how- 
ever, in an action brought by an assignee, set up and prove a mistake 
in the drawing of the instrument and have it reformed.'^ But it has 
been held that a mortgagor who had given a mortgage upon land held 
by him under the pre-emption act, after filing his declaratory state- 
ment and before entry, and therefore void, was not estopped from set- 
ting up the invalidity of it in defense, when no fraud, misrepresenta- 
tion, or concealment on his part was shown.®* 

A wife who has joined in her husband's mortgage of certain lands, 
including the homestead, can not on foreclosure claim that the home 
lot was her separate property, and that she had not known that the 
mortgage covered it, — that she had not read the mortgage nor heard 
it read ; and that, if she had, she would not have recognized the home 
lot by its description — if it appear that the mortgagee had acted in 
good faith, and had done nothing to mislead her.°° 

A defense by a married woman that she executed her mortgage to 
secure a debt of her husband must be specially pleaded.'® It would 

™Haggerty v. Byrne, 75 Ind. 479; 249. The respondent to a bill to set 
National Fire Ins. Co. v. McKay, 1 aside a mortgage sale of the stand- 
Sheldon (N. Y.) 138. ing title through a purchaser at the 

""Van Amburgh v. Kramer, 16 mortgage sale, is estopped to deny 

Hun (N. Y.) 205. that the mortgagor had title to the 

"Bird V. Davis, 14 N. J. Eq. 467. land, as he is the common source 

See also Hoffi v. Burd, 17 N. J. Eq. of title of both parties. Sullivan v. 

201- McLaughlin, 99 Ala. 60, 11 So. 447. 

°^Cook V. De la Guerra, 24 Cal. '"Peake v. Thomas, 39 Mich 584 

237. 585. 

""Andrews v. Gillespie, 47 N. Y. <»Chadron Banking Co. v. Ma- 

^^1't> <■ ivT .,., ,r r. lioney. 43 Nebr. 214, 61 N. W. 594. 

■"Brewster v. Madden, 15 Kans. 



51 THE ANSWER AND DEFENSES § 1484 

seem that the same rule would apply where a wife has joined her hus- 
band in a mortgage of land standing in his name, in case she objects 
to a foreclosure on the ground that the land mortgaged is her prop- 
erty, having been purchased with her money. In such a case in Ala- 
bama, however, where such a defense was taken, and the claim that 
the land was the property of the wife rested upon alleged declarations 
of the husband when he bought the land, ten years before, that he was 
buying for his wife, who furnished the money, that the evidence was 
of a species to be received with great caution, and was not to be re- 
garded as against the positive evidence of the mortgagee, that he 
loaned the money to the husband, the money with which the purchase- 
money of the lot was paid.*^ 

§ 1484. Estoppel of mortgagor to set up defense by reason of dec- 
larations and agreements. — The mortgagor may be estopped by his 
declarations or agreements from setting up a defense otherwise valid ; 
as where a purchaser of land subject to a mortgage admitted to a third 
person that it was all right and valid, and thereby induced him to buy 
it, he was not allowed afterward to urge a failure of consideration of 
the mortgage to the injury of the assignee."* And so he may be es- 
topped from taking advantage of a sale made without proper authority 
in the officer to sell, because no judgment of foreclosure had been en- 
tered on the mortgage; his admission that the debt was due; his acts 
at the sale in forwarding it and waiving matters of form ; his delivery 
of possession to the purchaser, and his standing by and suffering pur- 
chasers to improve the property, are sufficient for this purpose."" And 
so where a mortgage made by one member of a banking firm to his co- 
partner was sold by them to a purchaser, with the representation that 
it was a good bond and mortgage, each of them was held to be estopped 
from setting up the defense of usury.'''* A mortgagor who has induced 
another to take an assignment of his mortgage is estopped from deny- 
ing the validity of it in the assignee's hands. '^ 

Where a wife has given a mortgage as surety for her husband, in an 
action to foreclose the mortgage after her death, the husband, having 
procured the mortgagee's money by the mortgage, is estopped from 

«' Ingram v. lUges, 98 Ala. 511. "Hoeffler v. Westcott, 15 Hun (N. 

""Smith V. Newton, 38 111. 230. Y.) 243. 

See also Montague v. Priester, 82 S. "Jolinson v. Parmely, 14 Hrn 

Car. 492, 64 S. E. 393. (N. Y.) 398; Norris v. Wood, 14 

°» Cromwell v. Bank of Plttshurg, Hun (N. Y.) 196. 
2 Wall. Jun. 569. 



§ 1485 FORECLOSURE BY EQUITABLE SUIT 53 

disputing its Talidity.''^ And so, under a statute forbidding married 
women from becoming sureties, where a married woman represents 
that a loan which is secured by mortgage on her lands is for her own 
use, she will be estopped, as against one who in good faith has con- 
tracted with her in reliance upon her statements, from asserting that 
she is a surety, and not the principal in the transaction.'* 

Where a married woman makes application in her own name for 
a loan, and, with her husband, gives a note and mortgage on her sepa- 
rate estate to secure the loan, and is paid the proceeds of the loan, she 
can not, in an action to foreclose the mortgage, set up as a defense 
that she signed the note and mortgage merely as surety for her hus- 
band. If she paid over to her husband the money received, it was the 
result of her own folly. Prohibiting married women from becoming 
sureties was intended as a protection, and was never intended to shield 
them in the perpetration of a fraud.''* 

,§ 1485. Defenses against assignee. — It is not often that the mort- 
gage is an obligation to the mortgagee personally which neither his 
assignee nor personal representative can enforce ; yet such a mortgage 
may be made ; and such was held to be the effect of a mortgage which 
was the only evidence of the indebtedness secured, and this was "to 
be paid by the mortgagor to the mortgagee when called on by said 
mortgagee; and the mortgagor does not agree to pay the above sum 
to any one else except the mortgagee." The mortgagee having died 
without demanding payment, his administrator could not make de- 
mand, and maintain a suit upon the mortgage.'^'* It may be presumed 
in such a case that the mortgagee intended that the debt should not 
be paid at all unless he himself should see proper to demand it; and 
that, if he made no demand, the indebtedness should be retained by 
the mortgagor as a gift; and having died without making such de- 
mand, the gift became complete. 

In those states in which a transfer of the mortgage note carries 
with it the mortgage security, it is no defense to a suit by an assignee 
that he had no formal assignment of the mortgage.'^" The fact that he 

"Ellis v. Baker, 116 Ind. 408, 19 Insurance Co., Ill Ind. 343, 12 N. 

N. E. 193. E. 495; Ward v. Insurance Co., 108 

"Taylor v. Hearn, 131 Ind. 537, Ind. 301, 9 N. E. 361. 

31 N. E. 200, citing Cummlngs v. "State v. Frazier, 134 Ind 648 

Martin, 128 Ind. 20, 27 N. E. 173; 34 N. E. 636. 

Bouvey v. McNeal, 126 Ind. 541, 26 '= Sebrell v. Couch, 55 Ind. 122. 

N. E. 396; Lane v. Sehlemmer, 114 "Jackson v. Blodget, 5 Cow (N 

Ind. 296, 15 N. E. 454; Rogers v. Y.) 202, 205; Jackson v. Willard, 4 



53 THE AXSWEIJ AND DEFENSES § 1485 

purchased the mortgage at a discount is no defenseJ^ If the assign- 
ment was obtained by fraud, the defendant may show that he has paid 
it to the mortgagee from whom the plaintiff so obtained it.''^ 

In a suit by an assignee he should ordinarily prove the execution 
of the assignment to himself; but if he produces the note and mort- 
gage, and the mortgagee, who is made a party, is defaulted, a judg- 
ment creditor of the mortgagor can not call in question the assignee's 
titled" It is no defense for the mortgagor that the assignee is admin- 
istrator of the mortgagee's estate, and has assigned the mortgage 
through a third person to himself.*" 

The motives of the assignee in acquiring the assignment, and in 
foreclosing the mortgage, can not be set up in defense, and afford no 
ground for staying the suit.*^ Nor is a failure of consideration for the 
assignment a defense unless the party urging the defense shows 
wherein such failure affects him.*^ It is no defense to a suit by an as- 
signee to foreclose a mortgage that the assignee took title from mo- 
tives of malice, and solely with a view to bring an action, and that the 
assignor assigned it from a like motive, and without consideration. 
It is sufficient to sustain the action that the debt is due and has been 
transferred to the plaintiff; and the mortgagor can only arrest the 
action by paying or tendering, and bringing into court, the amount 
due.*^ 

"Where an assignee seeks to foreclose a mortgage which the mort- 
gagee testifies was given without consideration moving from him, and 
that he assigned it at the request of one of the mortgagors without 
consideration, this evidence casts upon the complainant the burden of 
proof that there was a consideration for the mortgage.** 

A mortgagor is not estopped from setting up a valid defense, as 
against an assignee for value without notice, merely on the ground 
that he failed before the assignment to take proceedings to procure 
the discharge of record and delivery up of a mortgage.*'^ 

Johns. (N. Y.) 41, 43; Rice V. Cribb, '"Biedler v. Malcolm, 121 App. 

12 Wis. 179. Div. 145, 105 N. Y. S. 642. 

"Knox V. Galligan, 21 Wis. 470; ''Morris v. Tuthill, 72 N. Y. 575. 

Croft V. Bunster, 9 Wis. 503; Griss- "Bishop v. Felch, 7 Mich. 371. 

ler V. Powers, 53 How. Pr. (N. Y.) See also Hughes v. Thweatt, 57 

194, 37 Am. Rep. 475, and cases Miss. 576. 

cited. '^ Magie v. Reynolds, 51 N. J. Bq. 

"Hall V. Erwin, 60 Barb. 349, 57 113, 26 Atl. 150. "He had a right 

N. Y. 643, 66 N. Y. 649. to rely upon the well-settled rule of 

"Markson v. Ide, 29 Kans. 649. law that the purchaser of a chose 

^Read v. Knell, 143 N. Y. 484, 39 in action of this character (a mort- 

N. E. 4. gage securing a non-negotiable ob- 

=' Davis V. Flagg, 35 N. J. Eq. 491. ligation) takes it subject to all eq- 



§ 1486 FOEECLOSUEE BY EQUITABLE SUIT 54 

§ 1486. Assignee for value. — It is not necessary to constitute a 
bona fide holding by the assignee that he should have paid value for 
the security at the time of receiving it. A past consideration is suflB.- 
cient.^° 

A farmer and his wife, on the line of a proposed railroad in Wis- 
consin, subscribed to stock in the road, and mortgaged their farm to 
secure a negotiable note given in payment of the subscription, upon 
representations made by agents of the road and others that the road 
would prove a very lucrative investment, and a very profitable thing 
to the neighborhood. After a good deal of money had been laid out 
in grading and other work upon the road, the further building of it 
was stopped for want of funds, and it remained unfinished. The 
mortgage having been assigned before maturity to a director of the 
road, who was also a large creditor of it at the time the mortgage was 
made, upon a bill filed by him to foreclose it, he was held to be a bona 
fide holder for value, and entitled to a decree.^^ "Where the mortgage 
itself is free from any taint the mortgagor may not, generally, take 
advantage of any illegality attending the assignment.^* So, the fact 
that the consideration for an assignment of a mortgage was a gaming 
debt owed the assignee by the assignor is no defense to an action by 
the assignee against the mortgagor for the foreclosure of the mort- 
gage.^' 

§ 1487. When assignee takes free from equities. — The assignee 
before maturity of a negotiable note secured by mortgage takes it free 
from any equitable defenses which the mortgagor might have had 
against it in the hands of the mortgagee, of which the assignee had no 
notice at the time the assignment was made.'" The defendant can not 
set up payment to the mortgagee after the assignment of the mort- 

uities, and that he has the power App. Blv. 140, 94 N. Y. S. 985; Con- 
to protect himself by making in- radt v. Lepper, 13 Wyo. 473, 81 Pac. 
quirles at the proper sources." Per 307. 

Pitny, V. C. '»Reed r. Bond, 96 Mich. 134, 55 

'"Croft V. Punster, 9 Wis. 503. N. W. 619 

or?^7^o®,''7-^jK''rf."'T^}J?"- ^^- "Carpenter v. Longan, 16 Wall. 

S.) 146, 22 L. ed. 105. In this ease, (u. S.) 271, 21 L. ed. 314; Beals v 

moreover, the representations were Neddo, 1 McCrary (U S ) 206- 

not considered binding, because Swett'v. Stark, 31 Fed '858- Pierce 

they were promissory, and not rep- v. Faunce, 47 Maine 507- Taylor v 

resentations of existing facts pe- Page, 6 Allen (Mass.) 86; Bloomer 

culiarly within the knowledge of v. Henderson, 8 Mich 395 77 Am 

the party making them. See also Dec. 453; Cicotte v. Gagnier 2 Mich 

Leavitt v. Pell, 27 Barb. (N. Y.) 381; Reeves v. Scully' Walk" 

^^l\ , r, •,., T^ -,„, (Mich.) 248; Cornell V. Hichens, 11 

"American Guild v. Damon, 107 Wis. 353; Croft v. Bunster, 9 Wis. 



55 THE ANSWER AND DEFENSES § 1487 

gage.°^ BTen duress or fraud in the execution of the mortgage is not 
available as a defense against such an assignee.'^ When a defense 
valid against the assignor is made, the plaintiff must show that he is 
a bona fide purchaser for value, where that issue is raised by the plead- 
ings."* The rule in this respect is the same whether the negotiable 
note is secured by a mortgage or not. "The contract as regards the 
note," says Mr. Justice Swayne,"* "was, that the maker should pay it 
at maturity to any bona iide indorsee, without reference to any de- 
fenses to which it might have been liable in the hands of the payee. 
The mortgage was conditioned to secure the fulfilment of that con- 
tract. To let in such a defense against such a holder would be a clear 
departure from the agreement of the mortgagor and mortgagee, to 
which the assignee subsequently in good faith became a party. If the 
mortgagor desired to reserve such an advantage, he should have given 
a non-negotiable instrument. If one of two innocent persons must 
suffer by a deceit, it is more consonant to reason that he who 'puts 
trust and confidence in the deceiver should be a loser rather than a 
stranger.' ""^ Moreover, the mortgage being considered a mere inci- 
dent of the debt, an accessory to the principal thing, the rights of the 
assignee in respect to the mortgage are determined by his rights re- 
specting the debt."" If, therefore, the mortgage be given to secure the 
payment of a non-negotiable note or bond, the assignee takes it, as he 
would such note or bond, subject to the equitable defenses which the 
defendant would have against it in the hands of the assignor."^ And 
so an assignee of a mortgage, taking it after the maturity of the debt, 
takes it subject to any defense that would have been admissible against 
the mortgagee."^ 

503; Martineau v. McCollum, 4 ''Matteson v. Morris, 40 Mich. 52; 
Chand. (Wis.) 153; Fisher v. Otis, GetzlafE v. Seliger, 43 Wis. 297. 
3 Chand. (Wis.) 83. But see Magie "* Carpenter v. Longan, 16 Wall. 
V. Reynolds, 51 N. J. Bq. 113, 26 (U. S.) 271, 21 L. ed. 314. 
Atl. 150, 154;" Palmer v. Yates, 3 °* "Accessorium non ducit, sequi- 
Sandf. (N. Y.) 137; Baily v. Smith, tur suum principale." 
14 Ohio St. 396, 84 Am. Dec. 385. ""Carpenter v. Longan, 16 Wall. 
Otherwise in Illinois: Colehour v. (U. S.) 271, 21 L. ed. 314; Bennett 
State Sav. Inst, 90 111. 152; Lauf v. Taylor, 5 Cal. 502; Pots v. Black- 
V. Cahill, 231 111. 220, 83 N. E. 155; well, 4 Jones Eq. (N. Car.) 58; Mar- 
Pierce V. Coryn, 126 III. App. 244; tlneau v. McCollum, 4 Chand. 
Lauf V. Cahill, 231 111. 220, 83 N. E. (Wis.) 153. 
155. See ante §§ 838, 884. »' Matthews v. Wallwyn, 4 Ves. 

"' Mead v. Leavitt, 59 N. H. 476. 118, 126. 

"^ Heals V. Neddo, 1 McCrary (TJ. "^ Robeson v. Robeson (N. J. Eq.), 

S.) 206; Simpson t. Del Hoyo, 94 23 Atl. 612. 
N. Y. 189. 



§ 1488 FOEECLOSUEE BX EQUITABLE SUIT 56 

§ 1488. Defense that complainant has parted with his interest. — 

It is a good objection to a suit that the complainant has parted with 
his interest in the mortgage before the time of answering; the party 
in interest is not before the court."' But the assignment of a note and 
mortgage after the commencement of foreclosure proceedings does not 
affect a decree obtained therein, if the assignment neither appears of 
record nor is brought to the knowledge of the court.^ On the other 
hand, a defendant who has no interest in the property can not assail 
the mortgage.^ If the mortgagor, after having suffered a bill of fore- 
closure to be taken as confessed against him, conveys his interest in the 
property, the purchaser takes it subject to the rights which the com- 
plainant has acquired in the suit, and to the admissions made by the 
mortgagor's default; and no defense can then be taken which would 
not have been open to the mortgagor had he not sold his interest.^ 

§ 1489. Indemnity. — Although the condition of a mortgage may 
be for the payment of a certain sum of money, it is competent to show, 
by parol evidence, that the mortgage was really given to indemnify 
the mortgagee as a surety, and that his ' liability has been discharged 
without his being damnified. The effect of such proof is not to con- 
tradict or vary the mortgage, but to indemnify the demand to which 
it really refers.* If there has been no breach of the condition of a 
mortgage of indemnity, there can be no foreclosure of it.° 

Where a suit is brought to foreclose a lost mortgage and note, the 
defendant can not resist the payment of either principal or costs on 
the ground of a refusal to give him indemnity." In case the defendant 
is entitled to any indemnity, he can not take advantage of the right in 
this suit, unless he can show he was ready before suit to tender pay- 
ment on receiving indemnity.^ 

§ 1490. Defense of want of consideration. — ^Want of consideration 
for the mortgage or failure of it is a good defense to it as between the 
original parties,^ but the proof should be as clear and convincing as 

"•"Wallace v. Dunning, Walk. Ch. ^Ide v. Spencer, 50 "Vt. 293. As 

(Mich.) 416. See also Smith v. to breach of condition of a mort- 

Bartholomew, 42 Vt. 356. gage to secure one for becoming 

^Bigelow V. Booth, 39 Mich. 622. bail, see Griswold v. Barker, 57 Vt. 

See also Ellis v. Sisson, 96 111. 105. 53. 

' Carleton v. Byington, 18 Iowa « Sharp v. Cutler, 25 N. J. Eq. 425. 

4^2. 'Massaker v. Mackerley, 9 N. J. 

"Watt V. Watt, 2 Barb. Ch. (N. Eq. 440. 

Y-) 371. ^Hicklin v. Marco, 56 Fed. 549; 

"Kimball v. Myers, 21 Mich. 276, Pacific Iron Works v Newhall 34 

4 Am. Rep. 487; Colman v. Post, 10 Conn. 67, 77; OLis v. McCaskill' 51 

Mich. 422, 82 Am. Dec. 49; Man v. Pla. 516, 41 So. 458; Braxton v Lid- 

Elkins, 10 N. Y. S. 488. don, 49 Fla. 280, 38 So. 717-"Mell 



57 THE ANSWER AND DEFENSES § 1490 

that required for the reformation of WTitten instruments.^ A partial 
failure of consideration is a defense pro tanto. These defenses must 
be distinctly pleaded.^" A mortgage given in consideration that the 
mortgagee should serve nine months in the army as a substitute for 
the mortgagor, who had been drafted, can not be enforced when it ap- 
pears that the mortgagee deserted within a few weeks after being mus- 
tered into the service." In an action to foreclose the mortgage of a 
married woman she may show by parol evidence that the consideration 
on which the mortgage was executed was her husband's indebtedness, 
then existing or thereafter to be incurred.^^ 

Evidence of ex parte statements, or declarations of the mortgagor, 
made after the execution of the mortgage, that it was given without 
consideration, and only for the purpose of putting the property be- 
yond the reach of his wife, with whom he was having difficulty, is in- 
admissible.^* 

A mortgagor may show a failure of consideration of a mortgage to 
secure a non-negotiable note in an action to foreclose the mortgage by 
an assignee of the note and mortgage.^* 

If it appears that the mortgage was given to secure future advances 
which were never made, the bill will be dismissed.^'' If some advances 
are made upon the mortgage, though not to the stipulated amount, the 
mortgage will be enforced to the amount actually advanced upon it.^° 
On the foreclosure of a mortgage given to secure the payment of judg- 
ments confessed by the mortgagor, but which were void for want of 
compliance with the statute, the defense may be taken that no indebt- 
edness is shown, and the bill should be dismissed.^'' But when there 
was an actual consideration for a mortgage, generally the inquiry can 
not be made whether the consideration was full and adequate.^^ 

A junior mortgagee or purchaser can not set up want of considera- 
tion in a senior mortgage which he has assumed, or expressly taken or 

V. Moony, 30 Ga. 413; Conwell v. "Nelson v. McPike, 24 Ind. 60. 

Clifford, 45 Ind. 392; Banks v. "Walk- '"Jp'erris v. Hard, 135 N. Y. 354, 32 

er, 2 Sandf. Ch. (N. Y.) 344, 3 Barb. N. E. 129. 

Ch. 438; Marshall v. Reynolds, 12 ^'Silva v. Serpa, 86 Cal. 241, 24 

N. Y. S. 19; Morris v. Davis, 83 Va. Pac. 1013. 

297, 8 S. E. 247; Cawley v. Kelley, "Walker v. Thompson, 108 Mich. 

60 Wis. 315, 19 N. W. 65; Akerly v. 686, 66 N. W. 584. 

Vilas, 21 Wis. 88. See ante § 610. " McDowell v. Fisher, 25 N. J. Eq. 

» Bray v. Comer, 82 Ala. 183, 1 So. 93. 

77; Mayo v. Hughes, 51 Fla. 495, 40 "Baldwin v. Flagg, 36 N. J. Eq. 

So. 499; Chaffe v. Whitfield, 40 La. 48. 

Ann. 631, 4 So. 563. " Austin v. Grant, 1 Mich. 490. 

"Philbrooks v. McEwen, 29 Ind. i» Norton v. Pattee, 68 N. Y. 144. 
347; Matteson v. Morris, 40 Mich. 
52. 



§ 1491 rOEECLOSUEE BY EQUITABLE SUIT 58 

bought subject to.^° The assumption by the mortgagor of a debt of 
the mortgagee to a third person which the latter releases is a sufiScient 
consideration.^" Payment is the only defense open to him against the 
mortgage assumed.^^ In the case of a purchase-money mortgage the 
failure of consideration may consist in a shortage of the acreage con- 
veyed to the mortgagor. The matter of this shortage is available to 
the mortgagee either as a separate cause of action or as a defense in 
the foreclosure action.^ ^ Agreements that will be effective to prevent 
or postpone foreclosure must be supported by a consideration.^' 

A mortgagor may not prevent foreclosure by attacking the validity 
of a prior mortgage, paid off out of the proceeds of the one being fore- 
closed on the ground of the illegality of its consideration.''* The bur- 
den is on the mortgagor to overcome the presumption of consideration 
raised by the seal on the mortgage.^'* 

§ 1491. Defense of want of consideration by purchaser subject to 
mortgage. — Failure or want of consideration as between the parties 
to a mortgage can not be set up as a defense by a purchaser of the land 
subject to the mortgage, which is in fact a part of the consideration, 
whether he has expressly assumed the mortgage as a part of the pur- 
chase-money or not.^" In a case in New York the owner of land made 

^Tery v. Durand Land Co., 112 Price v. Pollock, 47 Ind. 362; Terry 

Mich. 665, 71 N. "W. 525; Dyer v. v. Durand Land Co., 112 Mich. 665, 

Dean, 69 Vt. 370, 37 Atl. 1113. But 71 N. W. 525; Horton v. Davis, 76 

see Coleman v. Witherspoon, 76 Ind. N. Y. 495. In some of the earlier 

285. cases in New York, grantees who 

^ Blake v. Askew (Ark.), 166 S. had assumed the payment of exist- 

W. 965. ing liabilities were allowed to set 

^Crawford v. Edwards, 33 Mich, up defenses other than usury; all 

354. authorities agreeing that such 

'^Welborn v. Cobb, 92 S. Car. 384, grantees can not defend on that 

75 S. B. 691. ground. See Russell v. Kinney, 1 

== Nance v. Woods (Wash.), 140 Sandf. Ch. (N. Y.) 34; Jewell v. Har- 

Pac. 323. rington, 19 Wend. (N. Y.) 471; 

"Quigley v. Wolf (Mich.), 143 N. Hartley v. Tatham, 26 How. Pr. (N. 

W. 882. Y.) 158; Lester v. Barron, 40 Barb. 

"^Otis V. McCaskill, 51 Fla. 516, (N. Y.) 297. But the rule is estab- 

41 So. 458. See also Mayo v. lished that the grantor may create 

Hughes, 51 Fla. 495, 40 So. 499; any lien he pleases upon the land, 

?nf x'?®^'' a^^ ^'a '^^^^^' 5* ^'s'=- 124, whether it be founded on any con- 

Ed ;; XT- .-. ., ,„„ „ sideration as between him and the 

c^lf-^J:.^^^°\ ^^ ^^^- 1^2, 8 person in whose favor it is made 

?Ki r^i ^RH q/'t. ™,T«^w\*^°-' °'" '^°^' ^"^^ ** ^^^ grantee either 

l^l,^^\^^^' ^^ ^^°- 2^^= ^^^t V- expressly or impliedly undertakes 

Miller 125 ind 70 25 N. E. 143; for a consideration to pay U he can 

fo'TL^2c^^*|rN^'F^?Q'"^ii?^' «.°t defend against it See cases 

10 N. B. 299, 11 N. E. 792 Schee cited under this section and al<in 

V. McQuilken. 59 Ind. 269; Studa- Ritter v. Phillips 53 NY 586 See 

baker v. Marquardt, 55 Ind. 341; ante § 744 



59 THE ANSWER AND DEFENSES § 1491 

a mortgage to an insurance company for four thousand dollars, upon 
which the company advanced only two thousand dollars at the time. 
A further loan from the company of two thousand dollars was then 
contemplated, but was never made. The owner conveyed his equity 
of redemption subject to the mortgage, for a consideration expressed 
in the deed, from which the four thousand dollars were deducted. 
Several subsequent conveyances of the premises were made in the 
same manner. Afterward the owner procured the insurance company 
to assign the mortgage to a creditor, who paid the company the amount 
advanced upon the mortgage, and credited the ovmer the balance of the 
four thousand dollars secured. The creditor was allowed to foreclose 
the mortgage for the entire sum of four thousand dollars, against the 
objection of the purchaser of the equity of redemption that it was 
a valid lien for only the amount originally advanced upon it with in- 
terest.^^ The court said that .the purchaser's position was in no re- 
spect different from what it would have been had the original owner 
counted out in cash the sum specified in the mortgage, and placed it 
in the hands of their grantee as their messenger, with directions to 
place it in the hands of the company, and he had placed it in the hands 
of his grantee, who had in turn delivered it to his grantee, the owner 
of the equity of redemption, with the same directions, who with the 

"Freeman v. Auld, 44 N. Y. 50, wish to advance the whole amount, 
overruling same case in 37 Barb, and the mortgagees were willing to 
(N. Y.) 587. Mr. Justice Hunt said: accept a reduced amount, allowing 
"Two objections are mainly relied the mortgage to stand for its face, 
upon as justifying the judgment be- It is quite true that in a contro- 
low: 1. That the insurance com- versy between the mortgagees and 
pany advanced only the sum of the company, the latter could not 
$2,000; that they could have en- have compelled the payment of the 
forced the mortgage for no greater full amount. It is equally true that, 
amount against Allen and Stevens -where there is no such controversy, 
(the mortgagors); and that they where the makers desire it to be 
could transfer to their assignee no enforced to its nominal amount, 
greater rights than they possessed; where the holders of the property 
2. That if Allen and Stevens, or have consented and agreed that it 
the insurance company as their should be so enforced, and have had 
trustee, could have recovered the a deduction of $2,000 from their 
whole amount, that it was a lien or purchase-money based upon the pay- 
equitable claim, and that the sim- ment by them, or the subjecting the 
pie transfer of the mortgage did premises to the full amount of the 
not carry with it such lien or claim, mortgage, that the payment in full 
1. I look upon the insurance com- should be enforced. The insurance 
pany as holding this mortgage in a company may collect the full sum. 
double capacity; as owners to one- They hold it for their own benefit 
half of the amount, and as trustee to the amount advanced by them; 
for Allen and Stevens for the resi- as trustees for Allen and Stevens 
due. The later wished to impose a for the amount not allowed." See 
mortgage of $4,000 upon the lot. Grissler v. Powers, 53 How. Pr. (N. 
The insurance company did not Y.) 194, distinguished from above. 



§ 1493 FOKECLOSUEE BY EQUITABLE SUIT 60 

money in his pocket nevertheless proposed to prove that the mortgage 
was not a valid security for the amount in excess of the original ad- 
vance. 

§ 1492. Defense of fraud. — Fraud is a good defense when it is 
shown that it was practiced by the mortgagee or his agents upon the 
mortgagor ; or when the mortgagee or his assignee, at the time of tak- 
ing the mortgage, was aware that a fraud had been committed upon 
the mortgagor."* The answer should distinctly state the several facts 
necessary to constitute the fraud, and to bring the knowledge of it 
home to the mortgagee. Evidence of fraud is inadmissible if the an- 
swer contained no allegations of fraud."^ The fraud may be a defense 
to the whole claim, or it may be a defense in part, and available as a 
counterclaim. The burden of proof, that a mortgage was procured by 
false representation, lies with the defendant.^" 

In a foreclosure suit against a husband and wife, the latter may in 
her answer aver that she did not intend to convey the land described, 
and was induced to sign the mortgage through fraud and collusion on 
the part of her husband and the mortgagee. She need not assert this 
defense by cross-bill.^ ^ An answer by the wife, alleging that she exe- 
cuted the mortgage under duress by her husband, is insufficient, unless 
it also shows that the mortgagee was in some way connected with or 
had knowledge of the duress.'" 

A subsequent mortgagee may set up fraud in the consideration of a 
prior mortgage by answer, without filing a cross-bill; and a general 
allegation of such fraud is sufficient where the fraud alleged is that the 
mortgage was given to defraud creditors, and was without considera- 
tion.^' If the mortgagee was aware when he took the mortgage that 

=* Hicks v. Jennings, 4 Woods (U. Pac. 114; Langley v. Fitzgerald, 43 

S.) 496; Aiken v. Morris, 2 Barb. Colo. 301, 95 Pac. 923; Jenkins v. 

Ch. (N. Y.) 140; Reed v. Latson, Long, 19 Ind. 28; McCrelish v. 

15 Barb. T^. Y.) 9; Crowe v. Malba Churchman, 4 Rawle (Pa.) 26. 

Land Co., 76 Misc. 676, 135 N. Y. S. ™ Elphick v. Hofeman, 49 Conn. 

454; Allen v. Shackelton, 15 Ohio 331; Perrett v. Yardsdorfer, 37 

St. 145; Whittle v. Jones, 79 S. Car. Mich. 596; Sloan v. Holcomb, 29 

205, 60 S. E. 522. See also Cornell Mich. 153. 

V. Corbin, 64 Cal. 197; Manley v. ^Genthuer v. Fagan, 85 Tenn. 
Felty, 146 Ind. 194, 45 N. E. 74; 491, 3 S. W. 351. 
Lurch V. Holder (N. J.), 27 Atl. 81; '^Gardner v. Case, 111 Ind. 494, 
Bennett v. Bates, 26 Hun (N. Y.) 13 N. E. 36; Line v. Blizzard, 70 
364; Abbott v. Allen, 2 Johns. Ch. Ind. 23; Green v. Scranage, 19 Iowa 
(N. Y.) 519, 7 Am. Dec. 554; Champ- 461, 87 Am. Dec. 447; Berry v. Ber- 
lin V. Laytin, 6 Paige (N. Y.) 189, ry, 57 Kans. 691, 47 Pac. 837, 57 
affirmed 18 Wend. 407, 31 Am. Dec. Am. St. 351; Talley v. Robinson, 22 
382. See ante §§ 624-632. Grat. (Va.) 888 

» Wilson v. White, 84 Cal. 239, 24 »=McGuckin v. Kline, 31 N. J. Eq, 



61 THE ANSWER AND DEFENSES § 1492a 

such "was the purpose of the mortgagor, he can not avail himself of this 
defense.^^ 

A simulated decree of foreclosure and sale upon a mortgage upon 
real property, without the consent or Imowledge of the owner of the 
debt and instrument which the mortgage was given to secure, and in a 
name, as plaintiff, that does not appear in the mortgage or upon the 
records of the register of deeds, and a sale and conveyance pursuant to 
such simulated decree, are ineffectual upon the rights of the true owner 
of the debt and mortgage.^^ A party may not avail himself of the fact 
that he signed a mortgage without being aware of certain recitals 
therein, unless he alleges mutual mistake or fraud in the execution or 
procurement of the mortgage.^^ 

§ 1492a. Defense of fraudulent alteration. — A fraudulent altera- 
tion of a mortgage or of the note secured, made by the mortgagee, may 
defeat a recovery; but the burden of proof to show the alteration and 
the fraudulent intent is on the mortgagor.^^ To have this effect the al- 
teration must be one made by the holder of the mortgage in a material 
matter, with a fraudulent intent. An alteration not niade by a party 
to the instrument is without effect, and the original validity of the in- 
strument remains.^^ Thus the alteration of a mortgage by an agent 
of the mortgagee without his knowledge, so as to make it secure other 
notes, does not affect the validity of the mortgage, in an action to fore- 
close it for nonpayment of the notes which it was originally given to 
secure.^* 

If an alteration appears on the face of the mortgage note, and there 
is no evidence that it was made with a fraudulent intent, and the ef- 
fect of it is merely to make the note mature at an earlier date than it 
would as originally Written, such alteration is no defense to an action 
for foreclosure brought after the maturity of the note and mortgage- 

454; McConihe v. Fales, 107 N. Y. ^Brooks v. Allen, 62 Ind. 401; 

404, 14 N. E. 285. Nickerson v. Swett, 135 Mass. 514; 

»*Barwick v. Moyse, 74 Miss. 415, Hunt v. Gray, 35 N. J. L. 227; Sol- 

21 So. 238, 60 Am. St. 512 (citing on v. Savings Bank, 114 N. Y. 122, 

text). 21 N. E. 168; Martin v. Insurance 

'» Bradford Sav. Bank &c. Co. v. Co., 101 N. Y. 498, 5 N. E. 338; Ca- 

Crippen, 63 Nebr. 210, 88 N. W. 166. soni v. Jerome, 58 N. Y. 315, 321; 

=»McGaughey v. American Nat. Smith v. Kidd, 68 N. Y. 130, 141; 

Bank, 41 Tex. Civ. App. 191, 92 S. Robertson v. Hay, 91 Pa. St. 242; 

W. 1003. See also Cunningham v. Bigelow v. Stilphen, 35 Vt. 521. 

McCready, 219 Pa. 594, 69 Atl. 82. »Gleason v. Hamilton, 138 N. Y. 

But see Equitable Sav. &c. Assn. v. 353, 24 N. E. 283, affirming 19 N. Y. 

Barnes, 69 "Wash 1, 124 Pac. 118. S. 103. 

"Cosgrave v. Fanebust, 10 S. 
Dak. 213, 72 N. W. 469. 



§ 1492b roEECLOsuEE by equitable suit 62 

as originally ■written.^" Porgery of a mortgage is of course a defense, 
when proved, and a judgment canceling the apparent lien caused by 
such mortgage may be entered.*'- Such a mortgage can be validated 
or ratified only by execution of a new mortgage.*^ An answer alleging 
that defendant purchased the property subject to the mortgage and 
that a covenant to assume such mortgage was fraudulently inserted in 
the deed by his grantor, has been held sufficient without tender of a 
deed back to his grantor.*^ 

§ 1492b. Fraud as against mortgagor's creditors. — In an action by 
a mortgagee to foreclose a mortgage, against the assignee for the bene- 
fit of creditors of the mortgagor, an answer, seeking to avoid the mort- 
gage as in fraud of subsequent creditors, must expressly aver that it 
was executed with intent to defraud them, where by statute the ques- 
tion of fraudulent intent is one of fact.** 

A subsequent purchaser of the mortgaged premises, who has pur- 
chased with notice of the existence of the mortgage, can not set up that 
the note was without consideration, and was given for the purpose of 
defrauding the mortgagor's creditors, even as against an assignee of 
the note and mortgage after maturity.*' 

§ 1493. Usury is a defense.*" — ^The effect of the illegal rate of in- 
terest may be obviated if it can be shown that it was inserted by mis- 
take when the parties intended to provide for the legal rate only.*^ 
The law governing the contract as to usury is that of the state where 
it was made, if made in a state other than that in which the mort- 
gaged property is situate.*' It may be availed of by a wife for the pro- 

"Wolferman v. Bell, 6 Wash. 84, stead, 4 J. J. Marsh (Ky.) 608; Fan- 

32 Pac. 1017, 36 Am. St. 126. ning v. Dunham, 5 Johns. Ch. (N. 

"Capital Nat. Bank v. Williams, Y.) 122, 9 Am. Dec. 283; Fay v. 
35 Nebr. 410, 53 N. W. 202. See as Lovejoy, 20 Wis. 407; Piatt v. Rob- 
to evidence Oregon Mtg. Co. v. Es- inson, 10 Wis. 128. See ante §§ 
tes, 20 Wash. 659, 56 Pac. 834. 633-663. 

"Finley v. Babb, 144 Mo. 403, 46 "Griffin v. N. J. Oil Co., 11 N. J. 

S. W. 165. • Eq. 49. See ante §§ 633-649. 

« Sweetser v. Diehl, 14 Mont. 498, « Brower v. Life Ins. Co., 86 Fed. 

37 Pac. 10. 748; Crebbin v. Delbny, 70 Ark. 493, 

"Hutchinson v. First Nat. Bank, 69 S. W. 312; Sawyer v. Dickson, 

133 Ind. 271, 30 N. E. 952, 36 Am. 66 Ark. 77, 48 S. W. 903; Thomson 

St. 537. v. Kyle, 39 Fla. 582, 23 So. 12, 63 

"" Blake V. Koons, 71 Iowa 356, 32 Am. St. 193; Taylor v. American 

N. W. 379; Crosby v. Tanner, 40 Freehold L. Mtg. Co., 106 Ga. 238, 

Iowa 136. 32 S. E. 153; Commercial Bank v. 

*»De Butts V. Bacon, 6 Cranch. Auze, 74 Miss. 609, 21 So. 754; Dol- 

(U. S.) 252, 3 L. ed. 215; Cowles v. man v. Cook, 14 N. J. 56- Thomp 

WoodruflE, 8 Conn. 35; Cox v. Doug- son v. Ward, 33 Misc. 426 67 N Y. 

las, 12 Iowa 185; Outten v. Grin- S. 687; Meroney v. Atlanta Bldg. &c 



63 THE ANSWER AND DEFENSES § 1493 

tection of her homestead or of her dower interest, although her hus- 
band be estopped by his acts from setting it up as a defense. *° 

An answer pleading usury should set out the facts constituting it."" 
The defense must be specially pleaded.^^ If the answer alleges gener- 
ally that the mortgage contract is usurious without any specific allega- 
tion, the defense must be limited to a violation of the statute of the 
state regarding usury, and its usurious character under any other stat- 
ute can not be shown ;^^ and such an answer under the systems of 
pleading and practice generally in vogue would amount to nothing.^^ 
The answer must allege the usury, and strict proof of the usurious 
character of the mortgage must be given.^* After default has been 
entered, it would seem that it will not be removed to allow this de- 
fense except upon special terms. °^ 

Whether the defense of usury is a personal privilege of the debtor, 
or may be taken advantage of by others, is a question upon which the 
courts are divided in opinion. On the one hand, it is affirmed that 
any person who has become interested in the property subject to the 
mortgage, unless he has bought expressly subject to the mortgage, or 
has assumed the payment of it, may use this defense.^" Thus a second 
or other subsequent mortgagee may make this defense.°^ 

A judgment creditor of the mortgagor may avail himself of the de- 

Assn., 116 N. Car. 882, 21 S. E. 924, Assn. v. Westfall, 75 W. Va. 305, 47 

41 Am. St. 841; Bank v. Doherty, S. E. 74. 

42 Wash. 317, 84 Pac. 872, 4 L. R. "^Atwater v. "Walker, 16 N. J. Eq. 
A. (N. S.) 1191, 114 Am. St. 123. 42. 

See ante § 657. « Hosier v. Norton, 83 111. 519. 

"Campbell v. Babcock, 27 Wis. "Hunter v. Linn, 61 Ala. 492; 

512. Richards v. Worthley, 5 Wis. 73. 

™ Stanley v. Chicago Trust &c. See also Baldwin v. Norton, 2 Conn. 

Bank, 165 111. 295, 46 N. E. 273; 161; Haher v. Lanfrom, 86 111. 513; 

Haize v. Bradley, 23 Ky. L. 993, 64 Wheaton v. Voorhis, 53 How. Pr. 

S. W. 655; HcKinley-Lanning Loan (N. Y.) 319. 

&c. Co. V. Aldrich, 50 Nebr. 785, 70 "Bard v. Fort, 3 Barb. Ch. (N. 

N. W. 399; Hannas v. Hawk, 24 N. Y.) 632. 

J. Eq. 124; Jordan v. Warner, 107 "Banks v. HcClellan, 24 Hd. 62, 

Wis. 539, 83 N. W. 946. 87 Am. Dec. 594; HcAlister v. Jer- 

" Peterson v. Berry, 125 Fed. 902; man, 32 Hiss. 142; Doll v. Hollen- 

Clark V. Johnson, 133 Ala. 432, 31 beck, 19 Nebr. 639; Gunnison v. 

So. 960; Farley Nat. Bank v. Hen- Gregg, 20 N. H. 100; Cummins v. 

derson, 118 Ala. 441, 24 So. 428; Wire, 6 N. J. Eq. 73; Post v. Dart, 

Burnett v. Davis, 124 Ga. 541, 52 8 Paige (N. Y.) 639; Brooks v. Av- 

S. E. 927; Baker v. Hagrath, 106 ery, 4 N. Y. 225; Union Bank v. 

Ga. 419, 32 S. E. 370; Hollis v. Cov- Bell, 14 Ohio St. 200; Lloyd v. Scott, 

enant Bldg. Assn., 104 Ga. 318, 31 4 Pet. (U. S.) 205, 7 L. ed. 833. 

S. E. 215; Garlich v. Hutual Loan ""Greene v. Tyler, 39 Pa. St. 361. 

&c. Assn., 116 111. App. 311; Bird v. But see Stickney v. Hoore, 108 Ala. 

Kendall, 62 S. Car. 178, 40 S. E. 590, 19 So. 76. 
142; Washington Nat. Bldg. &c. 



§ 1494 FORECLOSURE BY EQUITABLE SUIT 64 

fense of usury to the extent of his legal lien.°* Creditors for whose 
benefit land has been conveyed in trust may set up this defense, though 
the trustees have neglected to do so.^° Although a judgment for the 
full amount of the note and an order for sale have already been en- 
tered, subsequent incumbrancers may before final distribution, by an- 
swer or cross-petition, set up the defense of usury, and have the pro- 
ceeds, to the amount of the usurious interest, applied to the payment 
of their liens."" 

On the other hand, the weight of authority at the present time 
favors the rule, that when the debtor is himself willing to abide by 
the terms of his contract, no one else can interfere and set up the de- 
fense of usury.°^ The fact that a usury law does not make, void usuri- 
ous contracts has been held to be decisive in favor of this view.°^ 

In litigation after a judgment of foreclosure, the mortgagor can not 
plead usury in the mortgage debt, unless the judgment be shown to 
have been procured by accident, fraud, or mistake, or the usury ap- 
pears on the face of the judgment."* It has been held that a statute 
limiting the rate of interest on chattel loans and making loans in vio- 
lation thereof absolutely void is without application to a loan secured 
by mortgage on real estate although some personal property may also 
be covered by the mortgage."* 

§ 1494. Defense of usury waived or lost. — Usury can not be set up 

as a defense by one who has purchased land and assumed the mortgage, 
or has purchased subject to a mortgage, the amount of which is made 
part of the consideration of the purchase, whether he has assumed the 
payment of it or not."^ When the purchaser sets up this defense, the 

■^Post V. Dart, 8 Paige (N. Y.) Kans. 355, 22 Am. Rep. 287 (where 

639. the cases are reviewed and coUect- 

■» Union Bank t. Bell, 14 Ohio St. ed) ; Campbell v. Johnston, 4 Dana 

200. (Ky.) 177, 179; Farmers' & Mechan- 

«° Brooke v. Morris, 2 Cin. (Ohio) ics' Bank v. Kimmel, 1 Mich. 84; 

528. Ransom v. Hays, 39 Mo. 445; Reap 

«* Stickney v. Moore, 108 Ala. 590, v. Battle, 155 Pa. St. 265, 26 Atl, 

19 So. 76; Speakman v. Oaks, 97 439; Stayton v. Riddle, 114 Pa. St 

Ala. 503, 11 So. 836; Fielder v. 464, 7 Atl. 72; Miners' Trust Co 

Warner, 45 Ala. 429; Cain v. Gimon, Bank v. Roseberry, 81 Pa. St. 309- 

36 Ala. 168; Loomis v. Eaton, 32 Bachdell's Appeal, 56 Pa. St 386; 
Conn. 550; Scott v. Williams, 100 Bonnell's Appeal (Pa.) 11 Atl 211- 
Ga. 540, 285 S. E. 243, 62 Am. St. Austin v. Chittenden, 33 Vt 553 
340; Primley v. Shirk, 163 111. 389, "^Miners' Trust Co. Bank v. Rose- 
45 N. E. 247; Adams v. Robertson, berry, 81 Pa. St 309 

37 111 45; Studabakerv. Marquardt, '"'McLaws v. Moore, 83 Ga. 177, 9 
55 Ind. 341; Carmichael v. Bodflsh, S. E. 615 

32 Iowa 418; Huston v. Stringham, « Chipman v. Farmers' &c. Nat. 

? Yo^n ?,' •.^^!" "^;..P;^''*^' ^^ ^^'^^' 121 Md. 343, 88 Atl. 151. 

Iowa 430; Pntchett v. Mitchell, 17 «De Wolf v. Johnson, 10 Wheat, 



65 THE ANSWER AND DEFENSES § 1495 

complainant can not overcome it by proof that the lands were conveyed 
to him subject to the mortgage, unless his pleading set forth the exe- 
cution and terms of the conveyance.'^ But a purchaser who has 
bought not merely the equity of redemption, but the whole title, pay- 
ing the full price, with no deduction on account of the mortgage, may 
set up usury.*^ A mortgagor who has conveyed the property subject 
to a mortgage wliich is usurious, and has afterward taken a reconvey- 
ance in which nothing is said about the mortgage, is entitled to set up 
the defense of usury.'^ It was suggested that if there had been a per- 
sonal liability on the part of the intermediate purchaser to pay the 
mortgage debt, it might not be in his power to release that liability by 
such a reconveyance without the consent of the mortgagee. 

Usury can not be set up against a mortgage which is given wholly or 
in part to secure the price of property purchased by the mortgagor, 
though the price be large, and more than others would pay for it, pro- 
vided the transaction was made in good faith."^ 

Where the principal sum secured by a mortgage, and the interest 
thereon, are not tainted with usury, but the mortgage provides for in- 
terest at a usurious rate upon money advanced by the mortgagee for 
the payment of taxes and insurance, his right to recover the principal 
and interest of the mortgage debt is not affected.^" 

§ 1495. Defense of usury where mortgage made to be sold at dis- 
count. — Accordingly a mortgagor may be estopped from setting up 
the defense of usury. If a mortgage be made for the purpose of being 
sold at a discount to some third person, and subsequently assigned at 

(U. S.) 367, 6 L. ed. 343; Price v. Y.) 639; Cramer v. Lepper, 26 Ohio 

Pollock, 47 Ind. 362, 366, per Down- St. 59, 20 Am. Rep. 756; Reed v. 

ey, J.; Stein v. Indianapolis, &c. Eastman, 50 Vt. 67; Dickenson v. 

Assn., 18 Ind. 237, 81 Am. Dec. 353; Bankers' Loan &c. Co., 93 Va. 4498, 

Butler V. Myer, 17 Ind. 77; Wright 25 S. E. 548; Thomas v. Mitchell, 

V. Bundy, 11 Ind. 398; Huston v. 27 Wis. 414. When grantee's title 

Stringham, 21 Iowa 36; Greither v. is in hostility to the mortgage, see 

Alexander, 15 Iowa 470; Perry v. Chamberlain v. Dempsey, 9 Bosw. 

Kearns, 13 Iowa 174; Hough v. Hor- (N. Y.) 212. See ante §§ 633, 644, 

sey, 36 Md. 181, 11 Am. Rep. 484; 745. 

Sellers v. Botsford, 11 Mich. 59; « Hetfield v. Newton, 3 Sandf. Ch. 

Conover v. Hobart, 24 N. J. Eq. 120; (N. Y.) 564. 

Merchants' Ex. Nat. Bank v. Com- "Lilienthal v. Champion, 58 Ga. 

mercial Warehouse Co., 49 N. Y. 158; Maher v. Lanfrom, 86 111. 513. 

635, 643, note; Freeman v. Auld, 44 ""Knickerbocker Life Ins. Co. r. 

N. Y. 50; Mason v. Lord, 40 N. Y. Nelson, 13 Hun (N. Y.) 321, affd. 

476; Hartley v. Harrison, 24 N. Y. 7 Abb. N. Cas. 170. 

170; Sands v. Church, 6 N. Y. 347; «>Saxe v. Womack, 64 Minn. 162, 

Hardin v. Hyde, 40 Barb. (N. Y.) 66 N. W. 269. 

435; Morris v. Floyd, 5 Barb. (N. "Hughes Bros. Mfg. Co. v. Con- 

Y.) 130; Post V. Dart, 8 Paige (N. yers, 97 Tenn. 274, 36 S. W. 1093. 

5 — Jones Mtg. — ^Vol. III. 



§ 1496 FOEECLOSUEE BY EQUITABLE SUIT 66 

a considerable discount under a promise of the mortgagor that he 
would make an affidavit to the effect that the consideration of the 
mortgage was the full amount expressed in it, and that there was no 
defense or set-off, he would be precluded from contradicting his affi- 
davit if he obtained the money upon the strength of it.'^ And so if a 
mortgagor, upon the assignment of a mortgage by the mortgagee, signs 
a certiiicate stating that the whole principal sum and interest thereon 
is due without any offset or legal or equitable defense, the mortgagor 
is estopped from setting up usury.'^ But where part of the money is 
paid before the giving of the affidavit, the creditor does not, in paying 
it, act upon the statements contained in the affidavit, and therefore 
the mortgagor is not estopped from asserting the usurious nature of 
the transaction so far as the amount then paid is concerned. That the 
creditor believes that an estoppel will be made in the future avails 
nothing. ''* 

§ 1496. Set-off and counterclaim. — Upon a bill to foreclose, the 
mortgagor is allowed to set off a debt due to him from the complain- 
ant, not only in cases where this would be allowed in actions at law,'* 
but also in cases of peculiar equity not strictly within the rules of 
law;'^ as for instance, in an action against a mortgagor and his 
surety on a bond secured by the mortgage, a debt due the mortgagor 

"Real Estate Trust Co. v. Rader, gage debt. Henninghausen v. Tisch- 

53 How. Pr. (N. Y.) 231. er, 50 Md. 583. But it has been held 

" Smyth v. Lombardo, 15 Hun (N. that the mortgagor can not set up 

Y.) 415. the mortgagee's indebtedness to 

'"Payne v. Burnham, 62 N. Y. 69. him as a defense to foreclosure pro- 

" Conner v. Smith, 88 Ala. 300, 7 ceedings instituted by reason of his 
So. 150; Knight v. Drane, 77 Ala. failure to pay an instalment of in- 
371; Gafford v. Proskauer, 59 Ala. terest. Peterson v. Johnson, 20 
264; Hess v. Final, 32 Mich. 515; Wash. 497, 55 Pac. 932. 
Lockwood V. Beckwith, 6 Mich. 168; ™ Goodwin v. Keney, 49 Conn. 
Hunt V. Chapman, 51 N. Y. 555; 563; Smith v. Billings, 170 111. 543, 
National F. Ins. Co. v. McKay, 21 49 N. E. 212; Raleigh v Raleigh, 
N. Y. 191, 196; Irving v. De Kay, 35 111. 512; Salladin v. Mitchell, 42 
10 Paige (N. Y.) 319; Holden v. Gil- Nebr. 859, 61 N. W. 127; Currie v. 
bert, 7 Paige (N. Y.) 208; Chapman Cowles, 6 Bosw. (N. Y ) 452- Hicks- 
V. Robertson, 6 Paige (N. Y.) 627, ville &c. R. Co. v. Long Island R 
31 Am. Dec. 264; Somerset Colliery Co., 48 Barb. (N Y) 355- Bell v 
Co. V. John, 227 Pa. 228, 75 Atl. Ward, 10 R. I. 503. An answer in 
1085. In earlier cases it was held foreclosure proceedings which al- 
that the defendant could not set off leges that the mortgage sought to 
a demand, but must resort to a be foreclosed is invalid and that 
fx?^^"^\"- ooT'""''? \^^^^^J ^°P^- defendant claims title under a sub- 
(N. Y.) 239. A shareholder and sequent mortgage, does not set up 
mortgagor in a building association a counterclaim, but an equitable de- 
may set off claims held by him fense. Caryl v. Williams, 7 Lans. 
against it, in release of his mort- (N. Y.) 416. ■"<*"!'■ 



67 THE ANSWER AND DEFENSES § 1496 

from the plaintiff may be allowed in set-off. The joint bond in such 
case is nothing more than a security for the separate debt of the mort- 
gagor. The mortgage is executed by him alone, and is a lien upon his 
land, and his interests alone are affected by the foreclosure. That a 
joint judgment might be rendered on the bond for any deficiency does 
not exclude the allowance of the counterclaim.'^^ The defense must be 
pleaded,^' and the evidence, to support it, direct and definite in char- 
acter.''* The burden of proof is on the defendant.'* The defendant 
can not make a counterclaim, and demand judgment upon it, unless 
the plaintiff is personally liable to him. His counterclaim must in 
some way go to qualify or defeat the plaintiff's demand.'" The mort- 
gagor can not set off a demand he has against a prior holder of the 
mortgage and note, unless the demand is founded on an agreement sup- 
ported by a new consideration, in pursuance of which such holder pro- 
cured the mortgage note, or there is a special equity which withdraws 
the demand from the operation of the general rule.'^ The demand 
must be of such a nature as .will sustain an action by the defendant 
against the plaintiff.*^ 

In an action to foreclose a mortgage for purchase-money of land, in 
which a personal judgment is demanded for any deficiency of the pro- 
ceeds of sale to pay the mortgage, interest, and costs, a breach of the 
covenant of seisin in plaintiff's deed of the premises to defendant is a 
proper counterclaim.*^ So is a claim for shortage in the quantity of 
land conveyed, the vendor having misrepresented the quantity.** The 
defendant's claim in such case arises out of a contract, and was a cause 
of action existing at the commencement of the foreclosure suit.** 

To entitle the defendant to set off a debt, it must have been due to 

"Bathgate v. Haskin, 59 N. T. & C. 96; Mills v. Carrier, 30 S. Car. 

533; Holbrook v. American F. Ins. 617, 9 S. E. 350. 

Co., 6 Paige (N. Y.) 220; Ex parte "-Brown v. Scott, 87 Ala. 453, 6 

Hanson, 12 Ves. 346. So. 384. 

"Lafayette Trust Co. T. Richards, »^Cragin v. Lovell, 88 N. Y. 258; 

81 Misc. 338, 143 N. Y. S. 483; Rad- Vassear v. Livingston, 13 N. Y. 248; 

ford v. Smith, 149 Wis. 163, 135 N. Ward v. Comegys, 2 How. Pr. (N. 

W. 472. S.) (N. Y.) 428; McKensie v. Far- 

"Cahill V. Lauf, 133 111. App. 607; rell, 4 Bosw. (N. Y.) 192. A claim 

Baker v. Tustin, 245 Pa. 499, 91 Atl. may be a valid set-off. 

891. ''Merritt v. Gouley, 12 N. Y. S. 

™Doolittle V. Nurnberg (N. Dak.), 132; Wilson v. Ott, 173 Pa. 253, 34 

147 N. W. 400. Atl. 23, 51 Am. St. 767. 

'"Williams v. Pratt, 10 Cal. App. "McMichael v. Webster, 54 N. J. 

625, 103 Pac. 151; Aultman &c. Co. Eq. 478, 35 Atl. 663. 

V. Meade, 28 Ky. L. 208, 89 S. W. ^Bathgate v. Haskin, 59 N. Y. 

137; National F. Ins. Co. v. McKay, 533; Hunt v. Chapman, 51 N. Y. 

21 N. Y. 191, 196; Lathrop v. God- 555; Seligman v. Dudley, 14 Hun 

frey, 3 Hun (N. Y.) 739, 6 Thomp. (N. Y.) 186. It is true that it has 



§ 1496 FOEBCLOSUKE BY EQUITABLE SUIT 68 

him from the plaintifE at the time the foreclosure suit was commenced.'" 
Generally a claim for unliquidated damages can not be set off when the 
defendant has an adequate remedy at law;*^ but under the codes of 
practice in some states such a claim may be allowed.*^ As a general 
rule matters sounding in tort can not be pleaded by way of set-ofE 
against a mortgage debt.^° In some Jurisdictions, however, the rule 
is not strictly followed, and here a set-off or counterclaim for fraud 
and deceit in the sale of the property may be interposed in an action 
to foreclose a mortgage.^" 

An overpayment by mistake upon the mortgage may be set up by 
the defendant, who may have judgment for the amount so overpaid."^ 
The defendant may set up a claim for rent or damages arising from 
the occupation and use of the property by the plaintiff prior to the 
foreclosure;"^ or a claim for damages for the wrongful appropriation 
of other security given to secure the same debt f^ or a claim for waste 
by the mortgagee in possession.** 

An answer that the mortgage was given by one partner to another 
to raise money for partnership purposes; that, although the partner- 
ship business had ceased, the parties were still partners; that, under 
the partnership agreement and transactions, the plaintiff is indebted 
to the defendant; and that there had been no settlement of the part- 
nership affairs, — is sufBcient to entitle defendant to an accounting, the 

been held that a breach of the cov- 219 Pa. 380, 68 Atl. 843; Cleaver v. 

enant of a deed without eviction Mathews, 83 Va. 801, 3 S. E. 439. 

can not be pleaded in bar of a suit ''Mahone v. Elliott (Ga.), 80 S. 

to foreclose a purchase-money mort- E. 713; Peterson v. Reid, 76 N. J. 

gage. In McConihe v. Fales, 107 N. Eq. 377, 74 Atl. 662; Schubart v. 

Y. 404, 14 N. B. 285, it Is held that Harteau, 34 Barb. (N. Y.) 447; Lig- 

a failure of title is no defense to a not t. Redding, 4 B. D. Smith (N. 

foreclosure suit without an allega- Y.) 285; Hattier v. Etinaud, 2 De- 

tion of fraud in sale or an eviction, sau. 570. 

But in that case there was no *" Insurance Co. T. Parker, 64 

breach of covenant set up as a Nebr. 411, 89 N. W. 1040; Watts v. 

counterclaim to reduce the amount Gantt, 42 Nebr. 869, 61 N. W. 104; 

due in equity upon the bond. The People t. Dennlson, 84 N. Y. 272; 

late case of Kirtz v. Peck, 113 N. Y. Bell v. Lesbini, 66 How. Pr. (N. Y.) 

222, 21 N. E. 130, is to the same 385; Rogers v. "Watson, 81 Tex. 400, 

effect. 17 S. W. 29. 

*> Conner v. Smith, 88 Ala. 300, 7 ^ Secor v. Siver (Iowa), 146 N. 

So. 150; Thompson v. Ellsworth, 1 W. 845. 

Barb. Ch. (N. Y.) 624; Knapp v. " Leach v. Vining, 18 N. Y. S. 822. 

Burnham, 11 Paige (N. Y.) 330; "^First Nat. Bank v. Parker, 28 

Holden v. Gilbert, 7 Paige (N. Y.) Wash. 234, 68 Pac. 756. 

627. '"McHard v. Williams, 8 S. Dak. 

" Gafford v. Proskauer, 59 Ala. 381, 66 N. W. 930, 59 Am. St. 766. 

264; .Somerset Colliery Co. v. John, «McMichael v. Webster, 54 N. J. 

Eq. 478, 35 Atl. 663. 



69 THE AXSWER AND DEFENSES § 1498 

indebtedness as alleged being a proper matter of defense."' Where the 
plaintiff demands a deficiency judgment the defendant is allowed to 
counterclaim for a breach of covenant of the deed of plaintiff against 
incumbrances."" 

The right to amend at the trial so as to set up a counterclaim may 
be denied where the party at the time of answering knew all the facts 
on which his attempted counterclaim was based."^ 

§ 1497. Set-off where suit brought in name of person other than 
real owner. — If the suit to foreclose be brought in the name of a per- 
son other than the real owner of the mortgage note, the defendant may 
have the benefit of any defense or set-off he has against the real owner. 
No other defense can be set up on the ground that the holder of the 
mortgage security is prosecuting the foreclosure for the benefit of an- 
other person."' 

§ 1498. Set-off where suit regarded as proceeding in rem. — In 

New Jersey, however, a foreclosure suit is regarded as so far a pro- 
ceeding in rem as to exclude the defense of set-off. Nothing can be 
set up in such suit, by way of satisfaction of the mortgage, in whole or 
in part, except payment. There must either have been a direct pay- 
ment of part of the debt, or an agreement that the sum proposed to be 
offset should be received and credited as payment;"" because, if there 
was no actual appropriation by the debtor at or before the time of pay- 
ment, the creditor may apply the payment to any other claim he has, 
at his discretion.^ An independent claim of the mortgagor can not be 
set off.^ A payment on account of the mortgage debt is not a cause of 
action, which must be pleaded as a counterclaim to entitle the defend- 
ant to prove it. An answer of payment in full or in part is sufficient: 



3 



"» Gassert v. Black, 11 Mont. 185, v. Bergen, 23 N. J Eq. 397; Dolman 

27 Pac. 791. v. Cook, 14 N. J. Bq. 56. It is pro- 

»* Simon v. Neef, 144 N. Y. S. 753. vided by statute in New Jersey that 

»' Levin v. Gates, 71 Misc. 234, 128 an assignee of a mortgage may avail 

N. Y. S. 746. himself of all just set-offs and de- 

'^ Chase v. Brown, 32 Mich. 225; fenses which would have heen al- 

Spear v. Hadden, 31 Mich. 265; lowed if his assignor had brought 

Lathrop v. Godfrey, 3 Hun (N. Y.) the action. Rev. Stat. 1877, p. 708, 

729. § 31; Comp. Stat. 1910, p. 433, § 61; 

" Conaway v. Carpenter, 58 Ind. Woodruff v. Morristown Inst, for 

477; Conover v. Sealy, 45 N. J. Eq. Savings, 34 N. J. Eq. 174. 

589, 19 Atl. 616; Parker v. Hartt, 32 ^Bird v. Davis, 14 N. J. Eq. 467. 

N. J. Eq. 235; Vanatta v. N. J. Mut. ^^ Barnes v. Moore, 63 Ga. 164; 

L. Ins. Co., 31 N. J. Eq. 17; William- White v. Williams, 3 N. J. Eq. 376. 

son V. Fox, 30 N. J. Eq. 488; Dudley " Hendrix v. Gore, 8 Ore. 406. 



§ 1499 FOEECLOSUEB BY EQUITABLE SUIT 70 

A mortgagor may avail himself by answer and set ofE rents re- 
ceived by the mortgagee in possession.* 

A mortgage to secure future advances is valid only to the amount 
of the advances actually made; but the mortgagee's failure to com- 
plete the contemplated advances affords ground for only nominal dam- 
ages by way of set-off;^ unless, perhaps, there was an express obliga- 
tion to make them. Under a covenant by the mortgagee to make par- 
tial releases, damages sustained by his refusal to release may be a 
matter of equitable offset to his claim upon the mortgage." 

§ 1499. Set-off of illegal interest paid. — Illegal interest previously 
paid upon the mortgage or included in it may be offset by the mort- 
gagor, '^ as also may be a payment of a bonus in addition to the lawful 
interest paid to procure an extension of time within which to pay the 
debt.* But one who has purchased subject to a mortgage, or has as- 
sumed its payment, is not entitled to the benefit of usurious interest 
paid by the mortgagor.' 

§ 1500. Defense of outstanding paramount title. — To a foreclosure 
suit on a purchase-money mortgage, it is no defense that there is an 
outstanding paramount title or incumbrance when there has been no 
actual eviction. The mortgagor is left to his remedy on the covenant.^" 
"Where there is a covenant against incumbrances, the mortgagor 
may be allowed a deduction for prior mortgages, taxes, assessments, 
or judgments. "Where there is a covenant of title and there has been 
an eviction by title paramount, relief may be given to the mortgagor. 

*Krueger v. Ferry, 41 N. J. Eq. Bourgardez, 23 Fla. 264, 2 So. 310; 

432; affd. Ferry v. Krueger, 43 N. J. Hanna v. Shields, 34 Ind. 84; Bm- 

Eq. 295, 14 Atl. 811. mons v. Gille, 51 Kans. 178, 32 Pac. 

"Dart v. McAdam, 27 Barb. (N. 916 (quoting text); Gayle v. Fattle, 

Y.) 187. 14 Md. 69; Sturgis Nat. Bank v. 

"Warner v. Gouverneur, 1 Barb. Levanseler, 115 Mich. 372, 73 N W 

(N. Y.) 36. 399; McLelland v. A. P. Cook Co., 94 

'Harbison v. Houghton, 41 111. Mich. 528, 54 N. W. 298; Pfirrman v 

522; Havens v. Jones, 45 Mich. 253, Wattles, 86 Mich. 254, 49 N. W 40- 

7 N. W. 818; Pond v. Causdell, 23 McConihe v. Fales, 107 N Y 404 14 

N. J. Eq. 181; Ward v. Sharp, 15 N. E. 285; York v. Allen, 30 n' Y 

Vt. 115. See ante § 648. 104; Abbott v. Allen, 2 Johns. Ch. 

«Real Estate Trust Co. v. Keech, (N. Y.) 519, 7 Am. Dec. 554- Piatt 

7 Hun (N. Y.) 253; McGregor v. v. Gilchrist, 3 Sandf (N Y ) 118- 

Mueller, 1 Cin. (Ohio) 486. Johnson v. White, 60 Ore. 611 119 

"Speakman v. Oaks, 97 Ala. 503, Pac. 769; Edgar v. Golden 36* Ore 

11„S°- 836. 448, 48 Pac. 1118, 60 Pac. 2; Munro 

Peters v. Bowman, 98 IT. S. 56, v. Long, 35 S. Car. 354 615 14 S E 

25 L. ed. 91; Alden v. Pryal, 60 Cal. 824; Lessly v. Bowie 27 S Car 193' 

215; Adams v. Fry, 29 Fla. 318, 10 3 S. E. 199; Kinports v. Rawson, 29 

So. 559 (quoting text) ; Randall v. W. Va. 487, 2 S. E. 85. 



71 THE ANSWBE AND DEFENSES § 1500 

Eelief may also be given when the mortgagor has been defrauded, or 
has by mistake obtained less land than he bargained for. The fore- 
closure may also be arrested pending action at law to try the title of 
an adverse claimant; but no relief can be given to the mortgagor on 
his assertion of an outstanding title where there has been no eviction 
and no action is pending to enforce it. In the latter case the mort- 
gagor will be left to his remedy at law on the covenants."^^ A de- 
fense to the foreclosure of a purchase-money mortgage, alleged to have 
existed at the time of its inception, can only arise when fraud has 
been practiced by the mortgagee in procuring its execution, or there 
has been a failure of consideration.^^ The mortgagor must not only 
show the fraudulent representations, but that he relied upon them 
and executed his mortgage accordingly.^^ A breach of the covenant 
against incumbrances in his grantor's deed is no defense to a fore- 
closure of the mortgage unless the mortgagor has been evicted.^* Evic- 
tion from a portion of the land is a partial defense.^ ° 

If, however, the mortgagor has been evicted, or, according to some 
authorities, if an ejectment suit has been commenced against him on 
such outstanding title, the court will interfere.^^ In the latter case, 
proceedings upon the mortgage, even if it be a power of sale mortgage 
not requiring a suit, will be enjoined until the action of ejectment is 
determined.^' Although there is an objection to undertaking a set- 
tlement of unliquidated damages in a court of equity, yet this may be 
done either by directing an issue, or by a reference to a master to ascer- 
tain the damages, before entering a decree upon the mortgage; or 
the court may avoid this objection by staying the foreclosure suit until 
the damages arising from the failure of title are ascertained in a suit 
at law.^^ 

"Redrew v. Sparks, 76 N. J. Eq. N. J. Eq. 412; Shannon v. Marselis, 

133, 79 Atl. 450. 1 N. J. Eq. 413; Ryerson v. "Willis, 

"McConihe v. Fales, 107 N. Y. 81 N. Y. 277; "Withers v. Morrell, 3 

404, 14 N. E. 285, per Ruger, C. J.; Edw. (N. Y.) 560. "Whether there 

Rockwell V. Wells, 104 Mich. 57, 62 can be any defense by way of re- 

N. W. 165; Frenche v. McConnell coupment, before eviction, was 

(N. J. L.), 38 Atl. 687. questioned in Church v. Fisher, 40 

"Ackman v. Jaster, 179 Pa. St. Ind. 145. 

463, 36 Atl. 324. "Johnson v. Gere, 2 Johns. Ch. 

"Frenche v. McConnell (N. J. (N. Y.) 546; Edwards v. Bodine, 26 

L.), 38 Atl. 687. "Wend. (N. Y.) 109. But see to the 

" Chaffey v. Boggs, 179 Pa. St. contrary, Piatt v. Gilchrist, 3 Sandf. 

301, 36 Atl. 241. (N. Y.) 118, and cases cited. 

"Taylor v. "Whitmore, 35 Mich. "Couse v. Boyles, 4 N. J. Eq. 212, 

97; Price v. Lawton, 27 N. J. Eq. 38 Am. Dec. 514; Coster v. Monroe 

325; Glenn v. Whipple, 14 N. J. Eq. Mfg. Co., 2 N. J. Eq. 467. 
50; "Van Waggoner v. McEwen, 2 



§ 1501 FORECLOSURE BY EQUITABLE SUIT 73 

The same rule applies to a bill to enforce a lien for purchase-money. 
"The rule," says Mr. Justice Swayne of the Supreme Court, "is 
founded in reason and justice. A different result would subvert the 
contract of the parties, and substitute for it one which they did not 
make. In such eases the vendor by his covenants, if there be such, 
agrees upon them, and not otherwise, to be responsible for defects of 
title. If there are no covenants, he assumes no responsibility, and the 
other party takes the risk. The vendee agrees to pay according to his 
contract, and secures payment by giving a lien upon the property. 
Here it is neither expressed nor implied that he may refuse to pay 
and remain in possession of the premises ; nor that the vendor shall be 
liable otherwise than according to his contract."^^ 

§ 1501. Allegations of failure of title. — This defense is founded on 
the covenants. An answer to a suit to foreclose a mortgage given for 
the purchase-money, which alleges a failure of title, must, in the ab- 
sence of any allegation of fraud, either set out the deed or the cove- 
nants contained in it;^" because the defense is founded on the cove- 
nants of warranty or seisin. Therefore, where the deed contains no 
such covenants, as in the case of a deed made by executors, containing 
no covenants except against the acts of themselves and their testator, 
it is no defense that a portion of the property was covered by an in- 
cumbrance not specified in the covenant.^^ The existence of a lease 
upon part of the premises is no defense to a suit to foreclose the pur- 
chaser's mortgage, if it is no breach of any of the covenants of his 
deed, and his grantor did not fraudulently mislead him.^^ No cove- 
nant will be implied in such a mortgage.^^ 

A purchaser who has not been disturbed and has not suffered any 
damages can not defend against a purchase-money mortgage given to 
a corporation, on the ground that the corporation has failed to perform 
an agreement executed by its president without authority.^* 

§ 1502. Failure of title where mortgagor in undisturbed possession. 

— If the mortgagor is in undisturbed possession, and no suit .is pend- 
ing for the possession of the property by an adverse claimant, the 
courts will not generally interfere to restrain the vendor from fore- 

'» Peters v. Bowman, 98 U. S. 56, 396; Sandford v. Travers. 40 N Y. 

25 L. ed. 91. 140. 

»Churcli V. Fisher, 46 Ind. 145. "= Sandford v. Travers, 7 Bosw. 

See also Davis v. Bean, 114 Mass. (N. Y.) 498. 

358, 360; Roake v. Sullivan, 69 =" Brown v. Phillips, 40 Mich. 264. 

Misc 429, 125 N. Y. S. 835. « Sturgis National Bank v. Le- 

^ Barry v. Guild, 126 111. 439, 18 vanseler, 115 Mich. 372 73 N W 

N. E. 759; Niles v. Harmon, 80 111. 399. 



73 



THE ANSWER AND DEFENSES 



1502 



closing a mortgage given for the price of land conveyed with full cove- 
nants of warranty, on account of any alleged defects in the title not 
amounting to a total failure of consideration, unless there was fraud 
in the sale.''° For will they allow a counterclaim on account of an 
outstanding incumbrance, unless the mortgagor has paid such incum- 
brance in whole or in part, or has lost the land in whole or in part un- 
der such incumbrance.''' Before this defense will avail, there must be 
either an eviction or something tantamount to it.''^ 

It is not always necessary that the purchaser should show that he 
has been dispossessed to establish eviction; it may be established by 
proof that at the time of his purchase the lands were in the actual pos- 
session of one claiming under a title hostile to his vendor, by reason 
of which he had not and could not obtain possession.^* Neither is it 



"Byrd v. Turpin, 62 Ga. 591; 
Douglass V. Thomas, 103 Ind. 187, 
188; Stahl v. Hammontree, 72 Ind. 
103; Mahoney v. Robbins, 49 Ind. 
147; McLelland v. A. P. Cook Co., 
94 Mich. 548, 54 N. W. 298; Smith 
v. Fitlng, 27 Mich. 148; Key v. Jen- 
nings, 66 Mo. 356, 368; Hulfish v. 
O'Brien, 20 N. J. Eq. 230; Hile V. 
Davison, 20 N. J. Eq. 228; Miller v. 
Gregory, 16 N. J. Eq. 274; Glenn v. 
Whipple, 12 N. J. Eq. 50; Van Wag- 
goner V. McEwen, 2 N. J. Eq. 412; 
Shannon v. Marsels, 1 N. J. Eq. 413, 
426; Frenche v. McConnell (N. J. 
L.), 38 Atl. 687; Peabody v. Kent, 
213 N. Y. 154, 107 N. E. 51; Ryerson 
V. Willis, 81 N. Y. 277; Parkinson 
v. Sherman, 74 N. Y. 88, 30 Am. 
Rep. 268; York v. Allen, 30 N. Y. 
104; Curtiss v. Bush, 39 Barb. (N. 
Y.) 661; Banks v. Walker, 3 Barb. 
Ch. (N. Y.) 438; Miller v. Avery, 2 
Barb. Ch. (N. Y.) 582; Sandford v. 
Travers, 7 Bosw. (N. Y.) 498; With- 
ers V. Morrell, 3 Edw. (N. Y.) 560; 
Leggett V. McCarty, 3 Edw. (N. Y.) 
124; Denston v. Morris, 2 Edw. (N. 
Y.) 37; Burke v. Nichols, 21 How. 
Pr. (N. Y.) 459, 34 Barb. 430, 2 
Keyes 670; Parkinson v. Jacobson, 
13 Hun (N. Y.) 317; Chesterman v. 
Gardner, 5 Johns. Ch. (N. Y.) 29, 9 
Am. Dec. 265; Abbott v. Allen, 2 
Johns. Ch. (N. Y.) 519, 7 Am. Dec. 
554; Bumpus v. Platner, 1 Johns. 
Ch. (N. Y.) 213, 218; Davison v. De 
Freest, 3 Sandf. Ch. (N. Y.) 456; 
Edwards v. Bodine, 26 Wend. (N. 
Y.) 109; Tallmadge v. Wallis, 25 



Wend. (N. Y.) 107; Lessly v. Bowie, 
27 S. Car. 193, 3 S. E. 199; Childs 
v. Alexander, 22 S. Car. 169, 185; 
Van Lew v. Parr, 2 Rich. Eq. (S. 
Car.) 321, 350; Whitworth v. Stuck- 
ey, 1 Rich. Eq. (S. Car.) 404, 410; 
Darling v. Osborne, 51 Vt. 148. Mr. 
Justice Nelson, in Patton v. Tay- 
lor, 7 How. (U. S.) 132, 159, 12 L. 
ed. 637, referring to several author- 
ities there cited, said: "These cases 
will show that a purchaser, in the 
undisturbed possession of the land, 
will not be relieved against the pay- 
ment of the purchase-money on the 
mere ground of defect of title, there 
being no fraud or misrepresenta- 
tion; and that, in such a case, he 
must seek his remedy at law on the 
covenants in his deed; that If there 
is no -fraud, and no covenants to se- 
cure the title, he is without rem- 
edy, as the vendor, selling in good 
faith, is not responsible for the 
goodness of his title beyond the ex- 
tent of his covenants in the deed." 
This doctrine is affirmed in Noonan 
V. Lee, 2 Black (U. S.) 499, 508, 17 
L. ed. 278; Peters v. Bowman, 98 
tr. S. 56, 25 L. ed. 91; and is sus- 
tained also in Hill v. Butler, 6 Ohio 
St. 207, where numerous cases are 
cited. See ante § 1355, near end. 

=« Evans v. McLucas, 12 S. Car. 56. 

"Piatt V. Gilchrist, 3 Sandf. (N. 
Y.) 118. In this case the earlier 
cases are reviewed at length. 

^Withers v. Powers, 2 Sandf. Ch. 
(N. Y.) 350. 



§ 1503 FOEECLOSUKE BY EQUITABLE SUIT . 74 

necessary that lie should resist the claim tinder the paramount title, or 
even await eviction by legal process. He may voluntarily surrender 
possession ; but then must stand ready to show that the title to which 
he surrendered was paramount, and was covered by his grantor's cove- 
nants of warranty."' If a judgment for the possession of the prop- 
erty be recovered against him, his delivery of possession, without 
awaiting expulsion by legal process, is an eviction.^" The mortgagor 
may safely pay the adverse claimant with the consent of his mort- 
gagee that the amount may be applied in reduction of the mortgage 
debt, if he obtain sufficient evidence of such consent.^^ 

The defense of eviction can not be set up by one who has merely 
purchased the equity of redemption subject to the mortgage, without 
assuming any personal liability for it, or against whom no personal 
claim is made, merely upon the ground that he is the assignee of the 
plaintiff's covenants.^" Eviction is no defense when no right or title 
to the part of the land from which the mortgagor is evicted was con- 
veyed to him ; as where a building and fence, not specified in the deed, 
encroached on an adjoining lot.^' 

§ 1503. Cases exceptional to general rule.-rJThe rule generally is 
that above stated, that the entire want of title in the vendor, or the 
partial failure of it, is no defense to the action, unless fraud be shown 
or the mortgagor has been evicted.^* Yet it has been held by several 
courts that the mortgagor may defend by a recoupment or offset of 
damages for a breach of the covenants in the deed to him, to the ex- 
tent of the damages sustained, if these are determined so that they 
may be deducted, whether the failure of title be complete or partial."^ 
A breach of covenant in the vendor's deed is a defense, where it is 
shown that the vendor is unable to respond to the damages occasioned 

^Cowdrey v. Coit, 44 N. Y. 382, «Robards v. Cooper, 16 Ark. 288; 

392, 4 Am. Rep. 690, per Gray, Conwell v. Clifford, 45 Ind. 392; 

Comr.; York v. Allen, 30 N. Y. 104; Church v. Fisher, 40 Ind. 145- 

Simers v. Saltus, 3 Den. (N. Y.) 214. Plowman v. Shidler, 36 Ind. 484; 

=°Dyett V. Pendleton, 8 Cow. (N. Hanna v. Shields, 34 Ind. 84; Rog- 

^■IJ?'^- ^ , „ ers v. Place. 29 Ind. 577; Hume v. 

^ Hart V. Carpenter, 36 Mich. 402. Dessar, 29 Ind. 112; Jordan v. 

After the death of the mortgagee, Blackmore, 20 Ind. 419; Hubbard v 

there may be difficulty In proving Chappel, 14 Ind. 601; Conklin v 

his oral admissions. Bowman, 7 Ind. 533; Buell v. Tate, 

==Brou y Becnel, 20 La. Ann. 7 Blackf. (Ind.) 55; Booth v. Ryan, 

254; Van Houten v. McCarty, 4 N. 31 "Wis. 45 

J. Eq. 141; National F. Ins. Co. v. =»Coy v.' Downie, 14 Fla 544- 

McKay, 21 N. Y. 191. See also Chambers v. Cox, 23 Kans! 393;' 

Sandford V. Trayers 40 N Y 140. Scantlin v. Allison, 12 Kans. 85 

T^Z 7^%\ 9^n ,°^ ^ ^^^- ^PP- Mendenhall v. Steckel, 47 Md. 453; 
Dec. (N. Y.) 260, 2 Keys 670. Lowry v. Kurd, 7 Minn. 356; Hall 



75 THE ANSWER AND DEFENSES § 1504 

by the breach.^" When a remedy upon the covenants would be inef- 
fectual, as, for instance, when the mortgagee is insolvent, the defend- 
ant, in a suit upon the note or mortgage, may set up the damages on 
the covenants.^^ 

§ 1504. Covenant broken at time suit is .brought. — ^When the cove- 
nant is broken at the time the suit is brought to recover the purchase- 
money, and the amount claimed under it is certain, the purchaser is 
entitled to detain the purchase-money to the extent to which he would 
at that time be entitled to recover damages upon the covenant, in 
order to avoid circuity of action. It is therefore held that a breach of 
the covenant of seisin in the vendor's deed may be set up as a defense 
to an action for the foreclosure of a mortgage given for the purchase- 
money, although a breach of the covenant of warranty may not.^^ A 
total failure of title is a total failure of consideration. The obligation 
of the mortgagor is not made for a covenant of the mortgagee, but for 
the land ; and if the land fails to pass, the promise of the mortgagor is 
a mere nudum pactum. The damages in an action on the covenant 
would be the same as the consideration for the promise ; and it is just 
that the mortgagor should, be allowed to show a total failure of consid- 
eration instead of being compelled to seek his remedy on the cove- 
nants.** 

A covenant against incumbrances is broken at the time of the con- 
veyance if a third person then had an interest in or lien upon the land 
granted which diminished the value of the absolute interest in the 
same, while at the same time the fee passed by the deed. If an in- 
cumbrance upon land conveyed to the grantee by deed containing such 
a covenant be fixed and capable of deduction out of the grantee's pur- 
chase-money mortgage, a suit upon such mortgage is by some courts 

V. Gale, 14 Wis. 54; Kelly v. Ker- such case, a failure of title to the 

shaw, 6 Utah 239, 14 Pac. 804; land might be interposed in an ac- 

Walker v. 'Wilson, 13 Wis. 522. tlon on the mortgage. Rice v. God- 

'"McLemore v. Mabson, 20 Ala. dard, 14 Pick. (Mass.) 293; Tall- 

137. madge v. Wallis, 25 Wend. (N. Y.) 

■"Knapp V. Lee, 3 Pick. (Mass.) 107. So might he have reserved a 

452. portion of the purchase-money, by 

** Latham v. McCann, 2 Nebr. 276. agreement, to await the clearing up 

The court says: "The parties in of any suspicion on the title; but he 

this case, as in every other case, chose, for some reason, to accept a 

must be bound by the bargain they deed with covenants of warranty, 

have chosen to enter into. The He can not now come forward and 

grantee might have demanded a say he will pay his note and mort- 

covenant of seizin — the assurance gage upon certain alleged defects 

that the grantor had, at the time of being remedied." 

making his deed, the very estate, '»Wilber v. Buchanan, 85 Ind. 42; 

both as to quantity and quality. Rice v. Goddard, 14 Pick. (Mass.) 

that he professed to convey. In 293. 



§ 1504 FOEECLOSUEE BY EQUITABLE SUIT 'J'6 

allowed to proceed to judgment, when the amount of the incumbrance 
may be offset against the amount of the mortgage ;*" and if a sale be 
had, the proceeds will be applied in the first place to discharge the 
incumbrance, and the amount so applied deducted from the mortgage 
debt.*^ But in other courts, and more generally, it is held that unless 
the defendant has been at cost to extinguish the incumbrance, or has 
suffered through its enforcement, he can be allowed only nominal dam- 
ages.*" 

The possession of a third person, without right and without the con- 
sent of the grantor, does not constitute an incumbrance, or a breach 
of a covenant in the grantor's deed against incumbrances; conse- 
quently the purchaser who has given a mortgage for a portion of the 
purchase-money can not charge the mortgagee with rent, or for dam- 
ages equal to rent, for the period during which such third person has 
held possession.*' Thus it is held that if there be a breach of the cove- 
nant against incumbrances by reason of the existence of tax liens, the 
amount of these would be a proper oifeet to the amount due on the 
mortgage.** But if for any reason a decree can not be made for the 
mortgagee directing a deduction of the amount due on the prior in- 
cumbrances against which the mortgagor is protected by the covenant, 
as, for instance, when such incumbrances exceed the amount of the 
mortgage, the foreclosure suit upon the latter will be stayed until the 
property has been released from such incumbrances.*^ A provision in 
the purchase-money mortgage for a release from a prior mortgage on 
the mortgagor's paying certain sums does not form an exception to 
the rule, that the grantor who has conveyed by deed having the usual 
covenants, including a covenant against incumbrances, must procure 
a release from such prior mortgage before he is entitled to a decree of 
foreclosure on the purchase-money mortgage. *° 

But if the purchase-deed contained no covenant against incum- 
brances, the purchaser, on a foreclosure of a mortgage given by him 

*> Stephens v. Weldon, 151 Pa. St. Car. 56; McCrady v. Brisbane, 1 

520, 25 Atl. 28; Dunn v. Olney, 14 Nott & McCord (S. Car.) 104, 9 Am. 

Pa. St. 219; In re McGill, 6 Pa. St. Dec. 676. 

504. *=Dinsmore v. Savage, 68 Maine 

" See post § 1698, last clause. See 191. 

also Smith v. Fiting, 37 Mich. 148, « Union Nat. Bank v. Pinner, 25 

151, per Marston, J.; Coffman v. N. J. Bq. 495; Van Riper v. Will- 

Scoville, 86 111. 300; Patterson v. iams, 2 N. J. Eq. 407; White v. 

Sweet, 3 Bradw. (111.) 550. Stretch, 2 N. J. Eq. 76. 

"Prescott V. Trueman, 4 Mass. '^Dayton v. Dusen^ury, 25 N. J. 

627, 3 Am. Dec. 249; Delavergne v. Bq. 110. 

Norris, 7 Johns. (N. Y.) 358, 5 Am. "Stiger v. Bacon, 29 N. J. Bq. 

Dec. 281; Evans v. McLucas, 12 S. 442. 



77 THE ANSWER AND DEFENSES § 1506 

for part of the purchase-money, can not ofPset an incumbrance, such as 
taxes, existing as a lien upon the land at the time the premises were 
conveyed to him.*^ 

§ 1505. Breach by mortgagee of independent covenant. — The breach 
by the mortgagee of an independent covenant is no defense 
to the foreclosure of a mortgage vrhich by its terms has become 
due and payable. Where, for instance, a mortgage is given in part 
payment of the purchase-money of the premises, and at the same 
time the mortgagee executes a covenant to the purchaser that he will 
immediately procure releases of their title from certain persons named, 
who are reputed to have some claim upon the lands, the covenant is 
not dependent upon the payment of the mortgage money, and does not 
constitute, with the mortgage, a condition that the mortgage shall be 
paid when the releases shall be procured.^^ 

§ 1506. Fraud of vendor as defense to purchase-money mortgage. 

— But if the sale was effected by the vendor's fraud, as by fraudulently 
procuring and exhibiting as true a false abstract of title, the purchaser 
may have the mortgage and the conveyance rescinded.*' Fraud is a 
defense only when it was practiced upon the defendant by the mort- 
gagee or his agents, or with his knowledge.^" The mortgagor may also 
set up a counterclaim for damages occasioned by the fraud practiced 

" Bandendistel v. Zabriskie, 50 N. importance, a breach of which, if 
J. Eq. 433, 26 Atl. 455. Beasley, C. he should be unable to procure 
J., said: "In such a situation the them, would subject him to small 
understanding is that the grantor damages; but he might be unwill- 
does not stipulate that the premises ing to bind himself to forfeit $2,500 
are free from liens, but that, to the of the purchase-money if he could 
contrary, if liens exist, and the not obtain the releases. The par- 
grantee shall be evicted under ties could have made the bargain 
them, the grantor will indemnify either way. They chose to make, 
him for such damage. The conse- and did make, independent cove- 
quence is that there is no covenant, nants. And there is no principle 
express or implied, for the removal established in courts of equity by 
of incumbrances, and for a court of which an effect will be given to 
equity to decree a removal would such covenants different from their 
be to order a specific performance legal effect, and independent cove- 
of a pure interpolation. There can nants turned into conditional, be- 
be no deduction from the purchase- cause it will give better protection 
money by reason of the existence of to a party, or will diminish litiga- 
a covenant for further assurance." tion." See also Duryee v. Linshei- 

" Coursen v. Canfield, 21 N. J. Eq. mer, 27 N. J. Eq. 366. 

92. "The mortgagee," said the "Rebards v. Cooper, 16 Ark. 288; 

Chancellor, "has a right to say in Furman v. Meeker, 24 N. J. Eq. 110; 

hcBC foedera non veni. He might Booth v. Ryan, 31 Wis. 45. 

have been willing to bind himself '"Aikin v. Morris, 2 Barb. Ch. (N. 

in a covenant to procure releases Y.) 140. 
which he knew were of little or no 



§ 1506a roKECLOSUEE by equitable suit 78 

by the mortgagee in the sale of the premises to the mortgagor ;^^ such 
as a misrepresentation as to the amount of the land;^^ its quality and 
value f^ and if such damages exceed or equal the amount of the mort- 
gage, the claim under the mortgage will be ■wholly defeated.^* 

But fraud in the sale of one of several tracts of land under one con- 
tract, but conveyed by separate deeds, can not be set up as a defense in 
a suit to foreclose a purchase-money mortgage upon another of such 
tracts.^" 

§ 1506a. Mistake as to quantity of land conveyed. — ^A mere mis- 
take of both parties as to the quantity of land conveyed is no 
ground of defense to a mdrtgage given for the purchase-money, there 
being no fraud or misrepresentation by the grantor.®* But it would 
seem that a misrepresentation by the grantor, though made under a 
mistake as to his own rights, but acted upon by the purchaser, may be 
ground for relief in respect to a mortgage given to the grantor for the 
purchase-money.^^ The deficiency in the property conveyed may be so 
serious that it may be regarded as evidence of imposition or fraud, and 
in such case the rule is to allow such a reduction of the purchase- 
money as will compensate the purchaser for the value of the land 
lost.=8 

" Allen v. Shackelton, 15 Ohio St. chase-money mortgage, "as it seems 
145. The fraud alleged in this case to us now," say the court, "the de- 
was a misrepresentation of the fendant appears to be entitled to a 
boundaries of the lot, and the prop- deduction for the proportionate 
erty covered by the mortgage. value of the 2 feet 8 inches which 

«' Dayton v. Melick, 32 N. J. Eq. 'he did not get to the 40 feet for 

570, 27 N. J. Eq. 362. which he agreed to pay, and for 

•« Kobiter v. Albrecht, 82 Wis. 58, which the deed was made. But we 

51 N. W. 1124. do not decide even that conclu- 

" Grant v. Tallman, 20 N. Y. 191^ sively, nor do we decide whether 

75 Am. Dec. 384; Lathrop v. God- he may recover more than that pro- 

frey, 6 Thomp. & C. (N. Y.) 96, 3 portion. We reverse the judgment 

^™ J^,^- of the court below to enable the de- 

=^ Hicks V. Jennings, 4 Fed. 855. fendant to lay his facts before a 

""Clark V. Davis, 32 N. J. Eq. 530; jury, and have the judgment of the 

Northrop V. Sumney, 27 Barb. (N. law upon them when they are all 

Y ) 196; Dresbach v. Stem, 41 Ohio known." In Tyson v. Eyrick, 141 

„p*;- ,. T .• . ^ P^- St. 296, 21 Atl. 635, a defense 

Yl^sq nm Ts w''*':?'!?^^ /^- ^^^ ^""^^^ to the extent of the 

Del ^R? io .,y^?T^- t^^' ^i^- ^^'"^ °f the strip of one foot in 

?1 Vt /qs ^^^^ ^- ^''^"' ^'^^^' to ^liich title could not be 

"srnmpt^a „ -no, -.1 ir. T, ^^"^^^^ ^^ Rodgers v. Olshoffsky, 

534 26 AU 618 T^ th v' ^^* f.^' ^^" ^^^ ^^^ "^' ^ Atl. 44. the cour 
bii ib AU. 618. In this case the did not allow the defense for th? 

r?ot"40 feefin'^Sdth''.'? ^"Tl ^'^''''^'^' ^hich wS T ? eet on 



'J'9 THE ANSWER AND DEFENSES § 1507a 

In an action to foreclose a purchase-money mortgage, evidence of a 
deficiency in the land can not be admitted under a general denial of 
liability, but must be specially pleaded.^* 

A purchaser who has assumed an existing mortgage can not set up 
in defense to a foreclosure suit upon it that his grantor misstated the 
number of acres conveyed, and that the mortgagee, when he sold the 
land to such vendor, made a similar misstatement ; for the purchaser 
and mortgagee are not in such case privies in contract.*" 

§ 1506b. Violation of law by mortgagee as defense. — A mortgagee 
may be denied the right to foreclose where his right to foreclose must 
be based on his illegal act. This was the conclusion where it was sought 
to foreclose a mortgage that had been released and canceled of record 
and this was done to avoid the taxation of the mortgage and the law of 
the state made such a transaction a crime.*^ In another case, however, 
it was held not an obstacle to foreclosure that the lender took the 
mortgage in the name of a nonresident, for the purpose of evading 
taxation to which the mortgage would have been subject if executed in 
the name of the resident lender."^ 

§ 1507. Defense of mistake as against assignee. — An assignee of 
a mortgage not due is not subject to this defense. Failure of title to 
a part of the premises for the purchase-money of which the mortgage 
was given is no defense to an action by an assignee of the mortgage 
who purchased it before due, and without notice of such failure."^ 
And as already stated such defense would not, generally, avail against 
the original mortgagee, for the mortgagor's remedy would be on the 
covenants of the deed of purchase ; but when the defense may be taken, 
the defendant may show that the assignment of the mortgage was col- 
orable only, and that the mortgagee is still the equitable owner.** 

§ 1507a. Assumption of mortgage by grantee of mortgagor. — The 

fact that a subsequent purchaser had assumed the mortgage debt is 
an affirmative defense in favor of the mortgagor and must be affirma- 
tively alleged in an action to foreclose brought against the mortgagor 
and his subsequent purchaser.''^ The allegation that the grantee of 

"» Tron V. Yohn, 145 Ind. 272, 43 »» Stilwell v. Kellogg, 14 Wis. 461. 

N. E. 437. See ante §§ 834-847. 

"Davis V. Clark, 33 N. J. Eq. 579; "Lathrop v. Godfrey, 3 Hun (N. 

Clark v. Davis, 32 N. J. Eq. 530. Y.) 739. 

°- Will V. Brookhart, 149 Iowa 426, "= Hibernia Sav. &c. See. v. Dick- 

128 N. W. 337. Inson (Cal.), 140 Pac. 265. 

"^Waterbury v. McKlnnon, 146 
Fed. 737, 77 C. C. A. 294. 



§ 1508 FOEECLOSUEE BY EQUITABLE SUIT 80 

the mortgagor assumed the payment of the mortgage debt in writing 
as a consideration for the deed will generally be held confessed unless 
denied.^° 

§ 1508. Validity of title as condition precedent to payment of 
mortgage. — Validity of title may be made a condition precedent to 
the payment of the mortgage. Where the mortgage and note are con- 
ditioned that the note shall not be deemed due and payable until the 
title of the grantor, which was known to be defective as to a portion of 
the premises, is perfected, the mortgagor may set up the nonperform- 
ance of this condition as a defense, and be allowed the value of that 
portion of the property in set-off; but he should be required at the 
same time to release whatever title he may have acquired to it by his 
deed.^^ A mortgage for purchase-money has been regarded as condi- 
tional upon the title, even when the condition is not expressed. And 
so where a mortgage was given of one tract of land to secure the pur- 
chase-money of another tract, which the mortgagee covenanted by his 
bond to convey with covenants of warranty, in an action to foreclose 
the mortgage the failure of title in the vendor was declared a good 
defense, on the ground that the mortgagor only undertook to pay the 
mortgage on the condition that the mortgagee had title to the tract he 
agreed to convey.^* 

§ 1509. Statute of limitations.— Generally the fact that the debt 
secured by the mortgage is barred by the statute of limitations is no 
defense to a bill to foreclose it.^" In a few states, however, when an 
action on the note is barred, the remedy on the mortgage is gone. 
Distinct remedies may be pursued, but the same limitation applies to 
both.'" Moreover, a purchaser from the mortgagor subsequent to the 
execution of the mortgage may plead the statute of limitations as a 
defense to an action commenced after the statute has run against the 
debt secured." Upon the same principle a junior mortgagee may 

-,-,7 o^^r^^nJ; Streeter, 88 Ark. 406, Dec. 754; Lord v. Morris. 18 Cal. 

tir -^r. ^^2. When tuere is no written ob- 

" Weaver v. Wilson, 48 111. 125. ligation for the debt, see Union 

2 Smith V. Newton, 38 111. 230. Water Co. v. Murphy's Flat Flum- 

"> See ante § 1204. Tl^e effect of ing Co., 22 Cal. 620 

the statute of limitations is there "Lent v. Shear, 26 Cal. 361; Low 

fully examined. See also Haskell v. Allen, 26 Cal. 141- Grattan v 

y. Bailey, 22 Conn. 569. 573; Mich. Wiggins, 23 Cal. 16; McCarthy v. 

^°t <^°; ^- Srown, 11 Mich. 265. White, 21 Cal. 495, 82 Am. Deo. 754; 

■ Coster V. Brown, 23 Cal. 142; Scott v. Sloan, 3 Tex. Civ. App. 302. 

Heinlin v. Castro, 22 Cal. 100: Mc- 23 S W 42 

Carthy v. White. 21 Cal. 495, 82 Am. " ' ' 



81 THE ANSWER AND DEFENSES § 1511 

avail himself of the defense of limitation against the debt secured by 
the prior mortgage which is sought to be foreclosed.'^ 

Where a mortgage is expressly made subject to a prior mortgage, the 
junior mortgagee can not, in an action to foreclose the prior mort- 
gage, claim that the latter is barred by the statute of limitations." 
An allegation in the answer of a second mortgagee that its lien is prior 
and superior to that of a first mortgage has been held insufSeient as a 
plea of limitations against the first mortgage.''* 

§ 1510. Insanity of mortgagor. — If the sanity of the mortgagor is 
questioned, the burden is upon the defendant to show it ; and he must 
show not merely an incapacity to make a valid contract at the date of 
its execution, but that the mortgagee knew and took advantage of the 
grantor's state of mind; otherwise, the consideration being paid, the 
security will be held good for the amount, although the insanity of the 
mortgagor be admitted or proved. 

The mortgage deed must at the hearing be admitted or proved. If 
there is an attesting witness, the only question that need be asked of 
him is whether the mortgagor executed the deed in the witness's pres- 
ence. It is not necessary, as in the case of a will, to prove that the 
person when he executed it was of sound mind. Although he has been 
found insane by an inquisition of lunacy, it is not the duty of the 
plaintifE to do more than prove the execution of the deed. The defend- 
ant must bring forward his own case to have the deed set aside, and 
the burden of proof lies on his side." 

I§ 1511. Eecovery of judgment on mortgage note as defense. — A 

recovery of judgment on the mortgage note or bond is no defense;''® 
on the contrary, such judgment may be relied upon as establishing the 
validity of the note or bond, and of the mortgage so far as the debt is 
concerned.''' ISTeither is the pendency of a suit at law upon the mort- 
gage debt any defense to a suit to foreclose the mortgage, unless made 

"Johnston v. Lasker Real Estate "Vansant v. Allmon, 23 111. 30 

Assn., 2 Tex. Civ. App. 494, 21 S. 'W. Jenklnson v. Ewing, 17 Ind. 505 

961. Severson v. Moore, 17 Ind. 231 

'^ Park v. Prendergast, 4 Tex. Civ. Goenen v. Schroeder, 18 Minn. 66. 

App. 566, 23 S. W. 535. See ante See ante § 936. 

§ 744. "Clarke v. Bancroft, 13 Iowa 320; 

"First Nat. Bank v. Citizens' Morris v. Floyd, 5 Barb. (N. Y.) 

State Bank, 11 Wyo. 32, 70 Pac. 726. 130; Hosford v. Nichols, 1 Paige 

™ Jacobs V. Richards, 18 Beav. (N. Y.) 220. See also Batchelder v. 

300. See also Farmers' Bank v. Taylor, 11 N. H. 129. 
Normand, 3 Nebr. (Unoff.) 643, 92 
N. W. 723. 

6 — JoxEs Mtg. — Vol. III. 



§ 1511a FOEECLOSUKE BY EQUITABLE SUIT 83 

SO by statute.'* A judgment may be had for the mortgage debt al- 
though the mortgage is not enforcible.''* One who has obtained a de- 
cree for foreclosure and a personal judgment for the debt may release 
the mortgage lien and enforce the personal judgment by execution.*" 
Of course a satisfaction of a judgment upon the debt would be a de- 
fense.*^ Under the Code of Kew York and the codes of some other 
states following that, proceedings in an action at law are suspended 
by a foreclosure suit;*^ and if judgment has been obtained at law, 
the remedy upon that must be first exhausted.'* 

A judgment against the mortgagee in an ejectment suit brought by 
him against the mortgagor has been held to be no bar to a bill to fore- 
close the mortgage. The verdict and judgment in such suit at law 
are not conclusive as to the equitable rights and relations of the par- 
ties; it is conclusive only that the mortgagee had not, at the com- 
mencement of the suit, the legal right to the possession.** 

§ 1511a. Defense of liability to creditor of plaintiff in garnishee 
process. — The defendant may set up his liability to a creditor of the 
plaintiff in a garnishee or trustee process. But to a foreclosure suit 
brought by the assignee of a mortgage, it is no sufficient answer for the 
defendant to say that he is liable for the debt as a garnishee in an ac- 
tion against the mortgagee, though he knew of the assignment of the 
mortgage to the plaintiff before he answered the garnishee process. 
Neither has the defendant any right to answer that the assignment is 
colorable, collusive, or fraudulent, as this is a matter which does not 
concern him.*° 

§ 1512. Defense of satisfaction of mortgage — Payment — ^Tender. 

— If the defendant sets up satisfaction of the mortgage, he must 
clearly set out the defense in his answer, and his proofs must clearly 
substantiate his answer; and if both answer and the testimony be 

"Guest V. Byington, 14 Iowa 30; «»Shufelt v. Shufelt, 9 Paige (N. 

Tappan v. Evans, 11 N. H. 311; Y.) 137, 37 Am. Dec. 381; North 

Williamson v. Champlin, Clarke (N. River Bank v. Rogers, 8 Paige (N. 

Y.) 9; Suydam v. Bartle, 9 Paige Y.) 648. 

(N. Y.) 294. "Smart v. Kennedy, 123 Ala. 

™ Moors V. Sanford, 2 Kans. App. 627, 26 So. 198. See also Harper v. 

243, 41 Pac. 193; Blossom v. West- Campbell, 102 Ala. 342, 14 So 650; 

brook, 116 N. Car. 514, 21 S. E. 193. Williamson v. Mayer, 117 Ala. 253, 

» Pinch V. Turner, 21 Colo. 287, 23 So. 3; Boyle v. Wallace, 81 Ala. 

40 Pac. 565. 352, 8 So. 194. 

" Farmers' Loan &c. Co. v. Reid, » Phipps v. Rieley, 15 Ore. 494, 16 

3 Edw. (N. Y.) 414. Pac. 185. 

»« Williamson v. Champlin, Clarke 
(N. Y.) 9. 



83 THE ANSWER AND DEFENSES | 1513 

vague and uncertain the defense will fail.'" The defense is not suffi- 
ciently averred by an answer that the mortgagor had paid a named 
amount on the mortgage for which no credit had been given and that 
he could not give the dates of the payments, or to whom or where they 
were made.*^ Payment in whole or in part, when properly set up and 
proved, is a good defense, not only for the mortgagor, but for junior 
incumbrancers.'' The burden of proof of payment is on him who al- 
leges it.'* Where the answer is one of payment solely, the defendant 
must produce some proof of the facts averred, from which payment 
may prima facie be inferred, before the plaintiff has to make proof of 
the allegations of the bill."" The payment must be to the party enti- 
tled to receive it. A payment to the mortgagee after he has assigned 
the mortgage and the assignment is recorded, will not operate as a 
discharge of the debt, in the absence of proof of agency, estoppel or the 
like.*^ A mortgagor who has not paid the mortgage debt can not set 
up a release executed by one who had no authority at the time to 
execute it.°^ It is a good answer to a foreclosure suit that the debt for 
the security of which the mortgage was given was an advancement or 
gift, and that accordingly the deed and note had been left with the 
mortgagor.'^ The defense that the complainant has received a piece 
of property, which should be applied on the mortgage debt, may be 
taken by answer without filing a cross-bill.'* 

Where in the foreclosure of a junior mortgage it appears that the 
prior mortgage was given by a son to his mother to secure to her the 
interest of a certain sum for her life, but that afterward the mother 
resided with the son, and the latter had repeatedly declared that the 
interest due his mother had been satisfied by arrangement between 

^Flnlayson v. Lipscomb, 16 Fla. Y.) 409. See also Garrison v. Par- 

751; Cameron v. Culklns, 44 Mich, sons, 45 Fla. 335, 33 So. 525; John- 

534, 7 N. W. 157; Richardson v. son v. Van Velsor, 43 Mich. 208, 5 

Tolman, 44 Mich. 379, 6 N. "W. 840; N. W. 265; Campbell v. Miller, 73 

Suhr V. Ellsworth, 29 Mich. 57; Nebr. 779, 103 N. W. 434; Edwards 

Reed v. Knecht, 42 Pa. Super. Ct. v. Thompson, 71 N. Car. 177; Jones 

107. In Pennsylvania, where this v. Hill, 62 Ore. 53, 124 Pac. 206; 

defense is set up in an action of Hendrix v. Gore, 8 Ore. 406. 

scire facias sur mortgage, the court '•Omaha Loan &c. Co. v. Luellen, 

may leave the question of payment, 3 Nebr. (Unoff.) 709, 92 N. W. 734. 

as one of fact to the jury. German »" Parsons v. Ramsey, 53 Fla. 

Ins. Co. V. Davenport (Pa.), 9 Atl. 1055, 43 So. 503. 

517. "Bettle v. Tiedgen (Nebr.), 116 

»' Montgomery v. King, 125 Ga. N. W. 959. 

388 54 S. B. 135. See also Link v. "Jennings v. Hunt, 6 Bradw. 

Mckee, 233 Pa. 461, 82 Atl. 682. (111.) 523. 

™Prouty V. Rice, 50 Barb. (N. Y.) "Peabody v. Peabody, 59 Ind. 556. 

344; Prouty v. Eaton, 41 Barb. (N. "Edgerton v. Young, 43 111. 464. 



§ 1513 FORECLOSURE BT EQUITABLE SUIT 84 

them, and that it was credited on the bond, which was not produced 
at the trial, nor was its nonproduction explained, it was held that, 
under the facts proved, there was a presumption that the interest had 
been satisfied."^ ' 

An agreement made by the holders of the iiotes of a corporation, 
secured by mortgage, to convert the notes into Stock upon a condition 
which has failed, is no defense to a suit to foreclose the mortgage.*" 

Where the defenses to a foreclosure suit arfe the invalidity of the 
mortgage, and also payment of the mortgage debt, it is error for the 
court, after deciding the first point in favor of the defendant, to re- 
fuse to pass upon the second, since a money judgment could be ren- 
dered for the debt if unpaid.'^ Where the objections to the plea of 
payment may be made by special demurrer, a motion to strike the plea 
will be denied, under the practice in some jurisdictions."* If the plea 
is one of tender of the amount due, it should set out the amount of the 
tender and the authority of the person, to whom made, to accept it.°° 

1§ 1513. Defense of agreement of parties subsequent to the mort- 
gage. — ^An agreement by the parties subsequent to the mortgage by 
which the rents of the mortgaged premises are assigned to the mort- 
gagee to be collected by him, and applied to the debt until it is fully 
paid, is a good defense to a suit to foreclose ;^ and so is an agreement 
to rescind a sale of land, the purchase-money of which the mortgage 
was given to secure, by which the land is to be reconveyed and the 
mortgage surrendered;" or an agreement to extend the time of pay- 
ment,^ when made for a valuable consideration.* An agreement ex- 
tending the time of payment is no part of the mortgage, and does not 
draw the mortgage within an act forbidding the foreclosure of a mort- 
gage until one year after the last instalment is due.^ 

A parol agreement between the mortgagor and mortgagee, that the 

»= Eckel v. Eckel, 49 N. J. Eq. 587, Ford v. Smith, 60 "Wis. 222, 18 N. 

27 Atl. 433. w. 925. 

"Tugh V. Falrmount Mining Co., ^Bledsoe v. Rader, 30 Ind. 354. 

112 U. S. 238, 28 L. ed. 684, 5 Sup. 'Andrews v. Gillespie, 47 N. Y. 

Ct 238. 487; Dodge v. Crandall, 30 N. Y. 

"Gleaton v. Gibson, 29 S. Car. 294; Oceanic Investing Co. v. 

514, 7 S. E. 833. Twenty-Eighth St. &c. Co., 148 N. 

•'Malsberger v. Parsons, 24 Del. Y. S. 560 (facts must be set out); 

254, 75' Atl. 698. Macaulay v. Hayden, 48 Misc. 21, 96 

"Stead V. Randall, 236 Pa. 64, 84 N. Y. S. 64. 

Atl. 662. See also Patten v. Pep- "Trayser v. Indiana Asbury Uni- 

per Hotel Co., 153 Cal. 460, 96 Pac. versity, 39 Ind. 556; Maryott v. 

296; Cassinella v. Allen (Cal.), 144 Renton, 21 N. J. Eq. 381; Tompkins 

P^'=; '^46. V. Tompkins, 21 N. J. Eq. 338. 

^Angier v. Masterson, 6 Cal. 61; "Wallace v. Hussey, 63 Pa. St. 24. 



85 THE ANSWER AND DEFENSES § 1514 

latter shall take possession and receive the rents and profits until the 
debt is paid, and then restore the property to the mortgagor, can not 
be specifically enforced, on account of the statute of frauds, but it 
may be ground for an equitable estoppel to prevent the mortgagee 
from claiming title by a foreclosure in violation of the agreement.*' 

It is not a defense as to the mortgagors that the mortgagee extended 
the time of payment to the grantee of the mortgagor, without the con- 
sent of the mortgagor, and this more especially -where the contract 
under which the mortgagor conveyed required him to obtain an ex- 
tension of the loanJ The burden of proof of the agreement to extend 
is on the defendant.' The fact that the heirs at law of a deceased 
mortgagor agree among themselves that the land of the deceased 
could be divided without sale has been held not to affect the right of 
the mortgagee to sell the land under the mortgage, and this more espe- 
cially where the heirs at law admit that there is not sufficient personal 
property to pay the debts of deceased." 

§ 1514. Defense of defective service of process. — As a general rule, 
a defendant can not object to an insufficient service, or the want of 
service, upon another defendant who is not a necessary party to the 
suit.^" Of course a defendant may take advantage of want of service, 
or of an ineffectual service, upon himself by a special appearance and 
plea in the suit ; or he may in such case take no notice of the suit, as 
he would not be bound by the decree. A decree, however, which re- 
cites that process was duly served upon a defendant is prima facie, if 
not conclusive, proof of notice to him of the foreclosure suit.^^ It has 
been held, however, that a person who stands in the relation of surety 
for the mortgage debt, and whose right it is to have the entire equity 
of redemption applied in the first place to the payment of it, may re- 
quire the bringing in of parties having an interest in it, so as to make 
the sale perfect against all equities.^^ 

Of course a defendant's appearance in an action cures a want of 
service. A mortgagor who was absent from the state when the action 
was commenced, but availed himself of a stay of proceedings obtained 
in his behalf after a decree was rendered, thereby appeared in the ac- 

'Higgins V. Haberstraw, 76 Miss. 'Tudor v. Security Trust Co. 

627, 25 So. 168. (Ky.), 173 S. W. 1118. 

' Schafer v. Jackson, 155 Iowa 108, ^"Mirns v. Mims, 35 Ala. 23; Sem- 

135 N. W. 622. pie v. Lee, 13 Iowa 304. 

'Lovelace v. Dwyer, 65 Ore. 113, "Carpenter v. Millard, 38 Vt. 9. 

131 Pac. 1028. "Kortright v. Smith, 3 Edw. (N. 

Y.) 402. 



§ 1515 FOEECLOSUKE BY EQUITABLE SUIT 86 

tion, which was afterward concluded by the decree of foreclosure and 
sale thereunder.^' It has been held that service upon the trustee hold- 
ing the legal title, while it may be sufficient to sustain a decree of 
foreclosure of the mortgage does not authorize the trustee to appear 
for the cestui que trust, so that a binding personal judgment can be 
rendered against him.^* 

§ 1515. Bill of interpleader. — If the defendant, admitting the in- 
debtedness, is in doubt as to which of two claimants he ought to pay 
it, he should make his answer a bill of interpleader, placing himself 
indifferently between them.^° The mortgagor can not set up by cross- 
bill the defense that the notes secured by the mortgage were improp- 
erly made payable to one of two partners who has misappropriated 
the funds of the firm, and is indebted to his copartner. In a case 
where a note and mortgage were assigned by the husband, who waSj 
mortgagee, to his wife, and placed with a bank for collection, and 
afterward garnishment process was served on both the bank and the' 
wife in a suit against the husband, it was held that there was no neces- 
sity for an interpleader in order to adjudicate the rights of the par- 
ties.^° 

" Franse v. Armbuster, 28 Nebr. 89, 96 N. W. 728, 100 Am. St. 317. 
467, 44 N. W. 481. See also Hiber- "Harrison v. Pike, 48 Miss. 46. 
nia Sav. &c. Soc. v. Cochran, 141 "Eau Claire Nat. Bank v. Chip- 

Cal. 653, 75 Pac. 315. pewa Valley Bank, 124 Wis. 520, 

"Thomily v. Prentice, 121 Iowa 102 N. W. 1068, 109 Am. St. 966. 



CHAPTEE XXXIII 

APPOINTMENT OP A EBCEIVBK 

I. When a Receiver Will Be Appointed, §§ 1516-1534 
II. Duties and Powers of a Receiver, §§ 1535-1537a 

I. When a Receiver Will Be Appointed 

Section Section 

1516. Creneral principles. 1526. Time of appointing receiver. 

1517. When appointed on applica- 1526a. Notice of application. 

tion of mortgagor — Grounds 1527. Defenses to the application, 

for appointment. 1528. Possession of defendant must 
(1518. Appropriate under leasehold be shown, 

mortgages. 1529. Verification. 

1519. English rule as to appoint- 1530. Necessity for default or ma- 

ment. turity of debt. 

1520. Rule in states where legal ti- 1531. Appointment after decree and 

tie vested in mortgagee. after appeal. 

1521. Prevailing rule — States where 1531a. Receiver during time al- 

legal title vested in mort- lowed for redemption, 

gagor. 1532. Necessity for showing security 

1522. The appointment as affected inadequate, and insolvency 

by statutes. of debtor. 

1523. In behalf of a subsequent 1533. Other grounds for appoint- 

mortgagee. ment of receiver. 

1524. Consent of prior mortgagee. 1534. Test of adequacy of security 

1525. Right of prior mortgagee to in respect to city property. 

possession until paid. 

§ 1516. General principles.^ — A receiver of the rents and profits 
raay be appointed pendente lite when the mortgage is insufficient, 
and the party personally liable is insolvent; or when it is provided by 
the deed that the mortgagee shall have the rents and profits after a 
default; for otherwise, since the owner of the equity of redemption, 
especially in all those states where the mortgagee's right of entry upon 
the happening of a default is taken away, is entitled to the rents and 
profits until a sale under decree of court and possession under it given 
to the purchaser, the holder of the mortgage would be deprived of 
a valuable part of his security.'' The power of a court of equity to 

^For the law relating to receiv- their debts and certificates, §§ 533- 

ers of railroad companies, see Jones 546. 

on Corporate Bonds and Mortgages; ^Keyser v. Hitz, 4 Mack. (D. C.) 

the appointment and jurisdiction of 179; Newport &c. Bridge Co. v. 

such receivers, §§ 456-492; their Douglass, 12 Bush (Ky.) 673; 

rights and liabilities, §§ 492-530; Douglass v. Cline, 12 Bush (Ky.) 

87 



1516 



APPOINTMENT OF A KECEIVEK 



88 



appoint a receiver in such cases is a part of its incidental jurisdic- 
tion, not depending on any statute.'' The mere fact that there has 
been a default in the payment of the debt is no ground for the ap- 
pointment of a receiver,* unless there be a stipulation in the mortgage 
that the mortgagee shall have the rents, or he is entitled to them 
under existing laws.^ Even if there be a stipulation in the mortgage 
that the rents and profits are included, a receiver will not be ap- 
pointed, where the mortgaged premises are sufiBcient to satisfy the 
debt." This right to have a receiver of the rents appointed pending 
the litigation depends upon the general principle of equity, that the 
purpose of such an appointment is to preserve the property, so that 
it may be appropriated to satisfying the decree of court. A mortgagee 
or trust creditor, to be entitled to a receiver, must show that it is nec- 
essary to interfere with the mortgagor's possession on account of the 
inadequacy of the security and the insolvency of the mortgagor.' 



608; Pearson v. Kendrick, 74 Miss. 
235, 21 So. 37; McDonald v. Vinson, 
56 Miss. 497; Myers v. Estell, 48 
Miss. 372; Wliltehead v. Wooten, 43 
Miss. 523; Leeds v. Gifford, 41 N. J. 
Eq. 464; "Wyckoff v. Scofleld, 98 N. 
Y. 475; Rider v. Bagley, 84 N. Y. 
461; Argall v. Pitts, 78 N. Y. 239, 
242; Mitcliell v. Bartlett, 51 N. Y. 
447; Syracuse City Bank v. Tall- 
man, 31 Barb. (N. Y.) 201; Warner 
V. Gouverneur, 1 Barb. (N. Y.) 36, 
38; Shotwell v. Smith, 3 Edw. (N. 
Y.) 588; Astor v. Turner, 11 Paige 
(N. Y.) 436, 43 Am. Dec. 766; How- 
ell V. Ripley, 10 Paige (N. Y.) 43; 
Sea Insurance Co. v. Stebbins, 8 
Paige (N. Y.) 566; Bank of Ogdens- 
burg V. Arnold, 5 Paige (N. Y.) 38, 
40; Frelinghuysen v. Colden, 4 
Paige (N. Y.) 204; Clason v. Cor- 
ley, 5 Sandf. (N. Y.) 447; Roberts 
V. Parker, 14 S. Dak. 323, 85 N. W. 
591; Ogden v. Chalfant, 32 W. Va. 
559, 9 S. E. 879. See also Strain v. 
Palmer, 159 Fed. 628, 86 C. C. A. 
618; Farmers' Loan &c. Co. v. Me- 
ridian Waterworks Co., 139 Fed. 
661; Land Title &c. Co. v. Kellogg, 
73 N. J. Eq. 524, 68 Atl. 80; Thomas 
v. Davis, 90 App. Div. 1, 85 N. Y. S. 
661; Sage v. Mendelson, 42 Misc. 
137, 85 N. Y. S. 1008; Lyng v. Mar- 
cus, 118 N. Y. S. 1056. For the rea- 
son intimated in the text, the prac- 
tice of appointing a receiver is 
chiefly confined to those states 



where the mortgagee's right of en- 
try upon default is taken away. 
Grantham v. Lucas, 15 W. Va. 425. 

"Merritt v. Gibson, 129 Ind. 155, 
27 N. E. 136, 15 L. R. A. 277; Main 
V. Ginthert, 92 Ind. 180; Decker v. 
Gardner, 124 N. Y. 334, 26 N. E. 814, 
11 L. R. A. 480; United States Trust 
Co. V. New York &c. R. Co., 101 N. 
Y. 478, 5 N. E. 316; Haywood v. 
Lincoln Lumber Co., 64 Wis. 639, 26 
N. E. 184; Sales v. Lusk, 60 Wis. 
490, 19 N. W. 362. 

* Warren v. Pitts, 114 Ala. 65, 21 
So. 494; Scott v. Ware, 65 Ala. 174; 
Williams v. Robinson, 16 Conn. 517. 
See also Ortengren v. Rice, 104 111. 
App. 428; .^tna Life Ins. Co. v. 
Broeker, 166 Ind. 576, 77 N. B. 1092. 

''Morrison v. Buckner, Hempst. 
(U. S.) 442; Jackson v. Hooper, 107 
Ala. 634, 18 So. 254; Whitehead v. 
Wooten, 43 Miss. 523. 

"^tna Life Ins. Co. v. Broeker, 
166 Ind. 576, 77 N. B. 1092. 

'Pullan V. Cincinnati &c. Air 
Line R. Co., 4 Biss. (U. S.) 35; 
Warren v. Pitts, 114 Ala. 65, 21 So. 
494; Scott v. Ware, 65 Ala. 174; 
Shotwell V. Smith, 3 Bdw. (N. Y.) 
588; Quincy v. Cheeseman, 4 Sandf. 
Ch. (N. Y.) 405. As to evidence of 
the mortgagor's insolvency, see Du- 
rant v. Crowell, 97 N. Car. 367, 2 S. 
E. 541. See also Elmira Mechanics' 
Soc. v. Stanchfield, 160 Fed. 811, 87 
C. C. A. 585; Albritton v. Lott- 



89 



WHEN APPOINTED 



§ 1516 



Where there is good equitable ground for the appointment of a re- 
ceiver, it is no valid objection to the appointment that the mortgage 
does not expressly pledge the rents and profits of the mortgaged prop- 
erty.' If the mortgagor is doing no injury or waste to the property, 
and is permitting or threatening none ; if he has not failed to pay the 
taxes, and is not allowing the mortgage debt to increase by the accu- 
mulation of interest ; and if he is not shown to be irresponsible for any 
deficiency there may be, a receiver will not be appointed.^ This relief 
is given with great caution, and only when the mortgagee has no 
other adequate means of protecting his rights.^" The necessity for this 
protection, and the special grounds and reasons for asking it, must 
be clearly alleged and proved before it will be granted.^^ The appoint- 
ment is a matter for the sound discretion of the court,^^ and will not 
be reviewed unless there be a gross abuse of the discretion.^' If the 
mortgagor is applying the rents and profits to keep down the interest 
on the first mortgage, the court will not appoint a receiver on the 
application of the second mortgagee, although it may appear that the 
security is inadequate and the mortgagor insolvent.^* If the first 
mortgagee be in possession, he can not be disturbed; and when a re- 



Blacksher Commission Co., 167 Ala. 
541, 52 So. 653; Glennon v. Wilcox, 
159 111. App. 42; West v. Adams, 106 
111. App. 114; Rabinowitz v. Power, 
131 App. Div. 892, 115 N. Y. S. 266. 

* Grant v. Phoenix Mut. L. Ins. 
Co., 121 U. S. 105, 30 L. ed. 905, 7 
Sup. Ct. 841. 

° Hutchinson v. First Nat. Bank, 
133 Ind. 271, 30 N. B. 952, 36 Am. 
St. 537; National F. Ins. Co. v. 
Broadbent, 77 Minn. 175, 79 N. W. 
676; Sales v. Lusk, 60 Wis. 490; 
Morris v. Branchaud, 52 Wis. 187. 

"Makeel v. Hotchkiss, 190 111. 
311, 60 N. E. 524; First Nat. Bank 
V. Gage, 79 111. 207; Silverman v. N. 
W. Mut. Life Ins. Co., 5 Bradw. 
(111.) 124; Cortleyeu v. Hathaway, 
11 N. J. Eq. 39, 64 Am. Dec. 478; 
Syracuse City Bank v. Tallman, 31 
Barb. (N. Y.) 201. See also Eslava 
V. Crampton, 61 Ala. 507. 

" Morrison v. Buckner, Hempst. 
(U. S.) 442; First Nat. Bank v. 
Gage, 79 111. 207; Heavilon v. Farm- 
ers' Bank, 81 Ind. 249; Callanan v. 
Shaw, 19 Iowa 183; Hackett v. 
Snow, 10 Ir. Eq. 220. See also Ti- 
tle Ins. &c. Co. V. California Dev. 
Co., 164 Cal. 58, 127 Pac. 502. 



"Cone v. Combs, 18 Fed. 576; 
Warren v. Pitts, 114 Ala. 65, 21 So. 
494; West v. Chasten, 12 Fla. 315; 
Benneson v. Bill, 62 111. 408; West 
V. Adams, 106 111. App. 114; Bean 
V. Heron, 65 Minn. 64, 67 N. W. 805; 
Jacobs V. Gibson, 9 Nebr. 380; Rider 
V. Bagley, 84 N. Y. 461; Cone v. 
Paute, 12 Heisk. (Tenn.) 506; Sales 
v. Lusk, 60 Wis. 490. See also Cou- 
per V. Shirley, 75 Fed. 168, 21 C. C. 
A. 288; Baker v. Varney, 129 Cal. 
564, 62 Pac. 100, 79 Am. St. 140; 
Lechner v. Green, 104 111. App. 442; 
New York Bldg. Loan Banking Co. 
V. Begly, 75 App. Div. 308, 78 N. Y. 
S. 169, 11 Ann. Cas. (N. Y.) 473. 

"Briggs V. Neal, 120 Fed. 224. 

"Warren v. Pitts, 114 Ala. 65, 21 
So. 494; Myton v. Davenport, 51 
Iowa 583; Cortleyeu v. Hathaway, 
11 N. J. Eq. 39, 64 Am. Dec. 478; 
New York Bldg. Loan Banking Co. 
V. Begly, 75 App. Div. 308, 78 N. Y. 
S. 169, 11 Ann. Cas. (N. Y.) 473; 
Wisconsin National Loan &c. Assn. 
V. Pride, 136 Wis. 102, 116 N. W. 
637. See also Title Ins. &c. Co. v. 
California Dev. Co., 164 Cal. 58, 127 
Pac. 502. 



§ 1516 APPOINTMENT OF A EECEIVEE 90 

ceiver is appointed on the application of a subsequent mortgagee, it 
must be with the consent of prior incumbrancers, or without preju- 
dice to their rights.^^ The first mortgagee may at any time enter or 
bring ejectment against such receiver. 

The appointment of a receiver is an equitable remedy, and has been 
said to be in eSect an equitable execution.^" This remedy bears the 
same relation to courts of equity that proceedings in attachment bear 
to courts of law. "The issuing of an attachment and the appointment 
of a receiver in a civil action are both proceedings which are merely 
ancillary or auxiliary to the main action. The action may be prose- 
cuted to final judgment, either with or without such proceedings.^' 
These auxiliary proceedings are merely intended to secure the means 
for satisfying the final judgment, in case the plaintiff should succeed 
in the action, and they can only be resorted to where the special cir- 
cumstances exist which the law prescribes for their institution."^^ The 
appointment of a receiver is equivalent to a sequestration of the rents 
and profits accruing after the date of the order, and as to all which 
have previously accrued, and which remain unpaid.^° The appoint- 
ment of a receiver does not create any new lien upon the property, 
and does not ordinarily give any advantage or priority to the person 
obtaining the appointment over other parties in interest.^" The ex- 
istence of a statute which declares that the mortgagor retains the 
legal title and right of possession does not affect the right of the 
court to appoint a receiver where this remedy is appropriate under the 
general equitable rule.^^ When the application is for the appointment 
of a receiver of the mortgaged property, it is improper for the court 
to appoint a receiver of any property not embraced in the mortgage." 

"Bryan v. Cormick, 1 Cox's Eq. "Johnston v. Riddle, 70 Ala. 219, 

Cas. 422; Calmer v. Dashwood, 2 225; Argall v. Pitts, 78 N. Y. 239; 

Cox's Bq. Cas. 378. Syracuse City Bank v. Tallman, 31 

"Jeremy's Bq. Jur. 249; Lightcap Barb. (N. Y.) 201, 212; Lofsky V. 

V. Bradley, 186 111. 510, 529, 58 N. B. Maujer, 3 Sandf. Ch. (N. Y.) 69, 71; 

221; Hass v. Chicago Building Soc, Thornton v. Bank, 76 Va. 432; Gay- 

89 111. 498; Briarfield Iron Works nor v. Blewett, 82 Wis. 313 52 N. 

Co V. Foster, 54 Ala. 622; Kreling W. 313. See also Southern Granite 

v. Kreling, 118 Cal. 421, 50 Pac. 549; Co. v. Wadsworth, 115 Ala. 570, 22 

Randall v. Wagner Glass Co., 47 So. 157; Beverley v. Brooke. 4 

Ind. App. 439, 94 N. B. 739; Vila v. Grat. (Va ) 187 

S" wi^^oTo*^ n^^^.T^'i? ^'^" ^''^ *^°- "Pascault v. Cochran, 34 Fed. 

«?. «^T^^^'i%'^;^;/^5^^^-^- 358; Wormser v. Merchants' Nat. 

f-,\? ^■,\r^: ^5' ^^^ ^™- ^*- 4'"'- Bank. 49 Ark. 117, 4 S. W. 198. 

Tr,fl^7fi^d^fVt??''-^'°^'''^^2 -Philadelphia Mortg. &c. Co. v. 

^^'J- 1^*'. 14 N. B. 358. Goos, 47 Nebr. 804, 66 N. W. 843. 

V <:i?n^^'''^^ny,-^%^'^^^^ *-Sv?- ^°- "St- Louis A. &c. R. Co. v. Whit- 
V. Sloan, 31 Ohio St. 1. per White, J. aker. 68 Tex. 630, 5 S. W. 448. 



91 WHEN APPOINTED § 1517 

§ 1517. When appointed on application of mortgagor — Grounds 
for appointment. — A receiver may be appointed on the application of 
the mortgagor, as against the mortgagee in possession, when there 
is equitable ground for it ; as, for instance, when the mortgagee is irre- 
sponsible, and the rents and profits are liable to be lost, or he is com- 
mitting waste. But if he be responsible, and anything remains due to 
him on the mortgage debt, the appointment will not be made unless 
he is mismanaging the property ;^^ and his affidavit that there is a 
balance due him will be sufficient to prevent the appointment, for the 
question of indebtedness will not be tried on such an application ; and 
when the question depends upon a settlement of the mortgagee's ac- 
count, it can be determined only upon a suit in equity to redeem.^* 
Where the mortgagee is in possession, and is insolvent, a receiver may 
be appointed at the instance of the mortgagor on a showing that the 
mortgagee is guilty of mismanagement, fraud, or waste.^° But in an 
action to redeem, the mortgagor is not entitled to have a receiver ap- 
pointed as against the mortgagee in possession, if there is a balance 
due the latter on the mortgage debt, unless the mortgagee is mis- 
managing the property.^" A mortgagee in possession may be divested 
of possession by the appointment of a receiver, when it appears that 
the mortgagee is financially irresponsible, or that the rents and profits 
will be lost or be in danger of loss, or that the mortgagee is commit- 
ting waste upon or materially injuring the premises.^^ A receiver will 
not be appointed in a proceeding to enforce a vendor's implied lien. It 
is no part of the contract of sale, either express or implied, that the 
vendor shall appropriate anything but the land itself for the satisfac- 
tion of his purchase-money ; and it is a part of the implied contract that 
the purchaser is entitled to the possession until the land is sold to en- 
force the lien.^^ The vendor who conveys and puts his vendee in posses- 
sion, reserving a lien for the purchase-money, reserves that lien upon 
the land, and not upon the rents and profits. He vests the vendee 
with the legal title to the right, under the contract of sale, to use and 

=° Boston &c. Providence R. Co. v. Home Sav. &c. Assn., 11 Wash. 277, 

N. y. &c. R. Co., 12 R. I. 220. See 39 Pac. 666. 

also Chapin v. James, 11 R. I. 86, 23 ™ Patten v. Accessory Transit Co., 

Am. Rep. 412. 4 Abb. Pr. (N. Y.) 235, 13 How. Pr. 

^ Patten v. Accessory Transit Co., 502; Boston &c. R. Co. v. New York 

4 Abb. Pr. (N. Y.) 235, 237; Quinn &c. R. Co., 12 R. I. 220; Rowe v. 

V. Brittain, 3 Edw. (N. Y.) 314; Wood, 2 Jac. & W. 553. 

Bolles V. Duff, 35 How. Pr. (N. Y.) "Harding v. Garber, 20 Okla. 11, 

481. 93 Pac. 539. 

=' Sibson V. Hamilton &c. Co., 21 ™ Morford v. Hamner, 59 Tenn. 

Wash. 362, 58 Pac. 219; Brundage v. 391. 



I 1518 APPOINTMENT OP A EECEIVEE 92 

occupy the property. He looks to the land and to his personal judg- 
ment against the vendee for the satisfaction of his claim. The right 
to possess and use the land by the vendee does not follow as an inci- 
dent to the breach of the vendee's covenant to pay. The vendor occu- 
pies a no more favorable attitude, so far as concerns the property and 
property rights of the vendee, than any other creditor, except to the 
extent of his lien upon the land sold by him.^" 

§ 1518. Appropriate under leasehold mortgages. — This remedy is 
regarded as peculiarly appropriate in cases of mortgages of leasehold 
estates, inasmuch as the value of such a security consists chiefly in 
the right to receive the rents, and the delay of protracted litigation 
may wholly destroy this value.^" In such a case there may be urgent 
need of the aid of a receiver by reason of the mortgagor's failure to 
pay the rent, and the landlord's threatening an eviction; and a re- 
ceiver may consequently be appointed before answer, and even before 
the service of process upon the defendant mortgagor.^^ But it is held 
that no receiver can be appointed in an action to foreclose a mortgage 
given on crops by a tenant, on an application by complainant alleging 
that the landlord by collusion with the tenant was attempting to gain 
possession of the crops under a pretended lien in his favor which was 
junior to the mortgage, where the landlord is solvent and it appears 
that no notice of the application was given.'^ 

§ 1519. English rule as to appointment. — The English rule, which 
prevailed before the right was made general by statute,^' was that a 

^Collins V. Richart, 14 Bush of the rents and profits of the es- 

(Ky.) 621; Columbia Finance &c. tate. He Is deemed the agent of the 

Co. V. Morgan, 19 Ky. L. 1761, 44 S. mortgagor, or owner of the prop- 

W. 389, 45 S. W. 65. erty, who is solely responsible for 

=» Astor V. Turner, 2 Barb. (N. Y.) his acts or defaults, unless other- 

444. wise provided for in the mortgage. 

=1 Barrett v. Mitchell, 5 Ir. Eq. The statute regulates his duties, 

501. powers, and compensation. This 

"= Meyer v. Thomas, 131 Ala. Ill, right to obtain the appointment of 

30 So. 89. a receiver Is independent of any ac- 

^23 & 24 Vict. ch. 145, §§ 11-32. tion to foreclose. It is not unusual 

This statute applies to all mort- to provide in the mortgage deed for 

gages, those containing powers of the appointment of a receiver. See 

sale as well as those that do not. Jolly v. Arbuthnot, 4 De G. & J. 224; 

It enables the mortgagee, in all Law v. Glenn, L. R. 2 Ch. App. 634; 

cases where the payment of the Berney v. Sewell, 1 Jac. & W. 647; 

principal is in arrear one year, or Cox v. Champneys, Jac. 576; Bryan 

the interest six months, or after v. Cormick, 1 Cox 422; Meaden v. 

any omission to pay any insurance Sealey, 6 Hare 620- Holmes v Bell 

premium which, by the terms of 2 Beav. 298; Sturch v Young 5 

the deed, ought to be paid, to ob- Beav. 557; Ackland v. Gravener, 31 

tain the appointment of a receiver Beav. 4S2. 



93 WHEN APPOINTED § 1520 

mortgagee who had a legal estate and might enter after a default, 
or recover possession at law, was not entitled to a receiver of the 
rents. But a legal mortgagee of business premises, who is prevented 
by the mortgagor from taking possession under the mortgage, may 
obtain, upon an interlocutory application, an order for the appoint- 
ment of a receiver.^* A subsequent mortgagee, however, having an 
equitable estate only, and being unable to enter as against the first 
mortgagee, was held to have a better ground for the application, and 
was therefore generally entitled to a receiver when proper occasion 
for the appointment was shown.^'* This distinction was clearly estab- 
lished by Lord Eldon, upon the ground that equity will not inter- 
fere when the mortgagee has an adequate remedy at law.°° When, 
under peculiar circumstances, the reason for this distinction fails, 
and the mortgagee, although having the legal estate, is unable to 
take possession, he is entitled to this relief in equity; as where a 
mortgage was given by a surety in addition to one given by the prin- 
cipal debtor, yet with a proviso that the mortgagee should not have 
recourse to the surety's estate or be at liberty to sell it until the estate 
primarily liable shall prove an insufficient security.*' The more mod- 
ern cases hold that, after a default in the payment of principal, inter- 
est, or insurance premiums has continued for a certain length of time, 
the mortgagee is entitled to have a receiver appointed, who is re- 
garded as the agent of the mortgagor and not of the mortgagee.** 

§ 1520. Utile in states where legal title vested in mortgagee. — In 

the United States, courts of equity have generally exercised their pow- 
ers in appointing receivers with much more freedom ; though the Eng- 
lish rule prevails in states where the legal title vests in the mort- 
gagee, and after forfeiture he can maintain an action of ejectment to 
recover possession; and in such states a court of equity will not gen- 

** Truman v. Redgrave, 50 L. J. take possession at once, there be- 

Ch. 830, 18 Ch. D. 547, 45 L. T. 605, ing no defense whatever to his ac- 

30 W. R. 421. tion of ejectment, still. If the mort- 

=' Anderson v. Kemshead, 16 Beav. gagee can not take possession, as If, 

329; Dalmer v. Dash wood, 2 Cox for instance, there is a prior mort- 

378; GreviUe v. Fleming, 2 Jo. & gagee, who refuses to take posses- 

Lat. 335; Meaden v. Sealey, 6 Hare sion, then, at the instance of the 

620. second mortgagee, the court does 

'"Berney v. Sewell, 1 Jac. & W. grant a receiver." 

647. See also observations of Lord "Ackland v. Gravener, 31 Beav. 

Romilly in Ackland v. Gravener, 31 482. 

Beav. 482, where he says that "Law v. Glenn, L. R. 2 Ch. 634; 

"though the court refuses to grant Mason v. Westoby, 32 Ch. D. 206, 55 

the receiver in cases where there is L. J. Ch. 507, 54 L. T. (N. S.) 526, 

no question, and the mortgagee can 34 Wkly. Rep. 498. 



§ 1531 



APPOINTMENT OF A RECEIVER 



94 



erally appoint a receiver, but will leave the mortgagee who has the 
legal title, or the right at law to enter and take possession of the mort- 
gaged premises, to pursue his legal remedy.^* There must be some- 
thing more than the inadequacy of the security and the insolvency 
of the mortgagor to warrant the appointment at the instance of a 
mortgagee having the legal estate. Other special circumstances calling 
for this equitable relief must be shown ; either that the mortgagee has 
only an equitable estate and can not enter and take possession, or that, 
by reason of the fraud or negligence of the person in possession, the 
security is likely to be impaired; as, for instance, by allowing the 
taxes to go unpaid, whereby a lien is created superior to that of the 
mortgage, and which may, if not extinguished, extinguish the mort- 
gage.*" The terms of the mortgage may, however, be such that the 
mortgagee will have no right, as against the mortgagor and his as- 
signs, to take the rents of the property prior to a foreclosure sale, or a 
sale under a power.*^ 

§ 1521. Prevailing rule — States where legal title vested in mort- 
gagor. — The prevailing rule, in those states in which the legal title 



'"Williamson v. New Albany R. 
Co., 1 Biss. (U. S.) 201; Oliver v. 
Decatur, 4 Cranch (D. C.) 458; 
Union Trust Co. v. St. Louis &c. R. 
Co., 4 Cent. L. J. 585; Prisbie v. 
Bateman, 24 N. J. Eq. 28; Best v. 
Schermier, 6 N. J. Eq. 154; Cortle- 
yeu V. Hathaway, 11 N. J. Eq. 39, 
64 Am. Dec. 478. In the last named 
case the court appointed a receiver 
upon the application of a subse- 
quent mortgagee — showing the in- 
solvency of the mortgagor, inade- 
quacy of the security, the sale of the 
premises to an insolvent purchaser, 
who had agreed, as part of the con- 
sideration, to reduce the mortgage 
debt, and upon obtaining possession 
refused to keep his agreement, and 
offered to sell the property for the 
amount of the incumbrances after 
taking off the crops. Mr. Chancel- 
lor Williamson, remarking upon the 
general rules governing the appoint- 
ment of a receiver, said that the 
courts of New Jersey had not 
adopted the rule of appointing a 
receiver simply on the ground of 
the inadequacy of the security and 
the insolvency of the mortgagor. 
"This court has gone upon the 
ground that where a man takes a 



mortgage security for his debt, and 
permits the mortgagor to remain 
in possession, if there is a default 
in payment, the mortgagee must 
appropriate the property in the 
usual way to the payment of the 
debt. If he is a first mortgagee, 
and wishes possession, he must 
take his legal remedy by ejectment 
If he is a second mortgagee, he 
takes his security with the disad- 
vantages of a second incumbrancer." 
See McLean v. Presley, 56 Ala. 211, 
where a receiver was denied to a 
mortgagee after he had himself, 
without right, become purchaser at 
a sale under a power in the mort- 
gage. Also Fifth Nat. Bank v. 
Pierce, 117 Mich. 376, 75 N. W. 1058. 
Union Trust Co. v. Charlotte Gen- 
eral Elec. Co., 152 Mich. 568, 116 N. 
W. 379. 

"Warwick v. Hammell, 32 N. J. 
Eq. 427; Brasted v. Sutton, 30 N. J. 
Eq. 462; Mahon v. Crothers, 28 N. 
J. Eq. 567; Johnson v. Tucker, 2 
Tenn. Ch. 398; Cone v. Paute, 12 
Heisk. (Tenn.) 506. 

"Freedman's Sav. &c. Co. v. 
Shepherd, 127 U. S. 494, 32 L. ed. 
163. 8 Sup. Ct. 1250. 



95 WHEN APPOINTED § 1521 

is regarded as being in the mortgagor until foreclosure, is that a re- 
ceiver will be appointed upon the application of a mortgagee after de- 
fault, without reference to his legal rights, whenever sufficient equi- 
table grounds for this relief are shown, which are in general that the 
premises are an inadequate security for the debt, and the mortgagor 
or other person in possession, who is personally liable for the debt, 
is unable to make good the deficiency;*^ and it is immaterial whether 

^'Cake V. Mohun, 164 U. S. 311, 41 Hauser, 68 Nebr. 663, 79 N. W. 555; 
L. €d. 447, 17 Sup. Ct. 100; Shep- Hyman v. Kelly, 1 Nev. 179; Leeds 
herd v. Pepper, 133 U. S. 626, 33 L. v. Gifford, 41 N. J. Eq. 464, 5 Atl. 
ed. 706, 10 Sup. Ct. 438; Freedman's 795; Warwick v. Hammell, 32 N. J. 
Sav. &c. Co. V. Shepherd, 127 U. S. Eq. 427; Patten v. Accessory Trail- 
494, 32 L. ed. 163, 8 Sup. Ct. 1250; sit Co., 4 Abb. Pr. (N. Y.) 235, 13 
Hitz V. Jenks, 123 V. S. 297, 306, 31 How. Pr. 502; Syracuse City Bank 
L. ed. 156; Grant v. Phoenix Mut. L. v. Tallman, 31 Barb. (N. Y.) 201; 
Ins. Co., 121 U. S. 105, 30 L. ed. 905, Warner v. Gouverneur, 1 Barb. (N. 
7 Sup. Ct. 841; Kountze v. Omaha Y.) 36, 38; Shotwell v. Smith, 3 
Hotel Co., 107 U. S. 378, 27 L. ed. Edw. (N. Y.) 588; Bolles v. Duff. 
609, 2 Sup. Ct. 911; Cone v. Combs, 35 How. Pr. (N. Y.) 481; Hollen- 
18 Fed. 576, 5 McCrary (U. S.) 651; beck v. Donnell, 29 Hun (N. Y.) 94, 
Hendrix v. American Mortgage Co., 94 N. Y. 342; Smith v. Tiffany, 13 
95 Ala. 313, 11 So. 213; Scott v. Hun (N. Y.) 671; Sea Ins. Co. v. 
Ware, 65 Ala. 174; Lehman v. Tal- Stebbins, 8 Paige (N. Y.) 565; Jen- 
lassee Manufacturing Co., 64 Ala. kins v. Hinman, 5 Paige (N. Y.) 
567; Beckwith v. Carroll, 56 Ala. 309; Bank of Ogdensburg v. Arnold, 
12; Price v. Dowdy, 34 Ark. 285; 5 Paige (N. Y.) 39; Durant v. 
Wood V. Grayson, 16 App. Cas. (D. Crowell, 97 N. Car. 367, 2 S. E. 541; 
C.) 174; Hart v. Respess, 89 Ga. 87, Kerchner v. Fairley, 80 N. Car. 24; 
14 S. E. 910; McKeel v. Hotchkiss, Williamson v. Gerlach, 41 Ohio St. 
190 111. 311, 60 N. E. 524; Cross v. 682; Henshaw v. Wells, 9 Humph. 
Will Co. Nat. Bank, 177 III. 33, 52 (Tenn.) 568; Karn v. Rorer Iron 
N. E. 322; First Nat. Bank v. 111. Co., 86 Va. 754, 11 S. E. 431; Dun- 
Steel Co., 174 111. 140, 51 N. E. 200; lap v. Hedges, 35 W. Va. 287, 13 S. 
Knickerbocker v. McKindley Coal E. 656; Winkler v. Magdeburg, 100 
Co., 172 111. 535, 50 N. E. 330; Haas Wis. 421, 76 N. W. 332; Morris v. 
V. Chicago Building Soc, 89 111. Branchaud, 52 Wis. 187, 8 N. W. 
498; Sleeper v. Iselin, 59 Iowa 379, 883; Schreiber v. Carey, 48 Wis. 208, 
13 N. W. 341; White v. Griggs, 54 4 N. W. 124; Finch v. Houghton, 19 
Iowa 650, 7 N. W. 125; Barnett V. Wis. 150; Anderson v. Matthews, 8 
Nelson, 54 Iowa 41, 6 N. W. 49, 37 Wyo. 513, 58 Pac. 898. See also 
Am. Rep. 183; Myton v. Davenport, Kerp v. Michigan L. &c. R. Co., Fed. 
51 Iowa 583; Mayfield v. Wright, Cas. No. 7727; Morrison v. Buck- 
107 Ky. 530, 54 S. W. 864; Taliar ner, Hempst. (U. S.) 442, 17 Fed. 
ferro v. Gay, 78 Ky. 496; Woolley v. Cas. No. 9844; Ruggles v. Southern 
Holt, 14 Bush (Ky.) 788; Brown v. Minnesota R. Co., Fed Cas. No. 
Chase, Walker (Mich.) 43; Mar- 12121; Dow v. Memphis &c. R. Co., 
shall &c. Bank v. Cady, 75 Minn. 20 Fed. 260; Albritton v. Lott- 
241, 77 N. W. 831; Farmers' Nat Blackshear Comm. Co., 167 Ala. 541, 
Bank v. Backus, 64 Minn. 43, 66 52 So. 653; Jackson v. Hooper, 107 
N. W. 5; Pearson v. Kendrick, 74 Ala. 634, 18 So. 254; Ashurst v. 
Miss. 235, 21 So. 37; Phillips v. Ei- Lehman, 86 Ala. 370, 5 So. 731; 
land, 52 Miss. 721; Myers v. Estell, Weis v. Neel (Ark.), 14 S. W. 1097; 
48 Miss. 372, per Simrall, J.; White- Planters' Oil Mill v. Carter, 140 Ga. 
head v. Wooten, 43 Miss. 523, 526; 808, 79 S. E. 1120; Garrard v. 
Waldron v. First Nat. Bank, 60 Amoss, 83 Ga. 765, 10 S. E. 587; 
Nebr. 245, 82 N. W. 856; Laune v. Glennoa v. Wilcox, 159 ill. App. 42; 



1531 



APPOINTMEN-T OF A EECBITER 



96 



a deficiency judgment against the parties liable for the debt is col- 
lectible.*^ The mere possibility that the property may, at some future 
time, become insufBcient to pay the mortgage debt, is not sufficient 
ground for appointing a receiver.** Additional grounds ■which are gen- 
erally conclusive are, that the mortgagor is allowing the security to 
diminish in value, or the mortgage debt to increase, and especially 
is allowing the interest on a prior mortgage to accumulate, and taxes 
to go unpaid.*^ The failure of the mortgagor to insure the mortgaged 
property does not alone justify the appointment of a receiver, where 
the mortgage provided that the mortgagee could have the property 
insured and include the premiums in the mortgage debt.*" If the 



Ruprecht v. Henrici, 113 111. App. 
398; Pringle v. James, 109 111. App. 
100; "West v. Adams, 106 111. App. 
114; McLester v. Hose, 104 111. App. 
433; Rlchey v. Guild, 99 111. App. 
451; Gooden v. Vinke, 87 111. App. 
562; Sweet &c. Co. v. Union Nat. 
Bank, 149 Ind. 305, 49 N. B. 159; 
Buchanan v. Berkshire L. Ins. Co., 
96 Ind. 510; Haugan v. Netland, 51 
Minn. 552, 53 N. W. 873; Pearson 
V. Kendrick, 74 Miss. 235, 21 So. 
37; Jacobs v. Gibson, 9 Nebr. 380, 2 
N. "W. 893; Land Title &c. Co. v. 
Kellogg, 73 N. J. Eq. 524, 68 Atl. 80. 
But see Phoenix Mut. L. Ins. Co. V. 
Grant, 3 McArthur (D. C.) 220. In 
Indiana it is only necessary to 
show that the mortgaged property 
is not sufficient to discharge the 
mortgage debt. It is not necessary 
to allege or prove the mortgagor's 
insolvency. Hursh v. Hursh, 99 
Ind. 500; Merritt v. Gibson, 129 Ind. 
155, 27 N. E. 136; Ponder v. Tate, 
96 Ind. 330; Main v. Ginthert, 92 
Ind. ISO. Leader Pub. Co. v. Grant 
Trust &c. Co. (Ind.), 108 N. E. 121, 
holding that the court was author- 
ized to appoint a recsiver where the 
debt exceeded the value of the prop- 
erty. The present rule is, that a 
mortgage which does not, in terms, 
give to the mortgagee the right of 
possession before sale and the ter- 
mination of the right of redemption, 
nor pledge the rents and profits, 
creates no lien upon nor interest in 
the right of possession given by the 
statute, nor upon the revenue which 
accrues from it, and the appoint- 
ment of a receiver to take posses- 
sion of property under such a mort- 



gage, or to appropriate the rents 
from it, is a violation of the statu- 
tory rights of the mortgagor. 
American Investment Co. v. Farrar, 
87 Iowa 437, 54 N. W. 361; Swan v. 
Mitchell, 82 Iowa 307, 47 N. W. 
1042. In Paine v. McBlroy, 73 Iowa 
81, 34 N. W. 615, the appointment 
of a receiver was provided for. 

'^Waldron v. First Nat. Bank, 60 
Nebr. 245, 82 N. W. 856; Philadel- 
phia Mtg. &c. Co. V. Goos, 47 Nebr. 
804, 815, 66 N. W. 843; Jacobs v. 
Gibson, 9 Nebr. 380, 2 N. W. 893. 
See also New York Bldg. Loan 
Banking Co. v. Begly, 75 App. Div. 
308, 78 N. Y. S. 169, 11 Ann. Cas. 
(N. Y.) 473; Browning v. Stacey, 
52 App. Div. 626, 65 N. Y. S. 203; 
Thockmorton v. Slagle, 3 Ohio Dec. 
550; Wisconsin Nat. Loan &c. 
Assn. V. Pride, 136 Wis. 102, 116 N. 
W. 637; Winkler v. Magdeburg, 100 
Wis. 421, 76 N. W. 332. But see 
Bank of Woodland v. Stephens, 144 
Cal. 659, 79 Pac. 379; Murphy v. 
Hoyt, 93 111. App. 313; Sickles V. 
Canary, 8 App. Div. 308, 75 N. Y. 
St. 34, 40 N. Y. S. 948. 

"Laune v. Heuser, 58 Nebr. 663, 
79 N. W. 555. 

*> Haugan v. Netland, 51 Minn. 
552, 53 N. W. 873; Lowell v. Doe, 44 
Minn. 144, 46 N. W. 297; Dunlap v. 
Hedges, 35 W. Va. 287, 13 S. B. 656. 
See also Ortengren v. Rice, 104 111. 
App. 428; Ferguson v. Dickinson 
(Tex. Civ. App.), 138 S. W. 221. 

"Planters' Oil Mill v. Carter, 140 
Ga. 808, 79 S. E. 1120; Ferguson v. 
Dickinson (Tex. Civ. App.), 138 S. 
W. 221. 



97 WHEN APPOINTED § 1523 

mortgage provides for the appointment of a receiver in case of fore- 
closure, a valid lien on the rents and profits is thereby created, so 
that a receiver will be appointed without regard to the mortgagor's 
insolvency.*' It is true that in half or more of the states and terri- 
tories the mortgagee has no legal rights that would aid him in such 
case, and resort to equity is the only remedy; but a resort to equity 
is sometimes an appropriate remedy in those states in which the mort- 
gagee has a legal remedy for recovering possession. In several states 
there is a statutory provision, in substantially the same terms, that, 
in an action by a mortgagee for the foreclosure of his mortgage and 
the sale of the mortgaged property, a receiver may be appointed where 
it appears that the mortgaged property is in danger of being lost, re- 
moved, or materially injured, or that the condition of the mortgage 
has not been performed, and that the property is probably insufficient 
to discharge the mortgage debt.*^ This however, is merely an enact- 
ment of the general equitable rule. 

§ 1522. The appointment as affected by statutes. — As already seen, 
by the statutory provisions of many of the states, the mortgagee is not 
in any case entitled to possession of the mortgaged property upon a 
default, but the mortgagor may still retain possession until a sale is 
made under a decree in a foreclosure suit, and in some states even un- 
til the lapse of a period of redemption allowed after the sale. Some 
of these statutes are interpreted as preventing the appointment of a 
receiver in any case; while others are regarded as giving special occa- 
sion for it, because they prevent the mortgagee's obtaining possession 
and protecting his rights, as he might under a mortgage conveying the 
legal title at common law. Even statutes precisely alike have in dif- 
ferent states been interpreted as operating in opposite ways upon the 
generally received rules for the appointment of receivers in fore- 
closure suits; for while generally the possession which the law allows 
to the mortgagor until a foreclosure sale is regarded as subordinate 
to the equitable rights of the mortgagee to the rents and profits under 
the condition of things which ordinarily authorizes the appointment 
of a receiver in equity, and while the statute confining the mortgagee 
to one remedy in case of default, which is an equitable suit for fore- 
closure and sale of the property and a judgment for any deficiency, 

"First Nat. Bank v. Illinois Steel Y. S. 370; Baier v. Kelley, 55 Misc. 

Co., 174 111. 140, affg. 72 111. App. 368, 106 N. Y. S. 552. 

640, 51 N. E. 200. See also Gale v. « Arkansas: Dig. of Stats. 1904, 

Carter, 154 111. App. 478; Pizer v. § 6354. 
Herzig, 121 App. Dlv. 609, 106 N. 

7 — Jones Mtg. — ^Vol. III. 



1522 



APPOINTMENT OF A EECEIVEH 



98 



is held to be a reason for adopting the practice of appointing a receiver 
when there were the usual grounds for the appointment/^ in Cali- 
fornia, on the other hand, it is held that by reason of the statute the 
practice of appointing a receiver to collect the rents pending the suit 
is not applicable ; that the mortgagor continues to be the owner of the 
estate, and is entitled to the possession of it until it passes to some 
one else under a foreclosure sale.°° In Michigan and Minnesota, also, 
the mortgagor being entitled by statute to the possession, and conse- 
quently to the rents and profits of the mortgaged premises, until he 
is divested by foreclosure and sale, it is held that it is not competent 
to cut short his right in this respect by the appointment of a receiver 
in the foreclosure suitf^ at least not until after default ;^^ or unless 
the right is clearly given by the contract of the parties.^' In South 
Carolina, also, a mortgagee is not entitled to the appointment of a 



California: Codes Civ. Proc. 
1906, § 564; Guy v. Ide, 6 Cal. 99, 
101, 65 Am. Dec. 490. 

Idaho: 2 Rev. Codes, § 4329. 

Indiana: Burns' Ann. Stat. 1914, 
§ 1279; Leader Pub. Co. v. Grant 
Trust &c. Co. (Ind.), 108 N. E. 121. 

Kentucky: Code of Practice 1895, 
§ 299. 

Montana: 2 Rev. Codes 1907, 
§ 6698. 

Nebraska: Cobbey's Ann. Stat. 
1911, § 1248, § 266 of Civ. Code; 
Philadelphia Mtg. &c. Co. v. Goos, 
47 Nebr. 804, 66 N. W. 843; Jacobs 
V. Gibson, 9 Nebr. 380. 

New York: 1 Bliss' Code of Civ. 
Pro. 1890, § 713; Stover's Code 
1902, § 713. 

North Dakota: Comp. Laws 1913, 
§ 7588. 

Ohio: 3 Gen. Code, § 11894. 

South Dakota: Rev. Code 1903, 
§ 227, p. 907. 

"Washington: Rem. & Bal. Stat. 
1910, Code Civ. Proc, § 741. 

Wyoming: Comp. Stat. 1910, 
§ 4914. 

*» Pasco V. Gamble, 15 Fla. 562; 
Lowell V. Doe, 44 Minn. 144, 46 N. 
W. 297; Hollenbeck v. Donnell, 94 
N. Y. 342, 29 Hun 94; Schreiber v. 
Carey, 48 Wis. 208, 4 N. W. 124; 
Finch V. Houghton, 19 Wis. 149; 
Hyman v. Kelly, 1 Nev. 179. The 
court say that the legislature hav- 
ing forbid the mortgagee pursuing 
the common-law remedy of eject- 



ment is rather a reason for a more 
liberal exercise of the chancellor's 
powers to protect the security. 
They expressly dissent from the 
case In California next cited. Guy 
V. Ide, 6 Cal. 99, 65 Am. Deo. 490. 
See statute, ante § 1521. In like 
manner an express stipulation in 
the mortgage that the mortgagor 
may retain possession of the prop- 
erty until foreclosure, prevents the 
appointment of a receiver. Chad- 
bourn V. Henderson, 2 Bax. (Tenn.) 
460. See also Elmira Mechanics' 
Soc. V. Stanchfield, 160 Fed. 811, 87 
C. C. A. 585; American Nat. Bank 
V. Northwestern Mut. L. Ins. Co., 
89 Fed. 610, 32 C. C. A. 275; David- 
son V. Allis, Fed. Cas. No. 3600; 
Philadelphia Mtg. &c. Co. v. Goos, 
47 Nebr. 804, 66 N. W. 843; Roberts 
V. Parker, 14 S. Dak. 323, 85' N. W. 
591. 

"Guy T. Ide, 6 Cal. 99, 65 Am. 
Dec. 490. See also Bank of Wood- 
land V. Stephens, 144 Cal. 659. 79 
Pac. 379. 

"Hazeltine v. Granger, 44 Mich. 
503, 7 N. W. 74; Wagar v. Stone, 
36 Mich. 364; Marshall &c. Bank v. 
Cady, 76 Minn. 112, 78 N. W. 978. 
See also Beecher v. Marquette &c. 
Rolling Mill Co., 40 Mich. 307. 

""Beecher v. Marquette &c. Roll- 
ing Mill Co., 40 Mich. 307. 

•^ Michigan Trust Co. v. Lansing 
Lumber Co., 103 Mich. 392. 61 N. W. 
668. 



99 WHEN APPOINTED § 1523 

receiver of the rents and profits of the mortgage property, of which 
the mortgagor has possession, unless the mortgage expressly provides 
that the lien shall attach to the rents and profits, as well as the land 
itself.^* 

§ 1523. In behalf of a subsequent mortgagee. — A subsequent mort- 
gagee can not have a receiver appointed to the prejudice of a prior 
mortgagee to whom something is due, if the prior mortgagee is in 
actual possession; and whenever an appointment is made, it is with- 
out prejudice to the right of any such prior incumbrancer to take 
possession.'*" The subsequent mortgagee may, in some cases, have the 
first mortgagee's receivership extend to cover the former's security, or 
continued for his benefit."^ A receiver will be appointed upon the 
application of a subsequent mortgagee, pending an action of fore- 
closure, when it appears that the owner in possession of the premises 
receives the rents, but refuses to apply them for the benefit of the 
property, and that the interest on the first mortgage, as well as the 
taxes and assessments on the property, are unpaid, especially if the 
mortgage contains a stipulation for the appointment of a receiver in 
case of default.^'' Where a receiver is appointed in behalf of a junior 
mortgagee to receive the rents for his benefit, such junior mortgagee 
acquires a specific lien on the rents collected by the receiver, superior 
to any claim, legal or equitable, of the first mortgagee."^ The posses- 

" Hardin v. Hardin, 32 S. Car. without prejudice to the first mort- 

599, 12 S. E. 936; Seignious v. Pate, gagee's taking possession, and that 

32 S. Car. 134, 10 S. E. 880; Mat- was afterward followed by Lord 

thews V. Preston, 6 Rich. Eq. (S. Kenyon." 

Car.) 307. ''» Miltenberger v. Logansport &c. 

'=1 Fisher's Law of Mtg. 408; R. Co., 106 U. S. 286, 27 L. ed. 117, 

Trenton Banking Co. v. ■Woodruff. 1 S. Ct. 140; Albritton v. Lott- 

3 N. J. Eq. 210; Wiswall v. Samp- Blackshear Comm. Co., 167 Ala. 541, 

son, 14 How. (N.Y.) 52,64; Quinnv. 52 So. 653; Roach v. Glos, 181 111. 

Brittain, 3 Edw. (N. Y.) 314; Sales 440, 54 N. E. 1022; Gillespie v. 

V. Lusk, 60 Wis. 490; Rowe v. Wood, Greene County Sav. &c. Assn., 95 

2 Jac. & W. 553; Berney v. Sewell, 111. App. 543; Evans v. Eastman, 60 

1 Jac. & W. 627; Hiles v. Moore, 15 111. App. 332; Clark v. John A. Lo- 

Beav. 175; Davis v. Marlborough, 2 gan Mut. Loan &c. Assn., 58 111. 

Swans. 108, 137; Dalmer v. Dash- App. 311; Howard v. Robbins, 67 

wood, 2 Cox 378; Norway v. Rowe, App. Div. 245, 73 N. Y. S. 172. 

19 Ves. 144, 153. In Berney v. Sew- " Cross v. Will County Nat. Bank, 

ell, 1 Jac. & W. 627, Lord Eldon 177 111. 33, 52 N. E. 322, affg. 71 111. 

said: "I remember a case where it App. 404; Keogh Mfg. Co. v. Whis- 

was much discussed whether the ton, 14 N. Y. S. 344. 

court would appoint a receiver ''"Goddard v. Clarke, 81 Nebr. 373, 

when it appeared by the bill that 116 N. W. 41; Longdock Mills &c. 

there was a prior mortgagee who v. Alpen (N. J. Eq.), 88 Atl. 623; 

was not in possession. I have a Kroehle v. Olcott, 148 App. Div. 54, 

note of that case. There Lord 132 N. Y. S. 1056; Abrahams v. 

Thurlow made the appointment Berkowitz, 146 App. Div. 563, 131 



§ 1534 APPOINTMENT OF A EECEIVEK 100 

sion of the prior mortgagee, and his application of the rents to the debt 
due him, may be as much to the advantage of the subsequent mortga- 
gee as his own would be. If the subsequent mortgagee insists upon 
obtaining possession himself, his only course is to redeem the estate 
from the prior incumbrance by paying it off;°° and this may be ren- 
dered necessary in case the prior mortgagee in possession does not 
apply the income of the property to the payment of the interest and 
principal of the mortgage debt, but applies it to other debts of the 
mortgagor, or pays it over to him. A receiver may even be appointed 
on the application of the mortgagor, when his grantee or mortgagee 
is in possession and is insolvent, and it is probable that the rents 
and profits will be lost through his management.*" 

§ 1524. Consent of prior mortgagee. — It is not necessary, as was at 
first held by Lord Thurlow,"^ that the first mortgagee's consent should 
be obtained before a receiver can be appointed on the application of 
an equitable mortgagee.''^ If he is not in possession the application 
will be allowed ; and he can not prevent it in any way except by tak- 
ing possession himself."' But, as already stated, the appointment is 
made without prejudice to those who have prior rights in the prop- 
erty."* If the prior mortgagee has the legal estate he may take pos- 
session at any time; and if he has an equitable estate only, his equi- 
table rights are protected by the court. The receiver appointed at the 
instance of a junior incumbrancer is entitled to receive the rents and 
profits for the benefit of the latter, until the prior mortgagee takes 
possession, or has a receiver in aid of his own suit to foreclose."^ But 
if the prior mortgagee be made a party to the bill, the junior mort- 

N. Y. S. 257; Madison Trust Co. v. 117; Howell v. Ripley, 10 Paige (N. 

Axt, 146 App. Div. 121, 130 N. Y. S. Y.) 43; Dunlap v. Hedges, 35 W. 

371. Va. 287, 13 S. B. 656; Sanders v. 

" Trenton Banking Co. v. "Wood- Lisle, Ir. Rep. 4 Eq. 43. 
ruff, 3 N. J. Bq. 210. «sin Virginia a receiver Is re- 

'«' Williams v. Robinson, 16 Conn, garded as acting in the interest of 

517, 524; Bolles v. Duff, 35 How. all parties, and no one having a 

Pr. (N. Y.) 481. See ante § 1517. right prior to that of the plaintiff 

^'Phipps V. Bishop of Bath, 2 can afterward take possession. He 

Dick. 608. must finally account according to 

"^ Bryan v. Cormick, 1 Cox 422. the priorities of the different in- 

<" Silver v. Bishop of Norwich, 3 cumbrancers. Beverley v. Brooke, 

Swans. 112, note. 4 Grat. (Va.) 187; Ranney v. Pey- 

"Dalmer V. Dashwocd, 2 Cox 378; ser, 83 N. Y. 1; Hennessey v. 

Davis V. Marlborough, 2 Swans. 108, Sweeney, 28 Civ. Proc. 332, 57 N. 

137, 165; Norway v. Rowe, 19 Ves. Y. S. 901; Holland Trust Co. v. Con- 

144, 153; Post v. Dorr, 4 Bdw. Ch. solidated Gas &c. Co., 85 Hun 454, 

(N. Y.) 412; Washington Life Ins. 66 N. Y. St. 291, 32 N. Y. S. 830. 
Co. V. Fleischauer, 10 Hun (N. Y.) 



101 WHEN APPOINTED ^ § 1525 

gagee has no exclusive right to the income of the receivership.^^ A re- 
ceiver appointed to collect the rents during the pendency of a suit to 
foreclose a subsequent mortgage may remain in possession to collect 
such rents until the further order of the court."^ Where a receiver is 
appointed in an action to foreclose a junior mortgage, to which action 
the first mortgagee was not made a party, the court may remove such 
receiver and appoint another in his place.** If a receiver of a lease- 
hold estate be appointed, upon the application of a junior mortgagee, 
with power "to pay the ground-rent and taxes," upon a subsequent 
foreclosure of the prior mortgage, the receiver is not bound to apply 
a balance of rents in his hands to the payment of accrued taxes. The 
order as to rents and taxes is permissive, not mandatory; and the 
junior mortgagee, having by diligence acquired a specific lien upon 
the rents superior to the equities of the prior mortgagee, is entitled 
to retain and apply them upon his mortgage.*" It is held, however, 
that if the prior mortgagee commences proceedings in a different 
court, a receiver already appointed by another court, on the applica- 
tion of a junior mortgagee, will not be interfered with while such 
mortgagee is in actual possession, and administering the property un- 
der the directions of that court."* 

§ 1525. Right of prior mortgagee to possession until paid. — A 

court of equity not only respects the actual possession of the prior 
mortgagee, but is cautious not to interfere with his rights to take or 
obtain possession if he should desire it.^^ But a subsequent mortgagee, 
having no right to the possession at law as against the prior mort- 
gagee, may, in case such prior mortgagee neglects or refrains from 
the exercise of his legal rights, have a receiver appointed to take pos- 
session and collect the rents and profits.'^ So long as anything is due 
the prior mortgagee, however small the amount, the possession will 
not be taken from him.'^^ This is stated by Lord Eldon very forcibly : 

«■ Miltenberger v. Logansport R. "Woods (U. S.) 606, 3 Am. L. T. R. 

Co., 106 U. S. 286, 27 L. ed. 117, 1 (N. S.) 91. 

Sup. Ct. 140. See also State Bank "Beverly v. Brooke, 4 Grat. (Va.) 

v. Cohen, 124 N. Y. S. 433. 187. 

" Kramp v. Kramp, 185 111. App. " Cortleyeu v. Hathaway, 11 N. J. 

464. Eq. 39, 64 Am. Dec. 478; Berney v. 

-* State Bank v. Cohen, 124 N. Y. Sewell, 1 Jac. & W. 627. 

S. 433, denying rehearing, 68 Misc. '^ Chambers v. Goldwin, cited and 

138, 123 N. Y. S. 747; Schneider v. commented upon in Quarrell v. 

Miller, 155 Wis. 239, 144 N. W. 286. Beckford, 13 Ves. 377; Hlles v. 

°°Ranney v. Peyser, 83 N. Y. 1, Moore, 15 Beav. 175; Codrlngton v. 

reversing 20 Hun 11. Parker, 16 Ves. 469; Faulkener v. 

™ Young V. Mont. &c. R. Co., 2 Daniel, 10 L. J. Ch. (N. S.) 33; 



§ 1526 APPOINTMENT OF A RECEIVEE 102 

"If you reeoUect, in Mr. Beckford's case I went to the very utmost; 
I said then that if Mr. Beckford would swear that there was sixpence 
due to him, I would not take away the possession from him. If there 
is anything due, I can not substitute another security for that which 
the mortgagee has contracted for. I know no case where the court has 
appointed a receiver against a mortgagee in possession, unless the 
parties making the application will pay him off, and pay him accord- 
ing to his demand as he states it himself."^* If he insists by his an- 
swer that he has not been fully paid, the court will not upon hearing 
of the motion try the question whether any balance is due.'' But if 
he refuses to accept what is due, or will not swear that something 
is due, a receiver will be appointed ;^° and it being his business to 
keep his accounts, if these be so incomplete that he can not determine 
whether anything is due, the court may assume that nothing is due 
and act accordingly.'^ 

§ 1526. Time of appointing receiver. — A receiver can not be ap- 
pointed prior to the filing of a suit to foreclose,''* and an order to show 
cause why a receiver should not be appointed, served before the suit 
is commenced, is irregular.'* As a general rule, the appointment can 
not be made until a bill has been filed for foreclosure and is pending, 
and the merits of the case have been disclosed by the defendant's an- 
swer f though, under circumstances rendering an immediate appoint- 
ment necessary to prevent threatened loss and injury to the property, 
an appointment may be made before the defendant's appearance,*^ and 
even before service upon him,*^ and especially if his residence be un- 
knovm.'* A receiver may be appointed prior to the service of sum- 
mons, where the defendant designedly keeps without the jurisdiction 
of the court, or is hiding to avoid service of the process.** The ap- 

Trenton Banking Co. v. Woodruff, (N. Y.) 444, 3 How. Pr. 225, 11 

3 N. J. Eq. 210. In this last case Paige 436; Kattenstroth v. Astor 

the priority of the first mortgagee Bank, 2 Duer (N. Y.) 632; Anon., 1 

in possession was contested. Atk. 578. See also People v. New 

"Berney v. Sewell, 1 Jac. & W. York, 8 Abb. Pr. (N. Y.) 7, 28 Barb. 

627. 240, 17 How. Pr. 56; West V. Swan. 

"Rows V. Wood, 2 Jac. & W. 553. 3 Edw. Ch. (N. Y.) 420. 

"Berney v. Sewell, 1 Jac. & W. "McCarthy v. Peake, 9 Abb. Pr. 

627. (N. Y.) 164; Ex parte Whitfield, 2 

"Codrington v. Parker, 16 Ves. Atk. 315; Maeden v. Sealey, 6 Hare 

469; Hiles v. Moore, 15 Beav. 175. 620; Caillard v. Caillard, 25 Beav. 

"Crowder v. Moone, 52 Ala. 220. 512. 

"Kattenstroth v. Astor Bank, 2 "'Barrett v. Mitchell, 5 Ir. Eq. 

Duer (N. Y.) 632. 501. 

"Morrison v. Buckner, Hempst. "^ Bowling v. Hudson, 14 Beav 

(U. S.) 442; Hardy v. McClellan, 53 423. 

Miss. 507; Astor v. Turner, 2 Barb. " Quinn v. Gunn, 1 Hog. 75; Mai- 



103 WHEisr APPOINTED § 1536a 

pointment may be made at the hearing, though not prayed for by the 
bill, if the facts stated in it are sufficient to authorize it.*' To entitle 
the plaintifi to the appointment of a receiver before the hearing, his 
complaint must contain a prayer for such appointment.'" The facts 
may be shown by affidavit.*' On petition supported by the proper 
proof, the appointment may be made at any time during the pendency 
of the suit. It may even be made after judgment; and the fact that 
the complaint does not state facts authorizing the appointment is no 
objection.** "Although, by the laws of this state, the mortgagor of 
lands holds the legal title until the foreclosure sale, yet in a proper 
case, when necessary to protect the mortgagee's interests, equity will 
appoint a receiver; this may be done by an order in the foreclosure 
suit after judgment; and the fact that the complaint does not state 
facts authorizing the appointment, is no objection in such a case."*' 
It has been held not error to continue the receivership after the final 
decree of sale, where the appointment was properly made in the suit 
to foreclose."" It is against the policy of the law that a mortgagee 
should receive the appointment, and if he does he is not entitled to 
compensation.*^ 

§ 1526a. Notice of application. — As a general rule, in order to 
give a court of equity jurisdiction of a motion for the appointment 
of a receiver, notice of such motion must be served upon all the par- 
ties adversely interested."^ So notice of the application for the ap- 
pointment of a receiver should, if practicable, be given to the mort- 
gagor and other parties in interest.** Notice is not required where 
the mortgage expressly provides that a receiver may be appointed 

colm V. Montgomery, 2 MoUoy 500; «■ Schreiber v. Carey, 48 Wis. 208, 

Maguire v. Allen, 1 Ball & B. 75; 4 N. W. 124. 

Coward v. Chadwick, 2 Russ. 150. ""Buchanan v. Berkshire L. Ins. 

''Malcolm v. Montgomery, 2 Mol- Co., 96 Ind. 510. 

loy 500; Osborne v. Harvey, 1 "Langstaffe v. Fenwick, 10 Ves. 

Young & C. C. C. 116. See also 405; Scott v. Brest, 2 T. R. 238. 

Connelly v. Dickson, 76 Ind. 440; "^Belknap Sav. Bank v. Lamar 

Adair v. Wright, 16 Iowa 385; Ham- Land &c. Co., 28 Colo. 326, 64 Pac. 

ilton V. Austin, 36 Hun (N. Y.) 138; 212; Schoenecke v. Chicago Title 

Barlow v. Gains, 8 Beav. 329. &c. Co., 178 111. App. 387; Vanse v. 

»°Cook V. Gwyn, 3 Atk. 689; Mere- Woods, 46 Miss. 120; Whitehead v. 

dith v. Wyse, 1 Molloy 2. Wooten, 43 Miss. 523. 

"Commercial and Savings Bank »= Jones on Corp. Mtg. and Bonds, 

of San Jose v. Corbett, 5 Sawyer § 454. Notice may be required by 

(U. S.) 172. statute, as in Nebraska. Comp. 

^ Haas v. Chicago Building Soc, Stats. 1893, Code of Civ. Pro., § 267; 

89 111. 498; Schreiber v. Carey, 48 and in such case an order made 

Wis. 208, 4 N. W. 124. without notice is void. Johnson v. 

Powers, 21 Nebr. 292, 32 N. W. 62. 



§ 1527 APPOINTMENT OF A RECEIVER 104 

without notice, especially if the owner is in default at the time of 
filing the application f* but it is held that even though a mortgage so 
provides, the court is not bound thereby, and may require notice to 
be given.°° The question of notice can not of course be raised by a 
party who has appeared and resisted the order.'" There are many 
circumstances under which the appointment of a receiver may be made 
on an ex parte application without notice. Such appointment was 
made where it appeared that the mortgagor had in bad faith sold the 
mortgaged property; that the vendee refused to attorn and deliver 
up possession to the mortgagee; that the mortgagor and vendee were 
both insolvent; that the vendee had removed a portion of the crops, 
and there was danger of further loss of crops; and that the security 
was inadequate.®^ 

§ 1527. Defenses to the application. — The defendant should an- 
swer the application by explicitly denying the facts alleged,'^ and 
not by demurrer."" To prevent the appointment of a receiver, the mort- 
gagor must either make a special affidavit of merits, or show that the 
property is sufficient to secure the mortgage.^ His affidavit that he 
has a good defense, without stating what it is, or stating it vaguely, 
is no answer to the application for a receiver.^ If he has conveyed the 
land subject to the mortgage, he is in no position to oppose the ap- 
pointment.' Only those whose rights would be affected by the appoint- 
ment can oppose it. Upon a bill to restrain waste by the mortgagor, 
there is no occasion for a receiver; the injunction is sufficient.* The 

"Conroy v. Polstein, 150 App. °°Pouder v. Tate, 96 Ind. 330. 

Div. 832, 135 N. Y. S. 419. > Sea Ins. Co. v. Stebbins, 8 Paige 

»= Hawkins v. Maxwell, 156 App. (N. Y.) 565; Lofslsy v. Maujer, 3 

Div. 31, 140 N. Y. S. 909. Sandf. Ch. (N. Y.) 69; Bancker v. 

"■Haas V. Chicago Building Soc, Hitchcock, 1 Ch. Dec. 88; Darcy v. 

89 III. 498. In Michigan a court of Blake, 1 Molloy 247; Shepherd v. 

equity can not make an ex parte Murdock, 2 Molloy 531; Leahy v. 

order appointing a receiver in a Arthur, 1 Hogan 92. Receiver not 

foreclosure suit, although the par- appointed where the property is 

ties agree thereto by the terms of mortgagor's homestead. Chadron 

the mortgage. Hazeltine v. Gran- Loan &c. Assn. v. Smith, 58 Nebr. 

ger, 44 Mich. 503, 7 N. "W. 74. 469, 78 N. "W. 938; Laune v. Hauser, 

"Hendrix v. Am. Mtg. Co., 95 58 Nebr. 663, 79 N. "W. 555. 

Ala. 313, 11 So. 213. See also ='Sea Insurance Co. v. Stebbins, 8 

Heard v. Murray, 93 Ala. 127, 9 So. Paige (N. Y.) 565; MacKellar v. 

514; DoUins v. Lindsey, 89 Ala. 217, Rogers, 20 J. & S. (N. Y.) 360. 

7 So. 234; Ashurst v. Lehman, 86 'Wall St. Fire Ins. Co. v. Loud, 
Ala. 370, 5 So. 731; Sims v. Adams, 20 How. Pr. (N. Y.) 95. 

78 Ala. 395. ■'Robinson v. Preswick, 3 Edw. 

»» Henry v. Watson, 109 Ala. 355, (N. Y.) 246. 
19 So. 413; Sea Ins. Co. v. Stebbins, 

8 Paige (N. Y.) 565. 



105 WHEN APPOINTED § 1539 

applicant has the burden of establishing the grounds on which the 
receivership is asked." After a receiver has once been appointed with- 
out opposition made at the time, an objection raised at a later stage 
of the case that the application was improperly allowed will not be 
regarded.* 

§ 1528. Possession, of defendant must be shown. — The application 
should show the defendant in possession, and notice of the applica- 
tion should be given him unless he has defaulted in the action,'' inas- 
much as in general the court is warranted in appointing a receiver 
only when the property is in possession of a party to the foreclosure 
suit, either by himself or his tenant. If the premises are in possession 
of a tenant who is not himself a party to the suit, he is not disturbed 
in his possession, but is directed to attorn to the receiver.* When the 
tenant is before the court, the receiver is appointed without restric- 
tion.' When a tenant is not made a party to the suit, his possession 
will not be disturbed by the appointment of a receiver, but he may 
be ordered to attorn to the receiver and to pay rent to him.'* The 
court is not warranted in appointing a receiver of the rents and 
profits of premises in the possession of a stranger to the suit.'*^ There 
can be no appointment of a receiver of mortgaged lands after an as- 
signee in bankruptcy of the estate of the owner of the equity of re- 
demption has been appointed and has taken possession of the mort- 
gaged property. The assignee is clothed with functions similar to 
those of a receiver.^' 

§ 1529. Verification. — The petition for the appointment of a re- 
ceiver should be verified by affidavit, and such afiidavit, as well as an 
affidavit in opposition to the application, must be positive, but any 
insufficiency in this respect may be cured by sufficient affidavits sub- 
sequently filed.'' The plaintiff must show by affidavit the amount due 

» Brown v. Chase, Walk. (Mich.)' "Sea Ins. Co. v. Stebbins, 8 

43; Johnson v. Young, 1 Nebr. Paige (N. Y.) 565; Bank of Ogdens- 

(UnofE.) 28, 95 N. W. 497; Wood v. burg v. Arnold, 5 Paige Ch. (N. Y.) 

Eckert, 3 N. J. L. J. 53; Durant v. 38. 

Crowell, 97 N. Car. 367, 2 S. B. 541. " Searles v. Jacksonville, P. &c. 

° Post V. Dorr, 4 Edw. (N. Y.) 412. R. Co., 2 Woods (U. S.) 621, Fed. 

' Sea Insurance Co. v. Stebbins, 8 Cas. No. 12586; Sea Ins. Co. v. 

Paige (N. Y.) 565; High on Receiv- Stebbins, 8 Paige (N. Y.) 565. 

ers, § 660. "In re Bennett, 2 Hughes (U. S.) 

'Smith V. Tiffany, 13 Hun (N. 156. 

Y ) 671; Sea Insurance Co. v. Steb- " Haines v. Carpenter, 1 Woods 

bins, 8 Paige (N. Y.) 665. (V. S.) 262, Fed. Cas. No. 5905; Pol- 

° Keep V. Mich. Lake Shore R. Co., lard v. Southern Fertilizer Co., 122 

6 Chicago Leg. News 101. Ala. 409, 25 So. 169; Smith-Dimmick ' 



§ 1530 APPOINTMENT 01" A EECEIVEK 106 

after the allowance of all just credits, if decree has been taken pro 
confesso. The statement in the bill is not enough.^* The affidavit 
must also show that the defendant is in possession. If the amoun'o 
actually due is in dispute, and the answer denies the allegations as to 
the inadequacy of the security, the court will not interfere with the 
possession.^^ If the petition for the appointment of a receiver is veri- 
fied, the bill of complaint need not be verified.^" 

§ 1530. Necessity for default or maturity of debt. — Generally the 
mortgage debt must be already due to entitle the mortgagee to have 
a receiver appointed ; at any rate there must have been such a default 
as entitles him to commence an action to foreclose the mortgage.^^ If 
a mortgage securing several notes provides that all the notes shall be- 
come due on default in the payment of any of them, on such default 
the mortgagee may foreclose for the notes due, or may declare them 
all due, and foreclose for the entire debt, but he can not have a re- 
ceiver appointed to take charge of the property and collect rents pend- 
ing the maturity of all the notes, and then have foreclosure.^^ Yet a 
receiver has been granted under peculiar circumstances, when the 
mortgagee was not entitled to a foreclosure, and merely to keep down 
the interest on the mortgage;^' as in a ease where the principal debt 
did not become due until after the mortgagor's death.^" If the prop- 
erty consists of separate parcels, or can be divided without injury to 
the parties interested, upon the maturity of a part of the debt a re- 
ceivership of one of the parcels may be granted.^^ A receiver will some- 
Lumber Co. V. Teague, 119 Ala. 385', Maujer, 3 Sandf. Ch. (N. Y.) 69; 
24 So. 4; Burgess v. Martin, 111 Morris v. Brancliaud, 52 Wis. 187, 8 
Ala. 656, 20 So. 506; Lindsay v. N. W. 883. That only a part of the 
American Mtg. Co., 97 Ala. 411, 11 debt is due, and that the premises 
So. 770; New South Bldg. &c. Assn. can be sold in parcels, so that a 
v. Willingham, 93 Ga. 218, 18 S. B. sale of part will satisfy the debt in 
435; Siegmund v. Ascher, 37 111. arrear, are circumstances to be eon- 
App. 122; Commonwealth v. Order sidered in determining whether 
of Vesta, 156 Pa. St. 531, 27 Atl. 14. a receiver will be appointed of the 
But see Triebert v. Burgess, 11 Md. entire property. Quincy v. Cheese- 
452. man, 4 Sandf. Ch. (N. Y.) 405. 

"Rogers v. Newton, 2 Ir. Eq. 40. "Phillips v. Taylor, 96 Ala. 426, 

"Callanan v. Shaw, 19 Iowa 183. 11 So. 323. 

"Cowell V. Gnatzig, 178 111. App. "Buchanan v. Berkshire L. Ins. 
482. Co., 96 Ind. 510, 531. 

"Phillips V. Taylor, 96 Ala. 426, =" Latimer v. Moore, 4 McLean (U. 
11 So. 323 (quoting text); Hollen- S. 110; Burrowes v. MoUoy, 2 Jo. 
beck V. Donnell, 94 N. Y. 342; Bank & Lat. 521, 8 Ir. Eq. 482; Newman v. 
of Ogdensburg v. Arnold, 5 Paige Newman, 2 Bro. C. C. 92, note 6. 
(N. Y.) 38; Quincy v. Cheeseman, ^Hollenbeck v. Donnell, 94 N. Y. 
4 Sandf. Ch. (N. Y.) 405; Lofsky v. 342. 



107 WHEN APPOINTED § 1531 

times be appointed before default/^ especially if it is certain that the 
default will occur and that a receivership will be necessary to protect 
the interests of the mortgagee.^^ 

§ 1531. Appointment after decree and after appeal. — Fnder cir- 
cumstances showing an urgent occasion for it, a receiver has been 
appointed after the decree for foreclosure, and even after appeal, as 
where there was danger that a tenant in possession might by further 
delay acquire rights by adverse possession.^* Generally the appoint- 
ment does not affect the rights of persons who are not parties to the 
suit, and will not be made unless the person in possession is either a 
party to the suit or his tenant.^ ° Where a mortgage provided that the 
mortgagee upon default might take possession of the property and 
rent it without losing his remedy by foreclosure, and the mortgagee 
without taking possession obtained a decree of foreclosure, it was held 
that it was then too late to apply for the appointment of a receiver, the 
mortgagor having the right to redeem within a limited period. The 
mortgagor by the terms of the mortgage bargained away his right 
of redemption only in case the mortgagee should take possession be- 
fore foreclosure.^" A provision in a mortgage that the mortgagee shall 
be entitled to the appointment of a receiver upon the commencement 
of a foreclosure suit, to take and hold the rents and profits for his 
benefit, does not entitle him to such appointment at the time he takes 
his decree,^' nor will the court appoint a receiver if it appears that the 
property is ample security, without the rents.^^ A receiver appointed 
pending foreclosure should be discharged after sale of the premises 
for the full amount of the debt, interest and costs, and the possession 

=^ Mayfleld v. Wright, 107 Ky. 530, ^ Sea Insurance Co. v. Stebbins, 8 

21 Ky. L. 1255, 54 S. W. 864; Mc- Paige (N. Y.) 565. See also Zeiter 

Mahon v. North Kent Ironworks v. Bowman, 6 Barb. (N. Y.) 133. 

Co., 2 Ch. 148. =«Swan v. Mitchell, 82 Iowa 307, 

^ Latimer v. Moore, 4 McLean (U. 47 N. W. 1042. The right of re- 
S.) 110, Fed. Cas. No. 8114; Wabash demption is in the nature of a stay 
&c. R. Co. V. Central Trust Co., 23 law, and courts ought to require a 
Fed. 513; Thompson v. Natchez Wa- very clear showing that it has been 
ter &c. Co., 68 Miss. 423, 9 So. 821; bargained away before depriving 
Syracuse City Bank v. Tallman, 31 the debtor of the right to retain 
Barb. (N. Y.) 201; Schreiber v. Ca- possession of the property until the 
rey, 48 Wis. 208, 4 N. W. 124. But redemption has expired. Per Roth- 
see Phillips V. Taylor, 96 Ala. 426, rock, J. 
11 So. 323. "Paine v. McElroy, 73 Iowa 81, 

=» Brinkman v. Ritzinger, 82 Ind. 34 N. W. 615. 

358; Buck v. Stuben, 63 Nebr. 273, '^Eidlitz v. Lancaster, 40 App. 

88 N. W. 483; Thomas v. Davles, 11 Div. 446, 59 N. Y. S. 54; Jarvis v. 

Beav. 29; Hackett v. Snow, 10 Ir. McQuaide, 24 Misc. 17, B3 N. Y. S. 

Eq. 220. 97. 



§ 1531a APPOIlirTMENT OF A EECEIVEK 108 

of the property should be restored to the owner of the equity. That 
a mortgagor who had transferred the property agreed to pay the mort- 
gagee the overdue interest and costs in consideration of which the 
mortgagee bid the full amount of the debt, interest and costs on fore- 
closure sale, does not entitle the mortgagor, as against the owner of 
the equity of redemption to the continuation of a receivership to en- 
able the mortgagor to collect, out of rents and profits, the amount he 
had so agreed to pay.^^ 

§ 1531a. Eeceiver during time allowed for redemption. — A re- 
ceiver may be appointed after iinal judgment or decree, or at any 
time during the statutory period for redemption, if such a course 
is plainly necessary to preserve the estate or to protect the rights of 
the mortgagee.^" In Indiana, where such a period of one year after 
sale is allowed for redemption, it is provided by statute that a re- 
ceiver may be appointed to protect or preserve, during this time, the 
land sold, and to secure to the person entitled thereto the rents and 
profits thereof.^^ Where, therefore, on foreclosure of a mortgage, the 
land has been sold to the mortgagee for less than his debt, and the 
security is shown to be inadequate and the debtor insolvent, a re- 
ceiver may be appointed to collect and hold, during the year allowed 
for redemption, the rents and profits of such parts of the land as are 
in the possession of the mortgagor's tenants.'^ The redemption statute 
gives to the debtor no new additional title or right, but simply ex- 
tends for one year his existing rights ; and no incident attaches to the 
debtor's possession by reason of the sale that places it beyond the reach 
of a court of equity.^* A similar decision was made in Wisconsin un- 
der a law allowing redemption after a sale;^* and under the present 
statute of that state, which, instead of allowing a year after sale for 
redemption before a deed can be made, allows a year after the decree 

^Bogardus v. Moses, 181 111. 554, 804, 66 N. W. 843; Schreiber v. Ca- 
54 N. B. 984. rey, 48 "Wis. 208, 4 N. W. 124; La- 
s' First Nat. Bank v. Illinois Steel pham v. Ives, Fed. Cas. No. 8082. 
Co., 174 111. 140, 51 N. B. 200; Haas ^Burns' Rev. Stat. 1914, § 1279. 
V. Chicago Bldg. Soc, 89 111. 498; "''World Bldg. L. &c. Co. v. Marlin, 
Christie v. Burns, 83 111. App. 514; 151 Ind. 630, 52 N. E. 198; Merritt 
"Wright v. Case, 69 111. App. 535; Bo- V. Gibson, 129 Ind. 155, 27 N. E. 
rufe V. Hinkley, 66 111. App. 274; 136; Connelly v. Dickson, 76 Ind. 
Merritt v. Gibson, 129 Ind. 155, 27 440. See also Travelers' Ins. Co. v. 
N. E. 136, 15 L. R. A. 277; Connelly Brouse, 83 Ind. 62; Ridgeway v. 
v. Dickson, 76 Ind. 440; Nolte v. Bank, 78 Ind. 119; Davis v. New- 
Morgan, 86 Kans. 823, 122 Pac. 886; comb, 72 Ind. 413. 
Nat. F. Ins. Co. v. Broadbent, 77 =» Merritt v. Gibson, 129 Ind. 155, 
Minn. 175, 79 N. W. 676; Philadel- 27 N. B. 136, per McBride, J. 
phia Mtg. &c. Co. v. Goos, 47 Nebr. »♦ Finch v. Houghton, 19 Wis. 149. 



109 WHEN APPOINTED § 1533 

foreclosing the mortgage before a sale can be made, a receiver may be 
appointed to receive the rents and profits during that period.^^ Where, 
however, a statute allows the mortgagor to remain in possession of the 
land until the expiration of the time allowed for redemption, although 
the statute also provides that the purchaser, from the time of the sale 
until redemption, is entitled to receive from the tenant in possession 
the rents of the property sold, or the value of the use and occupation 
thereof; a receiver will not be appointed for the premises before the 
expiration of the period allowed for redemption.^^ The court may even 
appoint a receiver after the sale, upon a showing that there is a neces- 
sity for the appropriation of the rents and profits to the payment of 
the mortgage debt,^' or where such appointment is shown to be neces- 
sary in order to protect the interests and preserve the rights of the 
parties to the action f^ but this power should be exercised by the court 
only in extreme cases and to prevent gross wrong and injustice.^' 

§ 1532. Necessity for showing security inadequate, and insolvency 
of debtor. — To warrant an appointment of a receiver it must be 
shown both that the property itself is an inadequate security and that 
the debt or the deficiency after the application of the proceeds of the 
security could not be collected of the mortgagor or other person liable 
for it.^" If it is clear that on a sale under the decree of foreclosure, 
the mortgaged property will sell for enough to pay the debt, inter- 

'"Schreiber v. Carey, 48 Wis. 208, S.) 442; Swan v. Mitchell, 82 Iowa 

4 N. "W. 124. 307, 47 N. W. 1042; Paine v. McBl- 

=°West V. Conant, 100 Cal. 231, 34 roy, 73 Iowa 81, 34 N. W. 615; Adair 

Pac. 705; White v. Griggs, 54 Iowa v. Wright, 16 Iowa 385; Brown v. 

650, 7 N. W. 125. Chase, Walk. (Mich.) 43; Myers v. 

"Haas V. Chicago Bldg. Soc, 89 Estell, 48 Miss. 372, 403; Hyman v. 

111. 498; Connelly v. Dickson, 76 Kelly, 1 Nev. 179; Astor v. Turner, 

Ind. 440; Adair v. Wright, 16 Iowa 2 Barb. (N. Y.) 444; Sea Insurance 

385; Smith v. Tiffany, 13 Hun (N. Co. v. Stebbins, 8 Paige (N. Y.) 565; 

Y.) 671; Astor v. Turner, 11 Paige Quincy v. Cheeseman, 4 Sandf. Ch. 

Ch. (N. Y.) 436, 43 Am. Dec. 766; (N. Y.) 405; Keep v. Mich. Lake 

Schrelber v. Carey, 48 Wis. 208, 4 Shore R. Co., 6 Chicago L. N. 101. 

N. W. 124; Thomas v. Davies, 11 See also Title Ins. &c. Co. v. Cali- 

Beav. 29. fornia Dev. Co., 164 Cal. 58, 127 Pac. 

»» Russell V. Bruce, 159 Ind. 553, 502; Planters' Oil Mill v. Carter 

64 N. E. 602, 65 N. E. 585; Walker (Ga.), 79 S. B. 1120; Haas v. Chi- 

V. Kersten, 115 111. App. 130; White cage Building Society, 89 111. 498; 

V. Mackey, 85 111. App. 282; Na- Ruprecht v. Henrici, 116 111. App. 

tional F. Ins. Co. v. Broadbent, 77 583; Ruprecht v. Henrici, 113 111. 

Minn. 175, 79 N. W. 676. App. 398; Sweet & Clark Co. v. 

''Haas V. Chicago Bldg. Soc, 89 Union Nat. Bank, 149 Ind. 305, 49 

111. 498. N. E. 159; Jacobs v. Gibson, 9 Nebr. 

"Pullan V. Cincinnati &c. Air 380, 2 N. W. 893; Graybill v. Heyl- 

Line R. Co., 4 Biss. (U. S.) 35; man, 139 App. Div. 898, 123 N. Y. S. 

Morrison v. Buckner, Hempst. (U. 622. 



§ 1533 APPOINTMENT OF A EECEIVEK 110 

est and costs, a receiver will not be appointed.*^ The property may 
be inadequate security for all the incumbrances upon it, and yet be 
sufiBeient for the particular mortgage which is the subject of the fore- 
closure suit.*^ An allegation that the property is probably insufficient 
to discharge the mortgage debt, without a statement of the value of 
the property, is not a sufficient allegation of fact to warrant the court 
in appointing a receiver.** The fact that a sale under decree of fore- 
closure resulted in a deficiency is, in the absence of special circum- 
stances, sufficient ground for the appointment of a receiver.** 

§ 1533. Other grounds for appointment of receiver. — There may 
be other and additional grounds for the application; but these two 
are the principal ones, which are essential in every case; and usually 
no others are essential if these are fully and clearly alleged and ap- 
proved. Coupled with these there may be strong grounds for inter- 
ference in the fact that the taxes have been suffered to remain unpaid 
and the property to be sold to satisfy them, and that the insurance has 
been neglected;*'* or that there is a contest as to whether a large por- 
tion of the property claimed under the mortgage is really covered by 
it ;** or that there is fraud or bad faith on the mortgagor's part in the 
management of the property, as in appropriating the rents and profits 
to other purposes than keeping down the interest on the incumbrances, 
or in permitting the property to depreciate and the buildings to go to 

"Pullan V. Cincinnati &c. R. Co., "Title Ins. &c. Co. v. California 

4 Biss. (U. S.) 35, Fed. Cas. No. Development Co., 164 Cal. 58, 127 

11461; ^tna Life Ins. Co. v. Broe- Pac. 502. 

ker, 166 Ind. 576, 77 N. E. 1092; «Walljer v. Kersten, 115 111. App. 

Shotwell V. Smith, 3 Edw. Ch. (N. 130. 

Y.) 588; Rogers v. Southern Pine "Eslava v. Crampton, 61 Ala. 507; 

Lumber Co., 21 Tex. Civ. App. 48, Chetwood v. Coffin, 30 N. J. Eq. 450; 

51 S. "W. 26. Stockman v. Wallis, 30 N. J. Eq. 

"Warner v. Gouverneur, 1 Barb. 449; Wall St. Fire Ins. Co. v. Loud, 
(N. Y.) 36, per Edmonds, J. "The 20 How. Pr. (N. Y.) 95. See also 
allegation Is that they are not an McLane v. Placerville &c. R. Co., 66 
adequate security for 'all just in- Cal. 606, 6 Pac. 748; Gale v. Carter, 
cumbrances' on them. All of the 154 III. App. 478; Ortengren v. Rice, 
just incumbrances, it would seem, 104 111. App. 428; Buchanan v. Berk- 
amount to near $70,000, while the shire L. Ins. Co., 96 Ind. 510; Slden- 
claim of the defendants is not more berg v. Ely, 90 N. Y. 257, 11 Abb. N. 
than half that sum. And while the Cas. (N. Y.) 354, 43 Am. Rep. 163;" 
defendants do not say whether the Johnson v. Tucker, 2 Tenn. Ch. 398; 
premises are or are not adequate Finch v. Houghton, 19 Wis. 149. 
security for the amount due to But see Ferguson v. Dickinson 
them, the mortgagor on the other (Tex. Civ. App.), 138 S. W. 221. 
hand avers that they are sufficient "Wall St. Fire Ins. Co. v. Loud 
for that amount. There is, there- 20 How. Pr. (N. Y.) 95. ' 
fore, no ground for the appoint- 
ment of a receiver." 



Ill WHEN APPOINTED § 1534 

decay.*^ Thus a receiver may be appointed where the mortgage is not 
only a lien on the land, but on the oil produced on the land, and it is 
shown that the mortgagor is removing the oil and appropriating the 
proceeds other than to the payment of the mortgage debt.** A show- 
ing that the mortgagor is out of the court's jurisdiction, that the prin- 
cipal and interest is due, that the buildings on the mortgaged prem- 
ises have not been insured, that the taxes are unpaid, and the se- 
curity is scant, will entitle the plaintiff in a foreclosure suit to the 
appointment of a receiver.*' Where the mortgage provides that the 
mortgagee may have the property insured and include the premium 
in the mortgage debt, the fact that the mortgagor has neglected to 
keep the property insured is no ground for the appointment of a re- 
ceiver.^" The fact that the parties have agreed that, in case of a de- 
fault, a receiver shall be appointed, should have weight when an 
application for a receiver is made.^^ Where a mortgagor has obtained 
an injunction to restrain the sale of the mortgaged property until 
certain counterclaims can be passed upon and the sum really due as- 
certained, the mortgagee is entitled to have a receiver appointed to 
take charge of the property and secure the rents and profits, provided 
these are in danger of being lost in the meantime.^^ As a general 
rule a receiver will not be appointed to take possession of a home- 
stead pending an action to foreclose ;^^ but where a part of the land 
has been set aside as the defendant's homestead, a receiver will be ap- 
pointed for the remainder.^* 

§ 1534. Test of adequacy of security in respect to city property. — 
In determining whether the security is adequate, the proper criterion 
in respect to city property is the rental of it rather than the price it 
would be likely to sell for. The income of improved property in large 
towns is considered a fair test of its value as an investment.^ ^ Of 

"Per Williamson, Chancellor, in "Planters' Oil Mill v. Carter, 140 

Cortleyeu v. Hathaway, 11 N. J. Eq. Ga. 808, 79 S. B. 1120; Ferguson v. 

39, 64 Am. Dec. 478; Chetwood v. Dickinson (Tex. Civ. App.), 138 S. 

Coffin, 30 N. J. Eq. 450; Stockman W. 221. 

V. Wallis, 30 N. J. Eq. 449. See also "^ Keogh Mfg. Co. v. Whiston, 14 

Graham v. Consolidated Naval N. Y. S. 344. 

Stores Co., 57 Pla. 418, 48 So. 743; "= Oldham v. First Nat. Bank of 

Bagley v. Illinois Trust &c. Bank, Wilmington, 84 N. Car. 304. 

199 111. 76, 64 N. E. 1085; Ekeberg "= Sanford v. Anderson (Nebr.), 92 

V. Mackay, 114 Minn. 501, 131 N. W. N. W. 152. 

787; De Barrera v. Frost, 33 Tex. "'Mackey v. Cox (Nebr.), 146 N. 

Civ. App. 580, 77 S. "W. 637. "W. 1008. 

^' Meridian Oil Co. v. Randolph, 26 "» Shotwell v. Smith, 3 Edw. (N. 

Okla. 634, 110 Pac. 722. Y.) 588. 

•» Gale V. Carter, 154 111. App. 478. 



§ 1535 APPOINTMENT OF A KECEIVER 113 

course there may be circumstances which in particular cases will 
modify or make inapplicable such a test. 

II. Duties and Powers of a Receiver 

Section Section 

1535. Rights, powers, and duties of 1537. Discharge of receiver. 

receiver in general. 1537a. Responsibility for default of 

1536. Receiver's claim to the rents. receiver. 

§ 1535. Rights, powers, and duties of receiver in general. — ^A re- 
ceiver is a ministerial officer of the court,'^ and the scope of his duty is 
purely administrative.^ He occupies a fiduciary relation, and the ut- 
most good faith is required of him in his dealings with the property 
entrusted to him.' He must act impartially in dealing with the par- 
ties to the controversy, and not to espouse the cause or interests of 
one party against another.* He is the representative of all parties in 
interest; of the mortgagee, the mortgagor, and all holding under 
them, and all having rights superior to theirs. The receiver of a bank- 
rupt corporation represents not only the mortgagees, but the assignees 
in bankruptcy, the creditors and stockholders as well.° He is not al- 
lowed to act with reference to the mortgaged property in any other 
relation inconsistent with his duties as receiver. If he is also mortga- 
gee, he will not be permitted to deal with the property in any way in- 
consistent with his duty as a receiver acting in the interest of all par- 
ties concerned." But a receiver of a corporation empowered to enforce 
a mortgage belonging to it may bid ofE the property to save a sacrifice 
of it. He succeeds to the rights and powers of the company in this re- 
spect.^ He should not involve the estate in any expense, even for re- 
pairs, without the authority of the court; nor, without such sanction, 
bring suits or defend them.* He should always apply to the court be- 

1 Booth V. Clark, 17 How. (U. S.) ■'Davis v. Gray, 16 Wall. (U. S.) 

322, 15 L. ed. 164; Vila v. Grand 203, 217, 21 L. ed. 447; Sutherland 

Island Electric Light &c. Co., 68 v. Lake Superior Ship Canal R. &c. 

Nebr. 222, 94 N. W. 136, 97 N. W. Co., 9 N. Bank. R. 298, 307. 

613, 63 L. R. A. 791, 110 Am. St. 400. »Bolles v. Duff, 54 Barb. (N. Y.) 

"Lyman v. Central Vermont R. 215, 37 How. Pr. 162; Iddings v. 

Co., 59 Vt. 167, 10 Atl. 346. Bruen, 4 Sandf. Ch. (N. Y.) 417. 

= Atkins V. Judson, 33 App. Div. 'Jacobs v. Turpin, 83 111. 424. 

42, 53 N. Y. S. 504; Harrigan v. Gil- ^Cowdrey v. Galveston R. Co., 93 

Christ, 121 Wis. 127, 99 N. W. 909. U. S. 352, 23 L. ed. 950; Wyckotf v. 

* Home Sav. &c. Co. v. District Ct., Scofield, 103 N. Y. 630; Ketchum v. 

121 Iowa 1, 95 N. W. 522; First Nat. Pacific R. Co., 3 Cent. L. J. 380; 

Bank v. E. T. Barnum Wire &c. Wynn v. Newborough, 3 Bro. C. C. 

Works, 60 Mich. 487, 27 N. W. 657; 88; Ward v. Swift, 6 Hare 309, 313; 

People V. Security L. Ins. &c. Co., Swaby v. Dickon, 6 Sim. 629, 631. 

79 N. Y. 267; Gadsden v. Whaley, 14 See also Standish v. Musgrove, 223 

S. Car. 210. III. 500, 79 N. B. 161. But see Kro- 



113 DUTIES AND POWERS § 1535 

fore exercising unusual discretion.® Having such authority, all debts 
incurred by him in carrying on the business for which the property is 
used, such as operating a mill, take precedence of the mortgage debt.^* 
"Where the receiver incurred expenses that would necessarily have been 
made by the mortgagee had he remained in possession of the premises, 
in order to make the same yield rent, such receiver will be allowed to 
retain from the rents collected the amount of his disbursements.^^ 
His possession is the possession of the court, and without its authority 
no one can directly or indirectly interfere with the property.^^ Like 
a trustee, he is bound to exercise such care over the property as a pru- 
dent man would take of his own.^' A receiver who acts in good faith, 
but under a mistake as to the extent of his powers, is not, it would 
seem, liable for his acts. But if he wilfully and corruptly exceeds his 
powers, he would be liable for the actual damage sustained by his con- 
duct.^* The receiver of a railroad may be empowered by the court 
to borrow money to complete unfinished portions of the road, to issue 
bonds, and to make them a first lien upon the property of the road.^° 
The receiver is entitled to his commissions and expenses even though 
it is found that the defendant is entitled to the possession of the 
property.^" A receiver can not be sued without leave of the court 
which appointed him first obtained. That court has jurisdiction of all 
matters in controversy affecting the property in the hands of the re- 
ceiver, and may draw to itself all controversies to which the receiver 
can be made a party. This court is not compelled to take jurisdiction 
of all such matters, but may assert its right to do so. By acting upon 
the parties it may prevent their proceeding in other courts against the 
receivers. If leave be not obtained upon motion to prosecute an inde- 
pendent suit at law or in equity against a receiver, the proper mode 
of proceeding is to apply for the appropriate remedy against the re- 
ceiver by petition in the cause in which the receiver was appointed, 
and not by original bill. Thus a bill in equity does not lie against a 

nenthal v. Eosenthal, 144 N. Y. S. (N. Y.) 513; Russell v. East An- 

830. glian R. Co., 3 Mac. & G. 104; Ames 

• Parker v. Browning, 8 Paige (N. v. Birkenhead Docks, 20 Beav. 332, 

Y.) 388, 35 Am. Dec. 717. 353. 

"Buster v. Mann, 69 Ark. 23, 62 ^Per Lord Eldon, 1 Jac. & W. 

S. W. 588. 247, 1 Fisher's Law of Mtg. 444. 

"Elmira Mechanics' Soc. v. "Stanton v. Alabama &c. R. Co., 

Stanchfield, 160 Fed. 811, 87 C. C. 2 Woods (U. S.) 506, 518. 

A. 585; Ruprecht v. Muhlke, 225 III. " Kennedy v. St. Paul &c. R. Co., 

188, 80 N. E. 106. 2 Dill. (U. S.) 448. 

"Albany City Bank v. Schermer- "Harrington v. Foley, 108 Iowa 

horn, 9 Paige (N. Y.) 372, 38 Am. 287, 79 N. W. 64. 
Dec. 551; Noe v. Gibson, 7 Paige 

8 — Jones Mtg. — ^Vol. III. 



§ 1536 APPOINTMENT OF A EECEIVEK 114 

receiver to restrain him from foreclosing a mortgage by sale under 
a power on the ground that the mortgage was obtained by fraudulent 
representations and is void, but relief should be sought by petition in 
the cause in which the receivers were appointed.*^ A mortgagee who 
seeks relief against the purchaser of property sold on foreclosure by a 
receiver, upon the ground of collusion with the receiver, should pro- 
ceed in the action wherein the receiver was appointed and not by an 
independent suit. The suit must certainly be in the court in which 
the receiver was appointed, or by leave of that court.^* The beneficiary 
in a mortgage deed made to and foreclosed by a trustee can not avoid 
the sale, after confirmation and distribution of the proceeds, on the 
ground that by the fraud of the receiver appointed by the court to 
make the sale the property was sold for less than it was worth, and 
was bid in by a syndicate, of which the receiver was a member, no 
neglect, fraud, or collusion being charged against the trustee, as the 
beneficiary, in the absence of fraud or neglect on the part of the 
trustee is bound by whatever would bind the latter.^' 

§ 1536. Receiver's claim to the rents. — Unless otherwise restricted 
by the terms of his appointment, a receiver is entitled to the imme- 
diate possession of all the property of every kind covered by the mort- 
gage.^" By the appointment of a receiver the mortgagee obtains an 
equitable claim not only upon the rents and profits actually due at 
the time, but also upon the rents to accrue ;^^ and his right to them 
is superior to that of the mortgagor's assignee in bankruptcy,''^ or to 
that of any one else claiming under the mortgagor, as, for instance, 
his grantee who has bought subject to the mortgage, even when he 

»' Porter v. Kingman, 126 Mass. 31 N. B. 712; Citizens* Sav. Bank v. 

141. Wilder, 11 App. Div. 63, 42 N. Y. 

"Lockwood V. Reese, 76 Wis. 404, S. 481; WyckofC v. Scofield, 53 N. Y. 

45 N. W. 313; In re Day, 34 Wis. Super. Ct. 237; Com. v. Young, 11 

638; Noonan v. McNab, 30 Wis. 277; Phila. (Pa.) 606. 

Milwaukee & St. P. R. Co. v. Mil- » First Nat. Bank v. Illinois Steel 

waukee &c. R. Co., 20 Wis. 165. See Co., 174 111. 140, 149, 51 N. E. 200; 

also James v. James Cement Co., 8 Conover v. Grover, 31 N. J. Eq. 539; 

N. Y. St. 490. Rider v. Bagley, 84 N. Y. 461; Gay- 

» Richter v. Jerome, 123 U. S. 233, nor v. Blewett, 82 Wis. 313, 52 N. 

246, 31 L. ed. 132, 8 Sup. Ct. 106; W. 313. See also Ortengren v. Rice. 

Shaw v. Railroad Co., 100 U. S. 605, 104 111. App. 428; Stephen v. Rei- 

611, 25 L. ed. 757; Corcoran v. Ca- bling, 45 111. App. 40; Citizens' Sav. 

nal Co., 94 U. S. 741, 745, 24 L. ed. &c. Co. v. French, 4 Ohio S. & C. PI 

190; Kerrison v. Stewart, 93 U. S. Dec. 443, 4 Ohio N. P. 61. 

155, 160, 23 L. ed. 843; Fletcher v. "^Post v. Dorr, 4 Edw. (N. Y.) 

Ann Arbor R. Co., 116 Fed. 479. 412; Hayes v. Dickinson, 9 Hun (N 

""Wilson V. Welch, 157 Mass. 77, Y.) 277. 



115 DUTIES AND POWERS § 1536 

has taken a note mth personal security for the rent.''' But the re- 
ceiver can not call upon the mortgagor, or a junior mortgagee, to 
refund rents collected before the appointment of the receiver;^* nor 
is the receiver entitled to receive such rents.'"' All rents and profits 
that come into the hands of the receiver are dedicated, along with 
the corpus of the funds brought within the domain of the court, to the 
satisfaction of the lien.^* The mortgagor can not evade the effect of 
such appointment by leasing the mortgaged land and taking the rent 
in advance. If such lease is made pending a foreclosure suit, the ten- 
ant stands in the position of a purchaser or lessee pendente lite from 
the mortgagor, with contructive notice of the action to foreclose by 
the filing of the notice of lis pendens, and takes subject to whatever 
order or decree the court may lawfully make affecting either the title 
or possession. He could not get any better right than his lessor, the 
mortgagor, had.^^ Under a statute giving the mortgagor the right to 
the possession of the premises until the expiration of a year from the 
time of sale upon foreclosure, the mortgagee is not entitled to a re- 
ceiver during that time to take possession of the crops upon the mort- 
gaged premises.^^ The tenants of the premises may be compelled to 
attorn to the receiver.^' So also a purchaser of the premises from the 
mortgagor may be directed to pay to the receiver an occupation rent.^" 
If the person in possession refuses to attorn, the court may on motion 
pass an order directing him to do so, although he was not made a 
party to the suit in the first instance.'^ If he disobeys the order of 

«Lofsky V. Maujer, 3 Sandf. Ch. «Sheeks v. Klotz, 84 Ind. 471; 

(N. Y.) 69. White v. Griggs, 54 Iowa 650, 7 N. 

"Johnston v. Riddle, 70 Ala. 219; W. 125. 

Elder v. Bagley, 84 N. Y. 461; Post ^Henshaw v. Wells, 9 Humph. 

T. Dorr, 4 Edw. (N. Y.) 412; How- (Tenn.) 568. A tenant after attor- 

ell V. Ripley, 10 Paige (N. Y.) 43. nlng can not surrender the prem- 

^Keyser v. Hitz, 4 Mackey (D. ises to the mortgagor. Nealis v. 

C.) 179; Davis v. Dale, 150 III. 239, Bussing, 9 Daly (N. Y.) 305. See 

37 N. E. 215; Noyes v. Rich, 52 also Niccolls v. Peninsular Stove 

Maine 115; Wyckoff v. Scofield, 98 Co., 48 111. App. 317; Woodyatt v. 

N. Y. 475; Argall v. Pitts, 78 N. Y. Connell, 38 111. App. 475. 

239. See also Mechanics' Soc. v. '" Astor v. Turner, 2 Barb. (N. Y.) 

Stanchfield, 160 Fed. 811, 87 C. C. 444. 

A. 585; Greenwich Sav. Bank V. Sil- "Sea Ins. Co. v. Stebbins, 8 

verman, 153 App. Div. 17, 138 N. Y. Paige (N. Y.) 565; Parker v. 

S. 13; Home L. Ins. Co. v. O'Sulli- Browning, 8 Paige (N. Y.) 388, 390, 

van, 136 N. Y. S. 105. 35 Am. Dec. 717; Reid v. Middleton, 

*> Pepper v. Shepherd, 4 Mackey ITurn. &R. 455; Bowery Sav. Bank 

(D. C.) 269; Keyser v. Hitz, 4 v. Richards, 3 Hun (N. Y.) 366. The 

Mackey (D. C.) 179; Williamson v. last named case is, however, over- 

Gerlach, 41 Ohio St. 682. ruled. Merritt v. Gibson, 129 Ind. 

"Gaynor v. Blewett, 82 Wis. 313, 155, 27 N. E. 136. See ante § 1531. 
52 N. W. 313. 



§ ISSY APPOINTMENT OF A EECEIVEK 116 

court, he may be proceeded against for contempt.'^ But a tenant in 
possession prior to the commencement of a suit to foreclose, and to 
which he was not a party, can not be compelled by order of court to 
pay rent to a receiver appointed during the pendency of such suit, 
such rent being recoverable only in an action against the tenant.^^ The 
court will not support a receiver in using forcible or violent means to 
assert his rights.^* In an action by a receiver to collect rents of the 
mortgaged premises, the question of his appointment, made upon the 
allegation that the property was inadequate to pay the mortgage debt, 
can not be raised, for the question has already been adjudicated in 
making the appointment.' ° A receiver appointed in a suit for the 
foreclosure of mortgage upon a farm, with power to 'let the premises, 
may lease them for a year without special order, that being the usual 
term for such leases, and such lease is neither limited nor determined 
by the duration of the suit.'' ■" 

§ 1537. Discharge of receiver. — If a foreclosure suit in which a 
receiver has been appointed is abandoned or discontinued, or dis- 
missed by the court for want of jurisdiction, the receiver should be 
discharged and the property restored to its owner.'^ If the foreclosure 
suit is abandoned after a receiver has been appointed, it no longer 
operates as notice in intercepting the rents and profits.'* And gen- 
erally the receivership is terminated when the property is bid off at 
the foreclosure sale for the full amount of the debt, interest, and 
costs ;" but where there is a deficiency judgment, the receivership may 
be continued through the period of redemption.*" It is the right of 
the mortgagor, whose property has been placed in the hands of a re- 
ceiver pending a suit for foreclosure, to pay the debt at any time, and 
have the property restored to his possession. This right does not de- 
pend upon the discretion of the court, but is one which he can claim 
and the court can not withhold.*^ Payment destroys the plaintiff's 

=°Henshaw v. Wells, 9 Humph: "'Johnston v. Riddle, 70 Ala. 219; 

(Tenn.) 568. Meyer v. Badger Lumber Co., 10 

^ American Mtg. Co. v. Sire, 103 Kans. App. 142, 62 Pac. 434. 

App. Div. 396, 92 N. Y. S. 1082. =' Johnston v. Riddle, 70 Ala. 219. 

=" Parker v. Browning, 8 Paige "'Bogardus v. Moses, 181 111, 554, 

(N. Y.) 388, 390, 35 Am. Dec. 717. 54 N. E. 984; Davis v. Dale, 150 111. 

''= Goodhue v. Daniels, 54 Iowa 19, 239, 37 N. B. 215. 

6 N. "W. 129. "Prussing v. Lancaster, 234 III. 

««Shreve v. Hawkinson, 34 N. J. 462, 84 N. E. 1062; Roach v. Glos. 

Eq. 413. See numerous English and 181 111. 440, 54 N. E. 1022; Stoddard 

Irish cases cited by the reporter, In v. Walker, 90 111. App. 422; Oakford 

a note to this case, as to the power v. Robinson, 48 111. App. 270. 

of a receiver to lease lands. Also " Milwaukee &c. R. Co. v. Soutter, 

Western Union Tel. Co. v. Boston 2 Wall. (U. S.) 510, 17 L. ed. 900, 

Safe Dep. &c. Co., 112 Fed. 37. Woolworth C. C. 49. 



117 DUTIES AND POWERS § 1537a 

cause of action; and though in general the receiver is appointed for 
the benefit of all parties interested, when upon payment the plaintiff's 
right of action is ended, the rights of the other parties fall with it.*^ 
But while the plaintiff's action is pending, a receiver appointed at his 
instance will not generally be discharged on his application without 
the concurrence of all others interested in the property.*' When the 
court is satisfied that the property mortgaged is ample security for 
the debt the receivership should be terminated.** 

§ 1537a. Responsibility for default of receiver. — ^Whether a mort- 
gagee who nominates and procures the appointment of a receiver is 
responsible for his default is a question upon which there is a conflict 
of authority. On the ground that a receiver is appointed for and on 
behalf of all persons interested, it is contended that any loss arising 
from the default of the receiver must be borne, as between the parties, 
by the estate in his hands.*' In a recent case in Arkansas, it was held 
that the mortgagee, at whose instance the receiver was appointed, 
could not be held liable in case such receiver embezzled or otherwise 
wasted the rents and profits.*® But on the other hand, in a compara- 
tively recent case in New Jersey, the vice-chancellor held that in such 
case the mortgagee must bear any loss caused by the defalcation of the 
receiver so appointed, and the insufficiency of his sureties.*^ The vice- 

*■ Davis V. Marlborough, Swans, cer), and he afterward embezzle or 

168; Paynter v. Carew, 18 Jur. 417. otherwise waste the rents and prof- 

*=Bainbrigge V. Blair, 3 Beav. its, the loss must fall on the mort- 

421. gagor.' But Mr. Eden, In his note 

"Howard v. La Crosse &c. R. Co., to that case, shows that such rule 

Fed. Cas. No. 6760. does not always prevail; and it ap- 

"2 Daniell Ch. Pr., pp. 740, 741, pears that Hutchinson v. Massa- 

2 Maddock Ch. Pr., p. 235; Kerr Re- reene, instead of holding that the 

ceivers, p. 164. These authorities loss in that case fell upon the es- 

all rely upon the single case of tate, holds precisely the contrary. 

Hutchinson v. Massareene, 2 Ball & * * * But I do not find it neces- 

B. 55, except that Mr. Maddock cites sary to decide the question whether, 

in addition the case of Rigge v. where an Indifferent person is ap- 

Bowater, 3 Brown. Ch. 365. The pointed by the court upon the ap- 

American treatises follow the Eng- plication of a mortgagee and be- 

lish. High, Rec. § 270, Beach on comes a defaulter, and his sureties 

Receivers, § 303. are insufficient, the resulting loss 

"Robinson v. Arkansas Loan &c. should fall on the mortgagee, and 

Co., 74 ArK. 292, 85 S. W. 413. have referred to the authorities 

"Sorchan v. Mayo, 50 N. J. Eq. only for the purpose of showing 

288, 23 Atl. 479. "The whole of the that they are not all in accord with 

case of Rigge v. Bowater is this: the general proposition laid down 

'The lord chancellor intimated his by the text-writers. It is also 

opinion (without deciding the case) worthy of remark that the case of 

that, if a receiver be appointed by a mortgagee who applies for a re- 

the court (upon the application of celver stands on a footing decided- 

a mortgagee or other incumbran- ly different from that of a creditor 



§ 1537a 



APPOINTMENT OP A EECEIVER 



118 



chancellor reviews and comments upon the authorities, and concludes 
that they do not support the contention that the mortgagee is not re- 
sponsible.** 



who is suing for himself and other 
creditors, and asks for a receiver to 
hold the property for the benefit of 
all the creditors. The mortgagee 
asks for the rents and profits to be 
applied to his mortgage, on the 
ground that he holds the legal title 
to the premises, and is entitled of 
right to the possession and to re- 
ceive the rents; and if he himself 
were in possession he would be 
entitled to hold it, and receive the 
rents himself, until his debts were 
paid; and it seems to me that it 
would be no hardship upon him if 
the rule were established that he 
should take the risk of the sol- 
vency of the receiver, and that a 
receiver so appointed should be 
considered as the agent of the 
mortgagee. Such a rule would 
make complainants and their solic- 
itors applying for such appoint- 
ments careful as to the character of 
the men whom they nominate to 



the court, and the responsibility of 
the sureties given by the appointee. 
But whatever may be the rule in 
ordinary cases, it seems to me that 
the circumstances of this case ren- 
der the equity of the exceptants 
quite plain. Here the complainant 
nominates, and procures to be ap- 
pointed, his own solicitor and agent. 
None of the owners of the equity of 
redemption took any part in the 
proceedings; they were all con- 
ducted under the instructions of this 
very agent; and I do not see how 
the case differs from that of the 
mortgagee being himself in posses- 
sion, receiving the rents and prof- 
its; and it seems to me that when 
they were paid to the receiver in 
this case they were in effect paid 
to the complainant, and he, in my 
judgment, must bear the loss." 

"Downs V. Allen, 10 Lea (Tenn.) 
652. 



CHAPTER XXXIV 

DECREE OF STRICT FORECLOSURE 

I. Nature and Use of This Remedy, §§ 1538-1541 

II. In What States It Is Used, §§ 1543-1556 

III. Pleadings and Practice, §§ 1557-1568 

IV. Setting Aside and Opening the Foreclosure, §§ 1569-1570 

I. Nature and Use of This Remedy 

Section Section 

1538. Historical. 1540. "When remedy is proper. 

1539. Nature of the remedy. 1541. Laud contract. 

§ 1538. Historical. — In the progress of the doctrine of mortgages 
the first advance was to relieve the mortgagor from the forfeiture of 
his estate through failure to perform the condition within the time 
limited by the deed. "At length," says Spence, "in the reign of 
Charles I., it was established that in all cases of mortgage, where the 
money was actually paid or tendered, though after the day, the mort- 
gage should be considered as redeemed in equity, as it would have 
been at law on payment before the day; and from that time bills be- 
gan to be filed by mortgagees for the extinction or foreclosure of this 
equity, unless payment were made by a short day, to be named."^ 
This was the form of foreclosure first adopted by the English courts 
of equity, and until quite recent times was the only form.'' Although 
this form of foreclosure has, through the action of the courts and 
by statutory enactments, gradually given way within the last hun- 
dred years to the more equitable mode of foreclosure by sale, it is still 
used by courts of equity as the mode best adapted for a few special 
cases, and in two of our states is the mode in general use.* 

This is the foreclosure spoken of in the books ; but since foreclosure, 
in this country at least, has come to mean generally a foreclosure by 
sale, this form, by which the absolute ownership of the property is 
given to the mortgagee under a decree of court, has of late come to be 

^ Spence Eq. Juris. 603. ' Lightcap v. Bradley, 186 111. 510, 

" Until the Chancery Improvement 519, 58 N. E. 221. 
Act, 15 & 16 Vict. ch. 86, § 48. 

119 



§ 1539 DECEEE OF STRICT FORECLOSURE 120 

designated, for the purpose of distinguishing it, a strict foreclosure. 
The efEect of a strict foreclosure is simply to cut off the equity of 
redemption. The mortgagee's title after foreclosure is that conveyed 
by the mortgage discharged from the condition of defeasance. It is 
the same as if the original mortgage had been an absolute deed, giv- 
ing no right of redemption at law or in equity.* 

§ 1539. Nature of the remedy. — A strict foreclosure was the 
natural remedy upon a mortgage when it was regarded as a condi- 
tional sale of the land rather than as a mere security; for the mort- 
gagor having failed to perform the condition, it was consistent with 
this doctrine of the condition that the courts should, after having re- 
lieved the mortgagor from the forfeiture of his condition, require him 
to perform it within a reasonable time or be forever barred of his 
right to redeem.^ But when the mortgage came to be regarded as a 
mere security for the payment of the debt, and the breach of the 
condition as of no efEect beyond giving the mortgage creditor the 
right to resort to his security, the natural remedy for the brea:ch was 
to sell the property secured and apply the proceeds to the payment 
of the debt; as in this way the debtor would have the benefit of the 
estate when this was of greater value than the debt, and the mort- 
gagee would have a claim for the deficiency not paid by the proceeds 
of sale. The advantages of a sale of the property over a foreclosure 
were discussed in the earlier cases, before the practice- of ordering a 
sale had become almost universal, as it now is, except in special cases.^ 

§ 1540. When remedy is proper. — Foreclosure is proper in the case 
of a mortgage given for the entire purchase-money, when the value 
of the premises is not more than the mortgage debt, and the mort- 
gagor does not appear in the suit.'^ It is proper where a mortgagee or 
purchaser is in possession under a legal title from the mortgagor, for 
the purpose of cutting off subsequent liens or incumbrances, as in 
case one has purchased in good faith at a mortgage sale which is not 
conclusive against some incumbrancer not made a party to the suit, 

* Champion v. Hlnkle, 45 N. J. Eq. (Ala.) 277; Williams' case, 3 Bland, 

162, 16 Atl. 701. (Md.) 186, 193; Wilder r. Haughey, 

" Lansing V. Goelet, 9 Cow. (N. Y.) 21 Minn. 101; Moulton v. Cornish, 

346, 352; Jefferson v. Coleman, 110 138 N. Y. 133, 33 N. B. 842; Bolles 

Ind. 515, 11 N. E. 463; Moulton v. v. Duff, 43 N. Y. 469; Lansing v. 

Cornish, 138 N. Y. 133, 33 N. B. 842. Goelet, 9 Cow. (N. Y.) 346, 352; 

See also Warner v. Freud, 138 Cal. Mills v. Dennis, 3 Johns. Ch. (N. 

651, 654, 72 Pac. 345. Y.) 367. 

"Mussina v. Bartlett, 8 Port. 'Wilson v. Geisler, 19 111. 49. 



131 NATURE AND USE OF EEMEDT § 1541 

and the purchaser has gone into possession.* It is proper, too, where 
the mortgage is in the form of an absolute deed without any written 
defeasance." In these cases the decree of strict foreclosure perfects 
and confirms the title. It bars the interest of persons who have a mere 
lien upon the land.^" 

The rights of a junior lien creditor, who has not been made a party 
to the foreclosure of a senior lien, may be barred by a suit for strict 
foreclosure requiring him to redeem within a reasonable time or stand 
foreclosed.^^ 

§ 1541. Land contract. — A judgment of strict foreclosure may 
properly be rendered upon a land contract for failure of the vendee 
to make the payments stipulated for.^^ As to the form of the decree, 
it should be that the money due on the contract be paid within such 
reasonable time as the court shall direct, and that in case of failure 
to make payment the vendee be foreclosed of his equity of redemption. 

A decree of sale would be improper, because the title to the prem- 
ises does not pass by the contract, but remains in the vendor. The 
vendor is entitled to such decree, although he is unable to give a 
perfect title to the property, unless the purchaser offers to rescind. He 
need not first tender a deed. If the purchaser has not tendered the 
purchase-money, and it appears that he would not have paid it if a 
tender of the deed had been made, such tender is rendered unneces- 
sary.^' 

A mortgagee who has taken possession of premises mortgaged for 
his support, on account of a breach of the condition, and has for sev- 
eral years supported himself, may have a decree to quiet the title. ^* 

'Jackson v. Weaver, 138 Ind. 539, "Koerner v. Willamette Iron 

38 N. E. 166; Jefferson v. Coleman, Works, 36 Ore. 90, 58 Pac. 863, 78 

110 Ind. 515, 11 N. B. 463; Miles v. Am. St. 759. 

Stehle, 22 Nebr. 740, 36 N. W. 142; "^ Warner v. Freud, 138 Cal. 651, 

Moulton V. Cornish, 138 N. Y. 133. 654, 72 Pac. 345; Taylor v. Collins, 

33 N. E. 842; Kendall y. Treadwell, 51 Wis. 123, 8 N. W. 22; Buswell v. 

14 How. Pr. (N. Y.) 165, 5 Abb. Pr. Peterson, 41 Wis. 82; Landon v. 

16; Benedict v. Oilman, 4 Paige (N. Burke, 36 Wis. 378; Kimball v. 

Y.) 58. Darling, 32 Wis. 675; Baker v. 

"Hone V. Fisher, 2 Barb. Ch. (N. Beach, 15 Wis. 99; Button v. 

Y.) 559. Schroyer, 5 Wis. 598. See ante §§ 

"Warner v. Freud, 138 Cal. 651, 225-235. 

72 Pac. 345; Jefferson v. Coleman, ^^'Mclndoe v. Morman, 26 Wis. 

110 Ind. 515, 11 N. E. 463; Bresna- 588, 7 Am. Rep. 96. 

han v. Bresnahan, 46 Wis. 385, 1 N. "Frizzle v. Dearth, 28 Vt. 787. 
W. 39. 



§ 1542 



DECREE OF STEICT FOKECLOSUKE 



133 



II. In What States It Is Used 



Section 

1542. Alabama. 

1543. California. 
1543a. Colorado. 

1544. Connecticut. 
1544a. Florida. 

1545. Illinois. 
1545a. Indiana. 

1546. Iowa. 

1547. Kentucky. 
1547a. Massachusetts. 
1547b. Michigan. 

1548. Minnesota. 



Section 

1549. Missouri. 

1550. Nebraska. 
1550a. New Jersey. 

1551. New York. 

1552. North Carolina. 

1553. Ohio. 

1553a. Pennsylvania. 
1553b. Rhode Island. 

1554. Tennessee. 

1555. Vermont. 
1555a. West Virginia. 

1556. Wisconsin. 



§ 1542. Alabama. — There may be a strict foreclosure where the 
parties have themselves agreed to this, or where it is for their inter- 
est;^ and it is a proper remedy in case the mortgagee has obtained a 
release of the equity of redemption, which is worth nothing above the 
debt, in order to cut ofE intermediate incumbrancers and quiet the 
title.'' 

§ 1543. California. — There may be a strict foreclosure when the 
circumstances of the case render this proper.* Under the latest de- 
cision in this state it would seem that if a strict foreclosure can be 
had in any case, it is only in favor of one who already has the legal 
title against which another asserts some equity; as where one joint 
owner redeemed the joint property from a foreclosure sale, and 
thereby acquired an equitable lien upon the interests of the others for 
reimbursement of their proportion of the money paid for redemption 
with interest, it was held that there could be no strict foreclosure, 
forfeiting the interests of the other joint owners for nonpayment 
within a time fixed. The holder of such lien has no legal title; and 
the only proper decree is for a sale of such interests to satisfy the lien, 
if the amount is not paid within a reasonable time to be fixed by the 
court.* 

§ 1543a. Colorado. — There can be no foreclosure without a sale 
under a decree of foreclosure.^ 



^Hunt v. Lewin, 4 Stew. & P. also McCaughey v. McDuffie, 141 



(Ala.) 138. 

"Hitchcock V. V. S. Bank, 7 Ala. 
386. 

■Calkins v. Stelnbach, 66 Cal. 117; 
Lord V. Morris, 18 Cal. 482, 489; 
Goodenow v. Ewer, 16 Cal. 461, 76 
Am. Dec. 540; McMillan v. Richards, 
9 Cal. 365, 70 Am. Dec. 655. See 



Cal. xviil, 74 Pac. 751. 

•Warner v. Freud, 138 Cal. 651, 
72 Pac. 345. 

'Code 1883, § 263; Mill's Ann. 
Code 1896, § 261; Nevin v. Lulu &c 
Silver Mining Co., 10 Colo. 357, 15 
Pac. 611. 



123 IN WHAT STATES USED § 1545a 

§ 1544. Connecticut. — A strict foreclosure is the usual form. As 
will be seen by reference to the statutes, no other form was provided 
for until 1886.* When foreclosure is made by an executor, adminis- 
trator, or trustee, the premises foreclosed, or the avails thereof, if sold 
by him, are held by him for the benefit of the same persons as the 
money secured by the mortgage would have been held if collected with- 
out foreclosure; and in case the premises are not sold, they are dis- 
tributed or disposed of to the same persons as would have been en- 
titled to the money if collected.'^ 

§ 1544a. Florida. — There is in this state no method either at 
law or in equity by which a mortgagee can be adjudged the absolute 
owner of the mortgaged property ; or, in other words, there is no strict 
foreclosure.' 

§ 1545. Illinois. — It is only in rare cases, as where the property is 
of less value than the debt and the mortgagor is insolvent, and the 
mortgagee is willing to take the property and discharge the debt, that 
a strict foreclosure is allowed." It is not proper where there are other 
incumbrances on the property, or creditors, or purchasers of the 
equity of redemption.^" When the mortgagor has deceased and his 
estate is insolvent, the case is assimilated to that where there are other 
incumbrances upon the property; and a sale should be directed in- 
stead of a strict foreclosure.^^ 

§ 1545a. Indiana. — It is provided by statute that there shall be 
a sale of the mortgaged property upon foreclosure.^^ Though the 
mortgage be by a deed absolute in form, the court can not decree a 
foreclosure and that the deed be absolute, but must order a sale.^' It 

'See ante § 1326. 528; Griesbaum v. Baum, 18 111. 

'Gen. Stats. 1902, §§ 4122-4126. App. 614; Brahm v. Dietsch, 15 111. 

"Browne v. Browne, 17 Fla. 607, App. 331; Hollis v. Smith, 9 111 App. 

623, 35 Am. Rep. 96. 109; Miller v. Davis, 5 111. App. 474. 

•Carpenter v. Plagge, 192 111. 82; "Farrell v. Parlier, 50 111. 274; 
61 N. B. 530; Lightcap v. Bradley, Horner v. Zimmerman, 45 111. 14; 
186 111. 510, 58 N. E. 221; Ellis v. Beyer v. Boyer, 89 111. 447, 449; 
Leek, 127 111. 60, 20 N. E. 218; 1111- Warner v. Helm, 6 111. 220; Hoilis 
nols Starch Co. v. Ottawa Hydraulic v. Smith, 9 111. App. 109; Murphy v. 
Co., 125 111. 237, 19 N. E. 486; Gor- Stith, 6 Bradw. (111.) 562; Greene- 
ham V. Farson, 119 111. 425, 10 N. meyer v. Deppe, 6 Bradw. (III.) 
E. 1; Boyer v. Beyer, 89 111. 447, 490; Rourke v. Coulton, 4 111. App. 
449; Sheldon v. Patterson, 55 111. 257. 

507; Horner v. Zimmerman, 45 111. "Boyer v. Boyer, 89 111. 447, 449. 

14; Stephens V. Bichnell, 27 111. 444, "2 R. S. 1876, p. 188, § 379 of 

81 Am. Dec. 242; Wilson v. Geisler, Code of Practice. 

19 111. 49; Johnson v. Donnell, 15 111. " Smith v. Brand, 64 Ind. 427. 
97; Moffett v. Farwell, 123 111. App. 



§ 1546 DEOEEB OF STKICT FOEECLOSUEE 124 

is only under special and peculiar circumstances, as vhere the com- 
plainant has obtained the complete title, save the interest of one who 
was not made a party to the foreclosure suit, that a strict foreclosure 
can be had.^* 

§ 1546. Iowa. — "What is known as a strict foreclosure has no 
place in our system of proeedure."^^ Yet when a junior lienholder has 
not been made a party to a suit to foreclose a prior mortgage, the 
purchaser under the foreclosure proceeding may prosecute an action 
requiring a junior lienholder to exercise his right of redemption, and 
in default thereof the latter may be foreclosed of all right of redemp- 
tion.^" 

§ 1547. Kentucky. — Strict foreclosures were formerly decreed, but 
now the code provides that there shall be a sale in all cases.^'' 

§ 1547a. Massachusetts. — A strict foreclosure may be decreed in 
equity, although the mortgage contains a power of sale.^* Such a 
foreclosure is, however, seldom resorted to; but it is one of the usual 
remedies in equity which may be resorted to unless the terms of the 
mortgage by express words or by fair implication exclude it. Thus a 
mortgage which does not provide any definite time for the payment 
of the mortgage debt, nor in any way limit the time for redemption, 
is not capable of a strict foreclosure.'' 

"In Jefferson v. Coleman, 110 "Caufman v. Sayre, 2 B. Mon. 
Ind. 515, 11 N. E. 465, the court, by (Ky.) 202; Civ. Code 1895, § 375. 
Mitchell, J., say: "In our state, as See ante § 1337. 
in all those states where a mortgage " Shepard v. Richardson, 145 
is regarded as creating only an Mass. 32, 11 N. E. 738; Shaw v. 
equitable lien, and not as a convey- Norfolk County R. Co., 5 Gray 
ance of the legal estate, the remedy (Mass.) 162; Hall t. Sullivan R. 
by strict foreclosure can only be re- Co., 21 Law Rep. 138. 
sorted to under special and peculiar ^ Shepard v. Richardson, 145 
circumstances. At best it is a harsh Mass. 32, 11 N. E. 738. Holmes, J., 
remedy, and on account of its sever- delivering the judgment, said: 
ity, and the anomalous relation it "Properly speaking, the right to 
bears to our conception of the in- foreclose means the right to cut off 
terest of a mortgagee and the stat- a right to redeem given by equity, 
utory method of foreclosure, it when, by the condition of the mort- 
should be pursued only in cases gage, the mortgagee's estate has be- 
where a statutory foreclosure and come absolute at law; Sampson v. 
sale would be Inappropriate." Tol- Pattison, 1 Hare 533, 536; Kock v. 
lowed in Loeb v. Tinkler, 124 Ind. Briggs, 14 Cal. 256, 262, 73 Am. 
331, 24 N. E. 235; Jackson v. Weav- Dec. 651. Where, by the letter of 
er, 138 Ind. 539, 38 N. E. 166. the deed, the mortgagor still has 

M Gamut V. Gregg, 37 Iowa 573. the right to redeem, the mortgagee 

But see Martin v. Jones, 15 Iowa can not maintain a bill to foreclose. 

240. See ante § 1335. Newcomb v. Bonham, 1 Vern. 7, 2 

"Shaw V. Heisey, 48 Iowa 468; Vent. 364. If, as in Welsh mort- 

Kramer v. Rebman, 9 Iowa 114. gages, the mortgagee's estate never 



125 



IN WHAT STATES USED 



§ 1550 



§ 1547b. Michigan.- 

or by advertisement.^" 



-A mortgage can be foreclosed only in equity 



§ 1548. Minnesota. — The court has power to decree a strict fore- 
closure/^ and this power is expressly conferred by statute, in cases 
where such remedy is just and appropriate ; but no final decree of fore- 
closure can be rendered until the lapse of one year after a judgment 
fixing the amount due.^^ The courts, however, regard a sale as the 
proper remedy in almost all cases.^'' 

§ 1549. Missouri. — Strict foreclosure "has never prevailed in this 
state."^* 

§ 1550. Nebraska. — Under the territorial statutes providing for 
foreclosure by a sale of the premises, it was held that the court had 
the same power as the English Chancery Court to decree a strict fore- 
closure.^" But in a later case, and under different statutes, it was 
held that a strict foreclosure could not be had; that the remedy is 
confined to a sale of the premises.^" The true statement of the N"e- 



becomes absolute, there never can 
be a foreclosure; Yates v. Hambly, 
9 Atk. 360; and though the failure 
expressly to fix a limit to the time 
for redemption does not necessarily 
take away the usual remedies 
(Balfe V. Lord, 2 Dru. & War. 480, 
489), in some cases, where no time 
was fixed by the deed beyond which 
the mortgagor could not defeat the 
mortgagee's estate by payment, the 
foundation for foreclosure has been 
thought to be wanting. Teulon v. 
Curtis, Younge 610." See also Fos- 
ter V. Boston, 133 Mass. 143. 

"Buck V. Sherman, 2 Doug. 176. 
See ante § 1342. 

=^ Bacon v. Cottrell, 13 Minn. 194; 
Drew V. Smith, 7 Minn. 301; Hey- 
ward V. Judd, 4 Minn. 483. See ante 
§ 1343. 

==Gen. Stats. 1913, § 8169. 

^Wilder v. Haughey, 21 Minn. 
101. 

=»0'Fallon v. Clopton, 89 Mo. 284, 
1 S. W. 302; Davis v. Holmes, 55 
Mo. 349. "That general remark," 
says Barclay, J., in Hannah v. Da- 
vis, 112 Mo. 599, 20 S. W. 686, 688, 
"we think, was not intended, and 
certainly should not be held, to for- 
bid the naming of a date for pay- 



ment in every instance where par- 
ties seek the aid of equity to redeem 
against liens of various kinds. In 
respect to ordinary mortgages, the 
statutory procedure in this state 
contemplates a sale as the means of 
foreclosure. * * * But it can not be 
declared as an inflexible rule that a 
sale is essential in every case to put 
an end to equitable rights of re- 
demption. That question must be 
governed largely by the circum- 
stances and equities of each contro- 
versy. Such is the plain meaning 
of the judgment pronounced in Mar- 
tin V. Ratcliff, 101 Mo. 254, 13 S. W. 
1051. A court of equity certainly 
has the discretion to name terms 
on which it will let in a party to 
redeem. Cowing v. Rogers, 34 Cal. 
648. This court has frequently ap- 
plied that proposition to varying 
states of facts." Citing Gooch v. 
Botts, 110 Mo. 419, 20 S. W. 192; 
Cobb V. Day, 106 Mo. 278, 17 S. W. 
323; Giraldln v. Howard, 103 Mo. 
40, 15 S. W. 383; Martin v. Ratcliff, 
101 Mo. 254, 13 S. W. 1051; Turner 
V. Johnson, 95 Mo. 431, 7 S. W. 570. 

^''Wood V. Shelds, 1 Nebr. 453. 
See ante § 1347. 

^ Kyger v. Ryley, 2 Nebr. 20. 



§ 1550a DECREE or strict foreclosure 126 

braska doctrine would be to say that "a strict foreclosure of the in- 
terest of one holding the legal title is unknown in our state."^^ In 
Nebraska, strict foreclosure will lie in a suit by a vendor of an exec- 
utory contract for the sale of real estate, against the vendee, where 
the conditions of the contract have not been complied with by such 
vendee and the legal title remains in the vendor.''' It will not lie at 
the suit of a mortgagee against a mortgagor who holds the legal title 
to the mortgaged premises, nor against a grantee of such mortgagor, 
who has purchased and recorded his deed to all or any part of the 
mortgaged premises, before action on the mortgage has been insti- 
tuted.^® There may not be a strict foreclosure of a deed of trust 
though it contains a provision that "this instrument shall not be con- 
strued as a mere mortgage."^" 

§ 1550a. New Jersey. — A strict foreclosure may be had, especially 
when the entire legal and equitable estate have become vested in the 
mortgagee.'^ The mortgagee in such case is entitled to a decree of 
strict foreclosure against judgment creditors of the mortgagor having 
liens on such land, who became such creditors while he still owned 
the equiiy of redemption.^'' 

§ 1551. New York. — A strict foreclosure is rarely pursued or al- 
lowed, except in cases where a foreclosure has once been had, and the 
premises sold without making the judgment creditor, or some person 
similarly situated, a party to the suit; in which case his right of re- 
demption may properly be barred in this way.'^ But even in that case 
this remedy will not be applied to relieve a party who has bought with 
full knowledge of the outstanding incumbrance and subject to it.'* 

"South Omaha Sav. Bank v. 133, 33 N. B. 842; BoUes v. Duff, 43 

Levy, 1 Nebr. (UnofE.) 255, 95 N. N. Y. 469, 10 Abb. Pr. (N. S.) 399. 

W. 603. 414, 41 How. Pr. 355; Robinson v. 

=» South Omaha Sav. Bank v. Ryan, 25 N. Y. 320; Kendall v. 

Levy, 1 Nebr. (Unoff.) 255, 95 N. Treadwell, 5 Abb. Pr. (N. Y.) 16, 

W. 603. 14 How. Pr. 165; Blanco v. Foote, 

=» South Omaha Sav. Bank t. 32 Barb. (N. Y.) 535; House v. 

Levy, 1 Nebr. (Unoff.) 255, 95 N. Lockwood, 40 Hun (N. Y.) 532; 

W. 603. Ross V. Boardman, 22 Hun (N. Y.) 

=°Fisk6 V. Mayhew, 90 Nebr. 196, 527; Benedict v. Oilman, 4 Paige 

133 N. W. 195, Ann. Gas. 1913A. (N. Y.) 58; Denton v. Nat. Bank, 

1043. 18 N. Y. S. 38. 

» Pettingill v. Hubbell, 53 N. J. " Denton v. Ontario Co. Nat Bank, 

Eq. 584, 32 Atl. 76; Benedict v. 150 N. Y. 126, 44 N. E. 781; Moul- 

Mortimer (N. J.), 8 Atl. 515. ton v. Cornish, 138 N. Y. 133, 33 N. 

^^Lockard v. Hendrickson (N. J. E. 842, reversing 16 N. Y. S. 267. 

Eq.), 25 Atl. 512; Parker v. Child, See also Kendall v. Treadwell, 5 

25 N. J. Eq. 41. Abb. Pr. (N. Y.) 16, 14 How. Pr. 

"Moulton V. Cornish, 138 N. Y. 165; Peabody v. Roberts, 47 Barb. 



127 IN WHAT STATES USED § 1553b 

§ 1552. North Carolina. — Foreclosure was formerly made with- 
out sale. In a ease before the court in 1837/° Euffin, C. J., said that 
"of late years a beneficial practice has gained favor, until it may be 
considered established in this country, not absolutely to foreclose in 
any case, but to sell the mortgaged premises and apply the proceeds 
in satisfaction of the debt: if the former exceed the latter, the excess 
is paid to the mortgagor ; if it fall short, the creditor then proceeds at 
law on his bond or other legal security to recover the balance of the 
debt." It was then the practice to direct a sale upon the application 
of either party; but when no such application was made, to decree a 
foreclosure.^' 

§ 1553. Ohio. — The rule formerly was that the mortgagee was 
entitled to foreclosure instead of a sale when two-thirds of the value 
of the mortgaged premises did not exceed the debt. Now a sale is pro- 
vided for in all cases.^^ 

§ 1553a. Pennsylvania. — A court of equity has no power to bar a 
mortgagor of his equity of redemption. This can only be extinguished 
by the mortgagor's own agreement, by some act done by himself that 
estops him, or by a judicial sale.'* 

§ 1553b. Rhode Island.— iThere may be a strict foreclosure in 
accordance with equity practice.^^ 

(N. Y.) 91; Benedict v. Gilman, 4 creed that, unless he reimbursed the 
Paige (N. Y.) 58. In Moulton v. plaintiff, his interest in the prop- 
Cornish, 138 N. Y. 133, 33 N. E. 842, erty should be deemed extinguished, 
the court said: "It is not neces- Other cases might be suggested 
sary to hold that in no case can where such form of relief would be 
the right to sell be held in abeyance, just. But in all cases equitable 
but the right can not be denied or groun"as for such a procedure must 
suppressed unless some adverse, be shown." In Denton v. Ontario 
dominating equity requires it. If County Nat. Bank, 150 N. Y. 126, 
in this case the plaintiff had pur- 44 N. E. 781, it is declared in a 
chased and taken possession in similar case that strict foreclosure 
ignorance of the existence of de- should be resorted to only in ex- 
fendant's mortgage, and the defend- treme cases. 

ant, having knowledge of the prose- " Fleming v. Sitton, 1 Dev. & Bat. 

cution of the foreclosure action, had Eq. 621. 

made no disclosure of his incum- " Green v. Crockett, 2 Dev. & Bat. 

brance upon the property, and the Eq. 390. See ante § 1352. 

purchaser was thus misled to his "Anon., 1 Ohio 235; Higgins v. 

prejudice, it might well have been West, 5 Ohio 554. See ante § 1353. 

hold that it would be inequitable to "Winton's Appeal, 87 Pa. St. 77. 

permit the defendant to exercise See ante § 1355. 

the power of sale in his mortgage, =» Bradford v. King, 18 R. I. 743. 
and it might properly have been de- 



§ 1554 DECREE OF STRICT FORECLOSURE 128 

§ 1554. Tennessee. — The court, as early as 1805, refused a prayer 
that the property might be vested in the complainant, but directed a 
sale, according to the provision of the statute relating to sales xmder 
execution.*" 

§ 1555. Vermont. — By reference to the statutory provisions in 
respect to foreclosure, it will be seen that the form of foreclosure in 
equity is a decree of strict foreclosure, although there may be a fore- 
closure by action of law with a similar result.*^ 

§ 1555a. West Virginia. — Strict foreclosure of mortgages in rare 
instances, if at all, prevails in West Virginia. The practice is to ap- 
point a day within which the mortgagor may redeem, and to decree 
a sale of the property for payment of the debt secured in case of de- 
fault in redemption.*^ 

§ 1556. Wisconsin. — There may be a decree of strict foreclosure 
when this remedy is proper.*^ It may be entered by consent of par- 
ties,** but is not void if entered without consent.*^ Land contracts are 
foreclosed in this manner.*^ In the foreclosure of a mortgage con- 
ditioned to support the mortgagee and to pay his debts, the judgment 
should be in the nature of a strict foreclosure.*' 

III. Pleadings and Practice 

Section Section 

1557. Necessity that entire debt be 1563. Redemption. 

due. 1564. Redemption by infant heir. 

1558. Parties. 1565. Time for redemption fixed in 

1559. Heirs at law as parties. decree. 

1560. Pleading and practice. 1566. Dismissal of bill to redeem. 

1561. Judgment. 1567. Effect of strict foreclosure. 

1562. Delivery of possession. 1568. Costs. 

§ 1557. Necessity that entire debt be due. — ^TJntil the whole debt 
becomes due, a conclusive foreclosure of the whole estate mortgaged 
will not be decreed. Sometimes the mortgage contains an express stip- 
ulation that the whole debt shall be due and payable upon default in 
the payment of any instalment of it or of the interest accrued. Of 

" Hord V. James, 1 Overt. 201. " Salisbury v. Chadbourne 45 

" Paris V. Hulett, 26 Vt. 308. See Wis. 74. 

ante § 1361. "Salisbury v. Chadbourne, 45 

"Froidevaux v. Jordan, 64 W. Va. Wis. 74. 

388, 62 S. E. 686. « Landon v. Burke, 36 Wis. 378 

"Sage V. McLaughlin, 34 Wis. '"Bresnahan v. Bresnahan 46 

550; Kimball v. Darling, 32 Wis. Wis. 385. 
675; Bean v. Whitcomb, 13 Wis. 431. 



129 PLEADINGS AND PEACTICE § 1558 

course, the whole debt in such case being demandable, a decree of 
irrevocable foreclosure as to the entire debt may be made.^ 

§ 1558. Parties. — ^The rule as to parties is in general the same as 
in an action for the ordinary decree of sale. All persons interested 
in the mortgage or in the property^ should be made parties. If the 
rights of some have been already barred by a previous action of fore- 
closure, only those who still have claims against the property should 
be made parties.* The owner of the equity of redemption is a neces- 
sary party defendant, and the only one wholly indispensable. The de- 
cree operates directly upon the property, and its effect is to restore 
it, upon payment, to the mortgagor; or, upon failure of payment, to 
vest it in the mortgagee; unless, therefore, the mortgagor or his as- 
signee be before the court, the decree is without efficacy.* If subsequent 
mortgagees and others interested in the property are not made parties, 
they are not concluded by the proceedings. But while they are proper 
parties they are not necessary parties.'^ In Connecticut, where a strict 
foreclosure is the mode in use, it is held that the bill may be main- 
tained without making any subsequent incumbrancers parties." But 
the propriety of this practice has been called in question.'' For if tha 
mortgagor alone be made a party when there are others having rights 
in the equity of redemption, the foreclosure merely extinguishes hia 
right of redemption; and he may, by acquiring the right of a subse- 
quent incumbrancer, proceed to redeem, notwithstanding the fore- 
closure.* When a prior mortgagee who has foreclosed his mortgage, 
and purchased a part of the mortgaged premises, seeks again to fore- 
close his mortgage, as against a junior mortgagee not made a party 
to the first action, the purchasers on foreclosure of the other portions 
of the mortgaged premises are necessary parties, so that the liens of 
the two mortgages may be determined and adjudicated as against their 
respective portions.® 

^Caufman v. Sayre, 2 B. Mon. *Goodenow v. Ewer, 16 Cal. 461, 

(Ky.) 102; Stanhope v. Manners, 2 76 Am. Dec. 540. 

Eden 197; Leveridge v. Forty, 1 "Brooks v. Vermont Cent. R. Co., 

Maule & S. 706. 14 Blatchf. (U. S.) 463, 472; Weed 

"Though the Interest be only that v. Beebe, 21 Vt. 495. 

of an attaching creditor. Lyon v. ° Smith v. Chapman, 4 Conn. 344, 

Sanford, 5 Conn. 544. See chapter 346. 

xxxi. ' Goodman v. White, 26 Conn. 317, 

'Pettingill v. Hubbell, 53 N. J. 320. 

Eq. 584, 32 Atl. 76; Benedict v. Gil- = Goodman v. White, 26 Conn. 317. 

man, 4 Paige (N. Y.) 68. "Moulton v. Cornish, 138 N. Y. 

133, 33 N. E. 842. 



9 — Jones Mtg. — Vol. III. 



§ 1559 DECEEE OF STKICT FOKECLOSURE 130 

§ 1559. Heirs at law as parties. — In a bill in equity for a strict 
foreclosure after the death of the mortgagee, his heirs at la^w are neces- 
sary parties. The decree in such case vests the legal title to the prem- 
ises in the heir and not in the executor.^" This is the rule in England, 
■where formerly foreclosure 'was generally without sale.^^ When the 
bill is for a sale, and not for foreclosure, the heir of the mortgagee 
need not be joined. The personal representative alone may bring it.^^ 

§ 1560. Pleading and practice. — The pleadings and practice are 
substantially the same as in the ordinary action, though the plaintiff 
sometimes offers in his complaint to take the mortgaged premises in 
full payment and satisfaction of his debt.^' It is not infrequently a 
matter of agreement between the parties before the suit is commenced, 
that by this summary process the mortgagee shall be adjudged the 
absolute owner of the property, and that the mortgagor shall there- 
upon be freed from his debt, and in such case the bill should be drawn 
with reference to such agreement or understanding. In other cases 
m which there is no such agreement, but where the property is about 
equal in value to the debt, and it is the interest of the mortgagee to 
have a speedy foreclosure in this manner, his offer to take the prop- 
erty in satisfaction of the debt would generally be essential in pre- 
venting opposition to this form of foreclosure, and should therefore be 
set forth in the bill. 

This specific remedy should be prayed for in the bill ; though if in 
the progress of the cause the facts show that a strict foreclosure is 
the proper remedy, and subject to no objection, a decree might be 
entered in this form upon a bill drawn originally for a foreclosure 

"Osborne v. Tunis, 25 N. J. L. hands of the heir, so far, at least, 
633. "True," says the Chief Justice, as to satisfy the mortgage debt, but 
"while the mortgage retains its the foreclosure fixes the title in the 
character of a pledge, of a mere se- heir. And the reason assigned in 
curity for the debt, it may be as- the books why the heir of the mort- 
signed by the executor. It will pass gagee should be made a party to a 
by an assignment of the bond as a bill filed by the executor to redeem 
mere incident of the mortgage debt, or be foreclosed is, that otherwise, 
It is regarded as a chattel interest, if the mortgagor should redeem. 
But when the right to redeem is there would be no one before the 
foreclosed, its character as a pledge court from whom a conveyance of 
ceases, and the title to the land the legal estate can be taken " 
mortgaged vests absolutely, by force " 1 Fisher's Mtg., § 1061 
of the conveyance, in the mortga- " Dayton v. Dayton, 7 Bradw Ind 
gee, while living, or in his heir at 136. See ante § 1387 
law if he be dead. The title relates " For a form of complaint proper 
no longer to the money, but to the in this action, see Kendall v. Tread- 
land. Equity will permit the exec- well, 5 Abb. Pr. (N Y i 16 14 How 
utor to follow the land into the Pr. i65. 



131 PLEADINGS AND PRACTICE § 1561 

sale; and although a strict foreclosure be prayed for, the court may 
decree a sale.^* On the other hand, where a prior mortgagee has 
brought a hill for a strict foreclosure, which is denied on the ground 
that he bought at the foreclosure sale with full knowledge that the 
junior mortgagee had not been made a party to the foreclosure suit, 
the prior mortgagee is entitled to an ordinary decree foreclosing his 
mortgage as against the junior mortgagee, notwithstanding the prior 
defective foreclosure.^^ 

Unless a cross-bill is filed, a decree of strict foreclosure need not 
make any disposition of a superior lien, other than to declare its su- 
periority.^^ 

§ 1561. Judgment. — The judgment in a strict foreclosure bars the 
defendant of all right and title and equity of redemption, unless he 
redeems or pays the mortgage within a time certain therein fixed, and 
usually six months from the date of the judgment.^^ A shorter time 
than six months is frequently fixed upon in modern practice.^* It is 
therefore interlocutory, and makes provision applicable in case of a 
failure to redeem. When a day is appointed upon which redemption 
is to be made, the plaintiff should attend at the time and place fixed 
to receive the amount and release the property. 

The decree that the defendant pay the sum found due on the mort- 
gage within the time fixed is a final one, and vests the title of the 
mortgagor in the complainant, without any further order or decree 
after the time allowed for payment has elapsed.^® 

Where a town foreclosed a purchase-money mortgage, but after- 
ward extended the time of redemption so that the decree did not be- 
come absolute, and upon redemption by the mortgagor executed to 
him a quitclaim deed, the mortgagor was declared to hold title under 

"Sage V. Central R. Co., 9S U. S. the other, see Waters r. Hubbard, 

334, 25 L. ed. 394; Sagev. McLaugh- 44 Conn. 340. See also Sage v. 

lin, 34 Wis. 550. Central R. Co., 99 U. S. 334, 25 L. 

'"PettingiU v. Hubbell, 53 N. J. ed. 394. 

Eq. 584, 32 Atl. 76; Moulton v. Cor- ^ Ellis v. Leek, 127 111. 60, 20 N. 

nish, 138 N. Y. 133, 33 N. E. 842. E. 218. 

"Roberts v. W. H. Hughes Co., "Ellis v. Leek, 127 111. 60, 20 N. 

86 Vt. 460, 85 Atl. 982. E. 218; Mulvey v. Gibbons, 87 111. 

"Farrell v. Parlier, 50 111. 274. 367. The English practice is, upon 
For a form of judgment where there motion after default in making pay- 
were conflicting equities, see Ken- ment within the time, to order that 
dall V. Treadwell, 14 How. Pr. (N. the defendant do from henceforth 
Y.) 165, 5 Abb. Pr. 16. For decree stand foreclosed of all right, title, 
against two defendants, of whom and equity of redemption in the 
one stands in relation of surety to premises. 1 Smith's Ch. Pr. 532. 



§ 1562 DECEEE OE STEICT FOEECLOSUKB 132 

liis original deed from the town, and might maintain an action against 
it for a breach of a covenant therein.^" 

§ 1562. Delivery of possession.^^ — Upon failure of the defend- 
ant to pay the amount due within the time stipulated, it seems that 
application should be made to the court, founded upon proof of a de- 
mand and refusal to pay the amount adjudged to be paid, for the is- 
suing of a process in the nature of a writ of assistance, to put the 
plaintiff into possession. ^^ 

Under the English practice, however, upon a decree of strict fore- 
closure the court does not order a delivery of possession of the prem- 
ises to the complainant, but leaves him to his legal remedy by eject- 
ment.^^ The complainant has the legal title, and the court only de- 
clares that the equity of redemption is foreclosed. The delivery of 
possession is not necessary to give effect to the decree of court, as it is 
in case of a sale. If the mortgagee be in possession, the decree may 
properly direct him to vacate and release the premises on pajrment to 
him of the sum found due.^* 

§ 1563. Redemption. — On a strict foreclosure the time allowed for 
redemption before the foreclosure becomes absolute is within the dis- 
cretion of the court. Six months was the usual time formerly al- 
lowed,-^ but a shorter time is frequently allowed in recent practice ;^° 
the time is a matter, however, within the discretion of the court, hav- 
ing in view the circumstances of the case.^^ In Vermont the time is 

=» Daggett V. Mendon, 64 Vt. 323, paying the amount ascertained and 

24 Atl. 242. certified or found to be due, within 

^ In Connecticut provision is six months, at such time and place 

made by statute for delivery of as are appointed, the complainant 

possession. See ante § 1326. shall reconvey the mortgaged prem- 

""Diggle V. Boulden, 48 Wis. 477, ises; but that, in default of such 

4 N. W. 678; Buswell v. Peterson, payment, the defendant shall thence- 

41 Wis. 82; Landon v. Burke, 36 forth be absolutely debarred and 

Wis. 378. foreclosed of his equity of redemp- 

» Sutton V. Stone, 2 Atk. 101; tion. It is necessary, however, for 

Seaton's Decrees, 140. the complainant, in order to com- 

" Kendall v. Treadwell, 5 Abb. Pr. plete his title, to procure an order 

(N. Y.) 16, 14 How. Pr. 165. confirming it; otherwise the decree 

« Chicago, D. & V. R. Co. v. Fos- of foreclosure will not be pleadable 
dick, 106 U. S. 47, 27 L. ed. 47, 1 This order of confirmation is pro- 
Sup. Ct. 10. Matthews, J., said: cured on proof to the court of non- 
"According to the practice of the payment according to the terms of 
English chancery, a decree of this the decree." See 2 Daniell Ch. Pr 
nature in a foreclosure suit, after 997. 

directing an account to be taken of * Ellis v. Leek, 127 111. 60 20 N 

the principal and interest due to the E. 218. 

complainant upon the mortgage, ^ Clark v. Reyburn, 8 Wall (U 

orders that, upon the defendant's S.) 318, 323, 19 L. ed. 354; Barnes 



133 PLEADINGS AXD PRACTICE § 1565 

by statute made one year;^* and under the chancery practice it was 
before the statute a year and a -week.^" The time may be enlarged, and 
usually is on application, but a satisfactory reason for it must be 
shown.^* 

"When a sale is decreed instead of a foreclosure, it is not the practice 
ordinarily to fix a day for payment in failure of which the sale shall 
take place,^^ though this course has sometimes been taken.'^ The rea- 
son for enlarging the time of redeeming does not apply in case a sale 
is ordered according to the usual practice; for the mortgagor in the 
case of a sale is supposed to receive the full value of the property by 
the payment of the debt and receipt of the surplus, and therefore ap- 
plications for the postponement of sales are not ordinarily allowed. 

§ 1564. Redemption by infant heir. — ^When a strict foreclosure is 
had against an infant heir of the mortgagor, he is usually entitled to 
a day in court after he comes of age. The former practice was to al- 
low him six months after coming of age, not to go into the accounts 
or to redeem, but to show error in the decree. A decree of sale, how- 
ever, is binding upon the inf ant.^^ 

§ 1565. Time for redemption fixed in decree. — As already noticed 
a time for redemption is always allowed in a decree for a strict fore- 
closure. A decree which does not find the amount due, nor allow any 
time for the payment of the debt and the redemption of the estate, 
and which is final and conclusive in the first instance, can not be sus- 
tained unless authorized by statute. Although the usual time of re- 
demption allowed is six months, yet it is really within the discretion 
of the court as to the length of it ; but the discretion does not extend 
to withholding it entirely.^* 

Where the operation of a decree of foreclosure is suspended by an 
injunction, the time of redemption does not run pending the injunc- 

V. Lee, 1 Bibb (Ky.) 526; Murphy Cooper, 1 S. & S. 365; Quarles v. 

V. New Hampshire Sav. Bank, 63 Knight, 8 Price 630. 

N. H. 362; Ferine V. Dunn, 4 Johns. "' Mussina v. Bartlett, 8 Port. 

Ch. (N. Y.) 140; McKinstry v. Mer- (Ala.) 277, 288. 

vin, 3 Johns. Ch. (N. Y.) 466, note; '^Nimrock v. Scanlin, 87 N. Car. 

Harkins v. Forsyth, 11 Leigh (Va.) 119; Caphart v. Biggs, 77 N. Car. 

294. 261, 267. Three months is the usual 

^ See ante § 1361. time in North Carolina. 

^'Langdon v. Stiles, 2 Aik. (Vt.) =^ Mills v. Dennis, 3 Johns. Ch. (N. 

1S4. Y.) 367. 

'"Downing v. Palmateer, 1 Mon. ^ Clark v. Reyburn, 8 Wall. (U. 

(Ky.) 64, 66; Monkhouse v. Cor- S.) 318, 19 L. ed. 354; Johnson v, 

poration, 17 Ves. 380; Renvoize v. Donnell, iS 111. 97; Blanco v. Foote, 

32 Barb. (R Y.) 535. 



§ 1566 DECEEE OF STRICT POEECLOSUEE 134 

tion. If the mortgagor is in possession and remains in possession after 
such decree, the rents and profits belong to him; and the mortgagee 
can not recover, upon the injunction bond, for timber sold, or for the 
use of the mortgaged premises, before the decree becomes absolute, 
where the value of the premises is greater than the mortgage debt. If 
the mortgaged premises are not redeemed, and are insufiicient to pay 
the debt in full, the mortgagee's remedy is by suit for the balance of 
the debt.^" 

§ 1566. Dismissal of bill to redeem. — A foreclosure in equity may 
result from the dismissal of a bill to redeem. In New York it is held 
that after the mortgagor's failure to pay within the time limited, a 
final order that the bill be dismissed should be obtained, and that 
until this is done no title passes to the mortgagee.^" In Massachu- 
setts it is held that, even without a formal order of dismissal, a mort- 
gage is foreclosed upon the mortgagee's obtaining a judgment for 
costs after the mortgagor has failed to pay the amount found due in 
his suit for redemption within the time ordered. The judgment for 
costs substantially terminates the suit upon its merits.^'' 

§ 1567. Effect of strict foreclosure.— The efEect of a strict fore- 
closure is not to extinguish the debt, unless the premises are of suffi- 
cient value to pay it. When this is sufficient the debt is satisfied. The 
value of the property may be ascertained in a suit at law upon the 
mortgage debt to recover the difference.^* Sometimes, by agreement 

'"Hill v. Hill, 59 Vt. 125, 7 Atl. Edson, 5 Conn. 531; McEwen v. 

468. Welles, 1 Root (Conn.) 202, 1 Am. 

"Bolles V. Duff, 43 N. Y. 469; Dec. 39; Fitch v. Colt, 1 Root 

Beach v. Cooke, 28 N. Y. 508, 535, (Conn.) 266. An act of that year 

86 Am. Dec. 260; Ferine v. Dunn, 4 (G. S. 1875, p. 358, § 2) provided 

Johns. Ch. (N. Y.) 140; Wood v. that the foreclosure should not pre- 

Surr, 19 Beav. 551; Hansard v. elude the mortgage creditor from 

Hardy, 18 Ves. 455, 460. See ante § recovering the difference between 

1108. the value of the property estimated 

=" Stevens v. Miner, 110 Mass. 57. at the expiration of the time limited 

""New Haven Pipe Co. v. Work, for redemption and the mortgage 
44 Conn. 230; Bassett v. Mason, 18 debt. Laws 1878, ch. 129, § 2, pro- 
Conn. 131, 136; Edgerton v. Young, vided for the appointment of ap- 
43 111. 464, 470; Vansant v. Allmon, praisers to determine the value of 

B ^l'^-,lKr'^^l^^^„'^- ^^™''' ^ the property. It was held that the 

Wend. (N. Y.) 287; Spencer v. Har- two statutes together left it optional 

ford, 4 Wend. (N. Y.) 381; De with either of the parties whether 

Grant v. Graham, 1 N. Y. Leg. Obs. there should be an appraisal or 

75. In Connecticut prior to 1833 whether the court should determine 

the foreclosure extinguished the the value of the property upon 

debt, whatever may have been the proper evidence. Windham Co 

value of the property. Derby Bank Sav. Bank v. Himes, 55 Conn 433* 

V. Landon, 3 Conn. 62, 63; Swift v. 12 Atl. 517. In Vermont the decree! 



135 SETTING ASIDE AND OPENING § 1569 

of the parties or by the ofEer of the plaintiif, the decree transferring 
the absolute title to him is expressly taken in full satisfaction of the 
debt and the decree should then so provide.^" A debt not included in 
the decree is not satisfied by the foreclosure ; and it may be shown by 
parol whether a particular debt was included in the decree.^" But 
the decree does not operate to satisfy the debt, or any part of it, until 
it has become absolute by the expiration of the time limited in it 
within which the mortgagor may pay the debt and redeem the estate.*^ 
There is no judgment for a deficiency in this form of foreclosure.*'' 
The statutes providing for such a judgment relate wholly to foreclo- 
sures by sale. Very frequently the plaintiff releases the mortgagor 
from personal liability. He can enforce it only by suit at law. 

§ 1568. Costs. — Ordinarily costs will be allowed as upon a de- 
cree for sale. If, however, as is common where this form of fore- 
closure is used only in special cases, the mortgagee has proposed to 
take the property and discharge the debt, no costs are allowed. In 
all cases the court has discretionary power in this matter. When a 
purchaser at a foreclosure sale brings a bill for a strict foreclosure 
against a prior judgment creditor who was not a party to the former 
foreclosure suit, if he wishes to redeem he must pay the costs of suit, 
but not the costs of the suit on which the sale was made.*' 

IV. Setting Aside and Opening the Foreclosure 

Section Section 

1569. Opening or setting aside de- 1570. Effect of defective service of 
crees. process. 

§ 1569. Opening or setting aside decrees. — A strict foreclosure may 
be set aside for many of the same causes for which a foreclosure sale is 
set aside. ^ As the effect of the decree is to vest an absolute title in the 
holder of the mortgage, so long as he retains the title he stands very 
much in the same relation to the property and to the mortgagor as 
does a mortgagee who has bought the property at a foreclosure sale, 
and against whom the court would more readily set aside the fore- 
closure sale than against a stranger who had in good faith made the 

whether upon a bill in chancery or " Goddard v. Selden, 7 Conn. 515, 

in an action of ejectment, after the 520. 

expiration of the time of redemp- " Peck's Appeal, 31 Conn. 215. 

tion, operates as satisfaction in *'Bean v. Whitcomb, 13 Wis. 431. 

whole or pro tanto, as the case may ■"Benedict v. Oilman, 4 Paige (N. 

be. Paris v. Hulett, 26 Vt. 308. See Y.) 58; Vroom v. Ditmas, 4 Paige 

ante § 950. (N. Y.) 526. 

™ Wait's Prac. 248, 249. 'See post §§ 1668-1681. 



§ 1569 DECREE OE STRICT EOKECLOSUEE 136 

purchase.^ After the foreclosure the relations of the parties are also 
very much the same as they would be if the mortgage had been fore- 
closed by entry and possession in the manner in use in Massachusetts ; 
and the foreclosure will be waived or opened by the subsequent deal- 
ings of the parties between themselves in the same manner;^ as, for 
instance, by the payment of part of the amount due ;* by their treating 
the debt as still due;= or by their agreeing in any way that the fore- 
closure shall have no effect,^ or by the mortgagees treating the fore- 
closure as of no effects 

The opening of a decree of foreclosure does not depend upon the 
inquiry whether the proceedings in the case were regular, but may 
depend wholly upon equitable considerations in any way affecting the 
rights of parties.® "Where the failure of the mortgagor to pay accord- 
ing to the decree was not through his own negligence, but in conse- 
quence of propositions for settlement and payment which were to be 
carried into effect after the time of payment had expired, and the 
failure to perform this was on the part of the mortgagee, the decree 
of foreclosure was opened.^ The mortgagee's promise to give the mort- 
gagor further time for redemption after the expiration of the decree 
does not entitle the mortgagor to claim that the decree be opened, 
if he has made no offer to perform his part of the agreement.^" A 
promise by the holder of a mortgage or decree of foreclosure to allow 
a redemption after the expiration of the decree is equally binding 
upon one who purchases the decree with knowledge of such promise.'^^ 
A decree was opened after the expiration of the time limited for re- 
demption, for the reason that the mortgagor, having paid part of the 
debt, fell sick on a journey undertaken for the purpose of obtaining 
the balance of the money, and was unable to get back until ten days 
after the time limited, when he tendered the amount. ^^ It was opened, 
also, in a case where the mortgagor supposed he had made a valid 
tender within the time limited, though by informality it was not 
good.^^ 

If the mortgagor against whom a decree of foreclosure has been 

= See post § 1671. dredge, 28 Conn. 556, 73 Am. Dec. 

'See ante §§ 1265-1275. 688. 

"Gilson V. Whitney, 51 Vt. 552; "Pierson v. Clayes, 15 V't. 93. 

Smalley v. Hickok, 12 Vt. 153; Con- "Blodgett v. Hobart, 18 Vt. 414. 

verse v. Cook, 8 Vt. 164. "Woodward v. Cowdery, 41 Vt. 

"Bissell V. Bozman, 17 N. Car. 496. 

154. ^^Doty V. Whittlesey, 1 Root 

"Grlswold V. Mather, 5 Conn. 435. (Conn.) 310. 

'Co!er v. Barth, 24 Colo. 31. "Crane v. Hanks, 1 Root (Conn.) 

' Bridgeport Savings Bank v. El- 468. 



IS? SETTING ASIDE AND OPENING § 1569 

entered limiting the time of redemption to a particular day is pre- 
vented from paying the debt and redeeming, by the happening of an 
unforeseen event over which he had no control, a court of equity will 
open the foreclosure. This was done in a case where the foreclosure 
was to become absolute on the fifth day of August. The property was 
worth more than eight thousand dollars, and was nearly all the mort- 
gagor had, and the debt was less than four thousand dollars. The 
mortgagor had relied upon receiving the money from an uncle who 
had ample means, and had promised to furnish it on the third day 
of August, but unexpectedly failed to do so. On the evening of the 
fifth day of August the mortgagor procured a person who had the 
necessary amount in United States bonds, but not in money, to go to 
the mortgagee's house that evening. This person, finding that the 
mortgagee had gone to bed, sent him word by his wife that he had 
come to redeem the mortgaged property; to which the mortgagee re- 
plied that he was sick, and so nothing further was done. The mort- 
gagor 'w^as allowed to redeem.^* 

If the mortgagee, after a decree of foreclosure and before the ex- 
piration of the time limited for redemption, says to the mortgagor 
that he may pay the debt after the time limited, and that no ad- 
vantage should be taken of the decree, and the mortgagor in conse- 
quence allows the time to expire without paying the debt, the fore- 
closure will be opened. The mortgagor is also entitled to equitable re- 
lief if the decree has been obtained by fraud, or if after it is obtained 
he is deceived in relation to the time limited for redemption, and he 
consequently fails to redeem ;^° or if no service of the summons was 
made upon him, and he had no actual knowledge of the pendency of 
the suit until after the time of redemption had expired, though the 
decree found that service had been made.^" 

Where the parties to a foreclosure suit agreed upon a time for re- 
demption to be limited by the decree, but by mistake the time was 
not inserted in the decree, the mortgagor at the end of three years 
after the time so limited by agreement was not allowed to open the 
foreclosure and redeem. The mortgagor could equitably ask for noth- 
ing more than the correction of the mistake, and this would avail him 
nothing.^^ This relief may be had on an ordinary bill to redeem, tak- 
ing no notice of the decree of foreclosure.^* 

"Bostwick T. Stiles, 35 Conn. "Bridgeport Savings Bank v. El- 
195. dredge, 28 Conn. 556, 561. 

^ Weiss V. Ailing, 34 Conn. 60. " Colwell v. Warner, 36 Conn. 224. 

^Bridgeport Savings Bank v. El- 



§ 1570 DECREE OE STRICT FORECLOStJEE 138 

§ 1570. Effect of defective service of process. — In any case where 
proper service has not been made on a defendant, the foreclosure will 
be opened, or he will be allowed on application to have the judgment 
set aside and to appear in the suit.^° In his application for such re- 
lief he must tender payment of the mortgage debt, or show his readi- 
ness to do so.^° Where notice of a bill for foreclosure was ordered 
by the court to be given by mailing an attested copy of the bill to the 
parties interested in the property, and a subsequent mortgagee did not 
receive the notice, and had no knowledge of the suit until after a decree 
had been passed and the time limited for redemption had expired, the 
foreclosure was opened and further time for redemption allowed.^^ 

dredge, 28 Conn. 556, 73 Am. Deo. kinson v. Chilson, 71 Wis. 131, 36 
688. N. W. 836. 

"Fall v. Evans, 20 Ind. 210; =" Hatch v. Garza, 7 Tex. 60. 
Mitchell V. Gray, 18 Ind. 123; Wil- "Bank v. Norwich Savings So- 
ciety, 37 Conn. 444. 



CHAPTER XXXy 

DECREE OP SALE 

I. A Substitute for Foreclosure, §§ 1571-1573 

11. The Form and Requisites of the Decree, §§ 1574r-1586b 

III. The Conclusiveness of the Decree, §§ 1587-1589e 

IV. The Amount of the Decree, §§ 1590-1601 

V. Costs, §§ 1603-1607 

I. Substitute for Foreclosure 

Section SEcmorr 

1571. Generally. 1573. Jurisdiction of equity Inde- 

1572. Under English chancery prac- pendent of statute. 

tice. 

§ 1571. Generally. — As already noticed, the earliest remedy sought 
in chancery in the foreclosure of mortgages was a decree wholly cut- 
ting off the debtor's right to redeem, and vesting the estate absolutely 
in the mortgagee. This procedure, when the property exceeded in 
value the debt, sometimes operated harshly upon the debtor. It oper- 
ated unjustly to the creditor as well when the property was insuffi- 
cient to pay the debt, because no convenient remedy was afforded him 
to collect the deficiency. A more equitable" system was early adopted 
by the courts in this country, under which the property was sold for 
the benefit of the parties interested, and the proceeds applied first to 
the payment of the mortgage debt, and the surplus, if any, paid to 
the debtor or his assigns. If a balance of the debt remained unpaid 
after applying the proceeds of the property, an action at law might 
be had against the debtor to recover. Now in many states, under the 
new codes of civil practice, the formal distinction between suits in 
equity and suits at law has been done away with, and, though fore- 
closure remains of course an equitable procedure; provision is made 
for a decree or judgment in this proceeding, not only for a sale of the 
property, but also for a recovery of any balance of the debt remaining 
after the sale, thus avoiding the necessity of a separate action at law. 

§ 1572. Under English chancery practice. — In England the usual 
practice formerly was to decree a strict foreclosure though the Court 

139 



§ 1573 DECREE OF SALE 140 

of Chancery had the power, without the aid of any statute, to order 
a sale of the property.^ Now it is provided by the Chancery Improve- 
ment Act,'' that upon the request of the mortgagee, or of any subse- 
quent incumbrancer, or of the mortgagor, or of any person claiming 
under them respectively, the court may, instead of a foreclosure, di- 
rect a sale of the property upon such terms as it may deem proper. 
The consent of the mortgagee, or those claiming under him, is requi- 
site to a sale, when the request for it is made by any other person, un- 
less the party making the request deposits a reasonable sum of money 
for the purpose of securing the performance of such terms as the 
court may impose upon him.^ Under this statute the parties have no 
absolute right to require a sale, but the court has power in its discre- 
tion to grant it; and this is now the usual course. A sale may be 
directed against the wish of the mortgagor.* Where the security has 
been scanty, it has always been deemed proper to direct a sale;^ as 
also when the property was unproductive." An equitable mortgagee by 
deposit of title deeds is entitled to a decree of foreclosure instead of 
sale.'^ The usual practice in granting a sale of the property was to 
give a limited time, varying from one month^ to six: months," within 
which the mortgagor might redeem before the sale. Sometimes, how- 
ever, an immediate sale was ordered, as where the property was un- 
productive,^" or where for any reason this seemed to be for the benefit 
of all the parties.'^^ It was also the practice, in case the equity of re- 
demption belonged to an infant heir or devisee, to direct a sale with 
the consent of the mortgagee, because a sale would bind the infant, 
but he would be entitled to a day after coming of age to show cause 
against a decree of foreclosure.^^ But in this country a sale, with rare 
exception, being made in all cases, the only inquiry where infants are 
concerned is, whether a sale of the whole or of a part of the premises 
will be most for the infant's benefit, and a reference should be made 

^2 Story's Eq., §§ 1024-1026. In 'James v. James, L. R. 16 Eq. 

Ireland tlie decree is always for a 153. 

sale. Hutton v. Mayne, 3 Jo. & Lat. * Smith v. Robinson, 1 Sm. & Giff. 

586. 140; Staines v. Rudlin, 16 Jur. 965. 

ns & 16 Vict., ch. 86, § 48. "Bellamy v. Cockle, 18 Jur. 465; 

= Tlie deposit must be sufficient to Daniell's Ch., p. 1152. 

cover an unsuccessful attempt to "Foster v. Harvey, 11 Wkly. R. 

Bell. Bellamy v. Cockle, 18 Jur. 899. 

465. "Hewitt v. Nanson, 28 L. J. (Ch.) 

"Newman v. Selfe, 33 Beav. 522. 49. 

See also "Woodford v. Brooking, L. "Scholefield v. Heafleld, 7 Sim. 

R. 17 Eq. 425. 667; Davis v. Dowding, 2 Keen 245; 

"Dash wood v. Bithazey, Moseley Booth v. Rich, 1 "Vern. 295; Fisher's 

196. Mtg., pp. 526, 1018. 

° How T. Vigures, 1 Ch. R. 18. 



141 SUBSTITUTE TOE FOEECLOSUKE § 1573 

to ascertain this fact, and what part shall be sold if less than the 
whole.^^ 

§ 1573. Jurisdiction of equity independent of statute. — Independ- 
ently of all statutory provisions a court of equity has jurisdiction to 
order a sale and provide for carrying it out/* although in most of the 
states where foreclosure is effected by a judicial sale there are statutes 
providing for this, and regulating it. N"o sale can be made without a 
decree of court for that purpose first obtained.^'^ Although the prac- 
tice of foreclosure and sale of the mortgaged property in equity is 
traced to the civil law,^" where the remedy was generally by a pro- 
ceeding in rem for a sale of the property, yet under that law it was not 
indispensable that the mortgagee should obtain a judicial decree for 
such sale; the mortgagee might also by his own act, after giving a 
certain prescribed notice to the debtor, sell the property and reim- 
burse himself from the proceeds of the sale.^^ If the debtor could not 
be found so as to serve the notice upon him, an order of court 
was necessary. This right to sell was not confined to cases where the 
parties had expressly provided for it, but might be exercised as well 
when the mortgage itself was silent upon the matter.^* But under the 
common-law practice the mortgagee is never allowed to sell by his 
own voluntary act without a judicial decree, except when a power of 
sale is expressly given him; and, even when he has such special au- 
thority, in some states it is required by statute that a decree for the 
sale shall first be obtained, and the sale thus becomes a judicial sale 
rather than a sale under the power. A court of equity after having 
made a decree ordering a foreclosure sale and appointing a special 
master to conduct it, may make an order postponing the sale at the 
request of a large part of the bondholders secured by the mortgage 

'^ Mills V. Dennis, 3 Johns. Ch. prevailed under the colonial govern- 

(N. Y.) 367. ment. 

"Lansing v. Goelet, 9 Cow. (N. ^Hart v. Ten Eyck, 2 Johns. Ch. 

Y.) 346, 352, where Chancellor (N. Y.) 62, 100. "There never was 

Jones, in an elaborate opinion, justi- an instance," says Chancellor Kent, 

fles the practice of courts of equity "in which the creditor holding land 

in ordering sales; Belloc v. Rogers, in pledge was allowed to sell at his 

9 Cal. 123; Williams' case, 3 Bland own will and pleasure." 

(Md.) 186, 193; Mills v. Dennis, 3 "Story's Eq. Juris., §§ 1008, 1011. 

Johns. Ch. (N. Y.) 367; Green v. "Story's Eq. Juris., §§ 1008, 1024. 

Crockett, 2 Dev. & B. Eq. 390, 393. '» Story's Eq. Juris., § 1009. "Even 

The earliest statute in New York an agreement between them, that 

recognizing a foreclosure sale is there should be no sale, was so far 

that of April 3, 1801; Laws of N. invalid that a decretal order of sale 

Y. (Webster & Skinner's ed.) 443; might be obtained upon the applica- 

though it is said that the practice tlon of the creditor." 
of selling the mortgaged property 



§ 1574 DECEEE OF SALE 143 

who are not parties to the suit -without notice to the mortgagor or 
other parties interested. The rights of all parties are protected sulBfi- 
ciently by notice of the time to which the sale is adjourned.^' There 
is no rule in equity which prevents a mortgage creditor from taking 
a general decree of foreclosure on the mortgage for the reason that he 
has already obtained a judgment lien on other real estate of the mort- 
gage debtor for the same debt.^" A decree for the foreclosure of a 
mortgage is not a lien on any real estate of the defendant other than 
that embraced in the mortgage, although the decree be in form that 
the complainant recover of the defendant a specific sum of money.^^ 
It is well settled that a sale may be ordered before the rights of the 
parties under the several mortgages and other claims have been fully 
ascertained and determined.^^ 

II. The Form and Requisites of the Decree 

Section Section' 

1574. Scope of relief granted by de- 1580a. Nature of decree against 

cree generally. grantee of mortgagor. 

1575. Decree and order in terms of 1581. After-acquired title. 

mortgage — Descri_ption of 1581a. Provision for reconveyance 

mortgaged premises. on foreclosure of deed as 

1576. Order of sale. mortgage. 

1577. Decree where only part of 1581b. Allowance for waste com- 

debt or instalment of inter- mitted by mortgagor, 

est is due — Sale in parcels. 1581c. Damages for breach of cov- 

1577a. Decree where several mort- enant in purchase-money 

gages on same property — • mortgage. 

Separate mortgages on dif- 1582. Apportionment of debt among 

ferent pieces of property. cotenants. 

1578. Relief should conform to 1583. One decree for entire debt. 

pleadings. 1583a. Finding to support decree. 

1579. Interference with interests of 1584. Death of mortgagor. 

persons not made parties. 1585. Death of plaintiff. 

1580. Decree where junior mort- 1586. Allowance of day for payment 

gagee forecloses when prior before sale. 

mortgage not due. 1586a. Amendment of decrees. 

1586b. Opening or vacating decrees. 

§ 1574. Scope of relief granted by decree generally. — The decree 
for the sale of the premises should contain a description of the prop- 
erty to be sold; a statement of the amount of the debt; a direction 
that the premises, or so much of them as may be necessary, shall be 
sold by an officer designated, who shall execute a deed to the pur- 

'"Old Colony Trust Co. v. Great "Scott v. Russ, 21 Fla. 260; Clapp 
White Spirit Co., 181 Mass. 413, 63 v. Maxwell, 13 Nebr. 542. 
N. B. 945. ^ First Natl. Bank v. Shedd, 121 

"■Gushee v. Union Knife Co., 54 U. S. 74, 30 L. ed. 877, 7 Sup. Ct. 
Conn. 101. 807; Morton Trust Co. v. Metropol- 

itan St. R. Co., 165 Fed. 493. 



143 FORM AND EEQUISITES § 1574 

chaser ; and that out of the proceeds of the sale he pay to the plaintiff 
the amount of his debt, interest, and costs, together with the expenses 
of the sale. It is usual to provide that the plaintiff may purchase at 
the sale, and that the purchaser shall be let into possession on the pro- 
duction of the deed. If a personal judgment is asked for and is proper, 
the defendants, who are personally liable for the debt, must be desig- 
nated.^ A personal judgment against the defendant, followed by the 
usual order of sale, may be regarded as a finding of the amount due, 
and is in effect a judgment of foreclosure and sale.^ If redemption is 
allowed after sale, this right should be provided for in the decree, al- 
though it will not be considered as denied if not provided for.^ Where 
there is no one before the court who is personally liable on the mort- 
gage debt, the decree is in rem, and the proper form is to find the 
amount due on the mortgage and order the premises sold unless the 
amount is paid within the time fixed by the decree.* The decree may 
determine claims between different parties to the suit subsequent to 
the mortgage sought to be foreclosed and this would include such mat- 
ters as the rights and claims as between the mortgagor and subse- 
quent grantees of the premises f between a husband and wife as mort- 
gagors or owners;" between the widow and heirs or devisees of the 
mortgagor.' The court may provide in its decree for the protection 
of a contingent right of dower in the wife of the mortgagor, where 
the property sells for more than suflScient to satisfy the mortgage.® 
Where the mortgage is given by several parties to secure notes exe- 
cuted by one of them, the decree should be personally against the 
maker of the notes and for a foreclosure of the title and interest of 
all the mortgagors in and to the property.* The decree is generally 

* Leviston v. Swan, 33 Cal. 480, 5 Charter Oak L. Ins. Co. v. Stephens, 

Wait's Prac. 218; Ailing v. Nelson, 5 Utah 319, 15 Pac. 253. 

55 Nebr. 161, 75 N. W. 581; Cor- * Crawford v. Nimmons, 180 111. 

porate Investing Co. v. GracehuU 143, 54 N. B. 209. 

Realty Co., 157 App. Div. 259, 142 ' Duroe v. Stephens, 101 Iowa 358, 

N. Y. S. 131; Shields v. Simonton, 70 N. W. 610. 

65 W. Va. 179, 63 S. B. 972. A judg- ' State Bank v. Backus, 160 Ind. 
ment absolute is not rendered in- 682, 67 N. E. 512; Blossom v. West- 
valid because at head of paper on brook, 116 N. Car. 514, 21 S. B. 193. 
which it is written the name of an- 'Hudd v. Travellers Ins. Co., 24 
other county appears, but the cor- Ky. L. 2141, 73 S. "W. 759; Marselis 
rect county appears in all other v. Van Riper, 55 N. J. Bq. 618, 38 
papers and proceedings. Purr v. Atl. 196. See also Downey v. Mori- 
Bank of Fairmount, 139 Ga. 815, 78 arty, 81 Conn. 442, 71 Atl. 581. 
S. E. 181. * Shakleford v. Morrill, 142 N. Car. 

»Boynton v. Sisson, 56 Wis. 401, 221, 55 S. E. 82. 

14 N. W. 373. »McCornick v. Brown, 22 Idaho 

'Boester v. Byrne, 72 111. 466; 52, 125 Pac. 197. 



§ 1575 DBCEEE OF SALE 144 

held to establish conclusively both the debt and the lien.^" In most 
jurisdictions, it is thought, the decree may be entered nunc pro tunc.^^ 

§ 1575. Decree and order in terms of mortgage — ^Description of 
mortgaged premises. — The decree and order of sale may properly fol- 
low the terms of the mortgage, when this upon its face appears to con- 
vey the entire estate, and the officer must sell accordingly; but the 
purchaser will take only the interest the mortgagor had in the prem- 
ises, and it is no ground for reversal that the mortgagor had only an 
equitable interest.^ ^ If the mortgagor had no title to a portion of the 
premises embraced in the mortgage, this portion may properly be 
omitted from the order of sale.^^ When the terms of the mortgage are 
followed in the direction of sale, and the sheriff or referee sells a less 
estate than that expressed in the mortgage, as, for instance, a lease- 
hold estate when the mortgage erroneously described an estate in fee, 
the sale transfers all the title the mortgagor had in the premises, and 
it does not lie with the mortgagor, nor with a purchaser who has full 
knowledge of the facts, to object.^* It is usual to embody in the order 
of sale a full description of the property to be sold, with the particu- 
lar boundaries of it, so far at least as they can be ascertained from, the 
mortgage. But this is not essential. The decree of sale, instead of 
describing the mortgaged property at length, may direct a sale of the 
premises as described in the complainant's bill; and if the premises 
are properly described in the bill or in the mortgage, and this is made 
part of the bill as an exhibit, no formal description is necessary in the 
decree.^^ The description should be sufficient to identify the prem- 
ises for the purposes of sale.^" The failure to describe the land by 
calls will not invalidate a decree where it otherwise describes the 
land.^^ A decree which designates an entire tract of land by name, 
giving the number of acres, the county in which it is situated, the 

" Blair v. Guaranty Sav., Loan &c and state in which the property is 

Co., 54 Tex. Civ. App. 443, 118 S. W. situated, see Burton v. Ferguson, 69 

608. Ind. 486. As to sufficiency of de- 

" Powell V. Pierce, 168 Mich. 427, scription, see Thompson v. Jones, 77 

134 N. "W. 447. Tex. 626, 12 S. W. 77. 

"Schwartz v. Palm, 65 Cal. 54; "Quigley v. Beam, 137 Ky. 325, 

Jones V. Lapham, 15 Kans. 540; 125 S. W. 727; Lebus v. Slade, 24 

Norris v. Luther, 101 N. Car. 196, Ky. L. 1325, 71 S. "W. 510 (descrip- 

8 S. E. 95. tion so uncertain as to render the 

"Castro V. lilies, 22 Tex. 479, 73 sale void) ; Lincoln v. Lincoln St. R. 

Am. Dec. 277. Co., 75 Nebr. 523, 106 N. W. 317, 

"Graham v. Bleakie, 2 Daly (N. 121 Am. St. 816; McNair v. Johnson, 

y.) 55. 95 S. Car. 176, 78 S. E. 892. 

"Logan V. Williams, 76 111. 175. "Williams v. McComb (Tex. Civ. 

As to omission of name of county App.), 163 S. W. 654. 



145 FORM AND REQUISITES § 1576 

adjoining survey, and the beginning corner, is not void for want of 
description.^^ But if it can not be ascertained to what land the decree 
refers, it will be void for indefiniteness.^® If the original mortgage 
contains in the description of the premises a latent ambiguity which 
renders it uncertain what are the boundaries, the court may by its 
judgment fix the boundaries of the land with reference to the fore- 
closure sale.^" If by mistake lands not included in the complaint are 
included in the judgment the foreclosure sale does not give title to 
such lands. The decree relates to the land described in the complaint, 
and properly construed does not direct a sale of any other lands.^^ An 
order for the sale of the "mortgaged premises mentioned in complain- 
ant's bill" is not void because followed by an erroneous description, if 
the premises are correctly described in the bill in the master's report 
of sale, which is confirmed by the final decree, and in the master's 
deed of the property. The grantee in such deed acquires a valid title 
to the property.^^ If the decree makes unnecessary and erroneous re- 
citals in regard to the note and mortgage, the errors should be re- 
garded as clerical errors, it appearing from the whole record, with 
reasonable certainty, that the decree was rendered ia the cause of ac- 
tion set up in the foreclosure suit.^' 

§ 1576. Order of sale. — The court in decreeing sale under a trust 
deed does not derive its authority from the trust deed, but, having 
acquired jurisdiction of the parties and the subject-matter, should 
use its sound discretion for the benefit of both parties.^* If portions 
of the premises have been sold subsequent to the mortgage, the decree 
should provide that the portion still owned by the mortgagor, or the 
person equitably bound to pay the debt, shall be first sold, and then the 

'^Thompson v. Jones, 77 Tex. 626, ment and order of sale that they 

12 S. W. 77, per Hobby, J. "It is true are void for want of description, 

that less indulgence is shown in fa- Knowles v. Torbitt, 53 Tex. 557; 

vor of descriptions of property con- Steinbeck v. Stone, 53 Tex. 382." 

tained in deeds based on compul- ^Kibbe v. Thompson, 5 Biss. (U. 

sory sales under judicial process S.) 226. 

than in those contained in deeds be- *Doe v. Vallejo, 29 Cal. 385. 

tween private parties. Mitchell v. '^Clapp v. McCabe, 155 N. Y. 525, 

Ireland, 54 Tex. 301. And where 50 N. E. 274; Hasten v. Olcott, 101 

the description is of a part of a N. Y. 152, 4 N. E. 274; Laverty v. 

tract or survey, leaving an un- Moore, 33 N. Y. 658. 

designated portion unsold, and there ^ Thompson v. Crocker, 18 Colo, 

is no means of distinguishing it 328, 32 Pac. 831. 

from the portion sold, the descrip- == Hague v. Jackson, 71 Tex. 761, 

tion would be insufficient. Wilson 12 S. W. 63. 

V. Smith, 50 Tex. 366. In the pres- ""McLarty v. Urquhart, 153 N. 

ent case, however, * * * it can not Car. 339, 69 S. E. 245. 
be said from the face of the judg- 

10 — Jones Mtg. — Vol. III. 



§ 1576 DECKEE OF SALE 146 

portions previously alienated in the inverse order of their alienation."' 
If a party to the suit desires to have the premises sold in a particular 
order, he should see that the decree so provides ; or after the entry of 
the decree he may move for an order to the referee directing the man- 
ner in which the premises are to be sold."* In order to ascertain the 
respective equities of different owners, the court may order a refer- 
ence."^ If the owner of the land makes no request as to the order 
in which several tracts of land included in the mortgage shall be sold, 
he can not upon appeal object to a decree of court definitely fixing the 
order of sale.^^ The court may render a single decree specifying the 
order of sale of different parcels, and is not required to render a sep- 
arate decree and order of sale for each group of parcels as it becomes 
necessary to sell them in order to make sufficient proceeds to satisfy 
the decree."" Where a mortgage covers several parcels of land, and 
the court finds that the mortgagee is entitled to a sale thereof, it has 
no authority to except any part of the land from the decree of sale, 
though the value of the remainder is greater than the amount of the 
debt. The creditor has a right to resort to his entire security ia a 
legal manner.^" The decree should only direct a sale of so much of 
the land as may be necessary to pay the debt with interest and costs.^^ 
The authority of the ofiicer to make the sale is derived from the de- 
cree and not from the formal papers having the character of an execu- 
tion or order of sale issued by the clerk under the decree.^" Though 
foreclosure may be deided because the debt is not due, this does not 
prevent a judgment for possession of the premises.^^ It is not impera- 
tive that the decree should order the possession of the premises deliv- 

''Cheever v. Fair, 5 Cal. 337; New "Qulgley v. Beam, 137 Ky. 325, 

York Life Ins. &c Co. v. Milnor, 1 125 S. W. 727; Rowlett v. Harris, 

Barb. Ch. (N. Y.) 353; Knicker- 28 Ky. L. 780, 90 S. W. 562. 

backer v. Eggleston, 3 How. Pr. (N. '"De Witt County Nat. Bank v. 

Y.) 130; Rathbone v. Clark, 9 Paige Mickelberry, 244 111. 77, 91 N. E. 86; 

(N. Y.) 648; Warren v. Foreman, Thomas v. Thomas, 44 Mont. 102, 

19 Wis. 35; State v. Titus, 17 Wis. 119 Pac. 283, Ann. Cas. 1913 B, 616. 

241; Worth v. Hill, 14 Wis. 559; A decree of foreclosure is not a 

Ogden V. Glidden, 9 Wis. 46. dudgment within the meaning of 

=» Vandercook v. Cohoes Sav. Inst., the code and does not become dor- 

5 Hun (N. Y.) 641. mant by failure to issue an order of 

" Bard v. Steele, 3 How. Pr. (N. sale within five years. St. Paul Har- 

Y.) 110; New York Life Ins. &c Co. vester Works v. Huckfeldt (Nebr.), 

V. Cutler, 3 Sandf. Ch. (N. Y.) 176. 148 N. W. 153. See also Lindsey v. 

=» Price v. Lauve, 49 Tex. 74. Porter, 140 Ga. 249, 78 S. E. 848; 

=» Nix v. Thackaberry, 240 111. 352, Huber v. Jennings-Heywood Oil Syn- 

88 N. B. 811. dicate, 111 La. 747, 35 So. 889. 

*> Baker v. Marsh, 1 N. Dak. 20, ^ Sperry v. Butler, 75 Conn. 369, 

44 N. W. 662. 53 Atl. 899. 



147 FORM AND REQUISITES § 1577 

ered to the purchaser at the sale.^* Where a release of a part of a 
mortgage has become forfeited by failure to perform the condition on 
which it was granted, the decree should direct the sale of the land 
covered by the release after the other land covered by the mortgage, if 
necessary.^^ It is not necessary that the order of sale should recite an 
assignment of the decree.^*' In some jurisdictions it is held unneces- 
sary for the decree to direct the master commissioner to have the land 
appraised or how to appraise it.°' The court need not direct that the 
sale shall be made for the minimum price set forth in the trust deed.^* 
A statute fixing the time within which an execution shall be made 
returnable is without application to orders of sale on foreclosure.^® 
The order of sale may be amended so as to authorize a sale by a com- 
missioner in place of the sherifE.*" 

§ 1577. Decree where only part of debt or instalment of interest 
is due — Sale in parcels. — ^Where only part of the debt or an instalment 
of interest is due, and the premises can be sold in parcels, the decree 
should be for the absolute sale of so much as will raise the amount 
actually due.*^ If the premises can not be sold in parcels, the judg- 
ment should direct the sale of the whole, and the payment to the 
plaintiff of the amount actually due, and that the surplus be brought 
into court to await further order.*^ In such case it should appear of 
record that the court had first inquired whether the land could be 
sold in parcels.*' A decree directing a sale "according to law" has 
been held sufficient, although a statute required the court to direct a 
sale of the premises, "or so much thereof as is necessary."** When 
part of the mortgaged property has been sold for the payment of one 
instalment, a further decree of sale may be had for an instalment sub- 

"Hibernia Sav. &c. Society v. champ v. Leagan, 14 Ind. 401; 

Brittan, 20 Cal. App. 531, 129 Pac. Harris v. Makepeace, 13 Ind. 560; 

797. James v. Fisk, 17 Miss. 144, 47 Am. 

'"Barnes v. Southfield Beach R. Dec. Ill; Omaha L. &c. Co. v. Kit- 
Co., 65 Misc. 600, 120 N. Y. S. 616. ton, 58 Nebr. 113, 78 N. W. 374; 

'"McLagan v. Witte, 1 Nebr. Probasco v. Van Bppes (N. J.), 13 

(Unoff.) 438, 96 N. W. 490. Atl. 598; Roe T. Nicholson, 13 Wis. 

"James v. Webb, 24 Ky. L. 1382, 373. See ante § 1478 and post §§ 

71 S. W. 526. 1619, 1700. 

''Earle v. Sunnyside Land Co., "Walker v. Jarvis, 16 Wis. 28. 

150 Cal. 214, 88 Pac. 920. "Wainscott v. Silvers, 13 Ind. 

'"Wilson V. New, 4 Nebr. (Unoff.) 497; Cubberly v. Wine, 13 Ind. 353; 

348, 93 N. W. 941. Stewart v. Nettleton, 13 Wis. 465. 

" Granger v. Sheriff, 140 Cal. 190, " Treiber v. Shaffer, 18 Iowa 29. 

73 Pac. 816. See also Kirby v. Childs, 10 Kans. 

"Hunt V. Dohrs, 39 Cal. 304; 639. 
Denny v. Graeter, 20 Ind. 20; Beau- 



§ 1577a DECREE OP SALE 148 

sequently falling due.*^ When only one of several notes is due, the 
foreclosure suit is on that note alone, though all the notes are casually 
mentioned in the bill in stating the nature of the mortgage.*" Al- 
though the suit was commenced when only a part of the debt or one 
instalment of it was due, if the whole debt becomes due before the de- 
cree is entered, this should be in the ordinary form for a sale of the 
property to satisfy the whole debt.*^ Where a decree directs a sale sub- 
ject to the mortgage for the part of the debt not due, and the officer 
announces that the sale will be made in this manner, his failure to 
state this fact in his certificate of purchase and in his report of the 
sale, and the omission of this fact in the confirmation of the sale, do 
not affect or modify the original decree, or release the lien reserved 
for the unforeclosed part of the debt. TJnder a decree for a sale sub- 
ject to a lien specified, parol testimony is admissible to show that the 
property was offered for sale subject to such lien.*' A foreclosure for 
an instalment due before the principal amount, and a sale of the en- 
tire property, pass the interest of both mortgagor and mortgagee in 
the property, and a clear title to the purchaser.*' The court may order 
payment of the instalment due; but if the property be indivisible so 
that a larger amount is received than is needed for that purpose, the 
court may retain custody of the surplus and jurisdiction of the case 
until the whole debt falls due.^" The power to foreclose and sell for 
the principal sum secured by a mortgage, on account of the nonpay- 
ment of an instalment due, or of interest accrued, or taxes, exists 
when it is stipulated in the mortgage that in case of such nonpayment 
the mortgagee may sell the premises and pay the debt from the pro- 
ceeds.^^ 

§ 1577a. Decree where several mortgages on same property — Sepa- 
rate mortgages on different pieces of property. — A decree of sale in an 
action to foreclose several mortgages upon the same property may in- 

^ Fleming v. Soutter, 6 'Wall. (U. Simmons, 54 Iowa 269, 6 N. W. 274; 

S.) 747, 18 L. ed. 847; McDougal v. Poweshiek Co. v. Dennison, 36 Iowa 

Downey, 45 Cal. 165. 244, 14 Am. Rep. 521. 

""Anderson V. Pllgram. 30 S. Car. "Mussina v. Bartlett, 8 Port. 

499, 9 S. E. 587. (Ala.) 277, 284; Burroughs v. Ellis, 

" Buchanan V. Berkshire Life Ins. 76 Iowa 649, 38 N. W. 141; Mc- 

Cc, 96 Ind. 510, 524; Smalley v. Dowell v. Lloyd, 22 Iowa 448- 

Martin, Clarke (N. Y.) 293; Man- Adams v. Essex, 1 Bibb (Ky ) 149, 

ning v. McClurg, 14 Wis. 350. 4 Am. Dec. 623; Smalley v. Martin, 

« Hughes V. Frisby, 81 111. 188. Clarke (N. Y.) 293; Clark v Ab- 

"Grattan v. Wiggins, 23 Cal. 16; bott, 1 Madd. Ch. 474 

S^L'?^^; Palmer, 73 Iowa 446, 35 "Pope v. Durant, 26 Iowa 233; 

N. W. 515, 5 Am. St. 691; Escher v. Kramer v. Rebman, 9 Iowa 114. 



149 



FOESI AND EEQUISITES 



§ 1578 



elude a mortgage not due ■wlien the action was commenced, provided it 
became due and was unpaid at the time of entry of the decree.'^ "If, 
however, there had been no foreclosure as to either mortgage that was 
due when the action was commenced, there could have been none as 
to the mortgage that was not due at that time, because there would 
have been no foundation for a decree when the defendants were first 
brought into court and no reason for the commencement of the suit."^^ 
When two separate trust deeds, covering two separate pieces of prop- 
erty, are sought to be foreclosed in the same proceeding, the decree 
may not direct a sale of both properties for the payment of the entire 
account due upon both notes. The debt evidenced by each note can 
only be satisfied out of the land described in the mortgage given to se- 
cure the same."* 



§ 1578. Relief should conform to pleadings. — The decree should 
not attempt to give any relief not sought for in the pleadings;"' if it 
does, it will be vacated on motion.'" But sometimes, under the gen- 
eral prayer for relief, the court may grant relief not specifically asked 
for. Thus where a railroad mortgage contained a provision that in 
case of a foreclosure sale the holders of a majority of the bonds se- 
cured by the mortgage should in writing request the trustee to pur- 
chase the premises for the use and benefit of the bondholders, he 
should be authorized to do so, and the deed of trust was made a part 



"^^ Sherman v. Foster, 158 N. Y. 
587, 53 N. E. 504, affirming 91 Hun 
637. 

" Sherman v. Foster, supra, per 
Van, J., citing Pond v. Harwood, 
139 N. Y. Ill, 120, 34 N. E. 768, in 
which the court said, in equitable 
actions, "the right to judgment is 
not limited to the facts as they ex- 
isted at the commencement of the 
action, but the relief administered 
Is such as the nature of the case 
and the facts, as they exist at the 
close of the litigation, demand," 
citing Peck v. Goodberlett, 109 N. 
Y. 180, 16 N. E. 350; Madison Av. 
Bap. Church v. Oliver St. Bap. 
Church, 73 N. Y. 82; Worrall v. 
Munn, 38 N. Y. 137; Gay v. Gay, 10 
Paige (N. Y.) 369. 

"Snow v. Haberer, 170 111. App. 
265. 

•^^ Barraque v. Manuel, 7 Ark. 516; 
Johnson v. Polhemus, 99 Cal. 240, 
33 Pac. 908; White v. AUatt, 87 Cal. 



245, 25 Pac. 420; Monarch Brewing 
Co. V. Wolford, 179 111. 252, 53 N. 
E. 583; Dorn v. Lewis, 77 111. App. 
221; Seller v. Schaefer, 40 111. 'App. 
74; Rucker v. Steelman, 73 Ind. 396; 
Halstead v. Lake County, 56 Ind. 
363; Manatt v. Starr, 72 Iowa 677, 
34 N. W. 784; Knowles v. Rablin, 
20 Iowa 101; Hill v. Alexander, 2 
Kans. App. 251, 41 Pac. 1066; Likes 
V. Wildish, 27 Nebr. 151, 42 N. W. 
900; Ames v. New Jersey Franklin- 
ite Co., 12 N. J. Eq. 66, 72 Am. Dec. 
385; Hopper v. Sisco, 5 N. J. Eq. 
343; Ferguson v. Ferguson, 2 N. Y. 
360; Lagrave v. Hellinger, 144 App. 
Div. 397, 129 N. Y. S. 291; Davis 
V. Davis, 81 Vt. 259, 69 Atl. 876, 
130 Am. St. 1035; Oregon Mtg. Co. 
V. Estes, 20 Wash. 659, 56 Pac. 834. 
''"Simonson v. Blake, 12 Abb. Pr. 
(N. Y.) 331, 20 How. Pr. 484. See 
also Steinfeldt v. Bolen (Ariz.), 145 
Pac. 843. 



§ 1579 DECREE OF SALE 150 

of the bill, it was held to be proper to grant the relief specifically 
which the provisions of the deed of trust contemplated."' It is the 
holding of one of the cases that the mere fact that a bill to foreclose 
describes a mortgage as made to secure a note of a specific amount, 
while the mortgage introduced in evidence describes such note with- 
out specifying the amount thereof, does not amount to a fatal vari- 
ance, especially where the note is identified by oral testimony as the 
one secured by the mortgage.^* 

§ 1579. Interference with interests of persons not made parties. — 

The decree should not attempt to interfere with the rights of any who 
are interested in the property, but are not made parties to the suit; 
and it is ineffectual so far as it does this."' It should protect the rights 
of a defendant whose title to a part of the premises is paramount, al- 
though he could not be dispossessed of such part under the decree, 
even if no reservation is made in respect to it.°° Only the rights and 
interests possessed by the mortgagor at the date of the mortgage can 
be sold. A judgment which forecloses a prior mortgage is irregular, 
and may be opened on motion of the prior mortgagee."^ Neither has 
the court jurisdiction to determine an alleged title paramount to that 
of the mortgagor, set up by certain of the defendants in an answer 
containing a prayer only that the suit be dismissed as to them.*^ The 
rights of subsequent mortgagees who are made parties to the suit are 
generally sufficiently protected by the general direction in the decree 
for the payment of the surplus money into court, and by the subse- 
quent proceedings for its distribution; though the practice in some 
courts has been to determine the rights of junior mortgagees in the 
first place, and direct the payment of the surplus toward the satis- 
faction of them."' But the rights of subsequent incumbrancers may be 
protected by the court in the sale of the property, where a portion of 
it is sufficient to satisfy the mortgage, by ordering the sale of enough. 



V. Central R. Co. of Iowa. 3 Edw. (N. Y.) 500; Nixon v. Has- 

99 U. S. 334, 25 L. ed. 394. lett, 74 N. J. Eq. 789, 70 Atl. 987. 

■» First Nat. Bank v. Davis, 146 '"Ellas v. Verdugo, 27 Cal. 418; 

111. App. 462. San Francisco v. Lawton, 21 Cal. 

■"> SliurtlefE V. Bracken, 163 Cal. 24, 589, 79 Am. Dec. 187; Wicke v 

124 Pac. 724; Montgomery v. Tutt, Lake, 21 Wis. 410, 94 Am. Dec. 552! 

11 Cal. 307; Unity Co. v. Equitable "' McReynolds v. Munns, 2 Keyes 

Trust Co., 107 111. App. 449; Wat- (N. Y.) 214. 

son V. Spence, 20 Wend. (N. Y.) ""Gennes v. Peterson, 54 Ore. 378, 

260; Lumpkin v. Williams, 1 Tex. 103 Pac. 515. 

Civ. App. 214, 21 S. W. 967; Gates "Union Water Co. v. Murphy's 

V. Field (Tex. Civ. App.), 85 S. W. Flat Pluming Co., 22 Cal. 620. 
52. See also Tutten v. Stuyvesant, 



151 FOEM AND REQUISITES § 1580 

SO that the other inexmibrancers may be paid.°* And where after the 
decease of the mortgagor it appeared to be for the benefit of his chil- 
dren that the entire mortgaged premises should be sold, though the 
mortgage might have been satisfied by a sale of a part, the court or- 
dered the sale of the whole."' A junior mortgagee, whose mortgage is 
of record before the commencement of a suit to foreclose a senior mort- 
gage, and not made a party to such suit, is not affected by the fore- 
closure decree, and the same is true of his assignee."' As a general 
rule, the interests of beneficiaries under a deed of trust affecting land 
covered by an existing mortgage are determined by a judgment of 
foreclosure and sale under the mortgage, where the trustee is made a 
defendant in the foreclosure suit."'' 

§ 1580. Decree where junior mortgagee forecloses when prior mort- 
gage not due. — When a junior mortgagee forecloses his mortgage by 
bill in equity, in case the prior mortgage is not yet due, he may have 
a decree for a sale of the equity of redemption subject to the prior 
mortgage, leaving the purchaser to pay that when it becomes due. If 
the prior mortgage be due, the junior mortgagee may redeem and sell 
the whole estate to obtain the redemption money as well as his own 
claim."* It has been held in a few cases that without redeeming he 
may make the prior mortgagee a party to the bill, and ask for a sale of 
the whole estate, and the payment of all incumbrances out of the pro- 
ceeds;"" but this is not generally the law. Though the prior mortga- 

" Livingston v. Mildrum, 19 N. Y. "Western Ins. Co. v. Eagle Fire 

440. Ins. Co., 1 Paige (N. Y.) 284. See 

" Brevoort T. Jackson, 1 Edw. (N. also Trayser v. Indiana Asbury 

Y.) 447. University, 39 Ind. 556; New Eng- 

^'Wemple v. Yosemite Gold Min. land L. &c. Co. v. Robinson, 56 Nebr. 

Co., 4 Cal. App. 78, 87 Pac. 280; 50, 76 N. W. 415, 71 Am. St. 657; 

Martin v. Adams Brick Co., 180 Ind. Dwlnell v. Holt, 76 Vt. 413, 56 Atl. 

181, 102 N. E. 831; Jones v. Will- 99. 

lams, 155 N. Car. 179, 71 S. E. 222; ®Vanderkemp v. Shelton, 11 

Horr v. Herrington, 22 Okla. 590, Paige (N. Y.) 28. Wlien decrees of 

98 Pac. 443, 20 L. R. A. (N. S.) 47, foreclosure are entered upon several 

132 Am. -St. 648. Junior mortgagee mortgages in the same action, and 

not made a party, must satisfy the an order of sale is issued thereon, 

equity of the senior mortgagee or an agreement between the several 

purchaser in possession by the pay- mortgagees that the one holding 

ment of the amount due the senior the later lien shall buy the property 

mortgagee or purchaser, If the at the sheriff's sale under said order 

property has been sold, or if the and pay the matured portion of the 

parties desire, the property may be first mortgage, and the unmatured 

sold at an upset price fixed to cover portion thereof shall remain In full 

the amount of the senior debt, force, Is valid as against one who, 

Karl V. Conner, 30 Ky. L. 238, 97 with notice of such agreement 

S. W. 1111. afterward takes a mortgage from 

"' McNutt V. Nuevo Land Co., 167 the holder of the later lien, who 

Cal. 459, 140 Pac. 6. has purchased the property in pur- 



§ 1580a DECREE OF SALE 153 

gee be made a party and is defaulted, the decree only bars the equity 
of redemption of the complainant's mortgage, without affecting in any 
way that which is superior to it.'" A junior mortgagee is entitled to 
proceed with his bill to foreclose, although the senior mortgagee has 
obtained a judgment of foreclosure, and the junior mortgagee may 
seek his remedy against the surplus moneys on the first mortgage.''^ 
He is entitled to have the issues raised in his action tried when his 
action is reached. 

§ 1580a. Nature of decree against grantee of mortgagor. — The re- 
lief against the grantee of the mortgagor is a decree for the sale of 
the mortgaged premises and the application of the proceeds to the 
payment of the debt and costs.'" 

§ 1581. After-acquired title. — Ordinarily the title ordered to be 
sold is only that which the mortgagor held at the date of the mort- 
gage. If in any case there are facts of an equitable character, such 
that a title acquired afterward by the mortgagor or his vendee should 
be subjected to the lien of the mortgage, these should be set out in 
the complaint, and such after-acquired title should be included in the 
decree of sale; otherwise this will not include or affect the after-ac- 
quired title.''* It must be first subjected to the lien of the mortgage 
by the foreclosure decree, which then operates upon this title to the 
same extent as if it had been included in the mortgage.'^* 

§ 1581a. Provision for reconveyance on foreclosure of deed as 
mortgage. — ^Where the laws require the registration of judgments af- 
fecting the title to real property it is not necessary that the decree, 
in the case of the foreclosure of a deed, in effect a mortgage, should 
provide for the reconveyance of the premises on redemption.'^ 

§ 1581b. Allowance for waste committed by mortgagor. — ^Where 
that question is litigated, the decree may include an allowance to the 
mortgagee for damages due to waste committed by the mortgagor 

suance of said agreement. Ryan v. MuUer, 3 Cal. App. 54, 84 Pac. 453. 

West, 63 Nebr. 894, 89 N. "W. 416. '= Kreichbaum v. Melton, 49 Cal. 

'"McCormick v. Wilcox, 25 111. 50. See ante §§ 679-683. 

274; Harshaw v. McKesson, 66 N. "San Francisco v. Lawton, 18 

Car. 266. Cal. 465, 79 Am. Dec, 187. 

"Daily v. Kingon, 41 How. Pr. "White v. Daniel, 141 Wis. 273, 

(N. Y.) 22. 124 N. W. 405. 

"California Title Ins. &c. Co. v. 



153 POKM AND EEQUISITES § 1583a 

which depreciates the security so that a deficiency results by reason of 
such depreciation.'"' 

§ 1581c. Damages for breach of covenant in purchase-money mort- 
gage. — Where there has been a breach of covenant of warranty in a 
deed given a purchaser, who has returned a purchase-money mortgage, 
whereby the purchaser has been kept out of a portion of the premises 
by reason of a paramount title, such purchaser is entitled, in proceed- 
ings to foreclose, to be relieved against the mortgage to the amount of 
damages that may be shown to have resulted from the breach of the 
covenant.'"' 

§ 1582. Apportionment of debt among cotenants. — ^When several 
persons have acquired undivided interests in the land subsequent to 
the mortgage as cotenants, the decree will not apportion the debt 
among them.''* 

§ 1583. One decree for entire debt. — If a mortgage securing several 
notes covers two separate lots, and provides that one lot is pledged 
only as security for the first note falling due, upon default in pay- 
ment of all the notes, a judgment for the sale of both lots for the 
payment of the entire debt is not proper as against a purchaser of the 
lot pledged for the payment of such first maturing note. The liability 
of that lot should be limited according to the terms of the mortgage.^" 
If the complainant holds two mortgages covering in part the same 
premises, but securing different debts, one decree will be made for 
both debts instead of a separate decree for each,*" but if a subsequent 
purchaser or mortgagee has become interested in the property covered 
by one and not by the other, separate decrees should properly be made.*^ 
In the foreclosure of a mortgage on realty to secure the debt of the 
mortgagor and also that of a partnership of which he is a member, it 
is proper to enter up a special judgment against the mortgagor for 
the full amount of the secured debts.*^ 

§ 1583a. rinding to support decree. — A special finding in an action 
by the "trustee" of a mortgagee to foreclose a mortgage which fails 

'"Prudential Ins. Co. v. Guild (N. See also Narrell v. J. R. Phillips 

J. Eq.), 64 Atl. 694. Mercantile Co. (Ala.), 64 So. 305. 

"Bergman v. Fortescue, 74 N. J. '"Phelps v. Ellsworth, 3 Day 

Eq. 266, 69 Atl. 474. (Conn.) 397. 

'^Perre v. Castro, 14 Cal. 519, 76 '^Enright v. Hubbard, 34 Conn. 

Am. Dec. 444. 197. 

"Mickley v. Tomlinson, 79 Iowa '^Furr v. Bank of Fairmount, 139 

383, 41 N. W. 311, 44 N. W. 684. Ga. 815, 78 S. E. 181. 



§ 1584 DECKEE OE SALE 154 

to disclose the nature of the trust can not be aided by an alleged copy 
of the trust deed, filed as an exhibit to the complaint, since the deed 
was not the foundation of the action and is not properly in the record.*' 

§ 1584. Death of mortgagor. — A judgment for foreclosure and 
sale without any provision as to a deficiency may be executed not- 
withstanding the death of the mortgagor. It is to be enforced against 
the property and not against the person. There is no occasion to re- 
vive it or to bring in new parties.** The sale can be made, and the 
purchaser let into possession on producing the deed of the referee or 
other oflBcer making the sale,*^ So far as this part of the decree is 
concerned, it is in the nature of a proceeding in rem and the death 
of the mortgagor after the entry of the decree is no ground for staying 
its execution.*' The statutes which provide that no suits shall be 
brought against the estate of a deceased person for a year, or other 
specified time, after administration is taken upon his estate, do not 
suspend the right to prosecute a suit for foreclosure, when no judg- 
ment for a deficiency is sought.*'' The mortgagee may prove his claim 
and have it allowed against the estate of the mortgagor, and still pro- 
ceed directly to foreclose.** Upon the mortgagor's death after entry 
of a decree of foreclosure, but before sale, his interest in the land de- 
scends as real estate to his widow and heirs. The court may there- 
upon, on the petition of the widow, modify the decree after the mort- 
gagor's death so as to give the widow dower in the surplus over the 
mortgage debt.*" 

§ 1585. Death of plaintiff. — Neither does the death of the plain- 
tiff after judgment and before the sale give occasion to stay the sale 
or to revive the action."" Where, however, the plaintiff dies before 

^ Green v. McCord, 30 Ind. App. estate. Thompson v. Jones, 77 Tex. 

470, 66 N. E. 494. 626, 12 S. W. 77. See ante § 1442a. 

«*Cowell V. Buckelew, 14 Cal. 640; »»Lynde v. O'Donnell, 12 Abb. Pr. 

Hays V. Thomae, 56 N. Y. 521; Har- (N. Y.) 286. 

rison v. Simons, 3 Edw. (N. Y.1 s'Nagle v. Macy, 9 Cal. 426. See 

394; Trenholm v. Wilson, 13 S. Car. also Hunt v. Acre, 28 Ala. 580; Tren- 

174. In Texas, If a defendant in a holm v. Wilson, 13 S. Car. 174. 

foreclosure suit dies before the "Willis v. Farley, 24 Cal. 490. 

satisfaction of the decree, the =°Moores v. Ellsworth, 22 Iowa 

statute requires that its payment 299. But see Falkner v. Folsom, 6 

must be enforced through the pro- Cal. 412. 

bate court in the manner prescribed '" Holden v. Dunn, 144 111. 413, 33 

for the settlement of the estates, N. E. 413, 19 L. R. A. 481. 

* * * and not by execution. But "> Brand v. Smith, 99 Mich. 395, 

the judgment can not be avoided in 58 N. W. 363; Lynde v. O'Donnell, 

a collateral proceeding where there 21 How. Pr. (N. Y.) 34, 12 Abb. Pr. 

has been no administration on the 286. See ante §§ 1414-1419, 1442a! 



155 FOKM AND EEQUISITES § 1586 

judgment, this can not be perfected in his name, but his representa- 
tives must be substituted in his plaee.'^ 

§ 1586. Allowance of day for payment before sale. — A day for pay- 
ment, before the sale, is allowed by some courts by virtue of their 
equity jurisdiction.^^ The mortgagor can not object to a decree giving 
him this right, although it be unauthorized by law.*' A time for re- 
demption after the sale is in some states provided for, and in such 
case the decree must not direct the delivery of the deed until this time 
has passed.'* As regards redemption, the decree should make the 
same provisions for it whether the mortgage be in the usual form, or 
be merely an absolute deed without a formal defeasance or any de- 
feasance at a\\.^^ Where redemption is allowed after sale, the officer 
is directed in the first place to execute a certificate to the purchaser, 
and, in case there is no redemption within the time allowed by law, to 
execute a deed."" In the meantime the mortgagor remains in posses- 
sion, with no liability for rents and profits, or for use and occupation.'^ 
In the absence of special provisions of statute, courts of equity may al- 
low a period for redemption before a sale of the property, according 
to the circumstances of the case. This is always done in cases of 
strict foreclosure where the decree vests the complete title in the 
mortgagee.'* The practice does not generally apply to cases of decrees 
for the sale of the property, because the debtor is then protected by 
his right to receive the surplus arising from the sale ; but it has been 
extended by some courts to such cases." Even if it be the better prac- 
tice to include such a provision in the decree, this is a matter within 
the discretion of the chancellor, and a failure so to provide is not 

»^ Gerry v. Post, 13 How. Pr. (N. Mich. 462, 12 N. W. 911, 13 N. W. 

Y.) 118. 818. 

""Clark V. Eeyburn, 8 Wall. (U. «■ Smith v. Hoyt, 14 Wis. 252. 

S.) 318, 19 L. ed. 354; Vail v. Arkell, "Rhinehart v. Stevenson, 23 111. 

146 111. 363, 34 N. E. 937; Mebane 524; Warner v. De Witt County Nat. 

V. Mebane, 80 N. Car. 34; Capehart Bank, 4 Bradw. (111.) 305; Jones v. 

V. Biggs, 77 N. Car. 261. This was Gilman, 14 Wis. 450. 

the practice in Kentucky. Durrett "'Briggs v. Seymour, 17 Wis. 255. 

V. Whiting, 7 T. B. Men. (Ky.) 547; "Boester v. Byrne, 72 111. 466; 

Richardson v. Parrott, 7 B. Mon. Rosseel v. Jarvis, 15 Wis. 571. A 

(Ky.) 379; Woodard v. Fitzpatrick, direction to execute "a certificate 

2 B. Mon. (Ky.) 61. This is the as required by law" is sufficient, 

practice in Michigan. Detroit Sav. Walker v. Jarvis, 16 Wis. 28. 

Bank v. Truesdail, 38 Mich. 430. "Whitney v. Allen, 21 Cal. 233. 

The sale can not take place within »* Ferine v. Dunn, 4 Johns. Ch. 

less than a year from the time all (N. Y.) 140. 

the defendants have been properly =* Stockton v. Dundee Mfg. Co., 22 

brought in. Burt v. Thomas, 49 N. J. Eq. 56; Harkins v. Forsyth, 11 

Leigh (Va.) 294. 



§ 1586a DECREE OF SALE 156 

reversible error. ^ As will be seen by reference to the statutes regulat- 
ing foreclosure, it is in several states provided that there shall be a 
period of redemption after the sale, during which time the purchaser 
holds only a certificate of the sale entitling him to a deed at the close 
of the period if no redemption is made. In such case a decree that the 
sherifE shall execute a deed to the purchaser without waiting for the 
expiration of the time limited for redemption is erroneous, but may be 
amended.^ The decree should embody the statutory provision for 
redemption; but an objection that the decree does not do this can not 
be urged by creditors of the mortgagor or by his assignee in bank- 
ruptcy, except in connection with an ofEer to redeem.'' 

§ 1586a. Amendment of decrees. — The trial court has control of 
the judgment, though final, and may, on proper application, seasonably 
made, change the provisions of it, or insert other provisions for the 
benefit of any of the parties to the action.* The court, pending an ap- 
peal without supersedeas from a final decree settling the priority, of 
liens and fixing a day of sale, has power to postpone the sale, if a sale 
on the day fixed would be oppressive or unjust.^ But after the lapse 
of the term at which the decree was rendered, the purchaser at the 
sale may not, ordinarily, have the decree corrected, unless the record 
shows the alleged mistake.^ Where a cause is reversed on the ground 
that the mortgagee was a necessary party, the lower court had the 
power to allow an amendment making the mortgagee a party and con- 
forming its decree to this change.^ 

§ 1586b. Opening or vacating decrees. — A decree may be vacated 
and set aside for fraud in its procurement,* and the burden of proof 

^Gardner v. Cohn, 191 111. 553, 61 court is by a plea of the release of 

N. E. 492, affg. 95 111. App. 26. errors. Moore v. ■Williams, 132 111. 

"Harlan v. Smith, 6 Cal. 173; 591, 24 N. E. 617; Crosby v. Kiest, 

Board of Education v. Franklin, 61 135 111. 458, 26 N. E. 589; Columbia 

Ga. 303. Knickerbocker Trust Co. v. Ithaca 

"Bur ley v. Flint, 9 Biss. (U. S.) St. R. Co., 141 N. Y. S. 249. See 

204; Hards v. Connecticut Mut. L. also "Washington Trust Co. v. Morse 

Ins. Co., 8 Biss. (U. S.) 234. Iron "Works &c. Co., 187 N. Y. 307, 

* Russell V. Blakeman, 40 Minn. 79 N. B. 1022; Hart v. Jos. Schlitz 

463, 42 N. "W. 391; Livingston v. Brew. Co., 120 "Wis. 553, 98 N. "W. 

Mildrum, 19 N. Y. 440; Fuller v. 526. 

Brown, 35 Hun (N. Y.) 162; Brown "Bound v. South Carolina R. Co., 

V. Frost, 10 Paige (N. Y.) 243; 55 Fed. 186. 

Farmers' L. &c. Co. v. Oregon Pac. "Goulding Fertilizer Co. v. Blan- 

R. Co., 28 Ore. 44, 40 Pac. 1089. If, chard, 178 Ala. 298, 59 So. 485. 

after a decree has been rendered 'Swenney v. Hill, 69 Kans S68, 

this has been fully paid, and the 77 Pac. 696. 

errors released, the only mode in »Marcole v. Hlnnes (N. J. Eq), 

which the question can be brought 61 Atl. 975. 
to the attention of the appellate 



157 



CONCLUSIVENESS 



§ 1587 



of the charge is on the person moving therefor on that ground." Stat- 
utes authorizing tlie vacation of judgments for cause include decrees.^" 
It is not ground for vacation that there has heen an extension of the 
period of redemption,^^ or that there has been a mistake as to the 
residence of the defendant in the service by publication.^^ The decree 
may not be reopened merely to allow the admission of cumulative 
evidence.^^ A showing that the mortgagor served with process was 
subject to attacks of dementia is not sufficient to warrant the vacation 
of the decree unless it is also shown that he was suffering from such 
an attack at the time of service, or the attack continued for such time 
as to prevent his appearance and answer.^* The right to move for the 
vacation of a decree may be lost by long delay in applying therefor.^^ 

III. The Conclusiveness of the Decree 



Section 

1587. Collateral attack on decree. 

1588. Parties concluded by decree 

directing sale. 

1589. Prior and adverse rights. 

1589a. Effect of decree of foreclo- 
sure of junior mortgage on 
senior mortgage. 



Sectton 

1589b. Statutes making decrees con- 
clusive. 

1589c. Acceptance of proceeds by 
mortgagor as concluding 
him. 

1589d. Conclusiveness dependent on 
service of process. 

1589e. Conflict of laws. 



§ 1587. Collateral attack on decree. — The validity of the decree 
can not be attacked collaterally for mere irregularities, or for mat- 
ters of defense which do not go to the jurisdiction;^ and jurisdiction 



'Hallo well v. Daly (N. J. Eq.), 
56 Atl. 234; Gross v. McBrayer, 159 
N. Car. 372, 74 S. E. 915. 

" Waymire v. Shipley, 52 Ore. 464, 
97 Pac. 807. 

^ Johnson v. Anna Bldg. &c. Assn., 
133 111. App. 213. 

" Bower v. Stein, 177 Fed. 673. 

^ Spencer v. Alkl Point Transp. 
Co., 53 Wash. 77, 101 Pac. 509, 132 
Am. St. 1058. 

"Team v. Bryant, 71 S. Car. 331, 
51 S. E. 148. 

"Bower v. Stein, 177 Fed. 673; 
Campbell v. Coulston, 19 N. Dak. 
645, 124 N. W. 689. 

*Gray v. Brignardello, 1 "Wall. 
(U. S.) 627, 634, 17 L. ed. 693; 
National Nickel Co. v. Nevada 
Nickel Syndicate, 112 Fed. 44; Car- 
penter V. Zarbuck, 74 Ark. 474, 86 S. 
W. 299; Reagan v. Hodges, 70 Ark. 
563, 69 S. W. 581; San Gabriel Val. 
Bank v. Lake View Town Co. (Cal.), 



86 Pac. 727; Hansen t. Wagner, 133 
Cal. 69, 65 Pac. 142; White v. Pat- 
ton, 87 Cal. 151, 25 Pac. 270; Trope 
V. Kerns (Cal.), 20 Pac. 82; Miller 
V. Sharp, 49 Cal. 233; Reynolds v. 
Harris, 14 Cal. 667, 76 Am. Dec. 
459; Mann v. Jennings, 25 Fla. 730, 
6 So. 771; Lenfesty v. Coe, 26 Fla. 
49, 7 So. 2; Windett v. Connecticut 
Mut. L. Ins. Co., 130 111. 621, 22 N. 
E. 474; Goltra v. Green, 98 111. 317; 
Watson V. Camper, 119 Ind. 60, 21 
N. E. 323; Woolery v. Grayson, 110 
Ind. 149, 10 N. E. 935; Ogden v. 
Walters, 12 Kans. 282; Haseltine v. 
Gilliland, 2 Kans. App. 456, 43 Pac. 
88; Adams v. Cameron, 40 Mich. 
506; Ruggles v. First Nat. Bank 
(Phillips), 40 Mich. 264; Torrans v. 
Hicks, 32 Mich. 307; Berry v. King, 
15 Ore. 165, 13 Pac. 772; Welborn 
V. Cobb, 92 S. Car. 384, 75 S. E. 691; 
Thompson v. Jones, 77 Tex. 626, 12 
S. W. 77. 



§ 1587 DECKEE or SALE 158 

is presumed from the decree.^ It must be attacked, if at all, by direct 
application to the court that made it, or in due course of appellate 
procedure.' It has been held that the failure to follow a statutory 
requirement as to making provision in a decree for sales on credit was 
not jurisdictional, where the mortgagee purchased, and the price was 
credited on the mortgage debt.* Though the decree be erroneous, the 
title of one who has in good faith purchased under it is not affected 
by the error; and this is so even though the decree should afterward 
be reversed or set aside for error or irregularity.^ So long as the de- 
cree remains in force the mortgagor, or any other person who was 
a party to the proceedings, is estopped from asserting any anterior 
right or title to the mortgaged lands.® Where the court has jurisdic- 
tion of the person and the subject-matter, error in ordering a sale by 
an improper person or officer, may not be collaterally attacked in an 
action on a deficiency judgment. The remedy is by appeal from the 
foreclosure judgment.'' The judgment is conclusive as to the title 
held by the defendants after it was rendered.* The validity of a mort- 
gage has been held conclusively established by a decree, finding that a 
part of the instalments have not matured, and providing that it shall 
remain and be enforced as to the subsequent defaults.® After a decree 
is rendered, any right asserted in the proceedings can only be en- 

"Markel v. Evans, 47 Ind. 326; citing Galpin v. Page, 18 "Wall. (U. 

Keller v. Miller, 17 Ind. 206; Eddy S.) 350, 373, 21 L. ed. 959; Marks 

v. Kimerer, 61 Nebr. 498, 85 N. W. v. Cowles, 61 Ala. 299; Reynolds v. 

540. Hosmer, 45 Cal. 616; Reynolds v. 

' Central Trust Co. v. Peoria, D. Harris, 14 Cal. 667 ; Bryant v. Falr- 

&c. R. Co., 118 Fed. 80, 55 C. C. A. field, 51 Maine 149; Delano v. Wilde, 

52; Cannon v. Wright, 49 N. J. Eq. 11 Gray (Mass.) 17; Gott v. Powell, 

17, 23 Atl. 285. 41 Mo. 416; Hubbell v. Broadwell, 

* Audas V. Highland Land &c. Co., 8 Ohio 120; Stroud v. Casey, 25 Tex. 

205 Fed. 862, 125 C. C. A. 62. See 740. 

also Carpenter v. Zarbuck, 74 Ark. "Hefner v. Northwestern L. Ins. 

474, 86 S. W. 299. Co., 123 U. S. 747, 31 L. ed. 309, 

"Lambert v. Livingston, 131 111. 8 Sup. Ct. 337; Adair v. Mergen- 

161, 23 N. E. 352; Horner v. Zim- theim, 114 Ind. 303, 16 N. E. 603; 

merman, 45 111. 14; Graham v. Barton v. Anderson, 104 Ind. 578, 

Bleakie, 2 Daly (N. Y.) 55; Bur- 4 N. E. 420; RufC v. Doty, 26 S. Car. 

ford V. Rosenfield, 37 Tex. 42. If 173, 1 S. E. 707. 

upon appeal the decree is reversed 'Hibernia Sav. &c Soc v Boyd 

in so far as it directs a sale of a 155 Cal. 193, 100 Pac. 239; Springer 

portion of the land included in the v. Darlington, 207 111. 238, 69 N. E. 

decree, the effect of such a reversal 946. 

upon a sale already made under 'Gaylord v. La Fayette, 115 Ind. 

process directing a sale of the land 423, 17 N. E. 899; Ulrich v Dris- 

covered by the mortgage is to des- chell, 88 Ind. 354; Newcome v. 

troy the title to the land in ques- Wiggins, 78 Ind. 306. 

tion, where the mortgagee has "Naden v. Christopher, 67 Wash, 

acquired such title. Adams v. 578, 122 Pac. 2. 
Odom, 74 Tex. 206, 12 S. W. 34, 



159 CONCLUSIVENESS § 1587 

forced through the decree. This rule is illustrated in the following 
case: The owner of mortgaged premises conveyed them to a third 
party, who did not at once record his deed. Thereafter the mortgage 
was foreclosed and the property sold under the decree, and in this 
suit the owner of a judgment appeared as a defendant and procured 
an adjudication that the proceeds of the sale, after satisfying prior 
liens, should be applied to the payment of his judgment. Afterward 
the purchaser of the land recorded his deed and redeemed the prem- 
ises. Subsequently the judgment lien creditor, the property not hav- 
ing sold for enough to satisfy his claim, obtained execution and levied 
it on the land. It was held that the purchaser is to be considered as 
such only from the time that he recorded his deed, and that the judg- 
ment creditor's rights under his original judgment become merged 
into the foreclosure decree, and were exhausted by the sale thereunder 
as to property sold, and that the execution should be recalled.^" 
If the mortgage was invalid in its origin, a decree of foreclosure has 
no efEect whatever upon the property or its owners. Such was the case 
of a mortgage given by persons who claimed to be the trustees of a 
corporation and foreclosed; and afterward it was established by de- 
cree of the court that the mortgagors had usurped the powers of the 
corporation, and had no authority to bind it.^^ A decree of foreclo- 
sure entered before the debt has become due, or after the mortgage has 
been satisfied of record, is erroneous; and the decree should be set 
aside, unless in the latter case the entry of satisfaction be canceled. ^^ 
The interests of the parties become barred and foreclosed not upon 
the entry of the judgment, but upon the sale and conveyance of the 
land. "A judgment entered in a foreclosure action is final for all 
purposes of review, but in other respects it is interlocutory. All of 
the proceedings for the sale, including the advertising of the no- 
tice and the confirmation of the sale, take place thereafter. The 
provision barring others of their interest in, or of their rights of 
equity of redemption in the mortgaged premises, of necessity re- 
lates to the final concluding act, that of a sale of the premises. 
Until that time the mortgagee or the owner of the equity of redemp- 
tion may redeem, and persons having judgment liens thereon may 

"Williams v. Wilson, 42 Ore. 299, debt not due when suit was com- 

70 Pac. 1031. menced. Likes v. Wildish, 27 Nebr. 

" Brindernagle v. German Re- 151, 42 N. W. 900. When nothing 

formed Church, 1 Barb. Ch. (N. Y.) was due on mortgage at time of 

15. foreclosure. Bowen v. Brogan, 119 

"Russell V. Mixer, 39 Cal. 504. Mich. 218, 77 N. W. 942. 
When the decree includes part of 



§ 1587 DECKEE OF SALE 160 

sell upon execution, notwithstanding the judgment; hut as soon as 
the sale is made, confirmed and conveyance delivered, that provision 
of the judgment becomes operative and of full force, and the parties 
to the action are forever thereafter barred and foreclosed of all their 
right, title, interest and equity of redemption."^^ Where a federal 
court has rendered a decree foreclosing a mortgage, in suit wherein 
it had jurisdiction of the parties and the subject-matter, the fact that 
the provision of such decree directing the manner in which the prop- 
erty should be sold, and the order of sale subsequently issued thereon, 
inadvertently followed the state statute, and did not conform to the re- 
quirements of the United States Statute^* as to the notice of sale, 
does not render the sale made thereon void, but merely voidable; and 
where the defendant, with knowledge of the facts, and due notice of 
the application for confirmation makes no objection thereto, and does 
not appeal from either the original decree or the order of confirmation, 
he will be deemed to have waived the defect, and he can not attack the 
validity of the title acquired by the purchaser collaterally, by an action 
to recover the property.^" A decree of foreclosure is not final, so far 
as relates to the provisions therein for its own enforcement, directing 
the manner in which the mortgaged property shall be sold, etc., and 
in such respects it may be amended at any subsequent term.^" The 
decree is generally held res judicata as to all claims and demands 
which the mortgagor and other parties properly before the court could, 
but did not, set up and lirge.^^ Thus where a bond and mortgage were 

"Nutt V. Cuming, 155 N. Y. 309, the order of confirmation, and re- 
313, 40 N. E. 880, per Haight, J. fuses to take an appeal from said 
"Act March 3, 1903, 27 Stat. 751. order within the statutory period 
^ National Nickel Co. v. Nevada allowed therefor, can it be said that 
Nickel Syndicate, 106 Fed. 110, 114. he was deprived of his property 
Hawley, J., said: "If a party who without 'due process of law?' In 
is regularly brought before a court the foreclosure suit, and under the 
having full jurisdiction in the prem- proceedings had therein, the court 
ises in a pending suit, with knowl- acquired complete jurisdiction of 
edge of all the proceedings therein, the parties and of the subject-mat- 
without any fraud or undue induce- ter thereof. The court, having 
ments, consents to a sale of his legally acquired jurisdiction, had 
property in a different mode from the undoubted right to decide all 
that provided for by the statute, can questions which might properly 
it be said that such a sale is abso- arise therein; and Its judgment, 
lutely null and void? If, without orders, and decrees, however erro- 
consenting by word of mouth or neous they may have been, can not 
written stipulation, he stands by he collaterally assailed." See Cor- 
with his mouth closed and allows nett v. Williams, 20 Wall. (U. S.) 
the sale to proceed, having knowl- 226, 249, 22 L. ed. 254. 
edge of all the facts, and thereafter "Royal Trust Co. v. Washburn, 
declines to come into court on the B. & I. R. Co., 113 Fed. 531. 
day set for the confirmation to "Wardlow v. Middleton, 156 Cal. 
either protest, object, or except to 585, 105 Pac. 738; Hewitt v. Wal- 



161 



CONCLUSIVENESS 



§ 1588 



given for the same indebtedness and a decree was had in favor of the 
mortgagee and obligee upon a bill to foreclose the mortgage, such de- 
cree was held conclusive, in an action brought upon the bond for 
deficiency, as to any defense that was available in the foreclosure 
suit.^^ The rule forbidding a collateral attack on decrees or judg- 
ments does not apply where the decree or judgment is void.^* A decree 
that if the property is sold the defendants and all persons claiming 
under them since the recording of the mortgage, shall be forever 
barred of all rights and equity of redemption in and to said property, 
has been held not necessarily an adjudication of a tax title set up in 
the answer of one of the defendants. The decree is an adjudication 
affecting only the "rights and equity of redemption" under the mort- 
gage.^" A decree denying foreclosure does not affect the lien of the 
mortgage."^ 

§ 1588. Parties concluded by decree directing sale. — A judgment 
directing a sale of the mortgaged premises is conclusive as to all par- 
ties to the suit so long as it remains unreversed.^^ It is not conclusive 
against persons not parties to the proceeding,^^ and this would include 



ters, 21 Idaho 1, 119 Pac. 705, Ann. 
Cas. 1913C, 35; Pilliod v. Angola R. 
&c. Co., 46 Ind. App. 719, 91 N. B. 
829; Haag v. Baker, 78 Kans. 437, 
87 Pac. 473; Welsh v. Briggs, 204 
Mass. 540, 90 N. E. 1146; Walsh v. 
Robinson, 135 Mich. 16, 97 N. W. 
55; Equitable Land Co. v. Allen, 84 
Nebr. 514, 121 N. W. 600; Dubois 
v. Martin, 71 Nebr. 577, 99 N. W. 
267; Kiernan v. Jersey City, 80 N. 
J. L. 273, 78 Atl. 228, 31 L. R. A. 
(N. S.) 1023; Lagrave v. Hellinger, 
144 App. Div. 397, 129 N. Y. S. 291; 
Ernst V. Zeltner Brew. Co., 117 N. 
Y. S. 922; Williams v. Wilson, 42 
Ore. 299, 70 Pac. 1031; Findlay v. 
Longe, 81 Vt. 523, 71 Atl. 829. 

"State Mut. Bldg. &c. Assn. v. 
Batterson, 77 N. J. L. 57, 71 Atl. 
115. 

»» Clarke v. A. B. Frank Co. (Tex. 
Civ. App.), 168 S. W. 492. 

" Pearson v. Helvenston, 50 Fla. 
590, 39 So 695. 

^ Westminster College v. Fry, 192 
Mo. 552, 91 S. W. 472. See also 
Cady V. Barnes, 208 Fed. 361; Sta- 
ley V. Murry, 152 N. Y. S. 163. 

2=Murrell v. Smith, 51 Ala. 301; 
In re Angle's Estate, 148 Cal. 102, 
82 Pac. 668; Van Sickle v. Har- 

11 — Jones Mtg. — Vol. III. 



meyer, 172 111. App. 218; Illinois 
Nat. Bank v. Trustees of Schools, 
111 111. App. 189; Huber v. Jen- 
nlngs-Heywood Oil Syndicate, 111 
La. 747, 35 So. 889; Felino v. New- 
comb Lumber Co., 64 Nebr. 335, 89 
N. W. 755; McCracken v. Valentine, 
9 N. Y. 42; Manigault v. Deas, 
Bailey Eq. (S. Car.) 283. Under 
the laws of Arkansas a decree fore- 
closing a mortgage by a husband 
alone, who unsuccessfully asserted 
a homestead right is held to bar the 
right of the wife to assert a home- 
stead claim. Brignardello v. Coop- 
er (Ark.), 172 S. W. 1030. 

=° Zimmerman v. Kansas City 
Northwestern R. Co., 144 Fed. 622; 
Hayes v. Martin, 97 Ark. 643, 134 
S. W. 626; Burns v. Hiatt, 149 Cal. 
617, 87 Pac. 196; Morrissey v. Gray, 
160 Cal. 390, 117 Pac. 438, 442; 
Dundee Naval Stores Co. v. Mc- 
Dowell, 65 Fla 15, 61 So. 108; Chris- 
topher V. Mungen, 61 Fla. 513, 55 
So. 273; Wehrheim v. Smith, 226 
111. 346, 80 N. E. 908; State Sav. 
Bank v. Miller, 146 Iowa 83, 124 N. 
W. 873; Pens v. Yazoo &c. R. Co., 
122 La. 156, 47 So. 449; Northwest- 
ern Trust Co. V. Ryan, 115 Minn. 
143, 132 N. W. 202; New Jersey 



§ 1588 DECEEE OF SALE 163 

the grantee in a deed of record which was executed subsequent to the 
mortgage and not made a party.^* The rule would seem to be the 
same as to persons made parties who are not necessary or proper par- 
ties.^" The foreclosure would, however, conclude subsequent grantees 
whose deeds were not recorded,^" or recorded in improper books.''' 
A mortgagor, who has parted with his title through a simulated sale, 
may not challenge the regularity of the proceedings by which the mort- 
gage was enforced against the record owner and the property sold un- 
der the decree.^* It does not matter that the plaintiff held the mort- 
gage by assignment from the mortgagor as collateral security for a 
debt of his, and that he in this way had an interest in the mortgage; 
if the plaintiff, knowing this, makes him a party to the suit, and he 
does not answer, he can not, after a Judgment and sale of the prop- 
erty under it for a sum less than the debt for which the mortgage 
was held as collateral, maintain a bill to redeem. The interest of 
the mortgagor is not one prior to the mortgage, but one under the 
mortgage, and this is the ground upon which he is made a party to 
the foreclosure suit.^" Where a defendant has set up a claim under a 
title paramount to the mortgage, and the same has been litigated with 
the consent or acquiescence of both parties, both parties are bound by 
the judgment.^" Where one defendant had set up a paramount title to 
a portion of the mortgaged premises, and by agreement of all the 
other parties a decree was entered that this defendant's land was 
not subject to the mortgage, and more than a year afterward the 
parties, excepting this defendant, agreed that the decree might be 
vacated, and subsequently, without notice to this defendant, a new 
decree was rendered by which the land of this defendant was declared 
to be subject to the mortgage and was ordered to be sold, it was 
held that the last decree was void as to this defendant.'^ A judg- 

Bldg. Loan &c. Co. v. Schatzkin, 72 == Lander v. Persky, 85 Conn. 429, 

N. J. Eq. 175, 64 Atl. 1086; Wacht v. 83 Atl. 209. 

Ersklne, 61 Misc. 96, 113 N. Y. S. =« Gillian v. McDowall, 66 Nebr. 

130; Harding v. Gillett, 25 Okla. 814, 92 N. W. 991. 

199, 107 Pac. 665; Vanderwolk v. =' Sinclair v. Gunzenhauser, 179 

Matthael (Tex. Civ. App.), 167 S. Ind. 78, 98 N. B. 37. 

"W. 304. The foreclosure of a mort- "^Zayas v. Lothrop, Luce & Co. 

gage by one who owns a part of 231 U. S. 171, 34 Sup. Ct. 108. 

such bonds will not bar a subse- ^Bloomer v. Sturges, 58 N. T. 

quent foreclosure by an Innocent 168. 

purchaser and holder of another of ""Bundy v. Cunningham, 107 Ind. 

such bonds; such purchaser not 360; Helck v. Reinhelmer, 105 N. Y. 

having been a party to the first fore- 470. 

closure. Herzog v. Union Debeu- "Blake v. McMurtry, 25 Nebr. 

ture Co. (Nebr.), 144 N. "W. 814. 290, 41 N. W. 172. 

"* Clark V. Lesser, 106 Ark. 207, 
153 S. W. 112. 



163 CONCLUSIVENESS § 1589 

ment which the defendant has allowed to be entered upon default, 
under the belief that the judgment could not affect a right of home- 
stead in a portion of the mortgaged land which had been released 
from the mortgage by a release recorded before the assignment to 
the complainant in the foreclosure suit, may be set aside in a pro- 
ceeding instituted for that purpose.^ ^ Where a decree of sale provides 
that the sale shall be made subject to certain liens established or to be 
established by a reference to a master, as prior and superior liens, 
the purchaser can not dispute the validity of the liens thus established, 
even on the ground of fraud alleged to have been discovered after con- 
firmation of the master's report fixing the amount of such liens.^^ A 
decree against the administrator of the mortgagor is sufficient to bind 
the estate of the mortgagor.^* The decree is of course conclusive upon 
the defendant in the bill, and upon any purchaser from him who has 
purchased after the decree was rendered. In a contest with either 
by a purchaser at a judicial sale under the decree, the complainant's 
title to the mortgage is not an open question. His title to the mort- 
gage was essential to the decree rendered, and was necessarily ad- 
judicated as a part of the case then before the court.^^ After a long 
lapse of time since the decree was made, the court will presume, as 
against the parties calling the decree in question, that every act and 
thing was done, necessary to give jurisdiction and authority to the 
court pronouncing the decree, which the record does not show was 
not done, particularly when the record produced shows that all of the 
record and proceedings have not been produced.^'' 

§ 1589. Prior and adverse rights. — ^Where a party has a right 
under the mortgage, and also a right prior to it, he is not pre- 
cluded in respect to the prior right by a judgment of foreclosure, 
though the terms of it are broad enough to cover both rights. Only 
the rights and interests under the mortgage and subsequent to it can 
properly be litigated upon a bill of foreclosure.^^ One claiming ad- 

'' Lumpkin v. Williams (Tex.), 21 "Wade v. Miller, 32 N. J. L. 296; 

S. W. 967; Wicke v. Lake, 21 Wis. Frost v. Koon, 30 N. Y. 428; Corn- 

410. ing V. Smith, 6 N. Y. 82; Lee v. 

'=Swann v. Wright, 110 U. S. 590, Parker, 43 Barb. (N. Y.) 611; Lewis 

28 L. ed. 252, 4 Sup. Ct. 235. v. Smith, 11 Barb. (N. Y.) 152, 9 

=' Flack V. Bremen, 45 Tex. Civ. N. Y. 502, 61 Am. Dec. 706; Hol- 

App. 473, 101 S. W. 537. comb v. Holcomb, 2 Barb. (N. Y.) 

'=Gunn V. Wades, 62 Ga. 20. See 20; Lansing v. Hadsall, 26 Hun (N. 

ante §§ 1440, 1445, 1474. Y.) 619; Eagle Fire Co. v. Lent, 6 

==Kibbe v. Dunn, 5 Biss. (U. S.) Paige (N. Y.) 635; Elliott v. Pell, 

233; Chesebro v. Powers, 70 Mich. 1 Paige (N. Y.) 263. 
370, 38 N. W. 283. 



§ 1589 DECEEE OF SALE 164 

versely to the title of the mortgagor can not be made a party to the suit 
for the purpose of trying his adverse claim. If he has a claim under 
the mortgage also, his claim prior to it can not be divested by the de- 
cree. This prior claim is not a subject-matter of litigation in the fore- 
closure suit, and remains unaffected by it. The decree is final only 
within the proper scope of the suit, which is to bar interests in the 
equity of redemption.^* Therefore, where land was devised to one in 
trust to receive rents and profits, and apply to the benefit of another for 
life, remainder to the trustee in fee for his own benefit, and the. re- 
mainder-man and the tenant for life made a mortgage in which no al- 
lusion was made to the trust, it was held, upon a foreclosure of the 
mortgage, that the trust estate was not affected by the mortgage, or by 
the judgment of foreclosure, although the person named as trustee 
was in his individual capacity a party to the suit. The prior estate 
for life in trust not being subject to the mortgage, or within the power 
of the trustee to dispose of, remains unaffected.'^ In like manner, if 
there be an outstanding right of dower in the wife of the mortgagor, 
the making of her a party to an action of foreclosure, and the render- 
ing of a judgment foreclosing the rights of the defendants in the 
premises, do not affect this right. This remains the same as if she 
had not been made a party to the action.*" If, however, the mortgage 
be given to secure the purchase-money, the wife's dower is then sub- 
ordinate to the mortgage, and is barred if she be made a party.*^ 
Moreover, the decree is final and conclusive only against the owner and 
subsequent parties in interest when they have been made parties to the 
suit; and is unavailing against any one interested in the premises 
who was not made a party,*^ and in such case the decree is no bar to 
another foreclosure suit.*' It is held, however, that if a party like a 
contingent remainder-man having a prior interest is made a party to 

'« California Safe Deposit Co. v. »»Rathbone v. Hooney, 58 N. Y. 

Cheney Electric Light Co., 56 Fed. 463. 

257 (quoting text); McComb v. "Wade v. Miller, 32 N. J. L. 296; 

Spangler, 71 Cal. 418, 12 Pac. 347 Merchants' Bank v. Thomson, 55 N. 

(quoting text) ; Sichler v. Look, 93 Y. 7. 

Cal. 600, 29 Pac. 220; Cody v. Bean, «Brackett v. Baum, 50 N. Y. 8. 

93 Cal. 578, 29 Pac. 223; Ord v. This decision relates to a power of 

Bartlett, 83 Cal. 428, 23 Pac. 705; sale mortgage foreclosed under the 

San Francisco v. Lawton, 18 Cal. statute, but the reasoning applies 

465; Bozarth v. Landers, 113 111. here. 

181; Smith V. Roberts, 91 N. Y. 470, "Shores v. Scott River Co., 21 

477; Emigrant Sav. Bank v. Gold- Cal. 135; Goodenow v. Ewer, 16 Cal. 

man, 75 N. Y. 127; Frost v. Koon, 461, 76 Am. Dec. 540. 

30 N. Y. 428; Lewis v. Smith, 9 N. "Curtis v. Gooding, 99 Ind. 45. 
Y. 502, 61 Am. Dec. 706; Payn v. 
Grant, 23 Hun (N. Y.) 134. 



165 CONCLUSIVENESS § 1589a 

the foreclosure suit, and, without demurring, answering or asserting 
his prior title, allows judgment to be taken, and the facts stated in 
the bill are such that, if admitted, his title is subject to the mortgage 
and to the foreclosure, he is estopped from afterward setting up his 
interest as against the judgment.** A controversy between defendants 
to a foreclosure suit, as to which of them is the principal debtor and 
which is surety, can not be determined in such suit, and a decree 
which attempts to do so is of no effect.*^ 

§ 1589a. Effect of decree of foreclosure of junior mortgage on 
senior mortgage. — A decree foreclosing a junior mortgage can not 
affect the lien of a senior mortgage, where its priority is not attacked 
by the petition for foreclosure. If the holder of the senior mortgage 
has also acquired a third mortgage, or the equity of redemption, a 
foreclosure decree upon the second mortgage relates only to the third 
mortgage or the equity of redemption. "The clause in such decree, 
that the defendant and all persons claiming under him 'shall be fore- 
closed and forever barred from all equity of redemption in the prem- 
ises,' relates only to such rights and interests as are inferior to the 
mortgage that is foreclosed, and not to such as are superior."*" 

§ 1589b. Statutes making decrees conclusive. — ^Under a statute 
making decrees conclusive, a decree foreclosing a mortgage is conclu- 
sive that at the time of the decree, the defendant owed plaintiff the 
amount adjudged, though the decree was entered upon confession.*^ 

§ 1589c. Acceptance of proceeds by mortgagor as concluding him. 

— A mortgagor, who accepts and receipts for the amount of the pro- 
ceeds of the sale found due him, is thereafter estopped to contend that 
a provision in the decree ordering a sale without redemption was er- 
roneous. The acceptance operates as an estoppel and is treated as a 
release of errors.*' 

§ 1589d. Conclusiveness dependent on service of process. — Parties 
who have been personally served with summons, and have made an ap- 

"Boiling v. Pace, 99 Ala. 607, 12 Smith, 9 N. Y. 502; Shaw v. Cham- 

So. 796; Goebel v. Iffla, 111 N. Y. berlin, 45 Vt. 512; Bowne v. Page. 

170, 18 N. E. 649; Barnard v. Onder- 2 Tyler (Vt.) 392; Strobe v. Dow- 

donk, 98 N. Y. 158; Jordan v. Van ner, 13 Wis. 10, 80 Am. Dec. 709 

Epps, 85 N. Y. 427. and note. 

"Hovenden v. Knott, 12 Ore. 267, "Crow v. Crow (Ore.), 139 Pac. 

7 Pac. 30. 854. See also Vingut v. Ketcham, 

*°Buzzell V. Still, 63 Vt. 490, 22 102 App. Div. 403, 92 N. Y. S. 605. 

Atl. 619, citing Emigrant Sav. Bank *« King v. King, 215 111. 100, 74 

T. Goldman, 75 N. Y. 127; Lewis v. N. E. 89. 



§ 1589e DECREE OF SALE 166 

pearance in the suit, can not afterward, to defeat confirmation, assail 
the decree for mere irregularity.*' Where there has been actual per- 
sonal service and the court obtains jurisdiction, a mistake in the name 
of the defendant not brought to the attention of the court, does not 
render the decree subject to collateral attack.^" A decree based on 
service by publication is as conclubive as one based on personal serv- 
ice, subject to the right of the defendant to appear and answer within 
the time limited by statute.^^ The decree is conclusive on parties duly 
summoned who make default,^ ^ but only as to interests or title to the 
real estate. The rule is not so strict as to leasehold interests.^^ As 
against a collateral attack, there is a presumption that the administra- 
tor of the mortgagor's estate was properly served as prayed, though 
the decree does not mention service.^* 

§ 1589e. Conflict of laws. — ^Where the lex loci contactus is that 
after a decree for foreclosure no proceedings shall be had at law for 
the recovery of the debt secured by the mortgage, a judgment fore- 
closing the mortgage under such a statute is a bar to a subsequent 
action in another state on the mortgage debt.°° 

IV. The Amount of the Decree 

Section Section 

1590. Decree should fix amount of 1597. Taxes. 

indebtedness. 1598. Costs incurred in previous ac- 

1591. Inclusion of instalments not tion. 

due. 1599. Disbursements in proceedings 

1592. Collateral mortgage. for foreclosure — Abstracts. 

1593. Decree for full amount of 1600. Final judgment. 

principal and interest due 1600a. Appeal. 

on bond. 1601. Stay of proceedings on ac- 

1594. Interest. count of controversy be- 

1595. Exchange. tween subsequent incum- 

1596. Insurance — Rent paid to pro- brancers. 

tect estate. 

§ 1590. Decree should fix amount of indebtedness. — The decree 
directing a sale of the premises should find the exact amount due on 
the mortgage, and not leave this to be calculated by the ofiicer.^ A 

"Stratton v. Reisdorph, 35 Nebr. ==Heaton t. Grant Lodge (Ind. 

314, 53 N. W. 136. App.), 103 N. E. 488. 

■"Page V. Bresee, 92 Nebr. 241, "Flack t. Bremen, 45 Tex. Civ. 

138 N. W. 138. App. 473, 101 S. W. 537. 

"Heinroth v. Frost, 250 111. 102, "Gates v. Tebbetts, 100 Mo. App. 

95 N. E. 65. 590, 75 S. W. 169. 

"Baumgarten v. Mitchell, 10 Cal. 'Foote v. Yarlott, 238 111. 54, 87 

App. 48, 101 Pac. 43; Bickel v. Wess- N. E. 62; Warner v. De Witt Co 

inger, 58 Ore. 98. 113 Pac. 34. Nat. Bank, 4 Bradw. (111.) 305; 



167 THE AMOUNT 037 THE DECREE § 1589e 

decree ■which simply orders the payment of the sum due on the mort- 
gage debt, without finding the amount, is erroneous.^ Where there is 
no issue of payment or other diminution of the debt, the plaintiff is en- 
titled to a judgment for the full amount.* Where several mortgages 
upon separate parcels of land are foreclosed together, the decree must 
find the amount due upon each, and not the aggregate amount secured 
by all.* The parties themselves may fix the amount by agreement, 
and this will be adopted by the court in entering the decree.'' The 
decree can not be for a larger sum than that stated in the mortgage.* 
If the mortgagee has received payments upon collateral securities or 
rents and profits from the mortgaged premises, an accounting to as- 
certain the sum due should precede the decree.' If the mortgage was 
drawn for a larger sum than the actual debt secured, the decree should 
be for the correct amount of the debt.^ The amount due may be de- 
termined by the court,' or for its convenience reference may be made 
to a master or clerk of court, or other ofi&cer, to ascertain the amount,^" 
including costs and expenses.^^ If a master or referee is appointed 
to compute the amount due, the court can not in advance of the 
report direct that, upon its coming in, the same be affirmed and judg- 
ment entered thereupon. ^^ A part of the debt not due can not be in- 
cluded.^' But an instalment falling due before the hearing, although 
not due when the suit was brought, may be included.^* A judgment 
by default can not be entered for a larger amount than the complaint 

Wernwag v. Brown, 3 Blackf. "Home Fire Ins. Co. v. Fitch, 52 

(Ind.) 457, 26 Am. Dec. 433; Champ- Nebr. 88, 71 N. W. 940. 

lin V. Foster, 7 B. Mon. (Ky.) 104. 'Parlin v. Stone, 1 McCrary (U. 

As to certainty in the amount of S.) 443; Stanley v. Chicago Trust 

the decree, see Mulvey v. Gibbons, &c. Bank, 165 111. 295, 46 N. B. 273. 

87 111. 367; Keck v. Allender, 37 'Laylin v. Knox, 41 Mich. 40. 

W. Va. 201, 16 S. E. 520. 'Rollins v. Forbes, 10 Cal. 299; 

'Vermont Loan &c. Co. v. McGre- Vaughn v. Nims, 36 Mich. 297. See 

gor, 5 Idaho 320, 51 Pac. 102; Tomp- also Davis v. Alvord, 94 U. S. 545, 

kins T. Wiltberger, 56 111. 385; Wil- 24 L. ed. 283. 

son Sewing Machine Co. v. Rut- "Ireland v. Woolman, 15 Mich, 

ledge, 60 Iowa 39, 14 N. W. 92. 253. See also Van Boskerck v. Hay- 

= Toliver v. Stephenson, 83 Nebr. ward, 81 Misc. 370, 142 N. Y. S. 412. 

747, 120 N. W. 450. See also Key "American Securities Co. v. 

West Wharf &c. Co. v. Porter, 63 Goldsberry (Fla.), 67 So. 862. 

Fla. 448, 58 So. 599, Ann. Cas. " Citizens' Sav. Bank v. Bauer, 14 

1914A, 173. N. Y. Civ. Pro. 340, 1 N. Y. S. 450. 

*Hibernla Sav. & L. Soc. v. Kain, "King v. Longworth, 7 Ohio 585. 

117 Cal. 478, 49 Pac. 578; Collier v. "Fields v. Drennen, 115 Ala. 558, 

Ervin, 2 Mont. 335; Rader v. Ervin, 22 So. 114; Fulgham v. Morris, 75 

1 Mont. 632. Ala. 245; Carr v. Watkins, 10 Ky. 

'Clarke T. Bancroft, 13 Iowa 320; L. 342, 9 S. W. 218; Manning v. 

Nosier v. Haynes, 2 Nev. 53; Kelly McClurg, 14 Wis. 350. 
T. Searing, 4 Abb. Pr. (N. Y.) 354. 



§ 1591 DECREE OP SALE 168 

shows to be due.^^ Though the debt secured by the mortgage be made 
up of several amounts, as where the mortgagee has paid taxes or other 
liens upon the property for his own protection, the whole amount due 
and payable at the time of the foreclosure should be included in the 
decree. The different items of the debt can not be separated and 
collected by several actions. ^^ Though the mortgagee did not actually 
pay the money secured by the mortgage at the time of its execution, 
but as a matter of convenience indorsed certain promissory notes, 
and delivered them to the mortgagor for negotiation, and paid the 
notes at maturity, the transaction being treated as if the money had 
been paid at the date of execution, interest is properly computed from 
that time.^'^ Where a mortgage secures all sums due or thereafter 
to become due from the mortgagor to the mortgagee, the latter is en- 
titled to be allowed, as part of the sum due, a note of the mortgagor 
made payable to a firm of which the mortgagee is the surviving mem- 
ber, or to bearer, even though recovery on the note itself is barred by 
the statute of limitations.^^ If the mortgagor desires an account taken 
of the amount of profits received by the mortgagee in possession, he 
should ask the action of the court in session, and, upon a hearing by 
the court or before a master, should offer his proof.^® The question of 
the mortgagee's ability to account for rents and profits should be 
raised by the pleadings; otherwise the master, under an order of 
reference, will not without special directions entertain it.^" The full 
amount of the mortgage debt may be recovered as against a junior 
incumbrancer, though the mortgagee has agreed to sell the mortgage 
to the wife of the mortgagor at a discount.^^ The court will not or- 
dinarily fix the amount due under prior liens.^^ Where the contest is 
as to the right to a decree of foreclosure, the question of the right to 
rents and profits arising after the sale is not necessarily determined.^^ 

§ 1591. Inclusion of instalments not due. — Ordinarily the decree 
can not include any instalment of the mortgage debt not due at the 
time f^ and it can not be amended so as to include subsequent instal- 

" Savings & Loan See. v. Horton, 419; 'WyccfE t. Combs. 28 N. J. Eq. 

63 Cal. 105. 40. 

1° Johnson v. Payne, 11 Nebr. 269, '^Knox v. Moser, 69 Iowa 341, 28 

9 N. W. 81. N. "W. 629. 

"Baxter v. Blodgett, 63 Vt. 629, "^ Whitney v. Whitney Elev. &c. 

22 Atl. 625. Co., 180 Fed. 187; Davis v. Davis, 

^Gleason v. Kinney, 65 Vt. 560, 81 Vt. 259, 69 Atl. 876. 

27 Atl. 208. ^ Cram v. Waddell, 167 111. App. 

«> Hards v. Barton, 79 111. 504. 44. 

See also Roberts v. Pierce, 79 111. ="King v. Longworth, 7 Ohio 585. 

378. See ante § 1478. 

^'Longley v. Wilk, 171 111. App. 



169 THE AMOUNT OF THE DECEEE § 1593 

ments when they become due/^ though if an instalment not due when 
the suit was commenced falls due before the decree is entered, the 
amount of it is properly included.^" When only a portion of the debt 
is due, the judgment, besides finding the amount actually due at the 
time it is entered, should find, also, the amount secured by the mort- 
gage not then due, and should provide for a stay of proceedings, if, 
before the day of sale, the mortgagor pay the amount with costs. ^^ 
It is sometimes provided by statute that a decree may be entered de- 
termining the amount then due on the mortgage and providing for 
subsequent orders of sale to satisfy maturing instalments.^* But 
whether the amount not due should be stated or not depends upon 
the statutes and practice of the different states.^" When by the terms 
of the mortgage the entire mortgage debt becomes due on any default, 
the mortgagee may elect to consider the entire amount of the mortgage 
debt as due, and if he notifies the mortgagor of his election so to con- 
sider it, a decree may be entered for the full amount, although only 
a part of the debt is due;^" but there should be a proper rebatement of 
the interest on the notes not due.^^ 

§ 1592. Collateral mortgage. — If a mortgage made without con- 
sideration paid by the mortgagee be assigned by the latter as in- 
demnity against the assignee's liability as indorser for the mortgagor, 
it is of course security only for the amount the indorser has been 
obliged to pay, and on foreclosure the decree should be for that 
amount only.^' When a mortgage given to indemnify sureties is 

^ Byrne v. Hoag, 116 Cal. 1, 47 date of the decree. Cantwell v. 

Pac. 775. Welch, 187 111. 275, 58 N. E. 414. 

^ Union Trust Co. v. Detroit "Rice v. Cribb, 12 Wis. 179. See 

Motor Co., 117 Mich. 631, 76 N. W. also as to the practice in such cases, 

112; Jehle v. Brooks, 112 Mich. 131, Walker v. Hallett, 1 Ala. 379; Tag- 

70 N. W. 440; Hanford v. Robert- gart v. San Antonio Ridge Ditch &c. 

son, 47 Mich. 100, 10 N. W. 125; Co., 18 Cal. 480. 

Johnson v. Van Velsor, 43 Mich. ^Naden v. Christopher, 67 Wash. 

208, 5 N. W. 265; Howe v. Lemon, 578, 122 Pac. 2. 

37 Mich. 164; Vaughn v. Nims, 36 =» Hoffman on Referees, p. 229. 

Mich. 297; Malcolm v. Allen, 49 N. =»Noonan v. Lee, 2 Black (U. S.) 

Y. 448; Ferguson v. Ferguson, 2 N. 499, 17 Fed. 278; Noyes v. Clark, 

Y. 360, 364; Asendorf v. Meyer, 8 7 Paige (N. Y.) 180, 32 Am. Dec. 

Daly (N. Y.) 278; Cooke v. Pen- 620. See also Russell v. Wright, 23 

nington, 15 S. Car. 185; Manning v. S. Dak. 338, 121 N. W. 842. 

McClurg, 14 Wis. 350. In a mort- ^ Cosgrave v. McAvay, 24 N. Dak. 

gage to a loan association whose 343, 139 N. W. 693; Gillmour v. 

by-laws provide for the payment of Ford (Tex.), 19 S. W. 442. 

the premium in monthly instal- '""Van Deventer v. Stiger, 25 N. 

ments, it is proper to include in J. Eq. 224; Handy v. Sibley, 46 

the decree the amount of premiums Ohio St. 9, 17 N. E. 329. 
due from time of default to the 



§ 1593 DECEEE OF SALE 170 

foreclosed ■while suit is pending on the claim indemnified against, 
the decree may properly direct payment of the proceeds of sale into 
court, to await further order of court.'' If the complainant holds the 
mortgage assigned to him as collateral security for a specific debt of 
less amount than the mortgage, he can only have a decree for that 
debt, although pending the suit the mortgage is assigned to him abso- 
lutely. His remedy for the residue is by a supplemental bill; or, in 
case the whole premises are sold upon the decree in the original suit, 
he might have remedy by petition for the surplus.'* And so if one 
holding a mortgage as collateral security at the request of the mort- 
gagor, who owes the principal debt, assigns the mortgage to a third 
person for a sum less than the face of the mortgage, which sum is 
credited on the principal debt, and the mortgagor subsequently pays 
the balance of this debt, the mortgage in the hands of the assignee 
can be enforced for only the amount he paid for it either as against 
the mortgagor or against subsequent incumbrancers at the time of the 
assignment, for in such case that amount is the only part of the mort- 
gage remaining unpaid.'" 

§ 1593. Decree for full amount of principal and interest due on 
bond. — If the mortgage secures a bond the decree may be entered 
for the full amount of principal and interest due upon the bond, 
though it exceeds the amount of the penalty.'" Even when the suit is 
founded on the bond alone, the plaintiff may recover the full amount 
of the penalty as a debt, and interest in addition as damages for the 
detention of the debt.'^ When the suit is not upon the bond, but is a 
proceeding in equity upon the mortgage given to secure the bond, it 
has been considered that the lien upon the land is for the whole debt, 
both principal and interest, according to the condition of the mort- 
gage. "The mortgage," says Sir "William Grant," "is to secure pay- 

== Hunter v. Levan, 11 Cal. 11. erence to this distinction: "Look- 

'' Underbill v. Atwater, 22 N. J. ing at the question as a mere ques- 

Eq. 16. tion of equity, it will be found very 

== Hoy V. Bramhall, 19 N. J. Eq. difficult to assign a satisfactory rea- 

74, 97 Am. Dec. 687. son why the obligee should be per- 

■^Long V. Long, 16 N. J. Eq. 59. mitted to recover a larger amount 

But see Mower v. Kip, 6 Paige (N. upon the mortgage, which is a 

Y.) 88, reversing 2 Edw. 165, 29 mere security for the bond, than 

Am. Dec. 748; Harper v. Barsh, 10 he is permitted to recover upon the 

Rich. Eq. (S. Car.) 149. bond itself." In Cruger v. Daniel, 

"Long V. Long, 16 N. J. Eq. 59, 1 McMuU Eq. 57, the Chancellor, 

and cases cited there. referring to Clarke v. Abingdon, 

=» Clarke v. Abingdon, 17 Ves. 106. very justly remarks that the mort- 

Mr. Chancellor Green, in Long v. gage there did not secure the bond. 

Long, 16 N. J. Eq. 59, says, in ref- nor did it secure or refer to the 



I'J'l THE AMOUNT OF THE DECREE § 1594 

ment, not of a bond, but of the sum for which the bond was given, 
together with all interest that may grow due thereon. The same sum, 
therefore, is differently secured by different instruments; by a pen- 
alty and by a specific lien. The creditor may resort to either, and if 
he resorts to the mortgage the penalty is out of the question." The 
American cases go further than this, and hold that the real debt is 
the sum specified in the condition of the bond, with interest, and that 
the penalty is a mere matter of form in the instrument declaring the 
debt. This is the view taken by Chancellor Walworth, and followed in 
other cases. "The amount secured by the condition of the bond is 
the real debt, which he was both legally and equitably bound to pay. 
And if he neglects to pay the money when it becomes due, there is no 
rule of justice or common sense which should excuse him from the 
payment of the whole amount of the principal and interest, whether 
it be more or less than the former penalty of the bond."^" A decree 
for the amount of the face of a bond with interest, when the bond is 
in double the true amount of the debt, is erroneous, and a sale under 
it will be enjoined.^" 

§ 1594. Interest. — The decree should be for the amount of the 
debt, with interest thereon if it bears interest.*^ If the interest has 
been paid by a note of the mortgagor, and this remains outstanding, 
the amount of such note should be included in the decree, not only as 
against the mortgagor, but as well against subsequent incumbrancers, 
although the interest is indorsed on the mortgage note as paid.*^ If 
the debt does not bear interest the decree should not include interest.*^ 
Upon the foreclosure of a mortgage against a subsequent grantee of 
the mortgaged premises who has not assumed and agreed to pay the 
debt, the mortgagee is entitled to only such rate of interest as is speci- 
fied in the mortgage as recorded, although the notes themselves specify 
a greater rate.*^ He may be allowed interest upon amounts paid for 

penalty; and he holds that when "Stickney v. Stickney, 77 Iowa 

the mortgage expressly refers to 699, 42 N. "W. 518; Walker v. Ven- 

the bond and states the penalty, ters, 148 N. Car. 388, 62 S. B. 510; 

this is the entire debt secured, and Liskey v. Snyder, 66 "W. Va. 149, 

the judgment can not go beyond it. 66 S. E. 702. 

™ Mower v. Kip, 6 Paige (N. Y.) "Frink v. Branch, 16 Conn. 260. 

88, 29 Am. Dec. 748; approved in See ante § 925. 

Long V. Long, 16 N. J. Eq. 59, in "Heydle v. Hazlehurst, 4 Bibb 

which case Chancellor Green fully (Ky.) 19. 

reviews the decisions. Anderson v. "Gardner v. Emerson, 40 111. 296; 

Smith, 108 Mich. 69, 65 N. W. 615; Gilchrist v. Gough, 63 Ind. 576, 30 

Shelden v. Barlow, 108 Mich. 375, Am. Rep. 250; Whittacre v. Fuller, 

66 N W 338 5 Minn. 508; George v. Butler, 26 

« Scriven v. Hursh, 39 Mich. 98. Wash. 456, 67 Pac. 263. 



§ 1595 DECREE OF SALE 173 

taxes and other claims upon the property; but he should not be al- 
lowed more than the legal or usual rate of interest as against a junior 
incumbrancer, though he may have an agreement with the mortgagor 
for a higher rate of interest.*^ Interest upon a purchase-money mort- 
gage, upon land to which the mortgagee had no title till long after 
his conveyance to the mortgagor, should only be allowed from the 
time the mortgagee made the title valid and effectual, unless the mort- 
gagor has derived a profit from the possession and use of the property; 
and not even in that case if it appears that the use of the land was 
of value to the mortgagor by reason of improvements made by him 
upon the land.*" Under a provision of the Constitution of California 
declaring that any contract obliging the debtor to pay the tax on the 
money loaned shall be void as to any interest specified therein and as 
to such tax, a provision in a mortgage that, in case of foreclosure, the 
mortgagee may include therein all payments made by him for "taxes 
of this mortgage, or the money hereby secured," is void. But this 
provision is for the benefit of the borrower, and he may waive it if he 
sees fit. If he voluntarily fulfils his promise to pay interest, it is 
through a mistake of law on his part, or a waiver of a known right. 
In either case he is bound by his own act, and can not recover it, or 
have it credited on the principal of the loan.^^ The court should not 
combine principal and interest of several notes payable at different 
times into a new principal and decree its payment, with interest, from 
the date of the decree, when some of the notes have not matured at 
that date.** In making a final decree it is erroneous to include therein 
interest on the principal to a time beyond the date of the decree.*^ 

§ 1595. Exchange. — No allowance can be made for the difference 
of exchange, though the mortgage loan was negotiated in a foreign 
country where the mortgagee resides.^" 

§ 1596. Insurance— Rent paid to protect estate. — Premiums paid 
by the mortgagee for insurance against fire are a charge upon the 
premises if the mortgagor has expressly made them such ; but if paid 
without such agreement, they can not be allowed in the judgment." 

'"Butterfield v. Hungerford, 68 go. B9. See also Gibbes Machinery 

Iowa 249, 26 N. W. 136. Co. v. Hamilton (S. Car.). 84 S. B. 

"Toms V. Boyes, 59 Mich. 386, 26 296. 

N. W. 646. '"Chapman v. Robertson, 6 Paige 

«Harralson v. Barrett, 99 Cat. (N. Y.) 627, 31 Am. Dec. 264. See 

607, 34 Pac. 342. ante § 637. 

«Ware v. Hewitt, 63 W. Va. 47, "Burgess v. Southbridge Sav. 

09 S. B. 756. Bank, 2 Fed. 500; Loughridge v. 

^'Laflln v. Gato, 50 Fla. 558, 39 



173 THE AJrOUXT OP THE DECEEE § 1597 

They are, in such case, paid merely for the mortgagee's own security. 
Premiums for insurance paid after the commencement of the action 
will not be allowed except upon a supplemental complaint.^^ The in- 
surance recoverable is generally limited to the amount necessary to 
protect the mortgagee's interest in the property,^' and the amount 
paid must be established by proof. ^* Doubtless provision might be 
made in the decree for reimbursing the mortgagee for money paid by 
him for insurance during the year allowed by statute for redemption 
before sale, where the mortgage contains covenants that the mort- 
gagor would keep the premises insured, or that, in case of his failure 
to insure, the mortgagee might do so, and that the premiums should 
become part of the mortgage debt. But if no provision be inserted in 
the decree authorizing the sheriff to pay, out of the proceeds of the 
sale, any sums which the mortgagee might be compelled to pay there- 
after to keep the property so insured during the year allowed by the 
statute for redemption before sale, the court has no authority, after 
a sale of the land for the exact amount specified in the judgment, to 
enter further judgment or order for the amount so paid by the mort- 
gagee for insurance against the parties personally liable for the mort- 
gage debt, and award execution therefor.^^ If the mortgage be of a 
leasehold estate, the decree may include rent paid by the mortgagee 
for the protection of the estate.°° 

§ 1597. Taxes. — A mortgagee can not charge to the mortgagor, or 
have included in a decree in a foreclosure suit, the amount he has 
paid as taxes on his mortgage as for money at interest. He is as much 
bound to pay the tax upon this as upon his other property. °' But he 
may be allowed for payments made upon taxes assessed upon the land, 
and which are a charge upon it, properly payable by the mortgagor/^ 
including taxes he has paid pending the foreclosure suit before the 

Northwestern Mut. L. Ins. Co., 180 "Buszin v. Martinowicz, 178 111. 

111. 267, 54 N. E. 153; Faure v. App. 519. 

Wlnans, Hopk. Ch. (N. Y.) 283, 14 "= Northwestern Mut. L. Ins. Co. 

Am. Dec. 545. One bondholder pay- v. Drown, 15 Wis. 419. 

ing the premiums to preserve the ■"'Robinson v. Ryan, 25 N. Y. 320. 

security, though without the knowl- "Pond v. Causdell, 23 N. J. Eq. 

edge of the other bondholders, has 181. 

a lien for the amount paid. McLean ^ Loughridge v. Northwestern 

V. Burr, 16 Mo. App. 240. See ante Mut. F. Ins. Co., 180 111. 267, 54 N. 

§ 414. E. 153; Abbott v. Stone, 172 111. 434, 

=" Washburn v. Wilkinson, 59 Cal. 50 N. E. 328, affirming 70 111. App. 

538. 671; Boone v. Clark, 129 111. 466, 21 

"City Lumber Co. v. Hollands N. E. 850; De Leuw v. Neely, 71 

(Mich.), 148 N. W. 361. 111. 473; Douglass v. Miller, 102 111. 



§ 1597 DECEEE OF SALE 174 

rendering of the decree/" and street improvement assessments.*" The 
bill should contain a proper allegation and prayer in regard to taxes, 
otherwise the decree can not properly direct an application of the 
proceeds of a sale to the pajrment of the delinquent taxes.*^ An al- 
lowance for taxes can not be made under a general prayer for relief.*^ 
When the taxes remain outstanding and unpaid, the decree may, upon 
the application of the plaintiflE, properly direct that the taxes due on 
the property be first paid out of the proceeds of the sale.*^ In render- 
ing judgment for a deficiency against a purchaser who has assumed 
the payment of a mortgage, it is proper that the taxes due upon the 
property should be deducted from the proceeds of the sale before ascer- 
taining the deficiency, for it is the duty of the purchaser to see that 
the taxes are paid."* But after trial in the foreclosure suit, and with- 
out notice to the mortgagors, it is error to include the taxes in a judg- 
ment entered merely upon the production of the tax receipt."^ If 
the taxes were illegally assessed and the payment thereof might have 
been successfully resisted, the mortgagee will not be allowed to re- 
cover them."" If money has been paid under a foreclosure judgment 
upon an assessment which is afterward vacated, the payment being 
out of money to which the mortgagor would be entitled, as surplus 
money after sale, he is entitled to recover the money so paid."' Inter- 
est is properly allowed on the taxes legally paid by the mortgagee."* 
If the mortgagee has taken a tax title for the purpose of protecting 

App. 345; Seaman v. Huffaker, 21 '"Phillips v. Phillips, 163 Cal. 530, 

Kans. 254; Young v. Omohundro, 69 127 Pac. 346. 

Md. 424, 16 Atl. 120; Neale v. Hag- °^ Brown v. Miner, 128 111. 148, 

thorpe, 3 Bland (Md.) 551, 590; 21 N. E. 223; DeLeuw v. Neely, 71 

Farwell v. Bigelow, 112 Mich. 285, 111. 473. 

70 N. W. 579; Vaughn v. Nims, 36 "''Brown v. Miner, 21 111. App. 60, 

Mich. 297; Johnson v. Payne, 11 21 N. B. 223. 

Nehr. 269, 9 N. W. 81; Southard v. ■« Harris v. McCrossen, 31 Kans. 

Dorrington, 10 Nebr. 119, 4 N. W. 402; Opdyke v. Crawford, 19 Kans. 

935; Rapelye v. Prince, 4 Hill (N. 604; Tuck v. Calvert, 33 Md. 209, 

Y.) 119, 40 Am. Dec. 267; Faure V. 224; Baston v. Pickersglll, 55 N. Y. 

Winans, Hopk. Ch. (N. Y.) 283, 14 310; Poughkeepsie Sav. Bank v. 

Am. Dec. 545; Silver Lake Bank v. Winn, 56 How. Pr. (N. Y.) 368; 

North, 4 Johns. Ch. (N. Y.) 370; Ketcham v. Fitch, 13 Ohio St. 201. 

Burr V. Veeder, 3 Wend. (N. Y.) " Fleishhauer v. Doellner, 60 How. 

412. See ante § 1134 and post § Pr. (N. Y.) 438. 

1683. ™ Northwestern Mut. Life Ins. Co. 

''Brookway v. McClun, 243 111. v. Allis, 23 Minn. 337. 

196, 90 N. B. 374; Thackaberry v. ""Atwater v. West, 28 N. J. Eq. 

Johnson, 131 111. App. 463; Com- 361. 

mercial Nat. Bank v. Gaukler, 165 "Brehm v. New York, 104 N Y. 

Mich. 403, 130 N. W. 655; Jehle v. 186, 10 N. E. 158. 

Brooks, 112 Mich. 131, 70 N. W. " Wright v. Conservative Inv. Co., 

440. 49 Ore. 177, 89 Pac. 387. 



175 THE AMOUNT OF THE DECREE § 1597 

the mortgage, the decree may properly provide that on payment of 
the cost of the tax title with interest the mortgagee shall assign the 
tax title.^® If a mortgagee has paid the taxes to protect his security, 
and afterward forecloses his mortgage without including the amount 
so paid in his complaint, he can not thereafter maintain an action to 
recover such amount, for the reason that the claim for taxes became 
merged in the mortgage, and constitutes but a single and indivisible 
demand, and could not be separated and collected by several actions. '''' 
The result is similar in case the mortgagee pays the taxes to enable 
him to negotiate the mortgage, and he afterward sells the mortgage 
to the mortgagors, and executes and delivers an unconditional release 
of the mortgage and the debt secured thereby. The mortgagee can 
not afterward maintain an action against the mortgagors for the 
amount of the taxes so paid.'^ Where a judgment entered upon the 
foreclosure of a second mortgage provided that out of the moneys 
arising from the sale there should be deducted any liens on the prem- 
ises for taxes, but the whole amount realized at the sale was paid to 
the mortgagee without deducting or paying the taxes, in an action by 
the" first mortgagee, after foreclosing his mortgage against the second 
mortgagee who had purchased at the previous sale,* to recover the 
amount paid for taxes upon the premises, it was held that he was not 
entitled to recover. The first mortgagee not having been a party to 
the judgment upon the second mortgage, he was not entitled to en- 
force its provisions.'^ The purchaser of the property at the fore- 
closure sale has the right to insist upon the payment of the taxes in 
accordance with the judgment.'^ The payment of taxes by a second 
mortgagee to prevent the first mortgagee from foreclosing, is volun- 
tary as to the first mortgagee, and where the first mortgagee fore- 
closes his mortgage and purchases the property for only enough to pay 
the amount due him, he is not liable to the second mortgagee for the 
taxes so paid.'* A decree is not rendered invalid by the failure of the 
plaintiff to file an aflBdavit showing the payment of taxes required by 
the laws of the jurisdiction.''' 

^ Baker v. Clark, 52 Mich. 22, 17 " Pearmain v. Massachusetts Hos- 

N. W. 225. pital Life Ins. Co., 206 Mass. 377, 

"Johnson v. Payne, 11 Nebr. 269, 92 N. B. 497. See also Walsh v. 

9 N. W. 81. Robinson, 135 Mich. 16, 97 N. W. 

"Kersenbrock v. Muff, 29 Nebr. 55; Jamaica Sav. Bank v. Butler, 

530, 45 N. W. 778. 79 Vt. 372, 65 Atl. 92. 

"Mutual Life Ins. Co. v. Sage, 28 "Nevada Consol. Min. &c. Co. v. 

Hun (N. Y.) 595, 41 Hun 535. Lewis, 34 Nev. 500; 126 Pac. 105. 

"People V. Bergen, 53 N. Y. 404. 



§ 1598 DECEEE OF SALE 176 

§ 1598. Costs incurred in previous action. — Costs incurred in a 
previous action at la-w^ upon the note, and the expenses of a suit prose- 
cuted in good faith to collect the debt out of personal property assigned 
as collateral security for the same debt, should be allowed in the de- 
cree as a part of the mortgage debt.'^^ 

§ 1599. Disbursements in proceedings for foreclosure — ^Abstracts. 

— The disbursements made by the plaintifE in the proceedings for 
foreclosure, if legally and properly made, are always allowed to him, 
though not strictly costs.''^ Payments made by the plaintiff, to pro- 
tect his interest by redeeming from prior incumbrances, may be 
tacked to his own mortgage debt.'* Inasmuch as the junior mortgagee 
is thus subrogated to the prior mortgage, his decree should include 
interest on that mortgage at the rate borne by it to the date of the 
decree.'" If the mortgagee in possession has made repairs or improve- 
ments for which he is entitled to compensation, or if a purchaser un- 
der an imperfect foreclosure, who is in effect a mortgagee in posses- 
sion, makes such repairs or improvements, he should ask to have them 
allowed for in the decree. If the decree is entered without including 
any claim for aepairs, another bill can not be brought to make them 
a charge upon the property. The decree as entered is conclusive of 
the amount due on the mortgage.*" The court will generally refuse 
an allowance for money paid for searches or the continuation of an 
abstract of title not provided for in the mortgage or trust deed.*^ 

§ 1600. Final judgment. — A judgment which settles all the rights 
of the parties and directs a sale of the premises, and that the de- 
fendant pay any deficiency which may arise after such sale, is a final 
decree from which an appeal may be taken ; though in a limited sense 
it is interlocutory, inasmuch as further proceedings are necessary to 
carry it into effect.*^ It leaves nothing further to be adjudicated.'^ 

'"Pettibone v. Stevens, 15 Conn. Armstrong v. Fisher, 73 N. J. Eq. 

19, 38 Am. Dec. 57. See ante § 1084. 228, 66 Atl. 1071. 

"Benedict v. Warrlner, 14 How. «^ Grant v. Phoenix Ins. Co., 106 

Pr. (N. Y.) 568. U. S. 429, 431, 27 L. ed. 237, 1 Sup. ' 

™ Kelly v. Longshore, 78 Ala. 203; Ct. 414; Malone v. Marriott, 64 Ala. 

Hosier v. Norton, 83 111. 519; Dl- 486; Florida Fertilizer Mfg. Co. v. 

mick V. Grand Island Banking Co., Hodge, 64 Fla. 275, 60 So. 127; Hicks 

37 Nebr. 394, 55 N. W. 1066. v. Elwell, 129 111. App. 561; Dodge 

"Mosier v. Norton, 83 111. 519. v. Allis, 27 Minn. 376, 7 N. W. 732; 

»» Dewey v. Brownell, 54 Vt. 441, Clark v. Levy, 130 App. Div. 389, 

41 Am. Rep. 852. 114 N. Y. S. 890. 

'VBuszin V. Martinowicz, 178 111. »' Dodge v. Allis, 27 Minn. 376; 

App. 519; Mayer v. Jones, 132 App. Bolles v. Duff, 43 N. Y. 469, 10 Abb. 

Div. 106, 116 N. Y. S. 300. But see Pr. (N. S.) 399, 41 How. Pr. 355; 



177 THE AlIOUNT OF THE DECREE § 1600 

All prior decrees are interlocutory.'* It is no objection to such judg- 
ment that it was not rendered by a coart composed of the same judges 
who rendered the preliminary judgment, ascertaining and settling the 
rights of the parties and ordering judgment.*" A final decree order- 
ing, in default of payment, that the mortgaged property be sold, is 
not properly speaking, a money decree, even though the master ap- 
pointed to make the sale is directed to report any deficiency.*" The 
judgment for a deficiency is entered upon the coming in, and con- 
firmation of, the report of the sale without any further application 
to the court. The execution issues by virtue of the judgment of fore- 
closure.*^ ITothing remains to be judicially determined, and an ap- 
peal may be taken at once.** An action may be brought on a decree 
which ascertains the indebtedness of the defendant, though a sale of 
the land is ordered to satisfy the decree.** A decree determining the 
amount of the mortgage debt, and ordering a sale unless the same is 
paid by a day named, but also making a reference to a master to re- 
port the amount of prior liens, a detailed statement of the several 
properties covered by the mortgage, and a statement as to the order of 
sale and as to the form of the advertisement, is not a final decree 
from which an appeal may be taken.'" An order adjudging that plain- 
tiff has a lien on the premises described in the complaint to secure his 
debt, and directing that an account be taken to ascertain the amount 
thereof, and retaining the case for further action, is not appealable. 
It is merely an interlocutory order.' ^ A decree of foreclosure can not 

Morris v. Morange, 38 N. Y. 172, 4 " Kimbrell v. Rogers, 90 Ala. 339, 

Abb. Pr. (N. S) 447; Hipp v. Hu- 7 So. 241. 

chett, 4 Tex. 20. A decree in effect "Chamberlain v. Dempsey, 36 N. 

that unless a junior mortgagee, Y. 144, reversing 9 Bosw. 540. 

within a prescribed time, gives the "Brevard Naval Stores Co. v. 

prior mortgagee notice of his desire Commercial Bank of Jacksonville 

and intention to redeem the lands (Fla.), 64 So. 943. 

purchased by the latter at a for- " Bicknell v. Byrnes, 23 How. Pr. 

mer foreclosure sale, he is forever (N. Y.) 486. 

barred and foreclosed of and from *« Bolles v. Duff, 43 N. Y. 469 ; Mor- 

all right, title, interest, and equity ris v. Morange, 38 N. Y. 172. 

of redemption therein, and the lien »»Rowe v. Blake, 99 Cal. 167, 33 

of his mortgage thereon cut off and Pac. 864, 37 Am. St. 45. 

foreclosed, and that the plaintiff "Parsons v. Robinson, 122 U. S. 

shall hold the title thereto free 112, 30 L. ed. 1122, 7 Sup. Ct. 1153; 

from such lien, is a final judgment Railroad Co. v. Swasey, 23 Wall. 

and appealable. If the notice is not (U. S.) 405, 409, 23 L. ed. 136; Bost- 

glven, no further judgment need be wick v. Brinkerhoff, 106 U. S. 3, 27 

entered but this decree, by the force L. ed. 73, 1 Sup. Ct. 15. 

of its own provisions, effectually des- " Williams v. Walker, 107 N. Car. 

troys the lien of the defendant's 334, 12 S. E. 43; Blackwell v. Mc- 

mortgage. Moulton v. Cornish, 138 Caine, 105 N. Car. 460, 11 S. E. 360. 

N. Y. 133, 33 N. E. 842. 

12 — Jones Mtg. — ^Vol. III. 



§ 1600a DECREE OF SALE 178 

be changed to the detriment of the mortgagor without notice to him.®^ 
The decree is a final judgment, upon which the parties to the suit 
may rely; and any modification of it without lawful notice, particu- 
larly after the term at which it was rendered, is null and void."* But 
a mere mistake in the record entry of a decree may be corrected by 
the court at the term at which it was rendered, or by virtue of a 
statute at a subsequent term, so as to make the same correspond with 
the decree actually pronounced by the court, and to conform to the 
pleadings in the case.°* 

§ 1600a. Appeal. — An appeal is the proper remedy for any errors 
in substance of the decree, or in the directions for carrying it into 
execution."' After a decree from which no appeal is taken, and after 
a sale under such decree, a mortgagor, who was a party to the fore- 
closure suit, is estopped by the decree from maintaining a suit to re- 
cover possession of the property on the ground that the mortgage was 
invalid. The question of the validity of the mortgage is res adju- 
dicata."' A judgment of foreclosure and a judgment for a deficiency 
are each appealable, but both judgments can not be included in one 
appeal."^ A suit to have a deed declared a mortgage and foreclosed 
is a suit in equity and is appealable."^ The reviewing court indulges 
all presumptions in favor of the regularity of the decree and the 
showing on which it is based, and the burden of showing the contrary 
is on the one asserting error."" N"o consideration will be given to ob- 
jections not made in the court below.^ The court will not reverse for 
unsubstantial errors.^ The findings of a master approved by the court 

'^Symns v. Noxon, 29 Nebr. 404, '"Sherman v. Goodwin, 12 Ariz. 

45 N. W. 680. 42, 95 Pac. 121; Matz v. Arick, 76 

" Homan v. Helman, 35 Nebr. 414, Conn. 388, 56 Atl. 630; National 

53 N. W. 369; Blake v. McMurtry, Life Ins. Co. v. Crandall, 2 Nebr. 

25 Nebr. 290, 41 N. W. 172. (UnofC.) 335, 96 N. W. 624; Kings- 

"•Hoagland v. Way, 35 Nebr. 387, ley v. Svoboda, 2 Nebr. (UnofE.) 234, 

53 N. W. 207. 96 N. "W. 518; First Nat. Bank v. 

"> Barnard v. Bruce, 21 How. Pr. Citizens' State Bank, 11 Wyo. 32, 

(N. Y.) 360. 70 Pac. 726, 100 Am. St. 925. 

•' Robinson v. "Walker, 81 Ala. 404, » Sperry v. Butler, 75 Conn. 369, 

1 So. 347. 53 Atl. 899; First Nat. Bank v. Da- 

■" dinger v. Liddle, 55 Wis. 621, vis, 146 111. App. 462; Miller v. Mc- 

13 N. W. 703; Ballon v. Chicago & Laughlin, 141 Mich. 433, 104 N. W. 

N. W. R. Co., 53 Wis. 150, 10 N. 780; Lyle v. Armstrong, 235 Pa. 

W. 87. See also Wisconsin National 227, 83 Atl. 578. 

Loan &c. Assn. v. Pride, 136 Wis. ' Union Trust Co. v. Electric Park 

102, 116 N. W. 637. Amusement Co., 168 Mich. 574, 135 

"^ Fleurot v. Fletcher, 28 Ohio Cir. N. W. 115. 
Ct. 841, judgment affirmed 73 Ohio 
St. 381, 78 N. E. 1125. 



179 COSTS § 1602 

will not be disturbed on review unless they are plainly and clearly 
against the evidence.* An order of restitution on reversal may not be 
granted in a proceeding to which the purchaser is not a party/ The 
purchaser at the sale, on restitution of the property, after reversal, 
is entitled to credit for the amount of the taxes paid by him and re- 
pairs and improvements made, including insurance, if any, and is 
chargeable with all the rents and proiits.^ If upon an appeal the 
judgment for a deficiency is modified so that no personal judgment 
shall be entered against one of the defendants, but in other respects 
the judgment is afiBrmed, the former judgment is not vacated, and a 
sale of the mortgaged premises under it, pending the appeal, is not 
rendered void.^ 

§ 1601. Stay of proceedings on account of controversy between 
subsequent incumbrancers. — No stay of proceedings can be had on ac- 
count of a controversy between subsequent incumbrancers. In case 
of an appeal from a decree of sale on a bill to foreclose a mortgage, 
the amount of which and of other mortgages upon the property are 
not disputed, though there is a controversy about the validity of cer- 
tain judgments subsequent to the mortgages, the court will not stay 
proceedings under the decree, but will order the surplus money to be 
brought into court to abide its decision; for in such case, if the de- 
cree should be reversed, the mortgagor can not be prejudiced, while 
the mortgage creditors would be prejudiced by a delay in recovering 
their claims.'^ 

V. Costs 

Section Section 

1602. In general. 1606a. Stipulation for attorney's fee 

1603. Costs as dependent on stat- as usury — Miscellaneous 

utes and practice of the sev- matters. 

eral states. 1606b. Attorney's fees under stat- 

1604. Costs where subsequent in- utes of other states. 

cumbrancers unnecessarily 1606c. Expenses provided in mort- 
appear and answer. gage. 

1605. Costs to defendants who prop- 1607. Costs of irregular attempts at 

erly appear and answer. foreclosure. 

1606. Attorney's fees. 

§ 1602. In general. — The mortgagee in a foreclosure suit as in 
other cases is ordinarily entitled to his costs of suit, when he prevails 

' Cahill v. Lauf, 133 111. App. 607. « Batchelder v. Brickell, 75 Cal. 

^Schieck v. Donohue, 81 App. 373, 17 Pac. 441. 

Div. 168, 80 N. Y. S. 739. ' Schenck v. Conover, 13 N. J. Eq. 

^National Surety Co. v. Walker, 31. 
148 Iowa 157, 125 N. W. 338, 38 L. 
R. A. (N. S.) 333. 



§ 1603 DECREE OF SALE 180 

and obtains a decree, whether he be complainant or defendant.^ The 
costs are usually paid out of the proceeds of the sale.'' If, however, he 
has acted oppressively in demanding a larger sum than was due on 
his mortgage, and the mortgagor has been diligent in endeavoring to 
ascertain from him the amount of the incumbrance in order to pay 
it, costs will be denied to him, or possibly, in some cases, awarded 
against him f but merely claiming in good faith a larger sum than the 
court finally decides that he is entitled to is no ground for refusing 
him his costs.^ He may be made to pay costs if he has rejected a 
tender of the full amount due him,^ or if the litigation has in any 
way been occasioned by his misconduct. A solicitor may make him- 
self liable for costs incurred by a sale made by his direction when he 
knows that all the parties in interest Lave made a complete settlement 
of all the matters in controversy." Ih case of a partial reversal of the 
decree pf a lower court the apportionment of the costs is within the 
discretion of the court.'' The mortgagor is not chargeable for costs 
where there is no necessity for foreclosure,^ as where, under an agree- 
ment between the parties, it is to be resorted to only after consultation 
with the mortgagor.* The referee is usually allowed the same fees 
as the sheriff for making a sale.^" The mortgage may stipulate that 
costs shall be governed by the law of the jurisdiction where the mort- 
gage is executed.^^ Where the first sale is set aside, the expenses 
thereof may, in the absence of bad faith, be paid out of the proceeds 

^Uedelhofen v. Mason, 201 111. In New York it was formerly held 
465, 66 N. E. 364; Junk v. Zleske, that a tender made no difference in 
177 111. App. 103; Concklin v. Cod- the amount of the costs. Bartow 
dlngton, 12 N. J. Eq. 250, 72 Am. v. Cleveland, 16 How. Pr. (N. Y.) 
Dec. 393; Benedict v. GUman, 4 364, 7 Ahb. Pr. 339; Pratt v. Rams- 
Paige (N. Y.) 58; Loftus v. Swift, dell, 16 How. Pr. (N. Y.) 59, 62, 7 
2 Seh. & Lef. 642; Bartle v. Wilkin, Ahb. Pr. 340, n.; Stephens v. Veriane, 
8 Sim. 238; Witherell v. Collins, 3 2 Lans. (N. Y.) 90. But these cases 
Madd. 255. And without reference are overruled in Bathgate v. Has- 
to his success. Slee v. Manhattan kin, 63 N. Y. 261. 
Co., 1 Paige (N. Y.) 48; Vroom v. "Hobbs v. Lippincott (N. J. Eq.), 
Ditmas, 4 Paige (N. Y.) 526. 23 Atl. 955. 

'Carter v. Builders' Const. Co., 'Romberg v. McCormick, 194 111. 

130 App. Div. 609, 115 N. Y. S. 339. 205, 62 N. B. 537. 

' Large v. Van Doren, 14 N. J. Eq. « Williams v. Williams, 117 Wis. 

208; Van Buren v. Olmstead, 5 125, 94 N. W. 25. 

Paige (N. Y.) 9; Vroom v. Ditmas, "Feigner v. Slingluff, 109 Md. 474, 

4 Paige (N. Y.) 526; Detillin v. 71 Atl. 978. See also Matheson v. 

Gale, 7 Ves. 583. Rogers, 84 S. Car. 458, 65 S. E. 1054. 

* Loftus V. Swift, 2 Sch. & Lef. i° Harrington v. Bayles, 40 Misc. 

642. 388, 82 N. Y. S. 379, 33 Civ. Proc. 

» Castle T. Castle, 78 Mich. 298, 44 363, 13 N. Y. Ann. Cas. 36. 

N. W. 378; Pratt v. Stiles, 9 Abb. "Newton v. Hunt, 59 Misc. 633, 

Pr. (N. Y.) 150, 17 How. Pr. 211. 112 N. Y. S. 573. 



181 COSTS § 1604 

of the second sale.^^ The costs should be given the defendant where 
judgment is entered in his favor.^^ It is proper to refuse costs in a 
decree of foreclosure entered on a cross-bill in a suit to perfect title, 
■where foreclosure may be denied prior to the time the plaintiff's title 
is perfected.^* Statutes authorizing the giving of cost bonds by surety 
companies are generally held not unconstitutional as class legis- 
lation.^^ 

§ 1603. Costs as dependent on statutes and practice of the several 
states. — The matter of costs depends very much upon the statutes 
and practice of the several states, vsfhich are quite unlike. The fore- 
closure suit being an equitable one, the costs are generally within the 
discretion of the court.^* But although there is no fixed rule for giv- 
ing costs as in courts of law, the courts rarely, if ever, refuse costs.^^ 
The disbursements made for carrying on the suit are not strictly costs ; 
but if they are legally made and are of a reasonable amount they are 
allowed to the party making them.^* Provision is sometimes made 
that a plaintiff may serve upon a defendant a notice that no personal 
claim is made upon him ; and that in such case no service of the com- 
plaint by copy need be made on such defendant ; and then, in case he 
unnecessarily defends, he is liable in costs to the plaintiff.^" If a 
copy of the complaint be served, no notice for this purpose is re- 
quired.^" Where a mortgage secures debts to two persons and one of 
them claims a foreclosure decree and sale at his own expense, he is 
entitled to costs out of the fund, or by contribution from the other 
who accepted the benefit of his efforts.^^ 

§ 1604. Costs where subsequent incumbrancers unnecessarily ap- 
pear and answer. — If subsequent incumbrancers unnecessarily appear 
and answer, they are not entitled to costs until after the plaintiff's debt 

"Griffith v. Dale, 109 Md. 697, 72 Y.) 655; Gallagher v. Egan, 2 Sandf. 

Atl. 471. (N. Y.) 742. 

"Brown v. Skotland, 12 N. Dak. "Garr v. Bright, 1 Barb. Ch. (N. 

445, 97 N. W. 543. Y.) 157; Eastburn v. Kirk, 2 Johns. 

"Mock V. Chalstrom, 121 Iowa Ch. (N. Y.) 317; Stevens v. Veriane, 

411, 96 N. W. 909. 2 Lans. (N. Y.) 90. 

"Investors' Syndicate \. Pugh, "Benedict v. Warriner, 14 How. 

25 N. Dak. 490, 142 N. W. 919. Pr. (N. Y.) 568. 

">Garr v. Bright, 1 Barb. Ch. (N. "Code of N. Y, §§ 131, 157. 

Y.) 157; O'Hara v. Brophy, 24 How. =»0'Hara v. Brophy, 24 How. Pr. 

Pr. (N. Y.) 379; Bartow v. Cleve- (N. Y.) 379. 

land, 16 How. Pr. (N. Y.) 364; Pratt ^Trustees v. Greenough, 105 U. 

V. Ramsdell, 16 How, Pr. (N. Y.) S. 527, 532, 26 L. ed. 1157, per Brad- 

59, 62; Lossee v. Ellis, 13 Hun (N. ley, J.; Currie v. Bittenbinder (N. 

J.), 7 Atl. 872. 



§ 1605 DECREE OF SALE 183 

and costs are satisfied/^ and it is not necessary that they should ap- 
pear to a foreclosure suit if their claims are correctly set forth in the 
bill, as their rights will be fully protected under the decree. Where 
the court has discretionary powers in regard to costs, and the appear- 
ance of such incumbrancers though proper is not necessary, the plain- 
tiff, upon receiving the amount due him after he has brought suit, may 
discontinue against subsequent incumbrancers who have appeared, 
without costs to them.^^ Ordinarily, however, a subsequent mortgagee 
would be entitled to costs in such case.^* If a second mortgagee, after 
being made a party to a suit to foreclose a prior mortgage, receives 
payment and offers to disclaim, he is entitled to his costs.^^ A sub- 
sequent purchaser of the premises may make himself personally liable 
for costs, though not liable for the debt, if he makes an unreasonable 
and unfounded defense to the suit, and the property is not of suffi- 
cient value to pay the incumbrances.^" If a second mortgagee, upon 
a bill to foreclose his mortgage upon several lots, makes the holders of 
the prior mortgages upon these lots parties, and they appear and prove 
their claims, the costs of obtaining the decree, as well as the costs 
of sale, should be borne by all the parties who accept the benefit 
of the proceedings, in proportion to the respective amounts received 
by them, although not enough be received to pay the prior mortgages 
in full." 

§ 1605. Costs to defendants who properly appear and answer. — 

Defendants who properly appear and answer and make a valid de- 
fense are entitled to costs as a general rule. But several defendants 
having the same defense and employing the same solicitor are not al- 
lowed to swell the costs by filing separate answers.^* A prior mortga- 
gee, whether properly made a party for the purpose of having the 
amount of his claim ascertained,^' or whether improperly joined, is 
entitled to costs, to be paid out of the fund in the one case, or in the 
other by the plaintiff personally.^" 

=" Barnard v. Bruce, 21 How. Pr. "Scott v. Somers (N. J.), 9 Atl. 

(N. Y.) 360; Merchants' Ins. Co. v. 718. 

Marvin, 1 Paige (N. Y.) 557. =»Danbury v. Robinson, 14 N. J. 

^ Gallagher v. Egan, 2 Sandf. (N. Eq. 324. 

Y.) 742. » Berlin Building &c. Assn. v. 

""Young V. Young, 17 N. J. Eg. Clifford, 30 N. J. Bq. 482; Chamber- 

161. lain v. Dempsey, 36 N. Y. 144, 147; 

""Day V. Gudgen, L. R. 2 Ch. Biv. Boyd v. Dodge, 10 Paige (N. Y.) 42. 

209. "Millandon v. Brugiere, 11 Paige 

""Danbury v. Robinson, 14 N. J. (N. Y.) 163. 
Eq. 324. 



183 



COSTS 



1606 



§ 1606. Attorney's fees.'^ — A reasonable fee for the expense of 
foreclosing beyond the costs allowed by law may he contracted for in 



'^A stipulation for attorney's fees 
is valid in: 

Alabama: Munter v. Lynn, 61 
Ala. 492; Wells v. American Mtg. 
Co., 109 Ala. 430, 20 So. 136; Lang- 
ley V. Andrews, 142 Ala. 665, 38 So. 
238; Speakman v. Oaks, 97 Ala. 503, 
11 So. 836; Lehman v. Comer, 89 
Ala. 579, 8 So. 241; Bynum v. Fred- 
erick, 81 Ala. 489, 8 So. 198. 

California: Leahy v. Warden, 163 
Cal. 178, 124 Pac. 825; Avery v. 
Mande, 112 Cal. 565, 44 Pac. 1020; 
Hewitt V. Dean, 91 Cal. 5, 27 Pac. 
423; White v. Allatt, 87 Cal. 245, 25 
Pac. 420; Grangers' Assn. v. Clark, 
84 Cal. 201, 23 Pac. 1081; Rapp v. 
Gold Co., 74 Cal. 532, 16 Pac. 325; 
Monroe v. Fohl, 72 Cal. 568, 14 Pac. 
514; Corson v. McDonald, 3 Cal. 
App. 412, 85 Pac. 861 (attorney's 
fee a lien on the land). Counsel 
fees stipulated to be paid are, like 
the costs, a mere incident to the 
cause of action, and may be fixed 
by the chancellor at his discretion, 
not exceeding the amount stipu- 
lated. Carriere v. Minturn, 5 Cal. 
435; O'Neal v. Hart, 116 Cal. 69, 47 
Pac. 926. Attorney's fees are fixed 
by the court without regard to any 
stipulations of the parties. Code 
Civ. Pro. 1903; App. 780, Act March 
27, 1874. Attorney's fees, not in 
terms made a lien upon the prop- 
erty, are limited to a personal re- 
covery against the mortgagor. Cor- 
tleyeu v. Jones, 132 Cal. 131, 64 Pac. 
119; Latimer v. Capay Valley Land 
Co., 137 Cal. 286, 70 Pac. 82; Klokke 
v. Bscailler, 124 Cal. 297, 56 Pac. 
1113; Irvine v. Perry, 119 Cal. 352, 
51 Pac. 544. 

Florida: Carhart v. Allen, 56 
Fla. 763, 48 So. 47 (no necessity 
for proof of reasonableness where 
amount fixed by contract) ; Kel- 
logg V. Singer Mfg. Co., 35 Fla. 991, 
17 So. 68; L'Engle v. L'Bngle, 21 
Fla. 131. 

Georgia: British &c. Mtg. Co. v. 
Worrill, 168 Fed. 120 (attorney's 
fees part of debt) ; Fechheimer v. 
Baum, 43 Fed. 719; Georgia R. Co. 
V. Pendleton, 87 Ga. 751, 13 S. E. 
822; National Bank v. Danforth, 80 



Ga. 55, 7 S. E. 546; Merck v. Ameri- 
can F. L. Mtg. Co., 79 Ga. 213, 7 S. 
B. 265. 

Idaho: Broadbent v. Brumback, 
2 Idaho 366, 16 Pac. 555. 

Illinois: Uedelhofen v. Mason, 
201 Bl. 465, 66 N. E. 364; Baker v. 
Jacobson, 183 111. 171, 55 N. E. 724; 
ShafCner v. Appleman, 170 111. 281, 
48 N. E. 978; Fuller v. Brown, 167 
111. 293, 47 N. B. 202; Casler v. By- 
ers, 129 111. 657, 22 N. E. 507; Barry 
V. Guild, 126 111. 439, 18 N. B. 759; 
Clawson v. Munson, 55 111. 394; 
Huber v. Brown, 148 111. App. 399. 

Indiana: Johnson v. Hosford, IIC 
Ind. 572, 10 N. E. 407; Billingsley 
V. Dean, 11 Ind. 331; Barry v. Snow 
den, 106 Fed. 571. 

Iowa: Guaranty S. & L. Assn. v. 
Ascherman, 108 Iowa 150, 78 N. W. 
823; Livermore v. Maxwell, 87 Iowa 
705, 55 N. W. 37; Sperry v. Horr, 
32 Iowa 184; Weatherby v. Smith, 
30 Iowa 131, 6 Am. Rep. 663. By 
statute, 18 Gen. Assembly, ch. 185, 
§ 3, an aflldavit to certain facts is 
to be filed before the attorney's fee 
is allowed. See Fletcher v. Kelly, 
88 Iowa 475, 55 N. W. 474, 21 L. R. 
A. 347. 

Kansas: Seaton v. Scovill, 18 
Kans. 433, 435, 26 Am. Rep. 779; 
Tholen v. Duffy, 7 Kans. 405; How- 
enstein v. Barnes, 5 Dill. (U. S.) 
482, 29 Am. Rep. 406. 

Louisiana: Robson T. Beasley, 
118 La. 738, 43 So. 391 (fees may be 
allowed on all notes for default in 
payment of any) ; Hardy v. Pecot, 
113 La. 350, 36 So. 992 (fee due on 
all notes matured and not ma- 
tured) ; Hansen v. Creditors, 49 La. 
Ann. 1731, 22 So. 923 ; Levy v. Beas- 
ley, 41 La. Ann. 832, 6 So. 630; Suc- 
cession of Duhg, 41 La. Ann. 209, 6 
So. 502; Mullan v. His Creditors, 
39 La. Ann. 397, 2 So. 45; Dietrick 
V. Bayhi, 23 La. Ann. 767. 

Minnesota: Gen. Stat. 1913, 
§§ 8170, 8171; Murray v. Chamber- 
lain, 67 Minn. 12, 69 N. W. 474; 
Brown v. Baker, 65 Minn. 133, 67 
N. W. 793; Larocque v. Chapel, 63 
Minn. 517, 65 N. W. 941; Eliason v. 
Sidle, 61 Minn. 285, 63 N. W. 730; 



§ 1606 



DECREE OF SALE 



184 



the mortgage; and the court will consider the amount stipulated for 
by the parties to be reasonable, unless it be extravagantly large and 
extortionate or was inserted as a cover for usury.^^ Courts should 



Jones V. Radatz, 27 Minn. 240, 6 N. 
"W. 800; Griswold v. Taylor, 8 Minn. 
342. As to affidavit under the stat- 
ute, see Johnson v. Northwestern 
L. &c. Assn., 60 Minn. 393, 62 N. W. 
381; Brown v. Baker, 65 Minn. 133, 
67 N. W. 793; Brown v. Scandia 
Bldg. &c. Assn., 61 Minn. 527, 63 N. 
"W. 1040; Morse v. Home Sav. &c. 
Assn., 60 Minn. 316, 62 N. W. 112. 

Missouri: Bank v. Gay, 63 Mo. 
33. 

Nevada: Cox v. Smith, 1 Nev. 
161, 90 Am. Dec. 476. 

New York: An extra allowance of 
costs, under Code Civil Proc, § 3253, 
may be made in foreclosure proceed- 
ings in a sum not exceeding 2% 
per cent, of the amount due on the 
mortgage, nor the aggregate sum 
of $200, "in the discretion" of the 
court. Such discretion will not be 
reviewed on appeal, unless there 
has been a clear abuse of discretion. 
Mut. Life Ins. Co. v. Cranwell, 10 
N. Y. S. 404; Morss v. Hasbrouck, 13 
Weekly Dig. 393; Hamilton v. Rail- 
v/ay Co., 8 N. Y. S. 546. 

Washington: James v. Brainard- 
Jackson, 64 W-ash. 175, 116 Pac. 
633; Gravelle v. Canadian &c. Co., 
42 Wash. 457, 85 Pac. 36; Vermont 
L. &c. Co. V. Greer, 19 Wash. 611, 
53 Pac. 1103 (citing text); Ames 
V. Blgelow, 15 Wash. 532, 46 Pac. 
1046; Haywood v. M'Uer, 14 Wash. 
660, 45 Pac. 307. 

Such stipulation is void in the 
following states: 

Michigan: It IS regarded as a 
penalty. Bullock v. Taylor, 39 
Mich. 137, 33 Am. Rep. 356; Ben- 
dey V. Townsend, 109 U. S. 665, 27 
L. ed. 1065, 3 Sup. Ct. 482; Kitter- 
master v. Brossard, 105 Mich. 219, 
63 N. W. 75; Botsford v. Botsford, 
49 Mich. 29, 12 N. W. 897; Vosburg 
V. Lay, 45 Mich. 455, 8 N. W. 99; 
Myer v. Hart, 40 Mich. 517, 29 Am. 
Rep. 719; Van Marter v. McMillan, 
39 Mich. 304. 

Arkansas: Jarvis v. Southern 
Grocery Co., 63 Ark. 225, 38 S. W. 
148; Boozer v. Anderson, 42 Ark 
167. 



Kansas: Void since laws 1876, 
ch. 77, § 1. 

Kentucky: Void, Thomasson t. 
Townsend, 10 Bush (Ky.) 114; Rill- 
ing V. Thompson, 12 Bush (Ky.) 
310. 

Nebraska: Void also, since stat- 
ute of 1879; Gray v. Havemeyer, 53 
Fed. 174; Vitrified Pav. Co. v. Snead 
Iron Works, 56 Fed. 64; Dodge v. 
Tulleys, 144 U. S. 451, 36 L. ed. 501, 
12 Sup. Ct. 728; Security Co. v. 
Eyer, 36 Nebr. 507, 54 N. W. 838; 
Dow V. Updike, 11 Nebr. 95, 7 N. 
W. 857; Hardy v. Miller, 11 Nebr. 
395, 9 N. W. 475. 

North Carolina: Void, Williams 
V. Rich, 117 N. Car. 235, 23 S. E. 257. 
The court will not allow fees to 
counsel directly for services ren- 
dered to commissioners appointed 
to sell land under foreclosure. Gay 
V. Davis, 107 N. Car. 269, 12 S. E. 
194. 

North Dakota and South Dakota: 
Comp. Laws, § 5429; Farmers' Nat. 
Bank v. Rasmussen, 1 Dak. 60; Dan- 
forth V. Charles, 1 Dak. 285, 46 N. 
W. 576; Johnson v. Day, 2 N. Dak. 
295, 50 N. W. 701. 

Ohio: Void also, Leavans v. Ohio 
Nat. Bank, 50 Ohio St 590, 34 N. E. 
1089; Martin v. Bank, 13 Ohio 250; 
Spalding v. Bank, 12 Ohio 544; 
Shelton v. Gill, 11 Ohio 417; State 
V. Taylor, 10 Ohio 378. 

Oklahoma: Cooper v. Bank of In- 
dian Territory, 4 Okla. 632, 46 Pac. 
475. 

Pennsylvania: Woods v. North, 
84 Pa. St. 407, 410, 24 Am. Rep. 
201; Warwick Iron Co. v. Morton, 
148 Pa. St. 72, 23 Atl. 1065; John- 
ston V. Speer, 92 Pa. St. 227, 37 Am. 
Rep. 675; Hullng v. Drexell, 7 
Watts (Pa.) 126. 

South Carolina: Branyan v. Kay, 
33 S. Car. 283, 11 S. B. 970; Ault- 
man v. Glbert, 28 S. Car. 303, 5 S. 
E. 806. 

Wisconsin: Morgan v. Edwards, 
53 Wis. 599, 11 N. W. 21, 40 Am. 
Rep. 781; Spengler v. Hahn, 95 Wis. 
472, 70 N. W. 466. 

'-Attorney's fees for services ren- 



185 



COSTS 



1606 



exercise care to the end that reasonable fees are allo-wed.'* The right 
to attorney's fees in case of foreclosure is not a cause of action, but 
like the costs, is a mere incident to the cause of action.'* A percentage 
may be allowed instead of a fixed sum as a fee.'° But no allowance 
will be made in the decree for such fees after default, even when pro- 
vided for in the mortgage, unless claim is made for them in the bill.^° 
The allowance of a larger sum than that stipulated for in the mort- 
gage is erroneous.^' If in the provision for attorney's fees the amount 
is left blank, a reasonable fee may be allowed by the court.^* A stipu- 
lation in a mortgage allowing counsel fees for a foreclosure does not 



dered though the bill was taken pro 
confesso as against the mortgagor 
and the litigation resulted from 
the contentions of a codefendant. 
Peacock v. Thaggard, 128 Fed. 1005; 
Lewis V. Sutton, 21 Idaho 541, 122 
Pac. 911; Rohrhof v. Schmidt, 
218 111. 585, 75 N. E. 1062; Ba- 
ker V. Jacobson, 183 111. 71, 55 
N. E. 724; Heffron v. Gage, 149 111. 
182, 36 N. E. 5G9; Junk v. Zieske, 
177 111. App. 103; Salomon v. Stod- 
dard, 107 111. App. 227; Scott v. 
Carl, 24 Pa. Super. Ct. 460; Ver- 
mont L. &c. Co. V. Greer, 19 Wash. 
611, 53 Pac. 1103; Scholey v. De 
Mattos, 18 Wash. 504, 52 Pac. 242; 
Ames V. Bigelow, 15 Wash. 532, 46 
Pac. 1046. 

»= Purvis V. Frlnk, 57 Fla. 519, 49 
So. 1023; Patten v. Pepper Hotel 
Co., 153 Cal. 460, 96 Pac. 296; Cun- 
ningham V. McCready, 219 Pa. 594, 
69 Atl. 82; Matheson v. Rogers, 84 
S. Car. 458, 65 S. E. 1054. One thou- 
sand dollars reasonable for fore- 
closure of $10,000 mortgage. Coolin 
V. Anderson (Idaho), 140 Pac. 969. 
In the absence of evidence the court 
may find that the amount fixed by 
the mortgage is reasonable. Berk- 
eley Bank of Savings &c. Co. v. 
Miller (Cal.), 137 Pac. 1101. 

"■ Thrasher v. Moran, 146 Cal. 683, 
81 Pac. 32; Luddy v. Pavkovich, 
137 Cal. 284, 70 Pac. 177. 

°°Langley v. Andrews, 142 Ala. 
665, 38 So. 238; Buszin v. Martino- 
wicz, 178 111. App. 519; McLane v. 
Abrams, 2 Nev. 199; Cox v. Smith, 
1 Nev. 161, 90 Am. Dec. 476; Shreve 
v. Harvey, 74 N. J. Bq. 336, 70 Atl. 
671; Armijo v. Henry, 14 N. Mex. 



181, 89 Pac. 305; Balfour v. Davis, 
14 Ore. 47. In Daly v. Maitland, 
88 Pa. St. 384, 32 Am. Rep. 457, a 
stipulation for a commission of 5 
per cent, on a mortgage of $14,000 
was considered to be unreasonable. 
If the court allows as attorney's 
fees a sum greater than that stipu- 
lated in the mortgage, the plaintiff 
may remit the excess before appeal, 
giving notice to the defendant. Kil- 
lops V. Stephens, 73 Wis. Ill, 40 N. 
W. 652. gee ante §§ 359, 635 and 
post § 1923. 

^^ Augustine v. Doud, 1 Bradw. 
(111.) 588; Bryan v. Bryan, 139 Ga. 
51, 76 S. E. 563; Crowe v. Kennedy, 
127 111. App. 189; Succession of 
Howell, 121 La. 955, 46 So. 933. 
But see Thrasher v. Moran, 146 Cal. 
683, 81 Pac. 32. 

="Palmeter v. Carey, 63 Wis. 426, 
21 N. W. 793, 23 N. W. 586. 

=»Alden v. Pryal, 60 Cal. 215. 
Testimony may be taken by the 
court, or a master, to ascertain 
what a reasonable fee in the case 
is; but it is error to allow the fee 
without taking such testimony. The 
record should show that the allow- 
ance was made upon proper testi- 
mony. Long V. Herrick, 28 Fla. 
755, 8 So. 50; Kellogg v. Singer 
Mfg. Co., 35 Fla. 99, 17 So. 68; Jones 
V. Schulmeyer, 39 Ind. 119; McGill 
V. Griffin, 32 Iowa 445; Williams v. 
Meeker, 29 Iowa 292; Nelson v. 
Everett, 29 Iowa 184; Tholen v. 
Duffy, 7 Kans. 405. An allowance 
of $1,000 on the foreclosure of a 
$40,000 mortgage not unreasonable. 
Nix V. Thackaberry, 240 111. 352, 88 
N. E. 811. 



§ 1606 



DECEEE OP SALE 



186 



liable for them;'' he can not recover such fees for personally prose- 
cuting his foreclosure.^" It is not necessary that there should be any 
averment that the amount of fees stipulated for in the deed is reason- 
able, as they are a mere incident to the cause of action, and may be 
fixed by the court at its discretion.*^ If there be no stipulation in the 
mortgage for counsel fees they can not be recovered.*^ In some juris- 
dictions, however, the fees may be allowed where they are provided for 
in the notes though the mortgage is silent on the subject.*^ The right 
entitle the plaintiff to counsel fees unless he has paid them or become 
to the fees is wholly a matter of contract, unless provided for by 
statute.** Indorsers of the mortgage note may waive objection to a 
stipulation in the mortgage as to attorney's fees, and their waiver is 
a ratiiieation of the maker's act in making the stipulation, and they 
can not object to a judgment which includes the payment of such 
fees.*^ In Pennsylvania, however, a stipulation for the payment of 



'^ Bank v. Treadwell, 55 Cal. 379; 
Broadbent v. Brumback, 2 Idaho 
336, 16 Pac. 555; Reed v. Catlin, 49 
Wis. 686, 6 N. W. 326. See also Pol- 
lard V. American Freehold Land 
Mtg. Co., 139 Ala. 183, 35 So. 767. 

"Patterson v. Donner, 48 Cal. 
369; Reed v. Catlin, 49 Wis. 686, 6 
N. W. 326. 

■^ First Nat. Bank v. Holt, 87 Cal. 
158, 25 Pac. 272; Carriere v. Min- 
turn, 5 Cal. 435. 

«^ Perry v. Seals (Ala.), 65 So. 
151; Sichel v. CarrlUo, 42 Cal. 
493; Hamlin v. Rogers, 78 Ga. 631, 
5 So. 125; Stover v. Johnnycake, 9 
Kans. 367; Howell v. Pool, 92 N. 
Car. 450; Wylie v. Karner, 54 Wis. 
591, 12 N. W. 57. In California, 
when a mortgage provides for an 
attorney's fee, the court can not al- 
low more than is stipulated for. 
Monroe v. Fohl, 72 Cal. 568, 14 Pac. 
514. An allowance in excess of 
the sum stipulated for in the 
mortgage may be remitted, either 
before or after judgment, and the 
error cured. Killops v. Stephens, 
73 Wis. Ill, 40 N. W. 652. A pro- 
vision in a mortgage for reasonable 
attorney's fees to be taxed by the 
court and Included in the bill of 
costs without any provision that 
there shall be a lien upon the mort- 
gaged property does not authorize 
a decree that puch fees shall be a 
lien under the mortgage. Orange 



Growers' Bank v. Duncan, 133 Cal. 
254, 65 Pac. 469; Russell v. Findley, 
122 Cal. 478, 55 Pac. 143. 

« Worth V. Worth, 155 Cal. 599, 
102 Pac. 663. See also National 
Bank v. Mulford, 17 Cal. App. 551, 

120 Pac. 446. 

"Code of Civ. Pro. New York, § 
3253; Faulk v. Hobbie Grocery Co., 
178 Ala. 254, 59 So. 450; John 
Brickell Co. v. Sutro, 11 Cal. App. 
460, 105 Pac. 948; Johnson v. Clegg, 

121 111. App. 550; Goode v. Colorado 
Inv. Loan Co., 16 N. Mex. 461, 117 
Pac. 856; Hunt v. Chapman, 62 N. 
Y. 333; O'Neil v. Gray, 39 Hun (N. 
Y.) 566; Bockes v. Hathorn, 17 Hun 
(N. Y.) 87. For circumstances un- 
der which the stipulated attorney's 
fees will not be allowed, see Parks 
v. Allen, 42 Mich. 482, 4 N. W. 227; 
Soles V. Sheppard, 99 111. 616. When 
attorney's fees may be allowed on 
a cross-bill, see Town v. Alexan- 
der, 185 111. 254, 56 N. E. 1111. 
Where the trustee in a deed secur- 
ing a loan refuses to act, and the 
creditor forecloses, he is not en- 
titled to the attorney's fee provided 
in the deed to be paid to the trustee 
on foreclosure. Kinney v. Colum- 
bia Sav. &c. Assn., 113 Fed. 359. 

^= Georgia R. Co. v. Pendleton, 87 
Ga. 751, 13 S. E. 822. In this case one 
of the indorsers being the president 
of the corporation which executed 
the mortgage, -and he signing the 



ISr COSTS § 1606 

attorney's commissions upon mortgages is valid and not controlled by 
statute, but it is nevertheless regarded as in the nature of a penalty 
rather than as liquidated damages, and is subject to the equitable con- 
trol of the court, and will be enforced only to the extent of compen- 
sating the mortgagee for reasonable and necessary expenses of col- 
lection.*" A stipulation allowing, in case of suit, five per cent, attor- 
ney's commissions on the fifteen thousand dollars involved, was held 
to be unreasonable, an allowance of two per cent, being sufficient.*^ 
Under a stipulation for the payment of attorney's fees in case a suit 
for foreclosure is brought, payment or tender of payment of the 
mortgage debt after the bringing of suit but before judgment does not 
relieve the mortgagor from his agreement.** But if it appears that 
no demand of payment was made before entry of judgment, and that 
the debtor promptly paid or offered to pay the debt, interest, and costs 
at maturity, the creditor can not recover attorney's commissions. In 
such case the necessity of resorting to the services of an attorney does 
not appear.*^ Attorney's fees may be refused where a foreclosure suit 
is prematurely commenced and the mortgagor tenders the amount due 
on the mortgage before the time stipulated.^* Under a stipulation in 
a power of sale mortgage for the payment of attorneys fees in the 
event it becomes necessary to employ an attorney to collect any part 
of the mortgage debt or to foreclose the mortgage, if foreclosure is 
made by bill in equity, the bill should allege sufficient facts to show 
that this form of foreclosure was necessary; and an averment that 
such a foreclosure was necessary, because the mortgagee could not 
purchase at his own sale under the power contained in the mortgage, 
and without the power to so do the property would not bring its full 
value, sufficiently shows the necessity of a foreclosure in equity. °^ 
Under a stipulation in the mortgage that an attorney's fee shall be al- 
lowed if the mortgage is "collected by suit," if the mortgagee is made 

same as president, his assent to the 47 N. "W. 1072; Warwick Iron Co. v. 

stipulation as to attorney's fees was Morton, 148 Pa. St. 72, 23 Atl. 1065; 

given thereby, and no further Imler v. Imler, 94 Pa. St. 372. 

waiver as to him was necessary. -"Lindley v. Ross, 137 Pa. St. 629, 

"Wilson V. Ott, 173 Pa. St. 253, 20 Atl. 944; Moore's Appeal, 110 Pa. 
34 Atl. 23, 51 Am. St. 767; Lewis v. St. 433, 1 Atl. 593; Johnson v. 
Germania Sav. Bank, 96 Pa. St. 86; Marsh, 21 W. N. Cas. 570. If the 
Daly V. Maitland, 88 Pa. ,St. 384, 32 mortgage is overdue, a previous de- 
Am. Rep. 457. mand is not necessary. Walker v. 

" Warwick Iron Co. v. Morton, 148 Dickson, 175 Pa. St. 204, 34 Atl. 646. 

Pa. St. 72, 23 Atl. 1065; Daly v. ""Taylor v. King (S. Car.), 81 S. 

Maitland, 88 Pa. St. 384; Franklin E. 172. 

V. Kurtz, 3 Del. Co. (Pa.) 590. "Wells v. American Mtg. Co., 109 

«Mjones v. Bank, 45 Minn. 335, Ala. 430, 20 So. 136. 



§ 1606 DECEEE OF SALE 188 

a defendant in an action for partition, and has judgment for his note, 
the note is "collected by suit," and the mortgagee is entitled to the at- 
torney's fee.^^ Where a mortgage provided that out of the money aris- 
ing from a sale there might be retained the principal and interest, 
together with costs of sale and foreclosure, including counsel fees at 
a stipulated rate, on the amount found by the decree, it was held that, 
in case of payment after suit but before decree, the mortgagee was not 
entitled to recover fees.^' A stipulation for attorney's fees in case "it 
shall become necessary to employ an attorney to foreclose the mort- 
gage, or collect any part of the debt," does not entitle the mortgagee 
to attorney's fees incurred in the prosecution of a suit to compel the 
mortgagor to affirm or disaffirm a sale under a power in the mort- 
gage, at which the mortgagee became the purchaser, without being 
authorized thereto in the mortgage.^* A stipulation for reasonable 
attorney's fees where a tender of the amount of the mortgage is made 
after a foreclosure has been commenced, is satisfied by a tender of a 
reasonable compensation for the attorney down to the time of the 
tender."'' A trustee in a trust deed, who is also an attorney at law, is 
not entitled to an allowance for professional services rendered in fore- 
closing the deed in his own behalf and for his cocomplainant, the 
holder of the note, although the deed provides for the allowance of a 
reasonable sum for complainant's solicitor's fee. A trustee in a trust 
deed is the representative and trustee of both parties to the instru- 
ment, and he must act fairly and impartially, and not in the exclusive 
interest of either.'^' There must be some proof of the value of services 
rendered, when the amount is not fixed by the contract, and this may 
be shown by evidence of attorneys familiar with the pay for like serv- 
ices in the community. ^^ Where the mortgage provides for reasonable 

""Branyon v. Kay, 33 S. Car. 283, Land Mtg. Co., 103 Ala. 289, 16 So. 

11 S. E. 970. Attorney's fees may 801. 

be allowed to a prior mortgagee who ■" Smith v. Jackson, 153 111. 399, 

is not made a party to a foreclosure 39 N. B. 130. 

suit by a subsequent mortgagee, '"Gantzer v. Schmeltz, 206 111. 

and the prior mortgagee answers 560, 69 N. B. 584; Gray v. Robert- 

and files a cross-bill and obtains son, 174 111. 242, 51 N. B. 248. But 

foreclosure of his mortgage. Shaft- see Gale v. Carter, 164 111. App. 545. 

ner v. Appleman, 170 III. 281, 48 The rule would seem to apply to a 

N. E. 978. law firm of which the trustee is a 

"» Lammon v. Austin, 6 Wash. St. niember. Touhy v. McCagg, 121 111. 

199, 33 Pac. 355, citing Monroe v. App. 93; Touhy v. McCagg, 134 111. 

Fohl, 72 Cal. 568, 14 Pac. 514; App. 56; Gale v. Carter, 154 111. App. 

Schmidt v. Potter, 35 Iowa 426; 478; Stein v. Kaun, 244 111. 82, 91 N. 

Stover v. Johnnycake, 9 Kans. 367; B. 77. 

"Wylie V. Karner, 54 Wis. 591, 12 N. " Pollard v. American Freehold 

W. 57. Land Mtg. Co., 139 Ala. 183, 35 So. 

"Pollard V. American Freehold 767; Unity Co. v. Equitable Trust 



189 COSTS § 1606a 

attorney's fees, and the note provides for a named fee, the note is some 
evidence as to the amount to be allowed."* Where the judgment fore- 
closing a mortgage is vacated, no attorney's fees are due at the time of 
the order of vacation."' Attorney's fees may be refused in cases where 
the action instead of being one in foreclosure is an action to have a 
deed declared a mortgage.*" No attorney's fee may be allowed where 
the mortgage is not matured by breach of condition by the mortgagor, 
but is caused solely by the insolvency of the mortgagee."^ 

§ 1606a. Stipulation for attorney's fee as usury — ^Itliscellaneous 
matters. — A stipulation to pay a reasonable attorney's fee for fore- 
closure, to be taxed in the judgment, is not usurious and will be en- 
forced."^ The debtor, by neglecting or refusing to pay, imposes, upon 
the mortgagee the expense of resorting to law to enforce his rights, 
and it is only just that the expenses of foreclosure should be borne 
by the party whose own wrong has made it necessary to incur them. 
A stipulation for the payment of an attorney's fee of twenty-five dol- 
lars on the foreclosure of a mortgage of eleven thousand dollars is not 
unreasonable. Nor is a stipulation for two hundred and fifty dollars 
in a mortgage for nine thousand dollars.*^ It is presumed that such 
stipulations are made in reference to the costs and expenses otherwise 
chargeable, and that such fee is an allowance additional to these.** A 

Co., 204 111. 595, 68 N. E. 654; Way- Gower v. Carter, 3 Iowa 244, 66 Am. 

mire v. Shipley, 52 Ore. 464, 97 Pac. Dec. 71; Griswold v. Taylor, 8 Minn. 

807; Kurtz v. Ogden Canyon Sani- 342; Tallman v. Truesdell, 3 Wis. 

tarium Co., 37 Utah 313, 108 Pac. 443. In Williams v. Meeker, 29 

14. But see Wright v. Conservative Iowa 292, an attorney's fee of $75 

Inv. Co., 49 Ore. 177, 89 Pac. 387. was allowed. National Bank v. 

^Merrell v. Ridgely, 62 Fla. 546, Danforth, 80 Ga. 55, 7 S. E. 546; 

57 So. 352. See also Firestone Coal Merck v. Mortgage Co., 79 Ga. 213, 

Co. V. McKissick, 24 Colo. App. 294, 7 S. B. 265; Farwell v. Bigelow, 112 

134 Pac. 147. Mich. 285, 70 N. W. 579. See ante 

■^ Gibson v. Bethea, 95 S. Car. 343, § 635 and post § 1923. 

78 S. E. 1025. "^Telford v. Garrels, 132 111. 550, 

""McCurdy v. Boring (N. Dak.), 24 N. B. 573. As to reasonable al- 

146 N. W. 730. lowance, see also Mclntire v. Yates, 

"Union Trust Co. v. Shilling, 30 104 111. 491. An allowance of $781 

Ind. App. 543, 66 N. E. 699. in foreclosing a mortgage for $15,000 

"Machine Co. v. Moreno, 6 Saw- was not regarded as unreasonable 

yer (U S ) 35; Broadbent v. Brum- in Cohn v. Northwestern Mut. L. 

back, 2 Idaho 366, 16 Pac. 555; Ab- Ins. Co., 185 III. 340, 57 N. E. 38. 

bott v. Stone, 172 111. 634, 50 N. E. See also Thornton v. Commonwealth 

328; Mills Co. Nat. Bank v. Perry, Loan Assn., 181 111. 456, 54 N. E. 

72 Iowa 15, 33 N. W. 341, 2 Am. St. 1037; Casler v. Byers, 129 111. 657, 

228; McGill v. Griffin, 32 Iowa 445; 22 N. E. 507; Mclntire v. Yates, 104 

Weatherby v. Smith, 30 Iowa 131; 111. 491. 

Nelson v. Everett, 29 Iowa 184; <" Hitchcock v. Merrick, 15 Wis. 

Conrad v. Gibbon, 29 Iowa 120; Gil- 522; Rice v. Cribb, 12 Wis. 179; 

more v. Ferguson, 28 Iowa 220; Boyd v. Sumner, 10 Wis. 41; Tall- 



§ 1606a DECEEE OF SALE 190 

stipulation of five per cent, of the amount of the mortgage for counsel 
fees is additional to the cost recoverable by statute.^^ A provision in 
the mortgage that the mortgagor shall in case of foreclosure pay the 
costs, "and fifty dollars as liquidated damages for the foreclosure of 
the mortgage," was held to be void, because so indefinite that the court 
could not tell whether the payment was intended to be for something 
legal or illegal. A judgment rendered under such a stipulation for 
fifty dollars as attorney's fees was declared erroneous.^" But a stipu- 
lation that the mortgagee shall be entitled "to a judgment for, the 
possession of said premises, and costs, expenses, and attorney's fees of 
ten per cent, of the amount due for foreclosing said mortgage," is valid ; 
and on a mortgage debt of four thousand dollars or less, the amount 
is not so excessive that a court of equity will refuse to enforce it.*^ 
Under a provision in a power of sale for an attorney's fee in case of 
foreclosure, no allowance can be made if the mortgage is foreclosed in 
chancery instead.^' A stipulation that "an attorney's fee of fifty dol- 
lars for foreclosure, with costs of suit and accruing costs," shall be 
taxed against the mortgagor, does not authorize such a fee in case 
there be a decree for foreclosure, and the mortgagor pays the debt 
after a suit is commenced, but before a decree of sale is entered.'" 
A stipulation for attorney's fees in case of a foreclosure in equity or 
by sale under the power of sale does not authorize such fees incurred 
in an action to compel the mortgagor to elect to afiirm or avoid a sale 
under the power to the mortgagee.'"' A stipulation for an attorney's 
fee in a mortgage, made while a statute allowing such a fee was in 
force, is not affected by a repeal of that act.'^ A mortgagee in whose 
favor there is a stipulation that he shall be entitled to an attorney's 
fee in any action that he may bring on the mortgage may claim such 
fee when, as a defendant in a foreclosure suit, he sets up his cause of 

man v. Truesdell, 3 Wis. 443. In " Sharp v. Barker, 11 Kans. 381. 

Remington v. Willard, 15 Wis. 583, ""Van Marter v. McMillan, 39 

the mortgage stipulated for a fee of Mich. 304; Sage v. Riggs, 12 Mich. 

$75, and the court allowed under the 313; Hardwick v. Bassett, 29 Mich. 

Code five per cent, on the amount 17. In this case the court below 

due, being a very much larger sum. thought a fee of $75 "a reasonable 

A stipulation for $100 solicitor's number of dollars," according to 

fees, in a mortgage for $10,000, was the terms of the mortgage, 

enforced in Pierce v. Kneeland, 16 "Jennings v. McKay, 19 Kans. 

Wis. 672, 84 Am. Dec. 726. 120, distinguished from Life Assn. 

°=Gronfier v. Minturn, 5 Cal. 492; v. Dale, 17 Kans. 185. 

Carriere v. Minturn, 5 Cal. 435. '"Pollard v. American Freehold 

™Foote v. Sprague, 13 Kans. 155; L. & M. Co., 103 Ala. 289, 16 So. 801. 

Stover V. Johnnycake, 9 Kans. 367; "White v. Rourke, 11 Nebr. 519. 
Tholen v. Duffy, 7 Kans. 405; Kurtz 
V. Sponable, 6 Kans. 395. 



191 COSTS § 1606c 

action, for this is in effect bringing an action on the mortgage.'^ Un- 
der a stipulation that a trustee in a deed of trust shall be paid his fees 
and charges in executing his trust, including attorney's fees for fore- 
closure, an allowance of two thousand two hundred and fifty dollars 
was made where the mortgage debt was forty-three thousand dollars.'^ 

§ 1606b. Attorney's fees under statutes of other states. — The 
statute of another state allowing an attorney's fee will not be enforced 
in a state where such a fee is not allowed, though the mortgage and 
mortgage note both expressly provide that they are to be construed 
by the laws of such other state. The laws of the place of the forum 
govern the application of the remedy, such as the recovery of costs 
and the like.''^ 

§ 1606c. Expenses provided in mortgage. — An allowance may be 
made to a mortgagee for expenses incurred in a foreclosure suit aside 
from an allowance for attorney's fees, where the mortgage so pro- 
vides.'^ Thus where the mortgage provides that on redemption the 
mortgagor shall pay the cost of repairs, taxes and insurance paid by 
the mortgagee, the amount of these items may be included in the fore- 
closure decree.^' But a trust deed which allows the payment of so- 
licitor's fees, "and all other expenses of the trust," does not warrant 
the payment of the cost of an abstract of title, and expenses incurred 
in procuring information preparatory to bringing suit for fore- 
closure.''^ An allowance can not be made to the mortgagor for coun- 
sel fees when the property is insufficient to pay the mortgage debt.'* 
ISTo allowance for attorney's fees provided for in the mortgage note 
can be made when the mortgage expressly declares that it is given 
to secure the payment of the principal and interest of the note.''* 
Courts of equity may allow a mortgagee counsel fees incurred in de- 
fending his title, without any express contract;*" but fees paid to 

"Lanoue v. McKinnon, 19 Kans. in. the mortgage exceeds that al- 

408. lowed by law, one who has pur- 

" Guignon v. Union Trust Co., 156 chased, subject to the mortgage, !is 

111. 135, 40 N. E. 556, 47 Am. St. 186. not required to pay more than the 

"Security Co. v. Eyer, 36 Nebr. statutory allowance. First M. E. 

507, 54 N. W. 838, 38 Am. St. 735. Church v. Fadden, 8 N. Dak. 162, 77 

" Mercantile Trust Co. v. Mis- N. W. 615. 

souri, K. &c. R. Co., 41 Fed. 8. "Mei-cantile Trust Co. v. Mis- 

"Prybeski v. Piechoviak, 170 souri, K. &c. R. Co., 41 Fed. 8. 

Mich. 572, 136 N. W. 371. '•' Rafterty v. High, 108 Cal. xvii, 

"Cheltenham Imp. Co. v. White 41 Pac. 489. 

head, 128 111. 279, 21 N. B. 569; ^'Lomax v. Hide, 2 'Vern. 185; 

Equitable L. Assur. Soc. v. Olyphant, Hunt v. Fownes, 9 Ves. 70. 
10 N. Y. S. 659. If the fee specified 



§ 1607 DECREE OE SALE 192 

counsel, for resisting an application by the assignee in bankruptcy of 
the mortgagor to enjoin a sale under a power in the mortgage, do not 
constitute a payment in defense of the mortgage title.*^ A stipulation 
in a mortgage that the mortgagor shall pay the "expenses incurred in 
procuring and continuing abstracts of title" for the purposes of the 
foreclosure suit has been regarded as not allowable, but obnoxious to 
public policy.^^ 

§ 1607. Costs of irregular attempts at foreclosiire. — ^An irregular 
attempt at foreclosure, abandoned after a single publication of the no- 
tice on account of a defect in this, does not entitle the mortgagee to 
any attorney's fee provided for in the mortgage upon a foreclosure of 
it. By declining a tender of the full amount due, because such fee is 
not paid in addition, he renders himself liable to a statutory penalty 
for refusing to discharge a mortgage.^' A mortgagee is not generally 
entitled to costs of a foreclosure defective through an error of his own 
in the proceedings, whereby a new foreclosure is rendered necessary.** 
Where a mortgage provided that "in the event of foreclosure sixty 
dollars attorney's fee shall be by the court also taxed, and included 
in the decree of foreclosure," it was held that a tender before decree 
not including this fee was good, and that this fee could not be col- 
lected except by having it taxed in the decree.®^ But where a mort- 
gage provided that, in case a settlement was made after a suit to fore- 
close was instituted, there should be taxed as costs "and included in 
the judgment the sum of two hundred and fifty dollars for attorney's 
fees, and the defendant without answering paid into court the mort- 
gage debt and the ordinary costs, which the plaintiff accepted and 
the suit on motion of the defendants was dismissed, the acceptance of 
the amount deposited was held not to estop the plaintiff from claim- 
ing the stipulated attorney's fees, and the order dismissing the suit 
was vacated. *° 

=»Maus V. McKellip, 38 Md. 231. "Clark v. Stilson, 36 Mich. 482. 

"Northwestern Mut. L. Ins. Co. ""Schmidt v. Potter, 35 Iowa 426. 

v. Butler, 57 Nebr. 198, 77 N. W. 667. *= Hoyt v. Smith, 4 Wash. St. 640, 

"= Collar V. Harrison, 30 Mich. 66. 30 Pac. 665. 



CHAPTER XXXVI 

rOEECLOSUEB SALES UNDER DECREE OE COURT 

I. Mode and Terms of Sale, §§ 1608-1615 

II. Sale in Parcels, §§ 1616-1619 

III. Order of Sale, §§ 1620-1632a 

IV. Conduct of Sale, §§ 1633-1636 

V. Confirmation of Sale, §§ 1637-1641 

VI. Enforcement of Sale Against Purchaser, §§ 1643-1651 

VII. Deed and Title Conveyed, §§ 1652-1662 

VIII. Delivery of Possession to Purchaser, §§ 1663-1667 

IX. Setting Aside Sale, §§ 1668-1681 

I. Mode and Terms of Sale 

Section Section 

1608. Sale by the court through its 1612. Notice of sale. 

officers. 1613. Terms of sale. 

1609. Estate and interest sold. 1614. Deposit required. 

161(J. Subsequent incumbrances. 1614a. Mortgagee purchasing a t 
1611. Determination of priorities sale. 

before and after sale. 1615. Sale on credit. 
1611a. Appraisement for sale. 

§ 1608. Sale by the court through its officers. — A sale under a de- 
cree of court is in contemplation of law the act of the court. It is made 
through the instrumentality of some oflScer designated by statute or 
appointed by the court. Whatever name be given to this officer, vrhether 
master in chancery, referee, trustee, commissioner, or sheriff,^ in mak- 
ing the sale he acts as the agent of the court, and must report to it 
his doings in the execution of its order. This report should set out 
all the proceedings incident to the sale, the manner and particulars 

'Heyer v. Deaves, 2 Johns. Ch. office afterward expires before the 

(N. Y.) 154; Mayer v. Wick, 15 sale. Cord v. Hirsch, 17 Wis. 403. 

Ohio St. 548. In the federal courts That the person appointed to make 

the sale is usually made by the the sale is styled in the decree a 

marshal of the district, or by a mas- "commissioner" instead of "master," 

ter specially appointed. Blossom v. is no ground for setting aside th3 

Railroad Co., 3 Wall. (IT. S.) 196, sale, when the authority and duties 

235, 18 L. ed. 43. The sheriff or prescribed are the same. Mann v. 

other officer to whom the order is Jennings, 25 Fla. 730, 6 So. 771. 
given may sell, though his term of 

193 
13 — Jones Mtg. — Vol. III. 



§ 1608 



FORECLOSURE SALES UNDER DECREE 



194 



of it, the conveyance to the purchaser, and the payment of the pro- 
ceeds." When the sale is confirmed it becomes the act of the court, or, 
in other words, a judicial sale ; but, until confirmed, no title passes to 
the purchaser.^ In this respect the sale is unlike a sherifi's sale, which 
is a ministerial act, and the ofScer, and not the court, is regarded as 
the vendor ; and which, if made conformably to law, is final and valid, 
and passes the title.* On a sale of the mortgaged premises by a referee, 
all the proceedings, from appointment of the referee to final confirma- 
tion of his report of sale, including the passing of title to the vendee 
and distribution of the proceeds, are under the direction and control 
of the court ; and the court may confirm or reject the referee's report, 
or stay the sale, in its judicial discretion.^ 

A decree of foreclosure and sale is not outlawed by the expiration 
of twenty years, or of any number of years, and the question whether 
the decree will be enforced by sale after a long lapse of time is one 
for the court to decide, upon a consideration of all the facts,® and its 
decision upon such a question is not generally appealable.'' 

After the death of the defendant mortgagor the court may make an 
order providing for carrying out a decree of foreclosure without re- 



'Por form of report used in New 
York, see 5 Wait's Practice, 228. 
= Blossom V. Railroad Co., 3 Wall. 

(U. S.) 196, 18 L. ed. 43; Minne- 
sota R. Co. V. St. Paul Co., 2 Wall. 

(U. S.) 609, 17 L. ed. 886; Thorn 
V. Ingram, 25 Ark. 52; Southern 
Bank v. Humphreys, 47 111. 227; 
Bozza v. Rowe, 30 111. 198, 83 Am. 
Dec. 184; Penn v. Heisey, 19 111. 
295, 68 Am. Dec. 597; Ayers v. 
Baumgarten, 15 111. 444; Young v. 
Keogh, 11 111. 642; Mills v. Ral- 
ston, 10 Kans. 206; Forman v. Hunt, 
3 Dana (Ky.) 614; Hurt v. Stull, 4 
Md. Ch. 391; Sewall v. Costigan, 1 
Md. Ch. 208; Wagner v. Cohen, 6 
Gill (Md.) 97, 46 Am. Dec. 660; 
Mason v. Osgood, 64 N. Car. 467; 
Moore v. Shultz, 13 Pa. St. 98, 53 
Am. Dec. 446; Vandever v. Baker, 
13 Pa. St. 121; Yerby v. Hill, 16 
Tex. 377; Griffith v. Fowler, 18 Vt. 
390. 

* Harrison v. Harrison, 1 Md. Ch. 
Dec. 331, 335; Williamson v. Berry, 
8 How. (U. S.) 495, 546, 12 L. ed. 
1170; Mehane v. Mebane, 80 N. Car. 
34; Rorer's Jud. Sales, §§ 1-68. 

' Sessions v. Peay, 23 Ark. 39. See 
also Penn v. Tolleson, 20 Ark. 652; 



Robertson v. Haun, Freem. Ch. 
(Miss.) 265; Tooley v. Kane, 1 Smed. 
& M. Ch. (Miss.) 518; Deaderick v. 
Smith, 6 Humph. (Tenn.) 138. Un- 
der the New York practice, it seems 
that confirmation of the referee's 
report of sale is not necessary to 
pass title, although the safer prac- 
tice is to require confirmation. 
Moore v. Shaw, 15 Hun (N. Y.) 428, 
affd. 77 N. Y. 512. 

°Van Rensselaer v. Wright, 121 
N. Y. 626. See also Dalgardno v. 
Barthrop, 40 Wash. 191, 82 Pac. 285 
(five-year statutory limitation). 

'Fifteen years after judgment of 
foreclosure, this not having been 
executed and the referee appointed 
having died, an order was made, 
upon application by the plaintiff, 
notice of which was served only on 
the attorneys who had appeared 
for the mortgagor, appointing an- 
other referee to sell, and directing 
a sale in the city in which the 
premises were situated, instead of 
in another city, as directed by the 
Judgment. It was held that it wa,s 
within the discretion of the court 
to make such order, and that the 
modification of the judgment was 



195 MODE AND TERMS § 1609 

viving the action against his heirs or representatives.* But it has been 
held that an order of sale issued after the death of the plaintiff in 
foreclosure was void vrhere no revivor was had, and that the purchaser 
thereunder acquired no title to the land sold.' 

§ 1609. Estate and interest sold. — Only the right, title, or interest 
of the mortgagor at the time of the execution of the mortgage should 
be ordered sold.^" Generally no other or greater interest than that 
covered by the mortgage can be sold except by consent, or in case of an 
after-acquired title of the mortgagor.^^ The decree should not order 
the sale of the entire mortgaged premises, but only so much thereof 
as is necessary to satisfy the mortgage debt, where the equities of the 
case, or statutes so require.^^ 

On a bill by a junior mortgagee nothing more than the equity of 
redemption mortgaged to him can be decreed to be sold, unless the 
prior mortgagee consents that the decree may be made for the sale 
of the property and the payment of his mortgage also.^^ When, how- 
ever, all the incumbrances are due, and all the incumbrancers are par- 
ties to the suit, and the circumstances of the case show that the in- 
terests of the mortgagor and of the incumbrancers require it, the 
court will order a sale of the entire incumbered property.^* 

not material, and did not affect in- 425. See also Boone v. Clark, 129 

juriously the rights of any one. 111. 466, 21 N. B. 850, 5 L. R. A. 276. 

Wing V. Rionda, 125 N. Y. 678, 25 A sale under a mortgage by the 

N. E. 1064. mortgagee, after he had conveyed 

'Wing V. Rionda, 125 N. Y. 678, away all his interest, is void. Sad- 

25 N. E. 1064; Hays v. Thomae, 56 ler v. Jefferson, 143 Ala. 669, 39 So. 

N. Y. 521; Harrison v. Simons, 3 380. See ante § 1581. 

Edw. Ch. (N. Y.) 394. "Fry v. Merchants' Ins. Co., 15 

» Havens v. Pope, 10 Kans. App. Ala. 810; Little v. Vance, 14 Ind. 19; 

299, 62 Pac. 538. Treiber v. Shafer, 18 Iowa 29 (stat- 

" Schwartz v. Palm, 65 Cal. 54, 2 utory provisions) ; Quigley v. Beam, 

Pac. 735; Krexchbaum v. Melton, 49 137 Ky. 325, 125 S. W. 727; Park- 

Cal. 50; San Francisco v. Lawton, hurst v. Cory, 11 N. J. Eq. 233; 

21 Cal. 589; Marshall v. Livermore Brevoort v. Jackson, 1 Edw. Ch. 

Spring Water Co. (Cal.), 5 Pac. 101; (N. Y.) 447; Delabigarre v. Bush, 

Damm v. Damm, 91 Mich. 424, 51 2 Johns. (N. Y.) 490; Scottish- 

N. W. 1069; Hart v. Wandle, 50 N. American Mtg. Co. v. Reeve, 7 N. 

Y. 381; Wolf V. Stout, 9 Ohio Dec. Dak. 99, 72 N. W. 1088; Mayo v. 

231, 11 Wkly. L. Bui. 236. But see Tomkies, 6 Munf. (Va.) 520. See 

Norris v. Luther, 101 N. Car. 196, 8 also Moore v. Crandall, 146 Iowa 25, 

S. E. 95. 124 N. W. 812, 140 Am. St. 276; 

"Hibernla Sav. &c. Soc. v. Kain, Kirby v. Childs, 10 Kans. 639; Bern- 

117 Cal. 478, 49 Pac. 578; Troutman hardt v. Lymburner, 85 N. Y. 172. 

V. Schaeffer, 31 111. 82; Wilkerson "Hynds Mfg. Co. v. Oglesby &c. 

V. Daniels, 1 G. Greene (Iowa) 179; Grocery Co., 93 Ga. 542, 21 S. E. 63; 

Clapp V. Maxwell, 13 Nebr. 542, 14 Roll v. Smalley, 6 N. J. Eq. 464. 

N. W. 653; Clapp v. McCabe, 84 Hun "Shepherd v. Pepper, 133 U. S. 

379, 65 N. Y. St. 699, 32 N. Y. S. 626, 32 L. ed. 706, 10 Sup. Ct. 438; 



§ 1610 FOEECLOSUEE SALES UNDEE DECEEE 196 

Furthermore, the order of sale can not embrace other lands not de- 
scribed in the mortgage;^® though when through mistake the descrip- 
tion in a mortgage did not embrace a portion of the land intended to 
be conveyed, but the purchaser supposed he was buying the whole es- 
tate intended to be mortgaged, he was protected in his claim under 
the sale to the whole.^" A judgment for the sale of the mortgaged 
premises is not objectionable because it does not order the sale of land 
embraced in the mortgage to which the mortgagor had no title. ^^ 

If two tracts of land are embraced in the mortgage when only one 
of them was intended to be mortgaged, that may be foreclosed alone 
without a reformation of the deed, which would be necessary in case 
of a misdescription of the land.^' 

The sale of mortgaged property on foreclosure must follow the de- 
cree, and the sheriff must offer whatever the decree orders.^' He must 
sell only the property described in the decree.^" And so a referee, be- 
ing purely a ministerial officer, must follow exactly the provisions of 
the decree, and can not offer less than the decree directs him to sell.^^ 
Eeal property can only be sold by the sheriff or officer of the county 
in which the property is situated.^^ 

Mortgages of estates for years, as well as those in fee, may be fore- 
closed by sale.^^ And where a mortgage, for lack of words of inherit- 
ance, conveys less than the fee, it may be rectified and foreclosed by 
a decree ordering a sale of the premise, in fee.^* 

§ 1610. Subsequent incumbrances. — ^When a junior mortgagee 
whose debt is due is a party to a suit to foreclose a prior mortgage, 
the court may decree a sale of so much of the property as will be suffi- 
cient to satisfy both mortgages and all intermediate liens ;^^ and the 

Hefner v. Northwestern L. Ins. Co., Conklin v. Bowman, 11 Ind. 254. 

123 U. S. 747, 754, SI L. ed. 309; »» Mills v. Ralston, 10 Kans. 206. 

■Woodworth v. Blair, 112 U. S. 8, 28 '"Bole v. Newberger, 81 Ind. 274. 

L. ed. 615, 5 Sup. Ct. 6; Hill v. Na- "Woolf v. Leicester Realty Co., 

tional Bank, 97 U. S. 450, 453, 24 134 App. Div. 484, 119 N. Y. S. 288. 

L. ed. 1051; Jerome v. McCarter, ''"Vietzen v. Otis, 46 Wash. 402, 90 

94 U. S. 734, 24 L. ed. 136; Hagan Pac. 264 (Ball. Ann. Code, §§ 5890, 

V. "Walker, 14 How. (U. S.) 29, 37, 5195, 2 Hill's Ann. Code, §§ 500, 

14 Li. ed. 312; Finley v. Bank of 507). 

United States, 11 Wheat. (U. S. ^Johnson v. Donnell, 15 HI. 97; 

304, 6 L,. ed. 480. Lansing v. Albany Ins. Co., Hopk. 

"Wilkerson v. Daniels, 1 Greene (N. Y.) 102. 

(Iowa) 179. ^Coe v. New Jersey Midland R. 

" See ante §§ 97, 1464. Co., 31 N. J. Bq. 105. 

"Castro V. lilies, 22 Tex. 479, 73 =" Shepherd v. Pepper, 133 U. S. 

Am. Dec. 277. 626, 32 L. ed. 706, 10 Sup. Ct. 438; 

"Miller v. Kolb, 47 Ind. 220; Andrews v. O'Mahoney, 112 N. Y. 

Walker v. Sellers, 11 Ind. 376; 667, 20 N. E. 374. 



197 MODE AND TERMS § 1611 

master may be directed to ascertain the amount of such liens previous 
to the sale. But the junior mortgagee can not be paid until the mas- 
ter's report is filed and the surplus money brought into court, so that 
other persons may have an opportunity to present their claims.^' 
When the rights of the junior mortgagee have been determined, the 
court may decree that the surplus proceeds of the sale be paid over to 
him in satisfaction of his lien,^^ or it may order the entire proceeds 
brought into court for distribution among the parties entitled thereto, 
according to their equities and priorities.^^ Ordinarily, however, the 
amounts of subsequent incumbrances will not be determined until the 
question arises in its proper course upon application made for the 
surplus. The mortgagee can not be compelled to suspend proceedings 
to allow subsequent parties to contest their rights as between them- 
selves. These must be settled upon a reference to a master of their re- 
spective claims to the surplus money.^° 

Where the mortgagee has prepared the terms of sale which provide 
for the sale of the entire property in two parcels, subject to a prior 
mortgage held by himself, and there are also mortgages subsequent 
to the mortgage under foreclosure, the mortgagee can not object that 
the sale of the entire property for the payment of all the incum- 
brances was irregular; though the judgment did not provide for the 
payment of subsequent incumbrances.'" 

§ 1611. Determination of priorities before and after sale. — Ques- 
tions of priority of right to the proceeds of sale or of equities as to the 
order of sale can not be litigated between the defendants before 

=° Barnes T. Stoughton, 10 Hun Moore, 79 Miss. 74, 29 So. 820; 

(N. Y.) 14; Beekmaa v. Gibbs, 8 Seeley v. Wickstrom, 49 Nebr. 730, 

Paige (N. Y.) 511. 68 N. W. 1017; Lithauer v. Royle, 

" Canal Bank v. Hudson, 111 U. S. 17 N. J. Eq. 40. 

66, 28 L. ed. 854, 4 Sup. Ct. 303; ^Howell v. McAden, 94 U. S. 463, 

Hibernia Sav. &c. Soc. v. London &c. 24 L. ed. 254; Sutherland v. Lake 

F. Ins. Co., 138 Cal. 257, 71 Pac. Superior Ship Canal &o. Co., Fed. 

334; Union Water Co. v. Murphy's Cas. No. 13643; Clark v. Carnall, 18 

Flat Fluming Co., 22 Cal. 620; Bige- Ark. 209; Chicago &c. R. Land Co. 

low v. Stringfellow, 25 Fla. 366, 5 v. Peck, 112 111. 408; Crocker v. 

So. 816; Romberg v. McCormick, Lowenthal, 83 111. 579; Hards v. 

194 111. 205, 62 N. E. 537; Wallen v. Burton, 79 111. 504; Pardun v. 

Moore, 187 111. 190, 58 N. E. 392; Dobesberger, 3 Ind. 389; Livingston 

Dillman v. Will County Nat. Bank, v. Mildrum, 19 N. Y. 440. 

138 111. 282, 27 N. B. 1090; Shaver ^Miller v. Case, Clarke (N. Y.) 

V. Williams, 87 111. 469; State Bank 395; Heath v. Blake, 28 S. Car. 406, 

V. Backus, 160 Ind. 682, 67 N. E. 5 S. E. 842. 

512; Meredith v. Lackey, 16 Ind. 1; ""Andrews v. O'Mahoney, 112 N. 

Powers v. Golden Lumber Co., 43 Y. 567, 20 N. E. 374. 
Mich. 468, 5 N. W. 656; Hartman v. 



§ 1611a JOEECLOSUKE SALES UNDER DECREE 198 

judgment is entered for the plaintiff against whom they set up no 
equities or defense.^^ But questions as to priority of claims upon dif- 
ferent portions of the premises should he settled by the court before a 
sale is made, rather than after the sale, as the parties interested are 
then able to act intelligently as to the bidding at the sale, and the offi- 
cer selling can directly afterward go on with the distribution of the 
proceeds.'^ If, however, these questions relate merely to the distribu- 
tion of the surplus, and do not affect the order of sale, they are prop- 
erly settled upon application for the surplus after sale. Thus, in case 
of several mortgages which are undisputed, and subsequent judgments 
which are in controversy, the court will not stay proceedings on the 
execution, on the mortgagor's application, but will order the surplus 
brought into court until settlement of the contest concerning the 
judgments.^* 

In some states there are statutory provisions prescribing grounds 
for stay of execution upon foreclosure, and the court in its discretion 
may allow the settlement of collateral controversies between claim- 
ants and lienors, which may affect the validity of the sale or the rights 
of the primary parties.'* 

It is often important to settle the rights of the mortgagee under 
the mortgage before a foreclosure sale. Thus on a foreclosure of a 
mortgage given by a riparian owner, covering the shore, and includ- 
ing the land lying under water in front of the upland, which was 
afterward filled in and reclaimed by the mortgagor, before the sale was 
ordered, the rights of the mortgagee in the land that was submerged 
at the time of the mortgage, were directed to be defined.'^ 

§ 1611a. Appraisement for sale. — In several states, lands about to 
be sold on foreclosure are required by statute to be appraised,^' and 

"Smart v. Bement, 4 Abb. Dec. St. 16, 30 Atl. 513. But see Horner 

(N. Y.) 253. V. Corning, 28 N. J. Eq. 254; Clark 

''Johnson v. Badger Mill &c. Co., v. Vilas Nat. Bank, 24 Misc. (N. Y.) 

13 Nev. 351; Snyder v. Stafford, 11 621, 53 N. Y. S. 641. 
Paige (N. Y.) 71; Marling v. Ro- ''Point Breeze Ferry Co. v. Bra- 

brecht, 13 "W. Va. 440. In Virginia gaw, 47 N. J. Eq. 298, 20 Atl. 967. 
a decree of sale before taking an ac- »" Southwestern Arkansas &c. R. 

count of existing liens is erroneous. Co. v. Hays, 63 Ark. 355, 38 S. W. 

Alexander v. Howe, 85 Va. 198, 7 665 (statute applicable only to trust 

S. B. 248. deeds and power of sale mort- 

»Schenck v. Conover, 13 N. J. gages); Windham County Sav. 

Eq. 31; Union Ins. Co. v. Van Reus- Bank v. Himes, 55 Conn. 433, 12 

selaer, 4 Paige (N. Y.) 85. Atl. 517 (appraisal optional with 

»*Wyckoff V. Noyes, 36 N. J. Eq. parties); City Sav. Bank v. Kut- 

227; Dayton v. Dusenbury, 25 N. J. scher, 52 Conn. 407; State v. NichoUs, 

Eq. 110; Fisher v. Hartman, 165 Pa. 30 La. Ann. 980; Union Bank v. 



■199 



MODE AND TEEMS 



§ 1611a 



the statute being mandatory, a sale without such appraisement is 
void.*' Of course, the appraisement may be waived by agreement of 
the parties.''* The appraisers are appointed by the sheriff who super- 
vises or conducts the appraisement, or by his duly appointed deputy.*' 
It is generally provided that the appraisers must be disinterested*" 
freeholders,*^ and residents of the county where the sale is made.*^ 

The appraisement should recite the names of the owners of the 
equity of redemption,** and state the estimated value of the property 
in money, without fraud or concealment,** and be signed by the ap- 
praisers.*^ But signature by initials of the appraisers has been held 
sufficient.*" It is not necessary to affix an internal revenue stamp to 
the certificate of the sheriff attached to an appraisement.*' And mere 



Bradford, 2 La. Ann. 416; Wolcott 
v. Henninger, 1 Nebr. (Unoff.) 552, 
96 N. "W. 612; Coe v. Columbus &c. 
R. Co., 10 Ohio St. 372, 75 Am. Dec. 
518; Lancaster Bank v. Hogendob- 
ler, 4 Pa. L. J. 372; Tracey v. Shu- 
mate, 22 W. Va. 474. 

=' Tyler v. "Wilkerson, 27 Ind. 450; 
Meddis v. Fenly, 98 Ky. 432, 17 
Ky. L. 974, 33 S. W. 197; Doak v. 
Reynolds, 58 Nebr. 393, 78 N. "W. 
710; Neligh v. Keene, 16 Nebr. 407, 
20 N. W. 277; Johnson v. Lynch, 38 
Okla. 145, 132 Pac. 350; Hancock v. 
Youree, 25 Okla. 460, 106 Pac. 841. 

^'^ Stockmeyer v. Tobin, 139 U. S. 
176, 35 L. ed. 123, 11 Sup. Ct. 504; 
Harris v. Makepeace, 13 Ind. 560; 
Soniat v. Miles, 32 La. Ann. 164; 
New Orleans Mut. Ins. Co. v. Bag- 
ley, 19 La. Ann. 89; Broadwell v. 
Rodrigues, 18 La. Ann. 68; Craig v. 
Stevenson, 15 Nebr. 362, 18 N. W. 
510. But see Dennis v. Moses, 18 
Wash. 537, 52 Pac. 333, 40 L. R. A. 
302. It is sometimes provided thai 
the sale shall not be made for less 
than a certain proportion, generally 
two-thirds of the appraised valua- 
tion. Hart v. Beardsley, 67 Nebr. 
145, 93 N. W. 423; Pearson v. Badger 
Lbr. Co., 2 Nebr. (Unoff.) 251, 96 
N. W. 493. 

»» Wells V. Frazier, 64 Nebr. 370, 
89 N. W. 1033; Richardson v. Hahn, 
63 Nebr. 294, 88 N. W. 527; Carstens 
V. Eller, 60 Nebr. 460, 83 N. W. 743; 
Nebraska Loan &c. Assn. v. Mar- 
shall, 51 Nebr. 534, 71 N. W. 63. 

"Durland v. McKibbin, 5 Nebr. 



(Unoff.) 47, 97 N. W. 228; David 
Adler &c. Clothing Co. v. Hellman, 
4 Nebr. (Unoff.) 557, 95 N. W. 467; 
First Nat. Bank v. Tyler, 4 Nebr. 
(Unoff.) 63, 93 N W. 388; Stafford 
V. Harmon, 2 Nebr. (Unoff.) 528, 89 
N. W. 380. 

« Salisbury v. Murphy, 63 Nebr. 
415, 88 N. W. 764; Ackerman v. Al- 
lender, 62 Nebr. 700, 87 N. W. 543; 
Iowa Loan &c. Co. v. Whistler, 62 
Nebr. 698, 87 N. W. 538; Nebraska 
Loan &c. Co. v. Hamer, 40 Nebr. 
281, 58 N. W. 695; First Nat. Bank 
V. Tyler, 4 Nebr. (Unoff.) 63, 93 N. 
W. 388. 

« State Bank v. Green, 11 Nebr. 
303, 9 N. W. 86 (land lying in two 
counties). 

« Wells V. Frazier, 64 Nebr. 370, 
89 N. W. 1033. See also Pierce v. 
Reed, 3 Nebr. (Unoff.) 874, 93 N. W. 
154; Union Trust Co. v. King, 3 
Nebr. (Unoff.) 155, 91 N. W. 190. 

"Rouse V. Bartholomew, 51 Kans. 
425, 32 Pac. 1088; Amato v. Ermann, 
47 La. Ann. 967, 17 So. 505 (fraud- 
ulent undervaluation) ; Ramser v. 
Johnson, 2 Nebr. (Unoff.) 526, 89 
N. W. 381; Thatcher v. Dickinson, 
3 Ohio Cir. Ct. 144, 2 Ohio Clr. Dec. 
82 (appraisement in money). 

" Iowa Loan &c. Co. v. Greenman, 
63 Nebr. 268, 88 N. W. 518 (signa- 
ture by mark). 

«Rieck V. ZoUer, 3 Nebr. (Unoff.) 
721, 92 N. W. 728. 

"Rieck V. Zoller, 3 Nebr. (Unoff.) 
721, 92 N. W. 728. 



1611a 



FOEECLOSUEE SALES TJNDEK DECREE 



200 



clerical errors which mislead no one will not prejudice the appraise- 
ment.*' An actual view of the premises by the appraisers is not nec- 
essary, if they are well informed or familiar with their locality.*' Sep- 
arate and distinct parcels should be appraised separately, and not as a 
whole. ^^ In some states, the appraisers are required to determine the 
value of the land, deducting the amount of all liens and incumbrances 
prior to the mortgage.^^ And such rule would require deduction for 
unpaid taxes.''^ If the property sells for over two-thirds of the ap- 
praised valuation, any errors in making such deductions are consid- 
ered immaterial.^' This provision for reductions is for the benefit of 
the niortgagee, and the owner of the equity of redemption can not 
object to confirmation because of errors or misconduct of appraisers, 
in failing to make the deductions.^* 

An appraisement by duly qualified persons is presumed to be reg- 
ular and valid ;^° but it may be impeached by due motion to vacate, 
setting forth the grounds of objection,^^ and the appraisement may be 



''American Investment Co. v. Mc- 
Gregor, 48 Nebr. 779, 67 N. W. 785. 

"Zable V. Bank, 13 Ky. Law 197, 
16 S. W. 588; Crook v. Moore, 5 
Nebr. (Unoff.) 314, 98 N. "W. 713; 
Pierce v. Reed, 3 Nebr. (Unoff.) 874, 
93 N. W. 154; Levy v. Hinz, 3 Nebr. 
(Unoft.) 11, 90 N. W. 640; Iowa L. 
& T. Co. V. Devall, 63 Nebr. 826, 89 
N. "W. 381; Bostwick v. Keller, 62 
Nebr. 815, 87 N. W. 1060. 

•o Iowa L. & T. Co. V. "Whistler, 62 
Nebr. 698, 87 N. "W. 538; Smith 
Bros. L. & T. Co. v. Weiss, 56 Nebr. 
210, 76 N. "W. 564; Nye v. Rogers, 55 
Nebr. 353, 75 N. W. 854; American 
Inv. Co. V. McGregor, 48 Nebr. 779, 
67 N. "W. 785. See also Tichy v. 
Simecek, 5 Nebr. (Unoff.) 81, 97 N. 
W. 323 (appraisal together without 
prejudice). The premises need not 
be appraised in the smallest govern- 
mental subdivision. Hartwick v. 
Woods, 4 Nebr. (Unoff.) 103, 93 N. 
W. 415. 

■^'Eddy V. Kimerer, 61 Nebr. 498, 
85 N. W. 540; Globe Loan & T. Co. 
V. EUer, 61 Nebr. 226, 85 N. W. 48; 
Farmers' L. & T. Co. v. Schwenk, 54 
Nebr. 657, 74 N. W. 1063; Harte v. 
Wedge, 5 Nebr. (Unoff.) 231, 97 N. 
W. 1035. 

"' Beck V. McKibben, 63 Nebr. 413, 
88 N. W. 765; Young v. Wood, 63 
Nebr. 291, 88 N. W. 528; Newark 



Mutual Ben. Life Ins. Co. v. Sief- 
ken, 1 Nebr. (Unoff.) 860, 96 N. W. 
603. Taxes already included in the 
decree should not be deducted. 
Beck V. McKibben, 63 Nebr. 413, 88 
N. W. 765. 

»^Peck V. Starks, 64 Nebr. 341, 89 
N. W. 1040; Dartmouth Sav. Bank 
V. Foley, 2 Nebr. (Unoff.) 459, 89 
N. W. 317; Sanford v. Anderson, 2 
Nebr. (Unoff.) 315, 96 N. W. 486; 
Keene &c. Bank v. Johnson, 1 Nebr. 
(Unoff.) 69, 95 N. W. 504. An ap- 
praisement at $4,500 will not be set 
aside as insufficient where affidavits 
establish an average valuation of 
$6,300. Bird v. McCreary, 4 Nebr. 
(Unoft.) 183, 93 N. W. 684. 

" Green v. Paul, 60 Nebr. 7, 82 N. 
W. 98; Amoskeag Sav. Bank v. Rob- 
bins, 53 Nebr. 776, 74 N. W. 261; 
Hamer v. McKinley-Lanning L. &c. 
Co., 52 Nebr. 705, 72 N. W. 1041; 
Nebraska Land &c. Co. v. Cutting, 
51 Nebr. 647, 71 N. W. 312; Ameri- 
can Inv. Co. V. McGregor, 48 Nebr. 
779, 67 N. W. 785; Smith v. Fox- 
worthy, 39 Nebr. 214, 57 N. W. 994. 

°°McIntyre v. Evenson, 63 Nebr. 
849, 89 N. W. 397; De Groot v. Wil- 
son, 63 Nebr. 423, 88 N. W. 657; 
Union Trust Co. v. King, 3 Nebr. 
(Unoff.) 155, 91 N. W. 190. 

™ Siwooganock Guaranty Sav. 
Bank v. Feltz, 84 Nebr. 706, 121 N. 



201 



MODE AND TERMS 



§ 1613 



set aside for any substantial error/^ The valuation fixed by the ap- 
praisers will not be set aside for a mere mistake or underestimate,^' 
unless the inadequacy is so gross as to indicate fraud, since the ap- 
praisers act judicially.^^ All objections to the appraisement must be 
made before the sale, except where fraud is alleged.^" Upon vacating 
an appraisement, the court may order a new appraisement.^^ 

§ 1612. Notice of sale. — Due notice of the foreclosure sale must 
always be given,"^ in accordance with the existing statute,"^ or the pro- 



"W. 967; Mills v. Haner, 55 Nebr. 
445, 75 N. W. 1105; Ecklund v. 
Willis, 44 Nebr. 129, 62 N. W. 493; 
Bird V. McCreary, 4 Nebr. (Unoff.) 
183, 93 N. "W. 684; Union Sav. Bank 
V. Lincoln Normal University, 4 
Nebr. (Unoff.) 70, 93 N. W. 408; 
Nebraska Loan. &c. Trust Co. v. 
Dickerson, 1 Nebr. (Unoff.) 622, 95 
N. W. 774. An objection that the 
appraisement is irregular and not 
in accordance with law is too gen- 
eral. Bird V. McCreary, 4 Nebr. 
(Unoff.) 183, 93 N. W. 684. 

^ Ison V. Kinnaird, 13 Ky. L. 569, 
17 S. W. 633; Hartwick v. Woods, 
4 Nebr. (Unoff.) 103, 93 N. W. 415; 
Rieck V. Zoller, 3 Nebr. (Unoff.) 
721, 92 N. W. 728. See also Unland 
V. Crane, 63 Nebr. 451, 88 N. W. 667 
(error cured by sale for over two- 
thirds value); Union Sav. Bank v. 
Lincoln Normal University, 4 Nebr. 
(Unoff.) 70, 93 N. W. 408 (error not 
prejudicial). Correctness of ap- 
praisement can not be questioned 
except for fraud after foreclosure 
sale. Bank of Salem v. Cornell 
(Nebr.), 151 N. W. 148. Actual 
value must greatly exceed appraised 
value in order to raise presump- 
tions of fraud that will justify set- 
ting aside sale on that ground. 
Fink V. Murdock (Nebr.), 151 N. 
W. 951. 

■* Green v. Doerwald, 69 JCebr. 
698, 96 N. W. 634; Williams v. Tay- 
lor, 63 Nebr. 717, 89 N. W. 261; Cole 
V. Willard, 62 Nebr. 839, 88 N. W. 
134; National Life Ins. Co. v. Cran- 
dall, 2 Nebr. (Unoff.) 335, 96 N. W. 
624; Pearson v. Badger Lumber Co., 
2 Nebr. (Unoff.) 251, 96 N. W. 493. 
But see Big Boom Loan &c. Co. v. 
Ryan, 9 Ohio S. & C. PI. Dec. 518, 
6 Ohio N. P. 536. 



'» Williams v. Taylor, 63 Nebr. 717, 
89 N. W. 261; Brown v. Pitzpatrick, 
56 Nebr. 61, 76 N. W. 456; Ecklund 
V. Willis, 44 Nebr. 129, 62 N. W. 
493; Vought v. Foxworthy, 38 Nebr. 
790, 56 N. W. 538. 

=» Wells V. Frazier, 64 Nebr. 370, 
89 N. W. 1033; Peck v. Starks, 64 
Nebr. 341, 89 N. W. 1040; Farmers' 
&c. State Bank v. Thornburg, 64 
Nebr. 76, 89 N. W. 626; Waite v. 
Malchow, 63 Nebr. 650, 88 N. W. 
863; Mallory v. Patterson, 63 Nebr. 
429, 88 N. W. 686. 

°i Kline v. Camp, 49 Kans. 114, 30 
Pae. 175; Thompson v. Purcell, 63 
Nebr. 445, 88 N. W. 778; Ackerman 
v. Allender, 62 Nebr. 700, 87 N. W. 
543; Carstens v. Eller, 60 Nebr. 460, 
83 N. W. 743; Nebraska Loan &c. 
Co. V. Hamer, 40 Nebr. 281, 58 N. 
W. 695; Hubbard v. Draper, 14 Nebr. 
500, 16 N. W. 847. See also Logan 
V. Wittum, 67 Nebr. 143, 93 N. W. 
146; Wilson v. Neu, 4 Nebr. (Unoff.) 
348, 93 N. W. 941. 

"^Jensen v. Woodbury, 16 Iowa 
515; Routh v. Citizens' Bank, 28 La. 
Ann. 569; Saillard v. White, 14 La. 
84; Grant v. Walden, 6 La. 623 ; Ber- 
rien V. Fetters, 35 Mich. 233; Miller 
V. Lefever, 10 Nebr. 77, 4 N. W. 929; 
Dickey v. Goertner, 146 N. Y. S. 
264; Allis v. Sabin, 17 Wis. 626. See 
also Pendleton v. Vigneaux, 166 Fed. 
935 (notice to representatives and 
widow of defendant) ; Commerce 
Trust Co. V. Ellis (Mo.), 167 S. W. 
974 (book and page of record). 

^'Kopmeier v. O'Neil, 47 Wis. 593, 
3 N. W. 365. See also Allis v. Sabin, 
17 Wis. 626; Springer v. Law, 185 
111. 542, 57 N. E. 435, 76 Am. St. 57 
(statute concerning notice of execu- 
tion sales inapplicable); Crosby v. 
Kiest, 135 111. 458, 26 N. E. 589. 



1613 



FOEECLOSUKE SALES UNDER DECEEE 



203 



visions of the decree."* The time and place of the sale, and the terms 
and conditions of it, may be prescribed by the court,^' though it gen- 
erally leaves all these details to the master or other ofi&cer charged 
with the conduct of it ; but all his acts in relation to it are subject to 
the direction of the court at all times, and to its sanction when the 
sale is reported for confirmation. It is the duty of the officer, thus ap- 
pointed, to conduct all the proceedings leading up to the sale and the 
sale itself in a fair, impartial manner, so that the property may be 
sold for the best price possible. It is the duty of the court to see that 
the advertisement of sale is published in a paper that will give it gen- 
eral publicity, so as to invite competition, and that the sale in other 
respects is fairly conducted."" Where a statute directs publication in 
a paper "printed in the county" or "of general circulation in the 
county" or having a minimum circulation, such statute must be com- 
plied with."' Where publication in a daily newspaper of general cir- 
culation is not required by statute, the notice of foreclosure may prop- 
erly be published in a weekly newspaper in general use for the publica- 
tion of legal advertisements."' 



" Trust Co. V. Mauchchunk R. Co., 
1 Leigh Co. L. J. (Pa.) 84. See 
also Smith v. "Valentine, 19 Minn. 
452. 

«° Sessions v. Peay, 23 Ark. 39. 
Real property can only be sold on 
execution, in the county where the 
land is situated, and by the sheriff 
of that county; and such error is 
not cured by the terms of the de- 
cree or confirmation. Vietzen v. 
Otis, 46 Wash. 402, 90 Pac. 264. A 
sale of land under foreclosure, at a 
county seat, over eight miles from 
where the land was situated was 
allowed to stand, although not made 
on the premises. Aukam v. Zant- 
zinger, 98 Md. 380, 56 Atl. 820. An 
objection that a foreclosure sale was 
made at the south door of the court- 
house, instead of at the door of the 
courtroom, was held frivolous. Iowa 
Loan &c. Co. v. Nehler, 3 Nebr. 
(Unoff.) 680, 92 N. W. 729. 

°° State V. Holliday, 35 Nebr. 327, 
53 N. W. 142. 

" Minchrod v. Ullmann, 163 111. 25, 
44 N. E. 864; Mallory v. Patterson, 
63 Nebr. 429, 88 N. "W. 686; Nye v. 
Rogers, 55 Nebr. 353, 75 N. W. 854; 
Smith V. Foxworthy, 39 Nebr. 214, 



57 N. W. 994; Drew v. Kirkham, 8 
Nebr. 477, 1 N. W. 451; Trenery v. 
American Mtg. Co., 11 S. Dak. 506, 
78 N. W. 991. See also Shaw v. 
Smith, 107 Md. 523, 69 Atl. 116; 
Hoock V. Sloman, 155 Mich. 1, 118 
N. W. 489 (weekly newspaper); 
Michigan Mut. Life Ins. Co. v. Klatt, 
5 Nebr. (UnofC.) 305, 98 N. W. 436 
(socialistic paper of sufficient cir- 
culation) ; Polhemus v. Princilla 
(N. J. Eq.), 61 Atl. 263 (publication 
in two newspapers). The publish- 
er's affidavit that the newspaper is 
one of general circulation in the 
county is generally sufficient proof 
thereof. Bourke v. Sommers, 3 
Nebr. (Unoff.) 761, 92 N. W. 990. 
Advertisement in a county paper 
with an extensive circulation may 
be sufficient, though the property 
was located in a city. Barlow v. 
McCIintock, 10 Ky. L. 894, 11 S. W. 
29. Where part of the county is 
out off, including the mortgaged 
land, and annexed to a city, the no- 
tice should be published in the city 
paper. Roberts v. Loyola Perpetual 
Bldg. &c. Assn., 74 Md. 1, 21 Atl. 
684. 

"'Hoock V. Sloman, 155 Mich. 1, 
111. N. W. 489. 



203 



MODE AND TEKMS 



§ 1613 



The notice of the sale, when not regulated by statute, may be pre- 
scribed by the decree, or left to the officer intrusted with the execu- 
tion of the decree. It should fix the time of sale, and the hour of the 
day at which the sale is to be made should be designated; otherwise, 
if a reasonable price is not obtained for the property, the sale will be 
set aside.®" Any substantial mistake or indefiniteness in setting forth 
the time, will vitiate the sale."* But the fact that the notice bears a 
different date in the first insertion than in the successive issues of the 
paper containing it will not vitiate the proceedings, if the date of the 
sale itself and other essential features of the notice are correctly 
stated throughout the publications.''- It is proper to state the amount 
of the decree, but such statement is not essential to the validity of 
the notice. If the notice refers to the decree and the order of sale this 
is sufficient.'^ 

Where a decree directed notice of a sale to be published in a certain 
paper, which was after the decree and before the notice merged in an- 
other paper and its name changed, and on application to the judge at 
chambers he directed the sale to be advertised in the paper called by 



»» School Tp. Trustees v. Snell, 
19 111. 156. The decree directed 
the master to sell upon four weeks' 
notice of the time, terms and place 
of sale. The notice stated that 
the sale would be made on the 
2d day of January. "The proof 
showed that the property was sold 
at an enormous sacrifice. The no- 
tice as to the time of sale was 
insufficient. The 2d day of January 
included the astronomical period 
of a revolution of the earth 
upon its axis, twenty-four hours. 
2 Black. Com. 141 and notes. The 
sale, therefore, might consistently 
with the notice, have been made 
immediately before midnight of that 
day, and if it was so made, it is 
voidable. The object of a public 
sale is, by fairness and competi- 
tion, to evolve the full value of the 
property exposed, and produce that 
value in the form of money. This 
can, as a general rule, only be done 
by making the sale at a convenient 
or public place, accessible to bid- 
ders, and during the ordinary busi- 
ness hours of the day. The notice 
should have stated the hour of sale, 
or that the sale would be made be- 
tween certain named hours of the 



business portion of the day." See 
also Northrop v. Cooper, 23 Kans. 
432. 

'» May V. Hatcher, 130 Cal. 627, 63 
Pac. 33; Green, v. Corson, 50 Kans. 
624, 32 Pac. 380; Hendrix v. Nes- 
bitt, 96 Ky. 652, 16 Ky. L. 746, 29 
S. W. 627; Slater v. Taylor, 109 
Minn. 492, 124 N. W. 3, 134 Am. St. 
793 (omission of "a. m." immate- 
rial). 

"Pierce v. Reed, 3 Nebr. (Unoff.) 
874, 93 N. W. 154. 

" Springer v. Law, 185 111. 542, 57 
N. E. 435, 76 Am. St. 57; Iowa Loan 
&c. Co. V. Devall, 63 Nebr. 826, 89 
N. W. 381; Iowa Loan &c. Co. v. 
Whistler, 62 Nebr. 698, 87 N. "W. 
538; Amoskeag Sav. Bank v. Rob- 
bins, 53 Nebr. 776, 74 N. "W. 261; 
Stratton v. Reisdorph, 35 Nebr. 314, 
53 N. "W. 136; Gallentine v. Cum- 
mings, 4 Nebr. (Unoff.) 690, 96 N. 
W. 178; Levy v. Hinz, 3 Nebr. 
(Unoff.) 11, 90 N. "W. 640; Bourke 
V. Somers, 3 Nebr. (Unoff.) 761, 92 
N. W. 990. The exact amount due 
need not be stated in the notice. 
Bansemer v. Mace, 18 Ind. 27, 81 
Am. Dec. 344; Lewis v. Duane, 69 
Hun 28, 23 N. Y. S. 433. 



§ 1613 FOKECLOSUKB SALES UNDER DECREE 204 

its new name, the publication of the notice in that paper, in accord- 
ance with such order, was held valid and sufficient.'^' Even a change 
of place of publication and of the name of the paper does not destroy 
the identity of the paper, so long as it is the same in substance; and 
the notice may be published in the paper after such change without 
any further order of court, and the foreclosure will not be invali- 
dated.^* If the manner of advertising is fair, objection to it on the 
ground that the property did not sell for so much as the mortgagor 
valued it is without force.'^ The fact that one of the insertions ap- 
peared under the heading "Surrogate's Notices" was held not to in- 
validate the sale, especially where no one was injured or mislead 
thereby.^® 

The notice must be given in the manner provided by statute or pre- 
scribed by the order of court. The officer making the sale derives his 
authority from the decree, and he must pursue it substantially or his 
acts will be set aside.'' 

Generally when a notice is required to be published once in each 
week for a certain number of weeks, as, for instance, three weeks, it 
is not necessary that the time between the first aud last publications 
should be three full weeks, but only that one publication should be 
made on some day of each week.'* Though the mortgage contains a 
power of sale which provides for thirty days' notice, the court may 
decree a sale upon a shorter notice.'® The notice need not be published 
in all the editions of the paper issued on the days on which the notice 
was published.*" Where the decree required the advertisement to be 
published for three consecutive days next preceding the day of sale. 



V. Central R. Co., 99 U. S. 126; "Wood v. Morehouse, 45 N. Y. 

334, 25 L. ed. 394. 368, affg. 1 Lans. 405; Chamberlain 

"Perkins v. Keller, 43 Mich. 53, v. Dempsey, 22 How. Pr. (N. Y.) 

4 N. W. 559. A sheriff's return, 356, 13 Abb. Pr. 421; Alexander v. 

showing publication in the Work- Messervey, 35 S. Car. 409, 14 S. E. 

ers' Gazette, was held to sufficiently 854. See also Cortland Sav. Bank 

identify the paper designated in the v. Lighthall, 53 Misc. 423, 104 N. 

publisher's certificate as the Tri- Y. S. 1022 (twice a week for three 

City Workers' Gazette. Michigan successive weeks) ; Cook v. Lock- 

Mut. Life Ins. Co. v. Klatt, 5 Nebr. erby, 16 N. Dak. 19, 111 N. W. 628 

(Unoff.) 305, 98 N. W. 436. (seven successive times during six 

"Barlow v. McClintock, 10 Ky. weeks); Pink v. Murdock (Nebr.), 

L. 894, 11 S. W. 29. 151 N. W. 191 (notice insufficient 

'= State Realty &c. Co. v. Villaume, where published in every issue of a 

121 App. Div. 793, 106 N. Y. S. 698. weekly newspaper for thirty days 

"Augustine v. Doud, 1 Bradw. before the day of sale.) 

(111.) 588. '"Johnson v. Meyer, 54 Ark. 437, 

"Sheldon v. Wright, 5 N. Y. 497; 16 S. W. 121. 

Olcott V. Robinson, 21 N. Y. 150, re- ™ Bverson v. Johnson, 22 Hun (N. 

versing 20 Barb. 148, 78 Am. Dec. Y.) 115. 



205 MODE AND TEEMS § 1613 

in compliance with the statute, an advertisement on Thursday, Fri- 
day, and Saturday in a paper published daily except Sunday, was 
held sufficient where the sale was made on the following Monday.^^ 

The notice in its contents should be drawn in fairness both to those 
who are interested in the property and to those who may purchase it, 
and should neither contain uncalled for statements calculated to de- 
preciate the price unduly,'^ nor, on the other hand, should it contain 
statements which might unduly enhance the price or mislead the pur- 
chaser.^^ Thus, the advertisement should mention that the mortgaged 
premises were subject to a certain recorded lease for a term of years, ^* 
or that a junior mortgage on the premises had been held void at law, 
where such was the case.^° But the notice need not recite that the 
land is to be sold in parcels, though the decree so ordered.^" Where 
the statute provides that the notice of sale must specify the names of 
the mortgagor and the mortgagee, a notice designating the mortgagees 
in their firm name as "Cook & Dodge" does not render the foreclo- 
sure invalid.^^ A notice of sale which describes the property as it is 
described in the mortgage and decree is suflBcient.^* 

A party to the foreclosure is not entitled to notice of the time and 
place of the sale, but is required to use diligence to ascertain such 
facts.*' A personal notice of the sale need not be given to the de- 
fendant. The notice of sale prescribed by statute or by the decree is 
sufficient.'" The notice required by the decree will be held sufficient 
unless it is clearly unreasonable.'^ 

§ 1613. Terms of sale. — The general terms and conditions of the 
sale should be prescribed by the court and not left to the discretion of 
the officer or commissioner.'^ For example the decree may prescribe 

«i Wilson V. Petzold, 116 Ky. 873, «« German Loan Soc. v. Kern, 38 

76 S. W. 1093. Ore. 232, 62 Pac. 788, 63 Pac. 1052. 

«^ Marsh v. Ridgway, 18 Abb. Pr. ""Ring v. New Auditorium Pier 

(N. Y.) 262. It need not state tliat Co., 77 N. J. Eq. 422, 77 Atl. 1054. 

the property will be sold In parcels "Springer v. Law, 185 111. 542, 57 

when a sale in parcels has been or- N. B. 435, 76 Am. St. 57; Sanford v. 

dered. Hoffman v. Burke, 21 Hun Haines, 71 Mich. 116, 38 N. W. 777. 

(N. Y.) 58. See also Crumpton v. Baldwin, 42 

»=Veeder v. Fonda, 3 Paige (N. 111. 165 (promise to give personal 

Y.) 94. notice immaterial). 

"Carter v. Builders' Const. Co., "Crosby v. Kiest, 135 111. 458, 26 

129 App. Div. 318, 113 N. Y. S. 816. N. E. 599. 

*= Carter v. Builders' Const. Co., " Barbour v. Tompkins, 31 "W. Va. 

129 App. Div. 318, 113 N. Y. S. 816. 410, 7 S. E. 1, 3 L. R. A. (N. S.) 

"Fraser v. Seeley, 71 Kans. 169, 715. But see Fultz v. Davis, 26 

79 Pac. 1081. Grat. (Va.) 903. The sale must be 

" Cook V. Lockerby, 16 N. Dak. made in accordance with the decree, 

19, 111 N. W. 628. and its terms can not be changed 



§ 1613 FOEECLOSUEE SALES UNDER DECEEE 206 

that the sale be made for eash,°^ or that the bid may be paid in bonds,"* 
or that the mortgagee may bid at the sale.°° It is erroneous to decree 
a sale making the payments thereon fall due sooner than the instal- 
ments of the debt are payable by terms of the original obligation."' 
The officer making the sale should read the notice of sale, to inform 
the bidders of the location and description of the property; and he 
should also announce the terms of sale, if they are not contained in 
the published notice."^ The officer should also prepare a copy of the 
terms of sale, with a description of the premises, which should be 
signed by the purchaser, though it is held that sales made under de- 
crees of court are not within the statute of frauds."* The auctioneer, 
moreover, being the agent of both parties, his memorandum of the 
sale is binding upon the purchaser;"" but his memorandum must have 
his signature.^ This contract, however, is not regarded as complete 
until the officer's report of the sale has been confirmed. The terms of 
sale, according to the usual practice, provide that a deposit shall be 
paid down at the time of sale.^ The amount of this varies according 
to the circumstances of the case, but is generally about ten per cent, 
of the purchase-money, or an amount reasonably sufficient to insure 
completion of the purchase, or to cover expenses of resale.' It is 
proper to keep the biddings open till the deposit is made, and to re- 
sume the sale if the purchaser refuses or neglects to make it.* Under 

by agreement of the parties, ref- "^Koerner v. Gauss, 57 111. App. 

eree or counsel. Nebraska Loan &c. 668. 

Co. V. Hamer, 40 Nebr. 281, 58 N. *="Ware v. Hewett, 63 "W. Va. 47, 

W. 695; Mulling v. Franz, 147 N. Y. 59 S. B. 756. 

S. 418. »' Bioknell v. Byrnes, 23 How. Pr. 

■^Pool V. Young, 7 T. B. Mon. (N. Y.) 486. 

(Ky.) 587; Ing v. Cromwell, 4 Md. "^Halleck v. Guy, 9 Cal. 181, 70 

31; Hodges v. Copley, 11 Heisk. Am. Dec. 643; Fulton v. Moore, 25 

(Tenn.) 332. See also Worcban v. Pa. St. 468; Attorney-General v. 

Freeman, 34 Ark. 55. Where the Day, 1 Ves. Sen. 221; Sugden's 

decree orders a sale for cash, the Vendors, 148. See post § 1866. 

sheriff may properly announce that °» Craig v. Godfrey, 1 Cal. 415, 54 

he will not take checks or other Am. Dec. 299; Doty v. Wilder, 15 

similar instruments. Bartlett Es- 111. 407, 60 Am. Dec. 756; Hegeman 

tate Co. v. Fairhaven Land Co., 56 v. Johnson, 35 Barb. (N. Y.) 200; 

Wash. 437, 105 Pac. 848. A decree McComb v. Wright, 4 Johns. Ch. 

for sale upon credit, barring re- (N. Y.) 659; National Fire Ins. Co. 

demption, is improper where the v. Loomis, 11 Paige (N. Y.) 431. 

deed of trust provides for a cash ^Bicknell v. Byrnes, 23 How. Pr. 

sale with the right of redemption. (N. Y.) 486. 

Clark V. Jones, 93 Tenn. 639, 27 S. "Cummings v Hart 4 Nebr. 

W. 1009, 42 Am. St. 931. (Unoff.) 20, 93 N. W. 150; Michigan 

"Farmers' Loan &c. Co. v. Green Mut. L. Ins. Co. v. Klatt, 5 Nebr. 

Bay &c. R. Co., 6 Fed. 100, 10 Biss. (Unoff.) 305, 98 N. W. 436. 

(U. S.) 203. See also Sanxcy v. ^ Smith v. Deeson (Miss.), 14 So. 

Iowa City Glass Co., 63 Iowa 707, 40. See post § 1614. 

17 N. W. 429. * Lents v. Craig, 13 How. Pr. (N. 



207 MODE AND TEEMS § 1613 

special circumstances the sale may be adjourned to another day, and 
resumed if the deposit is not made in the mean time.° 

A statute which provides that if the bidder neglects or refuses to 
make immediate payment of the sum bid, the officer conducting the 
sale may immediately, or upon some other day to which he may in 
his discretion adjourn such sale, proceed to sell such land, does not 
contemplate that each bid, whether the highest or not, shall be accom- 
panied with the amount thereof, and it is not unusual to allow time 
within whicli to produce the amount of the bid. "A party attending 
such a sale can not know that he will be the successful bidder, and 
therefore should not be expected to be ready at the time of the bid 
with the money, the amount of which can not be ascertained until the 
bidding is concluded." Therefore, if upon the failure of a bidder to 
produce the money upon the spot, the oflBcer sells the land to another, 
though the first bidder soon after such sale tenders the amount of his 
bid, a resale may be ordered.® 

Where a purchaser in good faith left the place of sale without com- 
plying with the conditions of sale, under the supposition that he 
had until the next day to do this, and the referee then and there sold 
the premises again for a less price, the court ordered a resale upon 
the first purchaser's giving security to bid the same amount again.'' 

At a sale by a mortgage trustee late in the afternoon of Saturday, 
the terms of which were announced to be cash, the holder of the 
mortgage notes bid ten thousand and seventy dollars, and exhibited 
his certified check upon a bank for ten thousand dollars, and the prop- 
erty was struck off to him, although another person bid two thousand 
nine hundred and thirty-eight dollars and tendered the money for 
his bid. On Monday the highest bidder paid over the money bid, and 

Y ) 72, 2 Abb. Pr. 294; Sherwood in value. Mayer v. Jones, 132 App. 

v. Reade, 8 Paige (N. Y.) 633. See Div. 106, 116 N. Y. S. 300. 

also Converse v. Clay, 86 Mich. 375, « Converse v. Clay, 86 Mich. 375, 

49 N. W. 473. 49 N. W. 473. In such case it was 

= Where the parties agreed to ad- not improper to impose, as a con- 

journ the sale for a certain time, ditlon of such resale, that the first 

until commissioners appointed to bidder should deposit with the reg- 

determine the value of part of the ister, within ten days, a sum equal 

property taken by a city, had made to the amount of his bid, and a 

award and the same was confirmed, bond conditioned that the premises 

the agreement was a binding con- should on the resale bring the 

tract between the parties, and al- amount of the prior sale, together 

though the commissioners made an with all the costs of the cause and 

award as to the greater part of of the resale. 

the property, the agreement for ad- 'Lents v. Craig, 13 How. Pr. (N, 

journment continued until disposi- Y.) 72. 
tion of the balance, however small 



§ 1614 FORECLOSUEE SALES UNDER DECREE 208 

a confirmation of the sale was asked for. The other bidder contested 
the confirmation, but the court held that there had been a substantial 
compliance with the terms of the sale, and confirmed it.* Besides, 
the holder of the mortgage notes may, it seems, comply with the 
terms of the sale by merely indorsing the amount of the bid on the 
notes. The formality of paying over the money to the trustee and 
receiving it back from him is unnecessary.' 

§ 1614. Deposit required. — The trustee or commissioner appointed 
to conduct the sale may properly require that the purchaser shall de- 
posit or pay some portion of the price in cash at the time of sale ; and, 
if the sum be not so large as reasonably to deter persons from bid- 
ding, this requirement will not prevent a ratification of the sale.^° It 
has been held reasonable to require a deposit of one-tenth^^ or one-third 
of the bid,^^ or of fifty dollars as a guaranty of good faith.^' 

Where the sale is strictly for cash, the successful bidder must make 
his payment in accordance with the terms of sale, paying the entire 
price immediately.^* But where a requirement of immediate payment 
in cash of the whole purchase-money at the time of sale was oppressive 
and unjust to the mortgagor, the sale was set aside, in equity.^' The 
successful bidder must also furnish bonds or other security for de- 
ferred payment, as the court requires.^" It is proper to provide in a 
decree that, in case any other person than the mortgagee becomes pur- 
chaser at the sale, he shall be required to pay at once, in cash, a part 
of the bid as earnest money; and no objection can be taken that the 
same requirement is not made of the mortgagee.^' 

'Jacobs V. Turpln, 83 111. 424. the payment must be made in 

'Jacobs V. Turpin, 83 III. 424. money, and the tender of a note 

" Maryland Land &c. Soc. v. executed by the person entitled to 

Smith, 41 Md. 516. The deposit re- the proceeds of the sale is not suf- 

quired was $300, the property sell- ficient. Pursley v. Forth, 82 111. 327. 

ing for $5,600. Cummings v. Hart, Payment must be the full amount 

4 Nebr. (UnofC.) 20, 93 N. W. 150. of the bid, without a reduction for 

See also Sage v. Central R. Co., 99 illegal attorney's fees, included in 

U. S. 334, 25 L. ed. 394; Stoney v. the selling price. McComb v. Wil- 

Shultz, 1 Hill Eq. (S. Car.) 465, 27 kinson, 83 Mich. 486, 47 N. "W. 336. 

Am. Dec. 429. "Goldsmith v. Osborne, 1 Edw. 

"Smith V. Deeson (Miss.), 14 So. (N. Y.) 560. 

40. 1" Cornwall v. Palls City Bank, 92 

" Tyer v. Charleston Rice Milling Ky. 381, 13 Ky. L. 606, 18 S. W. 

Co., 32 S. Car. 598, 10 S. B. 1067. 452; Brown v. Lambeth, 2 La. Ann. 

"Michigan Mut. Life Ins. Co. v. 822; Burthe v. Bernard, 1 Rob. 

Klatt, 5 Nebr. (Unoff.) 305, 98 N. W. (La.) 395; Cook v. Fultz, 10 Sm. & 

436; Cummings v. Hart, 4 Nebr. M. (Miss.) 369. 

(Unoff.) 20, 93 N. W. 150. "Sage v. Central R. Co., 99 U. S. 

"Davis V. Hess, 103 Mo. 31, 15 334, 25 L. ed. 394. 
S. W. 324. Upon a sale for cash, 



209 



MODE AND TEEMS 



1614a 



The trustee is not obliged to accept the highest bidder if he has 
reason to apprehend that he has not the ability or intention to com- 
ply with the terms of sale. The requirement of a deposit is a reason- 
able precaution in order to insure the completion of the sale, or to 
cover the costs and expenses of it should it fail by the purchaser's de- 
fault.^« 

§ 1614a. Mortgagee purchasing at sale. — It has frequently been 
held that a mortgagee or trustee in a deed of trust can not purchase 
without leave at the foreclosure sale, and that where he does so the 
sale is voidable.^* If the mortgagee without leave purchases at such 
sale, he will be considered merely a mortgagee in possession of a re- 
deemable estate, and the mortgagor will have the right to disaffirm.^" 
Where the mortgagee purchases he is generally given credit for the 
amount of his claim, and pays only the surplus in money.^^ 

A trustee of mortgaged property will not be allowed to purchase 
for his own benefit, and if he makes such a purchase, it accrues in 
equity to the benefit of the cestui que trust, regardless of whether 
or not there was fraud. ^^ But the trustee of a corporate mortgage 
has been permitted to purchase for the benefit of bondholders.^' And 



" Gray v. Veirs, 33 Md. 18. 

" Cunningham v. Macon &c. R. 
Co., 156 U. S. 400, 39 L. ed. 471, 15 
Sup. Ct. 361; American Freehold 
Land Mtg. Co. v. Pollard, 127 Ala. 
227, 29 So. 598; McNeill v. McNeill, 
36 Ala. 109, 76 Am. Dec. 320; Burr 
v. Borden, 61 111. 389; Waite v. Den- 
nison, 51 111. 319; Duncan v. Home 
Co-operative Co., 221 Mo. 315, 120 
S. "W. 733; Sherrod v. Vass, 128 N. 
Car. 49, 38 S. E. 133; Craft v. Me- 
chanics' Home Assn., 127 N. Car. 
163, 37 S. E. 190. See also Owens 
V. Hornthal, 156 N. Car. 19, 72 S. 
E. 5. But see Innes v. Linscheid, 
126 111. App. 27; Chillicothe Paper 
Co. v. Wheeler, 68 111. App. 343. A 
second mortgagee may bid at the 
foreclosure sale of the first mort- 
gage. Delisi v. Ficarrotta, 135 N. 
Y. S. 653. A second mortgagee can 
not purchase and hold title ad- 
versely to the mortgagor. Pritch- 
ard V. Smith, 160 N. Car. 79, 75 S. 
E. 803. 

"American Freehold &c. Mtg. Co. 
V. Poland, 127 Ala. 227, 29 So. 598. 

=^Briant v. Jackson, 99 Mo. 585, 
13 S. W. 91; Lockwood v. Cook, 58 

14 — Jones Mtg. — Vol. III. 



Nebr. 302, 78 N. W. 624; Guthrie 
V. Guthrie, 4 Nebr. (Unoff.) 365, 93 
N. W. 1131; McLagan v. Witte, 1 
Nebr. (UnofC.) 438, 96 N. W. 490; 
Thomas v. Jarden, 57 Pa. St. 331; 
McMaster v. Kempshall, 1 Ch. 
Chamb. (U. C.) 329. See also Bur- 
ton V. Ferguson, 69 Ind. 486. The 
purchaser may retain the surplus to 
apply it on an elder mortgage or 
other lien. Cowles v. Raguet, 14 
Ohio 38. In Louisiana the pur- 
chaser retains the surplus to pay 
junior mortgages or other liens on 
the property; and if the sale is 
made to satisfy one of a series of 
mortgage notes, he must retain the 
surplus for satisfaction of the legal 
holders of the other notes. Citi- 
zens' Bank v. Webre, 44 La. Ann. 
334, 10 So. 728; Morris v. Cain, 39 
La. Ann. 712, 1 So. 797, 2 So. 418; 
Cummings v. Erwin, 15 La. Ann. 
289. 

^'Marquam v. Ross, 47 Ore. 374, 
78 Pac. 698, 83 Pac. 852. 

^ Nay Aug Lumber Co. v. Scran- 
ton Trust Co., 240 Pa. 500, 87 Atl. 
843, Ann. Cas. 1915 A, 235. 



§ 1615 FOEECLOSUKE SALES UNDER DECREE 310 

where a note is secured by a trust deed to a third person, it has been 
held that the cestui que trust may properly purchase at the sale.^* 

§ 1615. Sale on credit. — Ordinarily, except with the consent of 
both parties, the sale is for cash. The sheriff has no authority to sell 
on credit in the absence of any authority given in the deed,^^ or to 
accept anything other than lawful money in payment, unless other- 
wise authorized by the decree or the statute governing such sales.^' 
Although a sale upon credit might bring a larger price than a sale 
for cash, it would practically convert one mortgage into another or 
into several mortgages and might be prejudicial to the mortgagor.^^ 
But the mortgagee may allow time to the purchaser, and, whether this 
arrangement be made before or after the sale, it does not injure the 
mortgagor, and is no ground for setting aside the sale, if the credit 
is only for the amount due to him.^* But he can not allow credit be- 
yond this, except with the consent of the other incumbrancers entitled 
to the proceeds of sale.^° And where there are two joint mortgagors, 
one of them can not consent to a variance from the terms of sale pre- 
scribed in the mortgage, without the concurrence of the other.^" A 
court of equity may order the sale to be made on credit without vio- 
lating the obligation of the mortgage contract,^^ unless the mortgage 
deed expressly provides that the sale shall be for cash, in which case 
the requirement is obligatory and can not be disregarded by the 
court.'^ If a referee, with the consent of the parties in interest, sells 
the premises on time, and the sale is reported and confirmed, it will 

=« Freeman's Appeal, 74 Conn. 247, vis v. Hess, 103 Mo. 31, 15 S. W. 

50 Atl. 748. 324. 

''Sedgwick V. Fish, 1 Hopk. Ch. "Rice T. Schmidt, 11 La. 70; 

(N. Y.) 594; Crenshaw v. Selgfrled, Hooper v. Castetter, 45 Nebr. 67, 63 

24 Grat. (Va.) 272; Sauer v. Stein- N. W. 135. 

bauer, 14 Wis. 70. A sheriff, selling '' Sedgwick v. Fish, 1 Hopk. Ch. 

under a trust deed in the absence (N. Y.) 594. 

of the trustee, announced that the '^Mahone v. Williams, 39 Ala. 

purchase-price must be paid In 202; Rhodes v. Dutcher, 6 Hun (N. 

thirty minutes after the sale. The Y.) 453. 

wife of the debtor bid in the prop- ""Chaffraix v. Packard, 26 La. 

erty, and upon being asked what Ann. 172. 

she could do, replied that she did »" Arnold v. Greene, 15 R. I. 348, 

not know, and soon after left, with- 5 Atl. 503. 

out returning. The sheriff resold =« Stoney v. Shultz, 1 Hill Ch. (N. 

the property for a larger sum. It Y.) 465, 550, 27 Am. Dec. 429; Sedg- 

was held that the sheriff's conduct wick v. Fish, 1 Hopk. Ch. (N. Y.) 

was not oppressive. The sale be- 594; Lowndes v. Chisholm, 2 Mc- 

Ing for cash, he was justified In re- Cord Ch. (S. Car.) 455, 16 Am. Dec. 

quiring Immediate payment, and It 667. See also Wlllett v. Johnson, 84 

was proper for him to resell before Ky. 411, 8 Ky. L. 398, 1 S. W. 674. 

the bidders dispersed, thus avoiding "' Crenshaw v. Selgfried 24 Grat. 

the necessity of readvertising. Da- (Va.) 272. See to the contrary, 



311 SALE IN PARCELS § 1616 

not be set aside on the motion of a creditor of the deceased mortga- 
gor.'^ 

Where, upon a foreclosure sale by order of court, a lien is reserved 
in the deed to secure the unpaid instalments, the court may, before 
the final decree of distribution, proceed to a resale of the property by 
a supplementary proceeding without resorting to an original bill. If 
innocent purchasers have in the mean time acquired any rights, these 
must be protected.** 

When the terms of sale are cash, the purchaser must pay cash, and 
can not comply with such terms by a tender of the note of the person 
entitled to the proceeds of the sale.*' But where the terms of sale pro- 
vided for payment in cash, the acceptance by the sheriff of a certified 
check which is afterward paid, is not sufficient to defeat the sale.*" 
Thus a certified check tendered at a sale on Saturday afternoon, and 
paid the following Monday, was held equivalent to cash.*^ 

II. Sale in Parcels 

Section Section 

1616. Sale in parcels under statute 1618. Mode of sale determined by 

or decree. court or ofBcer. 

1617. Preference of mortgagor con- 1619. Sale in parcels for part of 

sidered. debt due. 

§ 1616. Sale in parcels under statute or decree. — A sale in parcels 
may be required by statute or by the court.^ In regulating foreclosure 
sales in equity, several states have by statute provided that the prop- 
erty shall be sold in parcels when practicable, but that, where a sale 
of the whole will be more beneficial to the parties, the decree shall be 
made accordingly. But courts of equity without statutory provisions, 
apply the same rules ; these provisions in fact being only confirmatory 
of principles by which courts of equity are necessarily governed in 
suits of foreclosure.^ 

Mitchell v. McKinny, 6 Heisk, powers in mortgages and trust 

(Tenn.) 83. deeds, see ch. xl, div 9. 

^Rhodes v. Dutcher, 6 Hun (N. = Livingston v. Mildrum, 19 N. Y. 

Y.) 453. 440, 443, per Selden, J.; Campbell v. 

^Stuart V. Gay, 127 U. S. 518, 32 Macomb, 4 Johns. Ch. (N. Y.) 534. 

L. ed. 119, 8 Sup. Ct. 1279. See also Wilmer v. Atlanta &c. Air 

»=Pursley v. Forth, 82 111. 327. Line R. Co., 2 Woods (U. S.) 447; 

See also Sage v. Central R. Co., 99 Gregory v. Purdue, 32 Ind. 453; 

U. S. 334, 25 L. ed. 394. Bernhard v. Hovey, 9 Kans. App. 25, 

'"Sheldon v. Pruessner, 52 Kans. 57 Pac. 245; Hutchison v. Yahn, 9 

593, 35 Pac. 204; Hanscom v. Meyer, Kans. App. 837, 61 Pac. 458; Walsh 

57 Nebr. 786, 78 N. W. 367. v. Colby, 153 Mich. 602, 117 N. W. 

^Jacobs V. Turpin, 83 111. 424. 207 (applying Comp. Laws 1897, § 

^As to sales in parcels under 528); Mclntyre v. Wyckoff, 119 



§ 1616 



FOKECLOSUEE SALES UNDER DECKEE 



313 



The premises may be sold in one piece or in parcels, as the court 
may consider most likely to bring the highest price.^ Several adjoin- 
ing tracts may be sold together* and a sale is not necessarily void be- 
cause the land was sold as an entirety.'' Where a sale in parcels will 
probably injure the interests of the defendants, the court will decree 
the sale of the entire mortgaged premises in one parcel, though com- 
posed of separate or distinct lots or tracts.^ Circumstances may render 
it impracticable to realize the best prices from the separate sale of 
disconnected parcels of land.'^ 

When the decree has directed the sale of the whole premises for 
the payment of an instalment then due, the court may in its discretion 
afterward regulate the execution of the decree by directing a sale of 



Mich. 557, 78 N. W. 654; Macomb v. 
Prentis, 57 Mich. 225, 23 N. W. 788; 
Sherwood v. Landon, 57 Mich. 219, 
23 N. W. 778; Magruder v. Eggles- 
ton, 41 Miss. 248; Thomas v. 
Thomas, 44 Mont. 102, 119 Pac. 283, 
Ann. Cas. 1913 B, 616 (statute held 
directory) ; Kanev. Jonasen, 55 Nebr. 
757, 76 N. W. 441; American Life 
&c. Ins. &c. Co. V. Ryerson, 6 N. J. 
Eq. 9; Montague v. Raleigh Sav. 
Bank, 118 N. Car. 283, 24 S. B. 6; 
Bartlett Estate Co. v. Fairhaven 
Land Co., 56 Wash. 437, 105 Pac. 
848 (statute held directory); Schrei- 
ber V. Carey, 48 Wis. 208, 4 N. W. 
124. A sale of one hundred acres 
in bulk, without being subdivided 
or offered in parcels is improper and 
may be vacated. State Bank v. 
Brown, 128 Iowa 665, 105 N. W. 49. 
Where four hundred acres were 
sold in bulk in satisfaction of a trust 
deed, and not in one hundred and 
sixty-acre tracts, as required by the 
Constitution of Mississippi, the sale 
was void. McClusky v. Trussel, 90 
Miss. 544, 44 So. 69. The presump- 
tion is that the officer followed the 
decree of the court in making the 
sale. Walsh v. Colby, 153 Mich. 602, 
117 N. W. 207. 

" McComb V. Prentis, 57 Mich. 225, 
23 N. W. 788; Thomas v. Thomas, 44 
Mont. 102, 119 Pac. 283, Ann. Cas. 
1913 B, 616; Kane v. Jonasen, 55 
Nebr. 757, 76 N. W. 441; Miller v. 
Trudgeon, 16 Okla. 337, 86 Pac. 523. 
See also Geuda Springs Town &c. Co. 
V. Lombard, 57 Kans. 625, 47 Pac. 
532; Burge v. Chestnut (Ky.), 121 



S. W. 989; Bartlett Estate Co. v. 
Fairhaven Land Co., 56 Wash. 437, 
105 Pac. 848. A manufacturing plant 
is properly sold as an entirety, 
where division into parcels would 
probably produce a lower price than 
its sale as a whole. Central Trust 
Co. V. United States Rolling Stock 
Co., 56 Fed. 5. 

* Hopkins v. Wiard, 72 Cal. 259, 
13 Pac. 687; Pepper v. Shepherd, 4 
Mackey (D. C.) 269; Thomas v. 
Thomas, 44 Mont. 102, 119 Pac. 283, 
Ann. Cas. 1913 B, 616 (buildings ex- 
tending over both tracts). See also 
Greenwell v. Moffet, 77 Kans. 41, 93 
Pac. 609; Harris v. Creveling, 80 
Mich. 249, 45 N. W. 85 (several lots 
constituting one farm). See post § 
1618. 

"Highland Land &c. Co. v. Audas, 
33 Ky. 214, 110 S. W. 325 (sale en- 
tire for less than amount of debt, 
interest and costs) ; Butters v. But- 
ters, 153 Mich. 153, 117 N. W. 203 
(no request for sale in parcels). 
Levy on the entire tract covered by 
a mortgage was held not excessive, 
though the value of the land was 
more than enough to satisfy the 
execution. Howland v. Donehoo 
(Ga.), 82 S. E. 32. 

" Elgutter V. Northwestern Mut. L. 
Ins. Co., 86 Fed. 500, 30 C. C. A. 218; 
Firestone v. Klick, 67 Ind. 309; Sal- 
yer v. Union Bank, 149 Ky. 847, 150 
S. W. 14. See also Bartlett Estate 
Co. V. Fairhaven Land Co., 56 Wash. 
437, 105 Pac. 848. 

' Miller v. Trudgeon, 16 Okla. 337, 
86 Pac. 523. 



213 SALE IX PARCELS § 1616 

a part only, if the premises are divisible, and may, upon the maturity 
of other instalments, direct further sales.^ The court need not render 
separate decrees for each parcel, one decree of sale being sufficient." 
Where the decree directs the sale of the premises in parcels, and the 
sheriff first offers for sale the rents and profits of each parcel for a 
term of years, and, receiving no bid, offers the fee of each parcel in 
succession, and finally the fee of the whole tract, the sale is valid, 
although the rents and profits of all the tracts together were not of- 
fered before the fee was offered.^" 

In determining whether the premises shall be sold together or in 
parcels, the court should direct the sale to be made in such manner 
as that the parties having equities subject to the mortgage shall not 
be prejudiced. ^^ It may sometimes happen that, even when the mort- 
gage describes the property in separate parcels, and the amount due 
on the mortgage may be raised by a sale of a portion of them, it may 
be necessary for the proper protection of the rights of subsequent in- 
cumbrancers that the property should be sold together ;^^ and in such 
case the court will so order although the statute provides that the 
decree shall be for the sale of such part as may be sufficient to pay 
the mortgage debt and costs ;^^ and even after a sale of a part, the 
court, still having jurisdiction of the parties, and the subject, may, 
for the protection of the parties, make a supplementary order for the 
sale of the remainder.^* A sale in entirety of two parcels of land, 
covered by separate trust deeds, should not be ordered, unless the in- 
terests of all parties require it.^^ 

If an order to sell in parcels be erroneous, a party aggrieved should 
apply to have the order amended ; it is not a defense to the suit which 
can be taken advantage of by plea, answer, or demurrer.^" 

A statutory provision that, in sales of real property consisting of 

'American Life &c. Ins. &c. Trust Beekman v. Gibbs, 8 Paige (N, Y.) 

Co. V. Ryerson, 6 N. J. Eq. 9. See also 511. 

Kilmer v. Gallaher, 107 Iowa 676, 78 " Johnson v. Hambleton, 52 Md. 

N. W. 685. 378; Gregory v. Campbell, 16 How. 

"Nix V. Thackaberry, 240 111. 352, Pr. (N. Y.) 417. 

88 N. B. 811. "Livingston v. Mildrum, 19 N. Y. 

"Carpenter v. Russell, 129 Ind. 440; Dobbs v. Niebuhr, 3 N. Y. S. 

571, 29 N. E. 36. See also Nix v. 413. 

Williams, 110 Ind. 234, 11 N. E. 36; "Livingston v. Mildrum, 19 N. Y. 

Bechtel v. Weir, 152 Cal. 443, 93 440; De Forest v. Farley, 4 Hun (N. 

Pac. 75. Y.) 640. 

"Blazey v. Delius, 74 111. 299; >» Warner v. Grayson, 200 U. S. 
Boteler v. Brookes, 7 Gill & J. (Md.) 257, 50 L. ed. 470, 26 Sup. Ct. 240. 
143; De Forest v. Farley, 62 N. Y. « Horner v. Corning, 28 N. J. Bq. 
628; Malcolm v. Allen, 49 N. Y. 448; 254. See also County Bank v. Gold- 
Livingston V. Mildrum, 19 N. Y. 440; tree, 129 Cal. 160, 61 Pao. 785. 



§ 1617 FOKECLOSUEE SALES UNDER DECREE 214 

several lots or parcels, the lots shall be sold separately, and that the 
debtor may direct the order in which the lots shall be sold does not 
apply where each parcel is first offered for sale separately, and no bids 
are received. In such case the property may then be offered and sold 
as a whole, and the sale will be upheld unless other reasons appear 
for setting it aside.^^ Even a sale in disregard of the statute is not 
absolutely void. It is only voidable, and will ordinarily be set aside on 
timely application.'' Where the mortgage itself provides in what par- 
cels the property shall be sold, the court may properly follow such 
provision in decreeing the sale.'* Where property is described in a 
mortgage as a single tract, it may properly be sold in entirety, unless 
the court directs otherwise.^" 

§ 1617. Preference of mortgagor considered. — The wishes of the 
mortgagor in respect to the mode and order of sale should be followed, 
if this can be done with safety to the mortgagee, and without injury 
to other parties in interest. If there be no question that the property 
is ample to satisfy the debt, whether sold together or in parcels, and 
there are no subsequent equities to be considered, the mortgagee in 
such case has no right to direct whether the sale shall be in one way 
or the other.^^ Where a decree of foreclosure directed the sale of cer- 
tain city lots, and the mortgagor presented a written request to the 
referee to have the corner lot, which was the most valuable, sold first, 
but the referee disregarded his request, which was made in good faith 
to increase the amount realized from the property, the sale was set 
aside and a resale ordered.^^ 

"Bechtel v. "Wier, 152 Cal. 443, 93 42 Mich. 304, 3 N. W. 961. See also 

Pac. 75, 15 L. R. A. (N. S.) 549; Blood v. Munn, 155 Cal. 228, 100 Pac. 

Connick v. Hill, 127 Cal. 162, 59 694 (waiver of stipulation). 
Pac. 832; Marston v. White, 91 Cal. *" Thomas v. Thomas, 44 Mont. 102, 

37, 27 Pac. 588; Walsh v. Colby, 119 Pac. 283, Am. Cas. 1913 B, 616. 
153 Mich. 602, 117 N. W. 207; "Walworth v. Farmers' Loan &c. 

Tichy V. Simeeek, 5 Nebr. (Unoff.) Co., 4 Sandf. Ch. (N. Y.) 51; Brown 

81, 97 N. W. 323. Separate parcels v. Frost, Hoffm. (N. Y.) 41. See 

mortgaged by a debtor and his also Caufman v. Sayre, 2 B. Men. 

surety for the same debt, were held (Ky.) 202; Wolcott v. Schenck, 23 

to have been properly sold as one How. Pr. (N. Y.) 385; Bartlett 

tract, after failure to sell the parcels Estate Co. v. Fairhaven Land Co., 

separately. Bechtel v. Wier, 152 Cal. 56 Wash. 437, 105 Pac. 848 (effect 

443, 93 Pac. 75, 15 L. R. A. (N. S.) of written request to sheriff before 

549. sale). A commissioner selling land 

" Vigoureux v. Murphy, 54 Cal. on foreclosure need not comply with 

346; Browne v. Ferrea, 51 Cal. 552; the mortgagor's request that ho 

Blood V. Light, 38 Cal. 649, 654; San offer the land in parcels a second 

Francisco v. Pixley, 21 Cal. 56. time. Connick v. Hill, 127 Cal. 162, 

"Bank v. Charles, 86 Cal. 322, 24 59 Pac. 832. 
Pac. 1019; Hopkins v. Wiard, 72 Cal. ^^^King v. Piatt, 37 N. Y. 155. 
259, 13 Pac. 687; Mickle v. Maxfield, 



215 SALE IN- PARCELS § 1618 

Under some circuinstances, where the property is of sufScient value, 
it seems that a mortgagee would be required to sell the land in such 
a manner that the mortgagor might have a homestead allotted to him 
in the residue. ^^ And so, a wife who joined with her husband in exe- 
cuting a mortgage, may assert her homestead right in a part of the 
mortgaged premises, and her right to have another part of the prem- 
ises sold first to satisfy the mortgage.^* 

If the mortgagor does not ask to have the property sold in parcels, 
though he has asked for and had adjournments of the sale, the sale 
will not be set aside because all the premises are sold as one parcel.^^ 
Where a building stood on both of two adjoining lots and the court 
was not asked to subdivide the property, a sale in one parcel was up- 
held.^^ But in a case where the security was doubtful, and the prop- 
erty consisted of one parcel, which, after the making of the mortgage, 
was laid out in streets and building lots, the mortgagee objected to a 
sale in parcels, unless security should be given him, because that por- 
tion of the land laid out for streets would not be included, and a sale 
in one parcel was held proper.^' A mortgagee who holds a mortgage 
upon the entire interest in a lot of land can not be called upon to al- 
low a sale of an undivided interest, even if the mortgage be made by 
joint tenants who desire a separate sale of undivided interests to en- 
able them more easily to adjust their rights as between themselves.^* 

§ 1618. Mode of sale determined by court or officer. — Whether the 
property shall be sold entire or in parcels is in some states determined 
by the court, generally through a reference, and in others is left to 
the discretion of the officer making the sale.^^ When determined by 
the court, the order of sale sometimes directs the form and manner 
of the division, and designates the part first to be sold,'" or more prop- 
erly to be offered for sale.^^ Objections to the manner of dividing the 

''Weil V. Uzzell, 92 N. Car. 515. =*See statutory regulations of the 

" Butters v. Butters, 153 Mich. 153, different states. In Nebraska, the 

117 N. W. 203. Code leaves the question whether 

" Guarantee Trust &c. Deposit Co. the mortgaged premises shall be sold 

V. Jenkins, 40 N. J. Eq. 451. as a whole or In parcels to the dis- 

'° Butters v. Butters, 153 Mich. 153, cretion of the oificer making the 

117 N. W. 203. sale, in case the court does not di- 

" Griswold v. Fowler, 24 Barb. (N. rect the manner in the decree. Mal- 

Y.) 135; Lane V. Conger, 10 Hun (N. lory v. Patterson, 63 Nebr. 429, 88 

Y.) 1, and cases cited. See also N. W. 6S6. 

Ellsworth V. Lockwood, 9 Hun (N. ="■ Brugh v. Darst, 16 Ind. 79; Bard 

Y.) 548, 42 N. Y. 89. v. Steele, 3 How. Pr. (N. Y.) 110. 

^ Schoenewald v. Dieden, 8 Bradw. ^ Cissna v. Haines, 18 Ind. 496. 

(111.) 389; Frost v. Bevins, 3 Sandf. This order may be based on the facts 

Ch. (N. Y.) 188. shown at the hearing, or upon the 



1618 



FORECLOSURE SALES UNDER DECREE 



216 



land shoiald be called to the attention of the court immediately and 
before the sale."^ An order once made will not be disturbed without 
good cause.^^ 

When by statute or rule of court the officer determines upon these 
matters, he must sell in parcels in just the same cases in which the 
statute or the general principles of equity would make this course 
obligatory upon the court ; and if he makes it otherwise, the court will 
set it aside.^* The officer must sometimes exercise a discretion, which 
is judicial in its nature,'^ and an honest exercise of such discretion 
will be as final as the action of a judicial tribunal.^" Where the evi- 
dence is conflicting his discretion will not be overruled.^^ If the offi- 
cer, instead of exercising his own discretion, relies upon the pur- 
chaser for his information, the sale may be declared invalid.** 

A statutory provision directing the sale of only so much as will pay 
the amount due with costs, if a division can be made, is peremptory 
upon the court,'^ leaving only the determination of the question 
whether such division can be made without injury to the whole. A 
sale, however, made without regard to this provision, is only voidable, 
and not void.*" 



consent of the parties, although 
there be no foundation for it in the 
pleadings. Cord v. Southwell, 15 
Wis. 211; Bank of Ukiah v. Reed, 131 
Cal. 597, 601, 63 Pac. 921; Hopkins 
V. Wiard, 72 Cal. 259, 262, 13 Pac. 
687; Macomb v. Prentis, 57 Mich. 
225, 23 N. "W. 788. 

'^Miller v. Kendrick (N. J.), 15 
Atl. 259. 

'= Vaughn v. Nims, 36 Mich. 297; 
Von Hemert v. Taylor, 76 Minn. 386, 
79 N. W. 319. 

"^ Waldo V. Williams, 3 111. 470; 
Meriwether v. Craig, 118 Ind. 301, 
20 N. E. 769; Benton v. Wood, 17 
Ind. 260; White v. Watts, 18 Iowa 
74; O'Donnell v. Lindsay, 39 N. Y. 
Sup. Ct. 523. See also Lay v. Gib- 
bons, 14 Iowa 377, 81 Am. Dec. 487; 
Russell V. Conn, 20 N. Y. 81. In 
Alabama, when the lands are sus- 
ceptible of division, and there are 
infant defendants whose titles will 
be affected, the court should decree 
a sale only after ascertaining 
whether or not the Interest of the 
infants will probably be promoted 
by a sale in parcels. Walker v. 
Hallett, 1 Ala. 379; Fry v. Mer- 
chants' Ins. Co., 15 Ala. 810. But if 



the defendants are adults, the court 
may, unless a sale in parcels is 
asked for, decree a sale without first 
ascertaining whether the sale will 
be for the interest of such defend- 
ants. Ticknor v. Leavens, 2 Ala. 
149; Homer v. Schonfeld, 84 Ala. 
313, 4 So. 105; Gladden v. American 
Mortgage Co., 80 Ala. 270. In Ken- 
tucky the court, before ordering a 
sale, must be satisfied whether or 
not the property can be divided 
without impairing its value. Civ. 
Code, § 694. The court may satisfy 
itself in any way as to the divisibil- 
ity of the property. Sears v. Henry, 
13 Bush (Ky.) 413, 415; McFarland 
V. Garnett, 10 Ky. L. 91, 8 S. W. 17. 

^ Snyder v. Stafford, 11 Paige Ch. 
(N. Y.) 71. 

'"O'Donnell v. Lindsay, 39 N. Y. 
Super. Ct. 523. See also Hughes v. 
Riggs, 84 Md. 502, 36 Atl. 269. 

" Hughes V. Riggs, 84 Md. 502, 36 
Atl. 269. 

== O'Donnell v. Lindsay, 39 N. Y. 
Sup. Ct. 523. 

""Bank V. Arnold, 5 Paige (N. Y.) 
38. 

"Bozarth v. Largent, 128 111. 95, 
21 N. E. 218; Meriwether v. Craig, 



217 SALE IN- PARCELS § 1618 

"Without any statutory requirement, a court of equity will order a 
sale in parcels when the property consists of distinct tracts, together 
worth much more than the debt secured.*^ The mere fact that the 
premises are a meager security and are going to ruin and decay does 
not justify a sale of the entire premises for a debt only partly due.*^ 
A decree for such a sale should rest upon an allegation and finding 
that the premises can not be divided without manifest injury to all 
parties concerned.''^ A sale of the property as an entirety is proper 
where it appears that a division of it into parcels would lessen its 
selling value.** 

"Where no request is made by the debtor to have the lands offered in 
separate parcels, and where the order of sale directs that all of the 
parcels be sold subject to a prior mortgage covering all of them, a 
sale of the whole property together should be confirmed.*^ 

If the decree of sale describes a quarter section as a single tract, it 
is not the duty of the master or other officer to divide the land into 
parcels in making the sale. If the decree describes several distinct 
parcels, then it is the duty of the officer to sell each parcel separately.*" 

The court having ordered that the property shall be sold either in 
one lot or in separate parcels, the parties to the suit can not by agree- 
ment disregard the order, and make a valid sale in any other man- 
ner.*^ A subsequent party in interest has a right to insist upon a 
strict compliance with the decree and the statute in the manner of the 
sale.** 

The fact that several parcels mortgaged together had previously 
been held, used, and conveyed together as one farm, is a sufficient rea- 
son for selling the whole in one parcel.*^ Where several lots naturally 
constitute one farm, one of which is partly fenced and cultivated 
while the other is not, they may be sold together.^" A tract of two 
hundred acres, lying in one section, cultivated as one farm, and mort- 
gaged as a whole, may be sold in one body, although parts of the tract 
are in separate quarter sections, and separately assessed.^^ On the 

118 Ind. 301, 20 N. E. 769; 3 Wait's " Babcock v. Perry, 8 Wis. 277. 

Prac. 376. " Farmers' & Millers' Bank v. 

" Ryerson v. Boorman, 7 N. J. Eq. Luther, 14 Wis. 96. 

167, 640. "Johnson v. Hambleton, 52 Md. 

"Blazey v. Dellus, 74 111. 299. 378; Yale v. Stevenson, 58 Mich. 537, 

^Blazey V. Delius, 74 111. 299. 25 N. W. 488; Anderson v. Austin, 

"Central Trust Co. v. United 34 Barb. (N. Y.) 319; Whitbeck v. 

States Rolling Stock Co., 56 Fed. 5. Rowe, 25 How. Pr. (N. Y.) 403. 

« Gueda Springs Town &c. Co. v. =" Harris v. Creveling, 80 Mich. 249, 

Lombard, 57 Kans. 625, 47 Pac. 532; 45 N. W. 85. 

Bell V. Taylor, 14 Kans. 277. "Pierce v. Reed, 3 Nebr. (Unoff.) 

*'Patton V. Smith, 113 111. 499. 874, 93 N. W. 154. 



§ 1619 FOEECLOSUEE SALES UNDER DECEEE 218 

other hand, the fact that separate parcels have previously been held 
and used by themselves, and are evidently capable of being so used to 
advantage in the future, affords a presumption that they should be 
sold separately." Thus, where the land mortgaged was divided into 
two separate farms, it was proper upon foreclosure to sell the land 
in two parcels.^^ 

Under a mortgage of real property, together with machinery and 
fixtures thereon, a provision of the mortgage, that in case of fore- 
closure the personal property shall be sold with the realty, will be fol- 
lowed in the decree.^* Generally land and buildings used as a mill, 
with the machinery therein and the water power connected with the 
same, constitute a unit, and, under a mortgage covering such prop- 
erty, the whole should be sold together without any special provision 
therefor, because the parts could not be sold separately without a 
large depreciation.^^ 

§ 1619. Sale in parcels for part of debt due. — The statutes of sev- 
eral states provide that, when a portion only of the mortgage debt is 
due, a portion of the mortgaged premises may be sold in satisfaction 
of such part, and that the judgment may stand as security for any 
subsequent default ; and that upon the happening of such default the 
court shall order a second sale to satisfy such default; and that the 
same proceeding may be had as often as a default shall happen. The 
subsequent sale is made by order of court upon the plaintiff's petition, 
which should state all the essential facts upon which the order is to 
be founded. Notice of the application must be given to all persons 
interested who have appeared in the action. The order for sale is is- 
sued as in other cases, and the sale is made in the same manner.°° The 
mere fact that the premises are a doubtful security for the debt and 
are depreciating in value, will not justify a sale of the entire premises 
for a debt, of which only a portion is due. In such case, it must be 
alleged in the pleadings and decided by the court that the premises 

"^Hubbard v. Jarrell, 23 Md. 66; The New York Code of Civil Pro- 
Clark V. Kraker, 51 Minn. 444, 53 cedure, § 1636, provides that when 
N. W. 706; Whitbeck v. Rowe, 25 only part of the mortgage debt is 
How. Pr. (N. Y.) 403. due, and the property is so situated 

'^ Mclntyre v. Wyckoff, 119 Mich, that it can be sold in parcels with- 

557, 78 N. W. 654. out injury to the interests of the 

"Wood v. Whelen, 93 111. 153. parties, the final judgment must di- 

■"^Hill V. National Bank, 97 U. S. rect that no more of the property 

450, 24 L. ed. 1051; Barlow v. Mc- be sold, in the first place, than will 

Clintock, 10 Ky. L. 894, 11 S. "W. 29. be sufficient to satisfy the sum due, 

" Bank of Napa v. Godfrey, 77 with costs and expenses of the sale. 

Cal. 612, 20 Pac. 142. See also Cauf- Long v. Lyons, 54 How. Pr. (N. Y.) 

man v. Sayre, 2 B. Mon. (Ky.) 202. 129. 



219 



ORDER Of SALE 



§ 1619 



can not be divided without material injury to the parties concerned.^^ 
If part of the debt be not due, the court should decree a sale of so 
much of the premises as will be sufficient to pay the amount due, and 
a further order of sale should be obtained on the maturing of the 
unpaid instalment of the debt, if the premises can be divided; and 
before rendering a judgment for a sale the court should determine 
whether the premises can be sold in parcels without injury.''* If the 
premises can not be divided, the decree should provide for the pay- 
ment of the money to the mortgagee in extinction of the debt, unless 
some safe course more beneficial to the mortgagor exists.^" Generally, 
a sale of the whole estate, when there is no order for a sale in parcels 
for an instalment due before the principal amount, exhausts the 
remedy of the creditor, and passes a clear title to the purchaser."" In 
such a case the creditor may retain from the proceeds of the sale 
enough to satisfy unpaid instalments not yet due.''^ 

III. Order of Sale 



Section 

1620. Sale in inverse order of alien- 

ation — Mortgagor's interest 
sold first. 

1621. Rule of inverse order — Adop- 

tion and application. 

1622. Rule applied to subsequent 

mortgages. 

1623. Parts of property sold under 

judgment. 

1624. Record and notice of subse- 

quent deeds. 

1625. Agreements charging certain 

parcels. 

1626. Iowa and Kentucky rule — 

Contribution according to 
value. 



^'Blazey v. Delius, 74 III. 299. 

^Hannah v. Dorrell, 73 Ind. 465 
Griffin v. Reis, 68 Ind. 9. 

™ Walker v. Hallett, 1 Ala. 379 
Levert v. Redwood, 9 Port. (Ala.; 
79; Firestone v. Klick, 67 Ind. 309 
Knapp V. Burnham, 11 Paige (N. 
Y.) 330. See ante § 1577. 

«° Poweshiek Co. v. Dennison, 36 
Iowa 244, 14 Am. Rep. 521, and cases 
cited; Todd v. Davey, 60 Iowa 532, 
15 N. W. 421; Escher v. Simmons, 
54 Iowa 269, 6 N. W. 274; Clayton v. 
Ellis, 50 Iowa 590. See also Brad- 
ford V. Harper, 25 Ala. 337; Kelly v. 
Payne, 18 Ala. 371; Marston v. Mars- 
ton, 45 Maine 412; Haynes v. Wel- 
lington, 25 Maine 458; Brown v. 



Section 

1627. Time of valuation — Sale in 

parcels. 

1628. Recourse to two funds. 

1629. Mortgagee holding lien on 

other property — Exoneration 
of surety. 

1630. Mortgagee of two parcels se- 

curing same debt. 
1630a. Mortgage by tenants in com- 
mon securing debt of one 
— Partition. 

1631. Deduction of value of parcel 

released before charging 
other portions. 

1632. Homestead. 

1632a. Duty of mortgagor to assert 
homestead right. 

Tyler, 72 Mass. 135, 69 Am. Dec. 239; 
Ritger v. Parker, 8 Cush. (Mass.) 
145, 54 Am. Dec. 744; Clower 
V. Rawlings, 9 Smed. & M. (Miss.) 
122, 47 Am. Dec. 108; Stark v. Mer- 
cer, 3 How. (Miss.) 377; Packer v. 
Rochester &c. R. Co., 17 N. Y. 283; 
Holden v. Sackett, 12 Abb. Pr. (N. 
Y.) 473; Lansing v. Goelett, 9 Cow. 
(N. Y.) 346; Carter v. Walker, 2 
Ohio St. 339; West Branch Bank v. 
Chester, 11 Pa. St. 282, 57 Am. Dec. 
547; Hodson v. Treat, 7 Wis. 263; 
Tallman v. Ely, 6 Wis. 244; Hope v. 
Booth, 1 Barn. & Ad. 498. 

°' Fowler v. Johnston, 26 Minn. 
338, 3 N. W. 986, 6 N. W. 486. 



§ 1620 FOEEOLOSUEE SALES UNDEE DECEEE ^ 220 

§ 1620. Sale in inverse order of alienation — Mortgagor's interest 
sold first. — ^When the mortgagor has made successive sales of distinct 
parcels of the mortgaged land to different persons by warranty deeds, 
it is generally regarded as only equitable that the mortgagee, when he 
afterward proceeds to foreclose his mortgage, should be required to sell 
in the first place such part, if any, as the mortgagor still retains, and 
then the parts that have been sold in the same subdivisions, begin- 
ning with the parcel last sold by the mortgagor.^ This rule rests upon 
the reason that, where the mortgagor sells a part of the mortgaged 
premises without reference to the incumbrance, it is right between him 
and the purchaser that the part still held by the mortgagor shall first 
be applied to the payment of the debt;^ and this part is regarded as 
equitably charged with the payment of the debt; therefore, when he 
afterward sells another portion of that remaining in his possession, 
the second purchaser simply steps into the shoes of the mortgagor as 
regards this land, and takes it charged with the payment of the mort- 
gage debt as between him and the purchaser of the first lot ; but still, 
as between the second purchaser and the mortgagor, it is equitable that 
the land still held by the latter should pay the incumbrance. In this 
manner the equities apply to successive purchasers. This order of 
equities proceeds upon the supposition that each subsequent purchaser 
has actual or constructive notice, by the record of the deed or other- 
wise, of each prior conveyance, by the mortgagor of portions of the 
premises.^ Not only is the portion of the mortgaged property retained 

^Farmers' Sav. &c. Assn. v. Kent, Morgan, 79 Mo. 47; Mahagan v. 

117 Ala. 624, 23 So. 757 (quoting Mead, 63 N. H. 570; Hoy v. Bram- 

text); Northwestern Land Assn. v. hall, 19 N. J. Eq. 563, 97 Am. Dec. 

Harris, 114 Ala. 468, 21 So. 999; 687; Gaskill v. Sine, 13 N. J. Eq. 

Burton v. Henry, 90 Ala. 281, 7 So. 400, 78 Am. Dec. 105; Blackledge v. 

925; Aderholt v. Henry, 87 Ala. Nelson, 2 Dev. Eq. (N. Car.) 65; 

415, 6 So. 625; Prickett v. Sibert, Schrack v. Shriner, 100 Pa. St. 45; 

75 Ala. 315; Meecham v. Steele, 23 Mevey's Appeal, 4 Pa. St. 80; Hodg- 

III. 135; Hahn v. Behrman, 73 Ind. don v. Naglee, 5 Watts & S. (Pa.) 

120; Gantz v. Toles, 40 Mich. 725; 217; Messervey v. Barelli, 2 Hill Ch. 

Morey v. Duluth, 69 Minn. 5, 71 N. (S. Car.) 567. This equity is recog- 

W. 694; Foster v. Union Bank, 34 nized even In Kentucky, where it is 

N. J. Eq. 48. See contribution to held that there is no equity of one 

redeem, ante §§ 1080-1092. purchaser over another. Blight v. 

'^ Andreas v. Hubbard, 50 Conn. Banks, 6 T. B. Hon. (Ky.) 192, 197, 

351; Boone v. Clark, 129 111. 466, 21 17 Am. Dec. 136; Dickey v. Thomp- 

N. E. 850; Lock v. Fulford, 52 111. son, 8 B. Mon. (Ky.) 312, 314. 

166; Mickley v. Tomlinson, 79 Iowa = See ante § 743. For cases giving 

383, 44 N. "W. 684; Massle v. Wilson, the reason for the rule, see Weath- 

16 Iowa 390; Bates v. Rudick, 2 erby v. Slack, 16 N. J. Eq. 491; 

Iowa 423; Millsaps v. Bond, 64 Miss. Tompkins v. Wiltberger, 56 111. 385; 

453, 1 So. 506; Georgia Pacific R. Lock v. Fulford, 52 111. 166; Igle- 

Co. V. Walker, 01 Miss. 481; Hall v. hart v. Crane, 42 111. 261; Matteson 



231 ORDER OF SALE § 1631 

by the mortgagor first liable to satisfaction of the mortgage, but where 
all the property has been sold in parcels to different purchasers at dif- 
ferent times, the parcels are liable in inverse order of alienation, upon 
foreclosure.* Where the mortgage covers two parcels of land, on one 
of which rests another incumbrance, recourse should first be had to the 
parcel not subject to the other mortgage. ° 

A provision in a mortgage covering several distinct lots that lots 
may be released upon the payment of not less than a specified sum, 
does not constitute it, in legal efEect, a separate mortgage upon each 
lot, securing distinct sums of money; and after the release of lots in 
accordance with such provision upon foreclosure of the mortgage upon 
the remaining lots the amount due is not to be apportioned among the 
several lots. The mortgage in such case is one transaction, and the 
provision as to the release of the mortgage on distinct lots is condi- 
tional upon payment.' 

§ 1621. Rule of inverse order — ^Adoption and application. — These 
equitable considerations have led to the adoption of the rule that the 
mortgagee in such case shall sell the mortgaged land in the inverse 
order of its alienation by the mortgagor; and it will be seen by the 
cases cited that this rule has been generally adopted.'' 

V. Thomas, 41 111. 110; WikofC v. "Shepherd v. Pepper, 133 IJ. S. 
Davis, 4 N. J. Eq. 224; Ingalls v. 626, 33 L. ed. 706, 10 Sup. Ct. 438; 
Morgan, 10 N. Y. 178; Stanly v. Chicago &c. R. Land Co. v. Peck, 112 
Stocks, 1 Dev. Eq. (N. Car.) 313. 111. 408; Millsaps v. Bond, 64 Miss. 
This rule Is applicable where a part 453, 1 So. 506; Condit v. Maxwell, 
of the residue of land not sold is sit- 142 Mo. 266, 44 So. 467; Mitchelson 
uated in another state. Welling v. v. Smith, 28 Nebr. 583, 44 N. W. 871, 
Ryerson, 94 N. Y. 98. 26 Am. St. 357; Hellyer v. Stover 
"National Sav. Bank v. Creswell, (N. J. Eq.), 42 Atl. 98; Locker v. 
100 U. S. 630, 25 L. ed. 713; Riley, 30 N. J. Eq. 104. 
Stephens v. Clay, 17 Colo. 489, 30 "Domestic Building Assn. v. Nel- 
Pac. 43, 31 Am. St. 328; Monarch son, 172 111. 386, 50 N. B. 194, affg. 
Coal &c. Co. V. Hand, 197 111. 288, 64 66 111. App. 601. 
N. E. 381; Mead v. Peabody, 183 111. ' Howser v. Cruikshank, 122 Ala. 
126, 55 N. E. 719; Hyde Park Thorn- 256, 25 So. 206; Scheuer v. Kelly, 
son-Houston Light Co. v. Brown, 172 121 Ala. 323, 26 So. 4; Farmers' 
111. 329, 50 N. E. 127; Lock v. Ful- Sav. &c. Assn. v. Kent, 117 Ala. 620, 
ford, 52 111. 166; Dilger v. Palmer, 624, 23 So. 757, 131 Ala. 246, 30 So. 
60 Iowa 117, 10 N. "W. 763, 14 N. W. 874; Burton v. Henry, 90 Ala. 281, 7 
134; Long v. Kaiser, 81 Mich. 518, So. 925; Aderholt v. Henry, 87 Ala. 
46 N. W. 19; Sibley v. Baker, 23 415, 6 So. 625; Prickett v. Sibert, 
Mich. 312; Bradfield v. Sewall, 58 75 Ala. 315; Mobile &c. Co. v. Hu- 
Nebr. 637, 79 N. W. 615; Warwick v. der, 35 Ala. 713; Bourland v. Wit- 
Ely, 29 N. J. Eq 82; Van Slyke v. tich, 38 Ark. 167; Terry v. Resell, 
Van Loan, 26 Hun (N. Y.) 344; 32 Ark. 478; Summerville v. March, 
Sternberge'r v. Hanna, 42 Ohio St. 142 Cal. 554, 76 Pac. 388, 100 Am. 
305; Perkins v. McAullffe, 105 Wis. St. 145; Stephens v. Clay, 17 Colo. 
582, 81 N. W. 645. But see Huff v. 489, 30 Pac. 43, 31 Am. St. 328; Fas- 
Farwell, 67 Iowa 298, 25 N. W. 252. sett v. Mulock, 5 Colo. 466; An- 



§ 1621 FORECLOSURE SALES UNDER DECREE 233 

For the reason that this rule, whether established by statute or by 
decisions of state courts, is a rule of property, the courts of the United 

dreas r. Hubbard, 50 Conn. 351; McVeigh v. Sherwood, 47 Mich. 545, 

Sanford v. Hill, 46 Conn. 42, 53; IL N. W. 379; Gilbert v. Haire, 43 

Ellis V. Fairbanks, 38 Fla. 257, 21 Mich. 283, 5 N. W. 321; Gantz v. 

So. 107; Ritch v. Eichelberger, 13 Toles, 40 Mich. 725; Sager v. Tup- 

Fla. 169; Gumming v. Gumming, 3 per, 35 Mich. 134; McKinney v. 

Ga. 460; Domestic Bldg. Assn. v. Miller, 19 Mich. 142; Ireland v. 

Nelson, 172 111. 386, 50 N. B. 194; Woolman, 15 Mich. 253; Cooper v. 

Brown v. McKay, 151 111. 315, 37 N. Bigly, 13 Mich. 463; Briggs v. Kauf- 

E. 1037; Boone v. Clark, 129 111. man, 2 Brown N. P. (Mich.) 160; 

466, 21 N. E. 850, 853; Moore v. Mason v. Payne, Walk. Ch. (Mich.) 

Shurtleff, 128 111. 370, 21 N. E. 775; 459; Howard v. Burns, 73 Minn. 356, 

Vogel V. Brown, 120 111. 338, 11 N. 76 N. W. 202; Cullen v. Minnesota L. 

E. 327, 12 N. E. 252; Hosmer v. &c. Co., 60 Minn. 6, 61 N. "W. 818; 

Campbell, 98 111. 572; Niles v. Har- Clark v. Kraker, 51 Minn. 444, 53 

mon, 80 111. 396; Sumner v. Waugh, N. W. 706; Johnson v. Williams, 4 

56 111. 531; Tompkins v. Wiltberger, Minn. 260, 268; Millsaps v. Bond, 

56 111. 385; Lock v. Fulford, 52 111. 64 Miss. 453, 1 So. 506; Georgia 

166; Dodds v. Snyder, 44 111. 53; Pac. R. Co. v. Walker, 61 Miss. 481; 

Iglehart v. Crane, 42 111. 261; Mat- Crosby v. Farmers' Bank, 107 Mo. 

teson V. Thomas, 41 111. 110; Mar- 436, 17 S. W. 1004; Bradfield v. Sew- 

shall V. Moore, 36 111. 321; Alexan- all, 58 Nebr. 637, 79 N. W. 615; 

der V. Welch, 10 111. App. 181; Lay- Lausman v. Drahos, 8 Nebr. 457; 

man v. Willard, 7 Bradw. (111.) 183; Mahagan v. Mead, 63 N. H. 570; 

Jennings v. Moon, 135 Ind. 168, 34 Gage v. McGregor, 61 N. H. 47; 

N. E. 996; Evansville Gas Light Co. Brown v. Simons, 44 N. H. 475; 

V. State, 73 Ind. 219, 38 Am. Rep. Sternberger t. Sussman, 69 N. J. 

129; Hahn V. Behrman, 73 Ind. 120; Eq. 199, 60 Atl. 195; Thompson v. 

Houston V. Houston, 67 Ind. 276; Bird, 57 N. J. Eq. 175, 50 Atl. 857; 

McShirley v. Birt, 44 Ind. 382; Mc- Powles v. Griffith, 37 N. J. Eq. 384; 

CuUum V. Turpie, 32 Ind. 146; Al- Acquackanonk Water Co. v. Mu- 

Bop V. Hutchings, 25 Ind. 347; tual L. Ins. Co., 36 N. J. Eq. 586; 

Aiken v. Bruen, 21 Ind. 137; Will- Dawes v. Cammus, 32 N. J. Eq. 456; 

iams V. Perry, 20 Ind. 437, 83 Am. Hiles v. Coult, 30 N. J. Eq. 40; Har- 

Dec. 327; Cissna v. Haines, 18 Ind. rison v. Guerin, 27 N. J. Eq. 219; 

496; Day v. Patterson, 18 Ind. 114; Hill v. McCarter, 27 N. J. Eq. 41; 

BroeKer v. Morris, 42 Ind. App. 417, Mutual Life Ins. Co. v. Boughrum, 

85 N. B. 982; Witt v. Rice, 90 Iowa 24 N. J. Eq. 44; Mount v. Potts, 23 

451, 57 N. W. 951; Mickley v. Tom- N. J. Eq. 188; Stelle v. Andrews, 

linson, 79 Iowa 383, 41 N. W. 311, 19 N. J. Eq. 409; Weatherby v. 

44 N. W. 684; Wallace v. Stevens, Slack. 16 N. J. Eq. 491; Keene v. 
64 Maine 225; Sheperd v. Adams, 32 Munn, 16 N. J. Eq. 398; Gaskill v. 
Maine 63; Holden v. Pike, 24 Maine Sine, 13 N. J. Eq. 400, 78 Am. Dec. 
427; Hopper v. Smyser, 90 Md. 363, 105; Gilbert v. Galpin, 11 N. J. Eq. 

45 Atl. 206; North v. Dearborn, 146 445; Winters v. Henderson, 6 N. J. 
Mass. 17, 15 N. E. 129; Beard v. Eq. 31; Wikoff v. Davis, 4 N. J. Eq. 
Fitzgerald, 105 Mass. 134; George 224; Britton v. Updike, 3 N. J. Eq. 
V. Wood, 9 Allen (Mass.) 80, 85 Am. 125; Shannon v. Marselis, 1 N. J. 
Dec. 741; Kilborn v. Robbins, 8 Al- Eq. 413; Libby v. Tufts, 121 N. Y. 
len (Mass.) 466; George v. Kent, 7 172, 24 N. E. 12; Bernhardt v. Lym- 
Allen (Mass.) 16; Chase v. Wood- burner, 85 N. Y. 172; Hopkins v. 
bury, 6 Cush. (Mass.) 143; Park- Wolley, 81 N. Y. 77; Barnes v. Mott, 
man v. Welch, 19 Pick. (Mass.) 64 N. Y. 397, 21 Am. Rep. 625; 
231; Allen v. Clark, 17 Pick. Chapman v. West, 17 N. Y. 125; How- 
(Mass.) 47; Gray v. Loud Lumber ard Ins. Co. v. Halsey, 8 N. Y. 271, 
Co., 128 Mich. 427, 87 N. W. 376; 59 Am. Dec. 478; Crafts v. Aspin- 
Case Threshing Machine Co. t. wall, 2 N. Y. 289; La Farge Fire 
Mitchell, 74 Mich. 679, 42 N. W. 151; Ins. Co. v. Bell, 22 Barb. (N. Y.) 



223 



ORDER OF SALE 



§ 1621 



States sitting in any state in which this rule is established will" fol- 
low it.^ 

This rule and the question of its adoption has been very frequently 
before the American courts ; and the principle of the rule has also been 
frequently stated by the English and Irish courts. "If afterward the 
mortgagor," says Lord Plunket, "sells a portion of his equity of re- 
demption for valuable or good consideration, the entire residue un- 
disposed of by him is applicable, in the first instance, to the discharge 
of the mortgage, and in case of the bona fide purchaser ; and it is con- 
trary to any principle of justice to say that a person afterward pur- 
chasing from that mortgagor shall be in a better situation than the 



54; St. John v. Bumpstead, 17 Barb. 
(N. Y.) 100; Johnson v. White, 11 
Barb. (N. Y.) 194; Ferguson v. Kim- 
ball, 3 Barb. Ch. (N. Y.) 616; Stuy- 
vesant v. Hall, 2 Barb. Ch. (N. Y.) 
151; Weaver v. Toogood, 1 Barb. 
(N. Y.) 238; Ex parte Merrian, 4 
Den. (N. Y.) 254; Kendall v. Nie- 
buhr, 58 How. Pr. (N. Y.) 156; 
Thomas v. Moravia Machine Co., 43 
Hun (N. Y.) 487; Van Slyke v. Van 
Loan, 26 Hun (N. Y.) 344; Clowes 
v. Dickenson, 5 Johns. Ch. (N. Y.) 
235, 240; Kels v. West, 56 Misc. 126, 
106 N. Y. S. 1108; McDonald v. 
Whitney, 9 N. Y. Weekly Dig. 529; 
Kellogg v. Rand, 11 Paige (N. Y.) 
59; Rathbone v. Clark, 9 Paige (N. 
Y.) 648; Farmers' Loan &c. Co. v. 
Maltby, 8 Paige (N. Y.) 361; Patty 
V. Pease, 8 Paige (N. Y.) 277, 35 
Am. Dec. 683; Skeel v. Spraker, 8 
Paige (N. Y.) 182; Gulon v. Knapp, 
6 Paige (N. Y.) 35, 29 Am. Dec. 
741; Jenkins v. Freyer, 4 Paige (N. 
Y.) 47, 53; James v. Hubbard, 1 
Paige (N. Y.) 228, 234; Howard Ins. 
Co. V. Halsey, 4 Sandf. (N. Y.) 565; 
Sternberger v. Hanna, 42 Ohio St. 
305; Green v. Ramage, 18 Ohio 428, 
51 Am. Dec. 458; Cary v. Folsom, 
14 Ohio 365; Commercial Bank v. 
Western Reserve Bank, 11 Ohio 444, 
38 Am. Dec. 739; Milligan's Appeal, 
104 Pa. St. 563; Mevey's Appeal, 4 
Pa. St. 80; Watson v. Neal, '35 S. 
Car. 595, 16 S. E. 833; Lynch v. Han- 
cock, 14 S. Car. 66 ; Norton v. Lewis, 
3 S. Car. 25; Stoney v. Shultz, 1 
Hih (S. Car.) 465, 27 Am. Dec. 429; 
Meng v. Houser, 13 Rich. Eq. (S. 
Car.) 210; Norton v. Lewis, 3 S. 
Car. 25; Rippetoe v. Dwyer, 49 Tex. 



498; Miller v. Rogers, 49 Tex. 398; 
First State Bank v. Cox (Tex. Civ. 
App.), 139 S. W. 1; Hawkins v. 
Potter (Tex. Civ. App.), 130 S. W. 
643; Henkel v. Bohnke, 7 Tex. Civ. 
App. 16, 26 S. W. 645; Deavitt v. 
Judevine, 60 Vt. 695, 17 Atl. 410; 
Root V. Collins, 34 Vt. 173; Lyman 
V. Lyman, 32 Vt. 79; Miller v. Hol- 
land; 84 Va. 652, 5 S. E. 701; Jones 
V. Phelan, 20 Grat. (Va.) 229; Al- 
ley V. Rogers, 19 Grat. (Va.) 366; 
Schofield V. Cox, 8 Grat. (Va.) 533; 
Jones V. Myrlck, 8 Grat. (Va.) 179; 
Henkle v. AUstadt, 4 Grat. (Va.) 
284; Conrad v. Harrison, 3 Leigh 
(Va.) 532; Solicitors' Loan &c. Co. 
V. Washington &c. R. Co., 11 Wash. 
684, 40 Pac. 344; Gracey v. Myers, 
15 W. Va. 194; Aiken v. Wilwaukee 
& St. Paul R. Co., 37 Wis. 469; State 
V. Titus, 17 Wis. 241; Worth v. Hill, 
14 Wis. 559; Ogden v. Glidden, 9 
Wis. 46. 

In Pennsylvania the doctrine of 
contribution pro rata adopted In the 
earlier decisions. Nailer v. Stanley, 
10 Serg. & R. (Pa.) 450, 13 Am. 
Dec. 691; Presbyterian Corporation 
V. Wallace, 3 Rawle (Pa.) 109; i)on- 
ley V. Hays, 17 Serg. & R. (Pa.) 
400, has been overruled in later 
cases of Milligan's Appeal, 104 Pa. 
St. 503; Carpenter v. Koons, 20 Pa. 
St. 222; Cowden's Estate, 1 Pa. St. 
267. 

'National Savings Bank v. Cres- 
well, 100 U. S. 630, 25 L. ed. 713; 
Orvis V. Powell, 98 U. S. 176, 25 L. 
ed. 238; Philadelphia Mtg. &c. Co. 
V. Needham, 71 Fed. 597; Black v. 
Reno, 59 Fed. 917; The Romp, Fed. 
Cas. No. 12030, Olcott (U. S.) 196. 



§ 1621 POKECLOSUEE SALES UNDEK DECREE 324 

mortgagor himself in respect to any of his rights."" In the same ease, 
when it was previously before the court, Lord Chancellor Hart said 
that, between the mortgagor "and the persons purchasing from him, 
the contributory fund must be so marshaled as to make his remain- 
ing property first applicable; and if that is insufiBcient, I think the 
portion of the last purchaser must be applicable before that of any 
prior purchaser."^" 

Justice Story, relying upon the English cases, questioned the cor- 
rectness of the doctrine that the parcels of property subject to mort- 
gage should be charged in the inverse order of sale, the parcels last 
sold being first charged to their full value, and so backward until the 
debt is fully paid. He said: "But there seems great reason to doubt 
whether this last position is maintainable upon principle; for as be- 
tween the subsequent purchasers or incumbrancers, each trusting to 
his own security upon the separate estate mortgaged to him, it is diffi- 
cult to perceive that either has, in consequence thereof, any superiority 
of right or equity over the other ; on the contrary, there seems strong 
ground to contend that the original incumbrance or lien ought to be 
borne ratably between them, according to the relative value of the 
estates."^^ 

The rule applies where the mortgagor has conveyed the premises in 
different parcels, and the grantees of these parcels again convey them 
in parcels, the grantees of the latter parcels being liable under this 
rule for the share of the mortgage chargeable upon their grantor's 
share of the premises, in the inverse order of conveyance to them.^'^ 
It applies where a grantee subject to incumbrances reconveys a part 
of the premises to his grantor without mentioning the incumbrances.^^ 

The rule is one of equity, and will not be applied in any case where 
its application would work injustice;^* it is not applied where the 
mortgage does not rest alike upon the whole of the land,^° nor does it 
apply to a sale of the equity of redemption upon execution for a debt 

° In Hartley v. O'Plaherty, Lloyd den of the prior incumbrances upon 

& Goold Cases temp. Plunket, 208, the land conveyed to the last mort- 

216. See also, for illustrations of gagee, made it a ratable charge on 

this rule, Hamilton v. Royse, 2 Sch. the whole estate. 

& Lef. 315, 326; Harbert's case, 3 "Beatty, 61, 79. 

Coke 11; Averall & Wade, Lloyd & "2 Story's Bq. Juris., § 1233.. 

Goold, temp. Sugden 252. '^Hiles v. Coult, 30 N. J. Eq. 40. 

The question was considered in "Hopkins v. Wolley, 81 N. Y. 77. 

Barnes v. Racster, 1 Y. & C. C. C. "Hill v. McCarter, 27 N. J. Eq. 

401, where the vice-chancellor. Sir 41; Bernhardt v. Lymburner, 83 N. 

L. Shadwell, in a case where there Y. 172. 

were several successive mortgages, '" Evansville Gas Light Co. v. 

instead of throwing the whole bur- State, 73 Ind. 219, 38 Am. Rep. 129. 



235 OEDEE OF SALE § 1623 

other than that secured by the mortgage.^" Equities existing between 
eotenants or joint owners of the mortgaged premises may require that 
certain parts of it, or interests, in it, be sold in a certain order.^' The 
rule of inverse order does not apply where tenants in common jointly 
mortgage the joint property for a joint debt and one of them subse- 
quently sells and conveys his entire interest to another person subject 
to the incumbrance. In such case the whole property is still liable for 
the entire debt and one tenant in common can not charge the whole 
joint debt primarily upon the interest of the other tenant in com- 
mon by selling and conveying his own interest.^^ 

Any one having a substantial and valuable interest in any of the 
parcels may demand the enforcement of his equity. The wife of a 
grantee of one of the parcels has such an interest by virtue of her in- 
choate right of dower.^' But the mortgagee making foreclosure sale is 
not bound to regard this equity unless notice of it is given him.^" And 
so, the interest of the mortgagor's wife may be protected by ordering 
that his interest be first sold, or that her dower right be excepted or 
reserved."^ 

§ 1622. Rule applied to subsequent mortgages. — This rule is gen- 
erally held to apply to subsequent mortgages of the equity of redemp- 
tion as well as to absolute conveyances of it.^^ The rule is also applied 
between a purchaser of one part and a person taking a subsequent 
mortgage on another part.^^ And the rule is applied as between suc- 

MErlinger v. Boal, 7 Bradw. (111.) Hale v. Gouverneur, 4 Edw. (N. Y.) 

40. 207. 

"Austin V. Bean, 101 Ala. 133, 16 ^ Boone v. Clark, 129 III. 466, 21 
So. 41; Schoenewald v. Dieden, 8 N. E. 850, per Shope, C. J.; Dodds 
111. App. 389; Smith v. Sparks, 162 v. Snyder, 44 111. 53; Schupanitz v. 
Ind. 270, 70 N. E. 253; Higham v. Parwick, 115 Iowa 451, 88 N. W. 
Harris, 108 Ind. 246, 8 N. E. 255; 951; Bernhardt v. Lymburner, 85 
Williams v. Perry, 20 Ind. 437, 83 N. Y. 172; Thomas v. Moravia Ma- 
Am. Dec. 327; Miller v. Felkner, 42 chine Co., 43 Hun (N. Y.) 487; 
Iowa 458; Quaw v. Lameraux, 36 Steere v. Childs,. 15 Hun (N. Y.) 
Wis. 626. See also McNamara v. 511; Burchell v. Osborne, 5 N. Y. 
McNamara, 135 N. Y. S. 215. S. 404, 6 N. Y. S. 863; Milligan's 

"Walker v. Sarven, 41 Fla. 210, Appeal, 104 Pa. St. 503, 

25 So. 885. '"Windsor v. Evans, 72 Iowa 692, 

'^ Crosby v. Farmers' Bank, 107 34 N. W. 481; Case Threshing Ma- 
Mo. 436, 17 S. W. 1004. chine Co. v. Mitchell, 74 Mich. 679, 

'"'Threefoot T. Hillman, 130 Ala. 42 N. W. 151; La Farge Fire Ins. 

244, 30 So. 513. Co. v. Bell, 22 Barb. (N. Y.) 54; 

^ Smith V. Sparks, 162 Ind. 270, Gracey v. Myers, 15 W. Va. 194; 

70 N. E. 253; Leary v. ShafCer, 79 State v. Titus, 17 Wis. 241. See also 

Ind. 567; Grable v. McCulloh, 27 Stulb v. Ainslie, 14 Wash. 567, 45 

Ind. 472; Lane v. Traders' Deposit Pac. 157. 
Bank, 14 Ky. L. 873, 21 S. W. 756; 

15 — Jones Mtg. — Vol. III. 



§ 1623 rOEECLOSUEE SALES UNDEE DECEEE 336 

cessive mortgagees of difEerent parts of the land covered by a prior 
general mortgage.''* 

In New Jersey, however, it is held that, as between the holders of 
mortgages of difEerent and distinct parts of the incumbered land, each 
is bound to bear his proportion according to the value of the parts ; and 
that the rule does not apply, as between them.^^ The entire premises 
may be decreed to be sold and the proceeds applied to the payment 
of the mortgages and other incumbrances, according to their priority, 
although sufficient to satisfy the first mortgage be obtained by a sale 
of part of the premises.^* 

When, however, a portion of the mortgaged premises has been mort- 
gaged again, and subsequently the balance has been conveyed abso- 
lutely, inasmuch as the mortgage is only a qualified alienation, and 
the mortgagor still has an interest in the property, that part is first 
sold; and if there is any surplus beyond the amount required to sat- 
isfy the second mortgage, that is, if the equity of redemption is of 
any value, that is applied in payment of the first mortgage before re- 
sorting to the portion of the premises conveyed absolutely.^^ But after 
this, if the property is not of sufiicient value to pay both mortgages, as 
between the second mortgagee and the subsequent purchaser, it would 
seem that in the distribution of proceeds the former should be en- 
titled to any surplus remaining after the payment of the first mort- 



If the mortgagor alienates a portion of the mortgaged premises and 
afterward mortgages another portion, the second mortgagee can not 
claim that the part alienated before the giving of his mortgage shall 
be first sold; but the rule of inverse order of alienation will apply 
against him.^* 

§ 1623. Parts of property sold under judgment. — The same rules 
apply to subsequent incumbrancers upon difEerent portions of the 

"Fassett v. Mulock, 5 Colo. 466; Bank, 150 N. Y. 126, 44 N. E. 781; 

Payne v. Avery, 21 Mich. 524; Smith v. Roberts, 91 N. Y. 470; 

Dawes v. Cammus, 32 N. J. Eq. 456; Bernhardt v. Lymburner, 85 N. Y. 

Stuyvesant v. Hall, 2 Barb. Ch. (N. 172. 

Y.) 151; Steere v. Childs, 15 Hun (N. '"Pancoast v. Duval, 26 N. J. Eq. 

Y.) 511; Schryver v. Teller, 9 Paige 445. 

(N. Y.) 173; Long v. Harbers, 6 ""Vogel T. Brown, 120 111. 338, 11 

Ohio Dec. (Reprint) 1066, 10 Am. N. E. 327; Ely v. Perrine, 2 N. J. 

L. Rec. 53; Milligan's Appeal, 104 Eq. 396. 

Pa. St. 503. Since the rule is one '"Kellogg v. Rand, 11 Paige (N. 

of equity, it will yield to superior Y.) 59. 

equities in the last incumbrancer. =* Sager v. Tupper, 35 Mich. 134. 
Denton v. Ontario County Nat. 



237 OKDEE OF SALE § 1624 

mortgaged premises either by mortgage or judgment.^" When por- 
tions of the property have been sold under judgment, those portions 
stand in the order of sale in a foreclosure suit as of the times when 
the judgments respectively become liens, and not as of the times when 
the conveyances under such sales were executed by the sherifiE.'" In 
Pennsylvania, however, it is held that the rule does not apply at all 
to sales under judgments ; the purchaser at such sales having no claim 
upon the mortgagor, or any one else, to pay off the mortgage for their 
relief.^^ 

§ 1624. Record and notice of subsequent deeds. — If the successive 
purchasers of different portions of the mortgaged premises have actual 
or constructive notice of prior sales, the rule applies as to their sub- 
jection to the mortgage in inverse order of alienation.^^ But, unless 
the last purchaser took with notice of the prior sales, the portion last 
sold can not be applied in satisfaction of the mortgage, in exoneration 
of the portions first sold.^^ And likewise, the rule requiring sale of the 
mortgaged premises in inverse order of alienation is never applied to 
a mortgagee without notice of such order.^* 

The record of a subsequent deed is not, however, notice to the prior 
mortgagee. He is not required to search the records from time to time 
to see whether other incumbrances have been put upon it.'° A distinct 

"^Fassett v. Muloch, 5 Colo. 466; 314; Warwick Sav. Inst. v. Provi- 
Bernhardt v. Lymburner, 85 N. Y. dence, 12 R. I. 144. 
172; Stuyvesant v. Hall, 2 Barb. "Matteson v. Thomas, 41 111. 110. 
Ch. (N. Y.) 151; New York Life ==Birnie v. Main, 29 Ark. 591; 
Ins. &c. Co. V. Milnor, 1 Barb. Ch. Dennis v. Burritt, 6 Cal. 670; Ritch 
(N. Y.) 353; Snyder v. Stafford, 11 v. Eichelberger, 13 Fla. 169; Car- 
Paige Ch. (N. Y.) 71; Conrad V. ter v. Neal, 24 Ga. 346, 71 Am. Dec. 
Harrison, 3 Leigh (Va.) 532. 136; Waughop v. Bartlett, 165 111. 

"» Woods T. Spalding, 45 Barb. 124, 46 N. B. 197; Boone v. Clark, 

(N. Y.) 602. 129 111. 466, 21 N. E. 850; Hosmer 

"Carpenter v. Koons, 20 Pa. St. v. Campbell, 98 111. 572; Doolittle 

222. v. Cook, 75 111. 354; Iglehart v. 

^^'Sanford v. Hill, 46 Conn. 42; Crane, 42 111. 261; Garrett v. Simp- 
Lock V. Fulford, 52 111. 166; Igle- son, 115 III. App. 62; Powers v. Laf- 
hart V. Crane; 42 111. 261; Miami ler, 73 Iowa 283, 34 N. W. 859; An- 
Exporting Co. v. United States nan v. Hays, 85 Md. 505, 37 Atl. 20; 
Bahk, Wright (Ohio) 249; Root Morse v. Curtis, 140 Mass. 112, 2 
V. Collins, 34 Vt. 173; Lyman v. N. E. 929, 54 Am. Rep. 456; Chase 
Lyman, 32 Vt. 79, 76 Am. Dec. 151; v. Woodbury, 6 Cush. (Mass.) 143; 
State V. Titus, 17 Wis. 241. James v. Brown, 11 Mich. 25; Nor- 

*'Ricker v. Greenbaum, 13 Fed. ton v. Metropolitan L. Ins. Co., 74 

363; Brown t. Simons, 44 N. H. Minn. 484, 493, 77 N. W. 298, 539; 

475; Hill v. Howell, 36 N. J. Eq. Meier v. Meier, 105 Mo. 411, 16 S. 

25; Sanborn v. Adair, 27 N. J. Eq. W. 223; Gage v. McGregor, 61 N. H. 

425; Ellison v. Pecare, 29 Barb. (N. 47; Johnson v. Bell, 58 N. H. 395; 

Y.) 333; Stanly V. Stocks, 16 N. Car. Brown v. Simons, 44 N. H. 475; 



§ 1624 



FORECLOSURE SALES UNDER DECREE 



238 



and actual notice is necessary to affect the rights of the mortgagee in 
this respect, and oblige him to foreclose with reference to the subse- 
quent order of alienation. The record is not even constructive notice 
to him. Only subsequent purchasers and incumbrancers are within 
the purview of the registry laws. A person interested in the equity 
wishing to protect himself must bring home to the mortgagee actual 
notice of his equities.^" If he is not a party to the foreclosure suit, and 
has no opportunity to present his claims there, he may file a bill 
against the mortgagee and the other subsequent purchasers, and ob- 
tain a stay of the sale until the respective equities can be adjusted. 
After a sale it is too late to assert his rights.^^ 

In like manner when there has been a partition of land, of which 
an undivided half was mortgaged, that part of the land set off to the 



Boyd V. Mundorf, 30 N. J. Eq. 545; 
Vanorden v. Johnson, 14 N. J. Eq. 
376, 82 Am. Dec. 254; Shannon v. 
Marsells, 1 N. J. Bq. 413; Howard 
Ins. Co. v. Halsey, 8 N. Y. 271, 59 
Am. Dec. 478; Truscott v. King, 6 
Barb. (N. Y.) 346; Wheelwright v. 
Loomer, 4 Edw. (N. Y.) 232; Ken- 
dall V. Niebuhr, 58 How. Pr. (N. 
Y.) 156; Cheesebrough v. Millard, 

I Johns. Ch. (N. Y.) 409, 7 Am. 
Dec. 494; Stuyvesant v. Hone, 1 
Sandf. Ch. (N. Y.) 419; Taylor v. 
Maris, 5 Rawle (Pa.) 51; Lake v. 
Shumate, 20 S. Car. 23; Lynchburg 
Perpetual Bldg. &c. Co. v. Fellers, 

96 Va. 337, 31 S. E. 505, 70 Am. St. 
851; Johnson v. Valido Marble Co., 
64 Vt. 337, 25 Atl. 441; Lyman v. 
Lyman, 32 Vt. 79, 76 Am. Dec. 151; 
McDaniels v. Colvln, 16 Vt. 300, 42 
Am. Dec. 512; Hall v. Williamson 
Grocery Co., 69 W. Va. 671, 72 S. 
E. 780; Deuster v. McCamus, 14 
Wis. 307; Greswold v. Marshan, 2 
Ch. Cas. 170. See also Luke v. 
Smith, 13 Ariz. 155, 108 Pac. 494; 
Schaad v. Robinson, 50 Wash. 283, 

97 Pac. 1041. In James v. Brown, 

II Mich. 25, the court says: "It is 
the duty of a subsequent mortgagee, 
if he intends to claim any rights 
through the first mortgage, or that 
may affect the rights of the mort- 
gagee under it, to give the holder 
thereof notice of his mortgage, that 
the first mortgagee may act with his 
own understandingly. If he does 
not, and the first mortgagee does 
with his mortgage what it was law- 



ful for him to do before the sec- 
ond mortgage was given, without 
knowledge of its existence, the in- 
jury is the result of the second 
mortgagee's negligence in not giv- 
ing notice." See ante § 723. 

™Bridgewater Roller Mills Co. v. 
Baltimore Bldg. &c. Assn., 124 Fed. 
718; Pitts V. American Freehold L. 
Mtg. Co., 123 Ala. 469, 475, 26 So. 
286; Hosmer v. Campbell, 98 111. 
572; Matteson v. Thomas, 41 111. 
110; Dates v. Wlnstanley, 53 111. 
App. 623; Annan v. Hays, 85 Md. 
505, 37 Atl. 20; Morse v. Curtis, 140 
Mass. 112, 2 N. B. 929, 54 Am. Rep. 
456; Lausman v. Drahos, 8 Nebr. 
457; Hoy v. Bramhall, 19 N. J. Eq. 
563, 97 Am. Dec. 687; Vanorden v. 
Johnson, 14 N. J. Eq. 376, 82 Am. 
Dec. 254; Blair v. Ward, 10 N. J. 
Eq. 119 ; Cheesebrough v. Millard, 
1 Johns. Ch. (N. Y.) 409, 414, 7 Am. 
Dec. 494; Gouverneur v. Lynch, 2 
Paige (N. Y.) 300; King v. Mc- 
Vlckar, 3 Sandf. Ch. (N. Y.) 192; 
Johnson v. Valido Marble Co., 64 
Vt. 337, 25 Atl. 441; McDaniels v. 
Colvln, 16 Vt. 300, 42 Am. Dec. 512; 
Lynchburg Perpetual Bldg. &c. Co. 
V. Fellers, 96 Va. 337, 31 S. E. 505, 
70 Am. St. 851; Hall v. Williamson 
Grocery Co., 69 W. Va. 671, 72 S. E. 
780. See also Waughop v. Bartlett, 
165 111. 124, 46 N. E. 197; Powers v. 
Lafler, 73 Iowa 283, 34 N. W. 859. 

='De Haven v. Musselman, 123 
Ind. 62, 24 N. E. 171; Lausman v. 
Drahos, 8 Nebr. 457. 



229 OEDEE OF SALE § 1625 

mortgagor should be first sold ; and if the officer, having been offered 
the whole amount of the debt for that part, proceeds to sell an undi- 
vided half of the whole, the sale will be set aside.^' And so if a portion 
of the mortgaged land has been sold to pay the mortgagor's debts after 
his decease, the residue of the premises remaining in his heirs must 
be first resorted to for the satisfaction of the mortgage.^" 

If the purchaser of one parcel has failed to record his deed a subse- 
quent purchaser who has first recorded his deed can insist that the 
parcel of such prior purchaser shall first be sold to satisfy the mort- 



In determining what portion of the mortgaged premises shall be 
first sold, the date of acquisition of the legal title prima facie deter- 
mines the order of such sales ; but the holder of a junior conveyance 
or his grantee may show that, prior to either conveyance he was in 
actual and open possession of the parcel purchased by him, under a 
contract of purchase, entitling him to specific performance before title 
was acquired by the senior conveyance.*^ 

§ 1625. Agreements charging certain parcels. — But this rule does 
not apply in cases where the parties have by agreement in their deed 
charged the mortgage upon the land in a different manner; as where 
by the terms of sale of a part of the premises the mortgage is made 
a common charge upon the whole premises, or the part conveyed is 
subjected to a proportionate part of the incumbrance;*^ or it is pro- 
vided that a certain parcel of the mortgaged premises shall first be 
charged with the payment of the mortgage debt.*^ Where the pur- 
chaser of a part of the mortgaged premises assumes and agrees to pay 

^Quaw V. Lameraux, 36 Wis. 626. on which a strictly personal llabil- 

'^ Moore v. Chandler, 59 111. 466. Ity may be based; but it clearly 

" Gray v. Loud Lumber Co., 128 makes the part conveyed subject to 

Mich. 427, 87 N. W. 376. its proper proportion of the incum- 

" Sternberger v. Hannah, 42 Ohio brances, so as to relieve, to that ex- 

St. 305. tent, that part retained by the mort- 

"^ Pancoast v. Duval, 26 N. J. Eq. gagor, and that therefore both parts 

445; Mutual Life Ins. Co. v. Bough- must contribute according to their 

rum, 24 N. J. Eq. 44; Hoy v. Bram- relative values." To same effect, see 

hall, 19 N. J. Eq. 563. In this case Briscoe v. Power, 47 111. 447; Zabris- 

the conveyance was made, "subject, kie v. Salter, 80 N. Y. 555; Warren 

however, to the payment by said v. Boynton, 2 Barb. (N. Y.) 13; 

grantee of all existing liens upon Coles v. Appleby, 22 Hun (N. Y.) 

said premises." The effect of this 72; Torrey v. Bank of Orleans, 9 

was to subject the lands conveyed Paige (N. Y.) 649; Halsey v. Reed, 

to the payment of a proportionate 9 Paige (N. Y.) 446. 

part of the mortgage. The court *> Mickle v. Maxfleld, 42 Mich. 304, 

say: "It may be that the language 3 N. W. 961. 

is not sufficient to create a covenant 



§ 1625 rOKBCLOSUEE SALES UNDEE DECREE 330 

the mortgage, his part of the land must be exhausted in satisfaction 
of the mortgage debt, before any other part can be resorted to, whether 
remaining in the hands of the mortgagor or conveyed to third par- 
ties.** In such cases if there be no specific agreement as to the propor- 
tion whicli each part is to bear, contribution must be made according 
to the relative value of each part.*'' If the purchaser has assumed a 
certain part of the mortgage debt, his land must first be exhausted to 
the extent of the amount assumed.*" 

A portion of a parcel of land subject to a mortgage vras sold to one 
who agreed to pay the entire mortgage, and afterward the remaining 
portion was sold to another. The mortgagee, with notice of such con- 
veyances, sold the land as one parcel in foreclosure. The second pur- 
chaser made no request that the land be sold in parcels, but several 
months after the foreclosure sale brought a bill to have the sale set 
aside as to the portion of the land conveyed to him, on the ground that 
the other portion should have been sold first. It was held that the bill 
could not be maintained.*'' Since a part of the mortgaged premises 
sold subject to the mortgage is primarily liable therefor, and the re- 
mainder of the land, whether retained by the mortgagor or sold to 
others, is only secondarily liable, the rule requiring sale of parcels in 
inverse order of alienation does not apply.*' 

" Skinner v. Marker, 23 Colo. 333, Dada, 79 N. Y. 373. The mortgagee 
48 Pac. 648; Cooley v. Murray, 11 need not observe this rule to his 
Colo. App. 241, 52 Pac. 1108; State prejudice, and If he has not accepted 
V. Ripley, 32 Conn. 150; Mead v. the grantee, assuming the mortgage, 
Peabody, 183 111. 126, 55 N. B. 719; as his debtor, he can not be corn- 
Pool V. Marshall, 48 111. 440; Wright pelled to proceed first against such 
V. Briggs, 99 Ind. 563; Windsor v. grantee or his land. Palmer v. 
Evans, 72 Iowa 692, 34 N. W. 481; Snell, 111 111. 161; Duckwall v. Kis- 
lowa Loan &c. Co. v. Mowery, 67 ner, 136 Ind. 99, 35 N. B. 697. 
Iowa 113, 24 N. W. 747; Burger v. '^ Moore v. ShurtlefC, 128 111. 370, 
Greif, 55 Md. 518; Welch v. Beers, 8 21 N. B. 775 (quoting text). 
Allen (Mass.) 151; Caruthers v. "Thompson v. Bird, 57 N. J. Bq. 
Hall, 10 Mich. 40; Mason v. Payne, 175, 40 Atl. 857. 
Walk. Ch. (Mich.) 459; Chancellor "'Long v. Kaiser, 81 Mich. 518, 43 
v. Towell (N. J.), 82 Atl. 861; Mills N. W. 19. 

V. Kelley, 62 N. J. Eq. 213, 50 Atl. « Monarch Coal &c. Co. v. Hand, 

144; Black v. Morse, 7 N. J. Eq. 509; 197 111. 288, 64 N. B. 381; Boone v. 

Wikoff v. Davis, 4 N. J. Eq. 224; Clark, 129 111. 466, 21 N. E. 850, 5 

Wilcox V. Campbell, 106 N. Y. 325, L. R. A. 276; Briscoe v. Power, 47 

12 N. E. 823; Browne v. Lynde, 91 111. 447; Insurance Co. v. Dunn, 167 

N. Y. 92; Coles v. Appleby, 87 N. 111. App. 22; Vogel v. ShurtlifE, 28 

Y. 114; Hart v. Wandle, 50 N. Y. 111. App. 516; De Haven v. Mussel- 

381; Burank v. Babcock, 3 N. Y. St. man, 123 Ind. 62, 24 N. B. 171; 

458; Baring v. Moore, 4 Paige (N. Brown v. South Boston Sav. Bank, 

Y.) 166; Clark v. Benthem, 4 Ohio 148 Mass. 300, 19 N. E. 382; Hanes 

Dec. (Reprint) 498. See also Waters v. Denby (N. J. Eq.), 28 Atl. 798; 

V. Hubbard, 44 Conn. 340; Judson v. Hill v. McCarter, 27 N. J. Eq. 41; 



231 OEDEK OF SALE § 1635 

When a purchaser of a part of the premises has agreed to assume 
the whole or a part of the mortgage debt as a part of the consideration 
he pays for the land, and subsequently sells it to another, this grantee 
having notice of such agreement stands in no better position than 
the first purchaser as regards any equity against the mortgagor.^' And 
so where the whole of a tract of land was subject to a mortgage and a 
portion of it was conveyed, and afterward the remainder was conveyed 
to the same purchaser subject to the payment of the mortgage, and 
the purchaser subsequently made mortgages of the different parcels, 
upon a foreclosure of the first-named mortgage the assumption of this 
mortgage in the deed of the second parcel was regarded as operating 
between the parties as an agreement that the land therein named 
should be the primary fund for the payment of the debt, and that the 
mortgage should be enforced upon that land in the first instance, and 
upon the lot first conveyed in the case of a deficiency; and therefore 
it was held that the order of sale was not determined by the order of 
alienation by the purchaser.^" 

But the assumption of the mortgage as it appears in a deed of a part 
of the mortgaged premises is not always conclusive as to a purchaser 
of another part as regards the equities of the parties. The grantor 
may, by a subsequent agreement with a purchaser of a part of the 
premises who has assumed the whole mortgage, release such purchaser 
wholly or in part from his obligation to pay the mortgage ; and a sub- 
sequent grantee of another part of the premises will succeed only to 
the equities of his grantor as they exist at the time of the conveyance 
to him, whether he has notice of such equities or not. Thus the owner 
of a tract of land, having conveyed a portion of it supposed to con- 
tain eight acres, with a covenant that in case of a deficiency he would 
make compensation therefor at a certain price, the grantee assuming 
and agreeing to pay the mortgage upon the whole tract, subsequently, 
upon ascertaining that there was a deficiency in quantity of the land 
conveyed, agreed to save the grantee harmless from a part of the mort- 
gage debt amounting to the value of the deficient land. The grantor, 
after making that agreement, conveyed the residue of the land to an- 
other person by a deed covenanting that such land was free of all in- 

Zabriskie v. Salter, 80 N. Y. 555; Eq. 186, 43 Am. Dec. 624; Crenshaw 

New England L. & T. Co. v. Ste- v. Thackston, 14 S. Car. 437. See 

phens, 16 Utah 385, 52 Pac. 624. also Gray v. Loud Lumber Co., 128 

" Skinner v. Harkner, 23 Colo. 333, Mich. 427, 87 N. "W. 376. 
48 Pac. 648; Ross v. Haines, 5 N. J. ™ Steere v. Childs, 15 Hun (N. Y.) 

Eq. 632; Engle v. Haines, 5 N. J. 511. 



§ 1626 FOKECLOSUEE SALES UNDEK DECEEE 233 

cumbrances. In an action to foreclose the mortgage it was held that 
the grantee of such residue succeeded only to the equities of the 
grantor existing at the time of the conveyance ; that the residue of the 
laud was chargeable with the portion of the mortgage against which 
the grantor had agreed to protect the purchaser of the portion of the 
land first conveyed; that the fact that the covenant of such purchaser 
to pay the whole mortgage was contained in a deed on record was im- 
material; and that it was also immaterial that the agreement of the 
grantor to reassume the amount of the rebate for the deficiency in the 
quantity of land was not of record, and that the grantee of the residue 
had no notice of it.^^ 

The rule does not apply in case the mortgage provides that in the 
event of a sale of any portion of the mortgaged lands, the mortgagee 
shall, upon payment to him of the purchase-money for such portion, 
release the same from the mortgage and credit the amount so received 
on the mortgage debt, and the mortgagee accordingly, receives for the 
portion of the land sold part of the purchase-money in cash and notes 
for the remainder and reserves a lien upon such portion for the de- 
ferred payments; but in case of default on the mortgage, foreclosure 
should first be had on the portion so sold for the amount due on the 
notes given for the deferred payments before resorting to the land held 
by the mortgagor or held by a purchaser from him succeeding to his 
equities."^ 

§ 1626. Iowa and Kentucky rule — Contribution according to value. 

— The rule that the sale shall take place in the inverse order of aliena- 
tion is rejected in the states of Iowa,°' and Kentucky.^* Instead of 
this they have adopted the rule that the several ovpners shall con- 
tribute according to the value of their portions of the property. If the 

'1 Judson v. Dada, 79 N. Y. 373. Dickey v. Thompson, 8 B. Men. 

"^ Northwestern Land Assn. v. (Ky.) 312. In the latter case this 

Harris, 114 Ala. 468, 21 So. 999; rule is discussed at length, and the 

Aderholt v. Henry, 87 Ala. 415, 418, earlier decisions approved and af- 

6 So. 625. firmed, though contrary to the later 

"" Huff V. Parwell, 67 Iowa 298, 25 decisions in other states. It was 
N. W. 252; Barney v. Myers, 28 considered more equitable that the 
Iowa 472; Griffith v. Lovell, 26 Iowa burden should be equalized accord- 
226; Massie v. Wilson, 16 Iowa 390; ing to the value of the different par- 
Bates V. Ruddick, 2 Iowa 423, 65 eels than that the whole should be 
Am. Dec. 774. thrown upon the last purchaser of 

"Campbell v. Johnston, 4 Dana the last lot. See also Hunt v. Mc- 

(Ky.) 177, 182; Boston v. Eubank, Connell, 1 T. B. Mon. (Ky.) 219. As 

3 J. J. Marsh. (Ky.) 43; Hughes v. to North Carolina, see Stanly v. 

Graves, 1 Litt. (Ky.) 317; Burk v. Stocks, 1 Dev. Bq. (N. Car.) 318, 

Chrisman, 3 B. Mon. (Ky.) 50; where the question was raised. 



333 ORDER OF SALE § 1628 

purchasers have made improvements upon their lots, the enhanced 
value resulting from the improvements is not included in the valuation 
of the property under this rule. In these states, therefore, the mort- 
gaged lands may be sold under the decree of foreclosure, without ref- 
erence to the mortgagee's knowledge that they have been sold in par- 
cels at different times to different persons. 

It has also been held in Georgia that, since a judgment binds all 
of the property of the defendant from its date, equity will not com- 
pel the plaintiff to levy on that portion of the property last sold by 
the mortgagor, or sell that part, before proceeding against property 
previously sold.°° 

§ 1627. Time of valuation — Sale in parcels. — When contribution 
is to be made under the rule adopted by these states, that the propor- 
tion is to be determined by the relative value of the different parcels, 
whether the valuation should be taken at the date of the mortgage, 
at the time of foreclosure, or at the date of the several purchases, is 
not perhaps very material, as the fluctuation of price would generally 
be about equal for the different parcels. Valuation at the date of the 
mortgage has been adopted in several states."" In Kentucky, the courts 
have also sustained a valuation at the date of the several purchases,"^ 
and seemed to approve a valuation at the time of foreclosure."^ The 
practice in different courts has not been uniform. Nor, indeed, has the 
practice of the same court always been the same in this regard. 

"When the mortgaged premises have been conveyed in distinct par- 
cels, and the subsequent grantees or mortgagees of the parts are bound 
to contribute in proportion to the value of their parts, they are en- 
titled to have the premises sold in parcels, provided it can be done 
without prejudice to the rights of the mortgagee."' 

§ 1628. Recourse to two funds. — As a general rule, if a mortgagee 
has other security for his demand, and another creditor has a lien upon 

"'^ Harden v. Grady, 37 Ga. 660, Lyon v. Robbins, 45 Conn. 513; Hall 

overruling Gumming v. Gumming, 3 v. Morgan, 79 Mo. 47. 

Ga. 460. See also Knowles v. Law- " Burk v. Chrisman, 3 B. Mon. 

ton, 18 Ga. 476, 63 Am. Dec. 290; (Ky.) 50. 

Hammond v. Myrick, 14 Ga. 77. ^ Dickey v. Thompson, 8 B. Mon. 

'*' Morrison v. Beckwith, 4 T. B. (Ky.) 312. See also Cheesebrough 

Mon. (Ky.) 73, 16 Am. Dec. 136; v. Millard, 1 Johns. Ch. (N. Y.) 409, 

Parkman v. Welch, 19 Pick. (Mass.) 7 Am. Dec. 494 (contribution accord- 

231; Johnson v. Williams, 4 Minn, ing to actual relative value rather 

260; Hill v. Howell, 36 N. J. Eq. 25; than price). 

Stevens v. Cooper, 1 Johns. Ch. (N. '"Pancoast v. Duval, 26 N. J. Eq. 

Y.) 425, 7 Am. Dec. 499. See also 445; Stelle v. Andrews, 19 N. J. Eq. 

409. 



§ 1628 



FOKECLOSURE SALES UNDER DECREE 



234 



one of the funds only, the former must resort in the first place to that 
security upon which no one other than his debtor has any claim f and 
he must exercise good faith and reasonable diligence in the enforce- 
ment of his rights."^ Where the mortgagee of the north half of a lot 
had notice that it was chargeable with, and of sufficient value for the 
payment of a prior mortgage upon the whole lot, and purchased such 
prior mortgage, it was held that he could not enforce it in equity 
against the other half of the lot. The north half, being chargeable 
with the payment of the mortgage upon the whole lot, should first be 
applied to that purpose; and if it was sufficient to satisfy the debt 
in full, the mortgage should be discharged as to the other half of the 
lot.«2 

This rule is subject to the qualification that it shall not be applied 
where it would work any injustice to the prior creditor,*' or to any 
other person interested in the securities, as, for instance, an interven- 
ing lienholder, having a superior equity ;°* or where the mortgagee's 
right to satisfy his claim out of both funds would be in any way im- 
paired ; or where there is any doubt of the sufficiency of the fund upon 



"McLean v. Lafayette Bank, 4 
McLean (U. S.) 430; Bryant v. 
Stephens, 58 Ala. 636; Terry v. Re- 
sell, 32 Ark. 478; Andreas v. Hub- 
bard, 50 Conn. 351; Boone v. Clark, 
129 111. 466, 21 N. E. 850; Chicago 
&c. R. Land Co. v. Peck, 112 111. 408; 
Iglehart v. Crane, 42 111. 261; Swift 
v. Conboy, 12 Iowa 444; Miles v. 
National Bank, 140 Ky. 376, 131 S. 
W. 26; Sibley v. Baker, 23 Mich. 
312; Trowbridge v. Harleston, "Walk. 
Ch. (Mich.) 185; Dawes v. Cammus, 
32 N. J. Eq. 456; Warwick v. Ely, 
29 N. J. Bq. 82; Sherron v. Acton 
(N. J. Eq.), 18 Atl. 978; Bishop 
Bailey Bldg. &c. Assn. v. Kennedy 
(N. J.), 12 Atl. 141; Ingalls v. Mor- 
gan, 10 N. Y. 178, Seld. Notes (N. 
Y.) 227; Everston v. Booth, 19 
Johns. (N. Y.) 486; Hays v. "Ward, 
4 Johns. Ch. (N. Y.) 123, 8 Am. Dec. 
554; Stevens v. Cooper, 1 Johns. Ch. 
(N. Y.) 425, 7 Am. Dec. 499; Cheese- 
brough V. Millard, 1 Johns. Ch. (N. 
Y.) 409, 7 Am. Dec. 494; James v. 
Hubbard, 1 Paige Ch. (N. Y.) 228; 
York & Jersey Steamboat Ferry Co. 
V. Jersey Co., Hopk. Ch. (N. Y.) 
460; Ramsey's Appeal, 2 Watts (Pa.) 
.■328, 27 Am. Dec. 301; Fowler v. 
Earksdale, Harper's Eq. (S. Car.) 



164; Blair v. White, 61 Vt. 110, 17 
Atl. 49; Scott v. Webster, 44 Wis. 
185; Story's Eq. Juris., §§ 559, 560. 
See ante § 728. This principle is 
illustrated by Lord Hardwicke in 
Lanoy v. Athol, 2 Atk. 444, 446: 
"Suppose a person who has two real 
estates mortgages both to one per- 
son, and afterward only one estate 
to a second mortgagee, who had no 
notice of the first; the court, in 
order to relieve the second mort- 
gagee, have directed the first to take 
his satisfaction out of that estate 
only which is not in mortgage to 
the second mortgagee, if that is suf- 
ficient to satisfy the first mortgage, 
in order to make room for the sec- 
ond mortgagee." See also Wright 
V. Nutt, 1 H. Bl. 136, 150. 

°' Shields v. Kimbrough, 64 Ala. 
504; Iglehart v. Crane, 42 111. 261; 
Kurd V. Baton, 28 III. 122. 

"^ Mclntire v. Parks, 59 N. H. 258. 

" Farwell v. Bigelow, 112 Mich. 
285, 70 N. W. 579; Slater v. Breese, 
36 Mich. 77; Norfolk State Bank v. 
Schwcnk, 51 Nebr. 146, 70 N. W. 
970. See also Michigan Trust Co. v. 
Red Cloud, 3 Nebr. (Unoff.) 722, 92 
N. W. 900. 

"■ Leib V. Stribling, 51 Md. 285. 



235 OEDEK OF SALE § 1639 

■which the junior creditor has no claim; or -where the prior creditor 
is not willing to run the risk of obtaining satisfaction out of that 
fund; or where that fund is of a dubious character, or is one which 
may involve him in litigation to realize."^ "But it is the ordinary 
case," says Lord Eldon, "to say, a person having two funds shall not 
by his election disappoint the party having only one fund ; and equity, 
to satisfy both, will throw him who has two funds upon that which 
can be affected by him only, to the intent that the only fund to which 
the other has access may remain clear to him."'* 

In accordance with these restrictions of the rule, where a creditor 
was secured by a mortgage of land and slaves, and the land was after- 
ward sold by the mortgagor, and one of the slaves was sold by the 
sheriff under executions issued part before and part after the mort- 
gage, though the sum received by the sheriff was suflScient to satisfy 
the senior executions and the balance of the mortgage debt, the mort- 
gagee was not compelled to resort to this fund, because he might 
thereby incur the expense and risk of litigation, but was allowed to 
foreclose the mortgage upon the land to satisfy his demand.'"' 

The mortgagee might lose the very benefit sought by having a dou- 
ble security, if he were compelled to incur the risk of delay or loss 
by being referred for his payment to security he deemed the more un- 
certain. The subsequent purchaser of the mortgaged property takes 
it with full knowledge of the incumbrance, and it is more equitable 
that he should be obliged to pay the mortgage debt and be subro- 
gated to the other security of the mortgagee than that the latter should 
be prejudiced. It is not necessary that it should appear that a second 
mortgagee knew at the time he took his mortgage that the prior 
mortgagee had collateral security, or that the second mortgagee took 
his mortgage relying on the equitable right to compel the marshaling 
of the assets. 

A trustee mortgagee, holding a senior lien upon land, can not be 
deprived thereof merely because he also has a right to satisfy thfl mort- 
gage debt out of a bond executed by his predecessor in trust, by vir- 
tue of which the mortgage came to him.°* 

§ 1629. Mortgagee holding lien on other property — ^Exoneration 
of surety. — So also when two persons have mortgages upon the same 

"* Boone v. Clark, 129 111. 466, 21 Lloyd & Goold temp. Sugden, 252, 

N. E. 850. and notes. 

*■ Aldrich v. Cooper, 8 Ves. 382, " Walker v. Covar, 2 S. Car. 16. 
395. See also Averall v. Wade, ^ Shuey v. Latta, 90 Ind. 136. 



§ 1629 rORECLOSUEE SALES UNDEE DECEEE 236 

piece of property, which is insufficient to satisfy both, and one of 
them has a lien for his debt upon other property, equity requires that 
he shall exhaust the latter before resorting to the mortgaged prop- 
erty.°' In like manner when two persons, to secure the debt of one of 
them, have jointly mortgaged three parcels of land, one of which they 
own jointly, while each of them owns one of the others individually, 
the decree should order the sale, first, of the portion of the mortgagor 
equitably bound to pay the debt, and next of the joint parcel.'"' 

The senior mortgagee should be notified by the junior mortgagee 
of his equitable rights, as the constructive notice arising from records 
is not a sufficient notice.''^ 

But where a principal debtor and his surety have both mortgaged 
their lands to secure a debt, the lands of the principal debtor are to be 
first sold, and those of the surety only for the deficiency.''^ "A pur- 
chaser of the property of the surety so mortgaged would have this 
same right ; so one taking title to such property of the surety by in- 
heritance would have this right. It has been held repeatedly that a 
wife, joining in a mortgage with her husband to secure his debt, has 
the right to have the two-thirds interest in the land first sold to pay 
the debt."" Therefore if a mortgage made to secure a husband's debt 
covers his land and land of his wife, the husband's land should first be 
sold in exoneration of that of his wife.''* 

"Where one of two tenants in common has paid his share of a joint 
mortgage, and the other has mortgaged his portion again, the former 
is entitled to a discharge under a ctatute authorizing joint debtors to 
make separate settlements with their creditors; and the second mort- 
gagee can not have the first mortgage satisfied from the joint property, 

"'Russell V. Howard, 2 McLean Bq. 1036; Norman v. Norman, 26 S. 

(U. S.) 489; Turner v. Flinn, 67 Car. 41, 11 S. E. 1096. A mortgage 

Ala. 529; Andreas v. Hubbard, 50 creditor need not proceed against a 

Conn. 351; Warner v. DeWltt County mere surety for the debt, in order to 

Nat. Bank, 3 Bradw. (111.) 305; Sib- relieve the mortgaged property for 

ley V. Baker, 23 Mich. 312; Trow- the benefit of other creditors. Cen- 

bridge v. Harleston, Walker (Mich.) tral Railroad &c. Co. v. Claghorn, 

185; Millsaps v. Bond, 64 Miss. 453; Speers Eq. (S. Car.) 545. 

Sternberg v. Valentine, 6 Mo. App. "Hoppes v. Hoppes, 123 Ind. 397, 

176; Whittaker v. Belvidere Roller- 24 N. B. 139, per Olds, J., citing 

Mill Co., 55 N. J. Bq. 674, 38 Atl. Birke v. Abbott, 103 Ind. 1, 1 N. B. 

289; Denton v. Nat. Bank, 18 N. Y. 485; Trentman v. Eldridge, 98 Ind. 

S. 38. 525; Main v. Ginthert, 92 Ind. 180; 

"Ogden V. Glidden, 9 Wis. 46. Grave v. Bunch, 83 Ind. 4; Leary v. 

"Annan v. Hays, 85 Md. 505, 37 Shaffer, 79 Ind. 567; Figart v. Hal- 

■A-tl. 20. derman, 75 Ind. 564; Medsker v. 

"Gresham v. Ware, 79 Ala. 192; Parker, 70 Ind. 509. 

Hoppes V. Hoppes, 123 Ind. 397, 24 " Shew v. Call, 119 N. Car. 450, 26 

N. B. 139; Drake v. Bray, 29 N. J. S. E. 33, 56 Am. St. 678. 



237 ORDER OF SALE ' § 1630 

or postponed to his own, on the ground that the release is in fraud 
of his rights.'^ 

§ 1630. Mortgagee of two parcels securing the same debt. — If one 
holds two mortgages on different parcels of land, or on^ mortgage on 
two parcels of land, to secure the same debt, in the absence of any 
equities in subsequent purchasers he may foreclose either one without 
the other ;'° and a foreclosure of one will bar a foreclosure of the other 
only where the land foreclosed is equal in value to the debt.''' But if 
there are subsequent purchasers, the equitable rules already spoken of 
must be observed ;''* and if the mortgages cover in part the same land, 
and are both foreclosed together, the land included in the first mort- 
gage should be exhausted before recourse is had to the second.'^ 

Where a mortgage covers two parcels of land, the owners of which 
have apportioned the mortgage between them, and the owner of one 
parcel has paid his share of it, upon a foreclosure of the mortgage 
the other tract should first be sold.'" 

Where joint owners of land have executed a mortgage, one of the 
mortgagors, upon alleging and proving that he executed the mortgage 
as a surety for the other, under a statute providing for the determina- 
tion of the question of suretyship, may have the interest of the prin- 
cipal debtor sold before his interest is sold.'^ 

When a principal and a surety have jointly mortgaged lands be- 
longing to each individually, the surety has an equity to require that 

"Southworth v. Parker, 41 Mich, gage on certain property, and a 

198. judgment lien on other property, 

'" Myers v. Pierce, 86 Ga. 786, 12 S. may foreclose both securities at 

B. 978; Thackaberry v. Johnson, 228 once. Gushee v. Union Knife Co., 

111. 149, 81 N. E. 828; Burpee v. 54 Conn. 101, 6 Atl. 192. 

Parker, 24 Vt. 567. See also Muller " Burpee v. Parker, 24 Vt. 567. 

V. Dows, 94 V. S. 444, 24 L. ed. 207; "Burpee v. Parker, 24 Vt. 567. 

Bull v. Coe, 77 Cal. 54, 18 Pac. 808, "Raun v. Reynolds, 11 Cal. 14. 

11 Am. St. 235; First Nat. Bank v. «»Weyant v. Murphy, 78 Cal. 278, 

Glenn, 10 Idaho 224, 77 Pac. 623, 20 Pac. 568. 

109 Am. St. 204; Commonwealth v. "Chaplin v. Baker, 124 Ind. 385, 

Louisville Trust Co., 16 Ky. L. 131, 24 N. E. 233. But an answer by 

26 S. W. 582; Button v. Merritt, 41 such alleged principal that the orig- 

Mich. 537, 2 N. "W. 806; McKinney v. inal surety, for a valuable consider- 

Miller, 19 Mich. 142; Davis v. Rider, ation, had agreed with his principal 

5 Mich. 423; Appleget v. Greene, 12 to pay the joint indebtedness, is 

Nebr. 304, 11 N. W. 322; Dickerson good, for such original surety there- 

V. Wenman, 35 N. J. Eq. 368; by becomes the principal, and the 

Thompson v. Skeen, 14 Utah 209, 46 principal becomes his surety. Sef- 

Pac. 1103; Hersner v. Martin, 8 ton v. Hargett, 113 Ind. 592, 15 N. 

Wash. 698, 36 Pac. 1096. A creditor E. 513. 
whose claim is secured by a mort- 



§ 1630a FOEECLOSUEE SALES UNDEE DECEEE 238 

the lands of the principal shall be first sold and applied to the satis- 
faction of the debt.*^ 

§ 1630a. Mortgage by tenants in common securing debt of one — 
Partition. — The same rule applies in case of a mortgage by tenants 
in common or joint owners, of the common land to secure the debt 
of one of them. The fact that one of three tenants in common joined 
in a mortgage of the joint property merely to secure money borrowed 
by her cotenant for his own use, and that the assignee of the mortgage 
knew the circumstances when he took the assignment, is no defense 
to a suit by such assignee to foreclose ; but such circumstances entitle 
her to a postponement of the sale of her interest, until after the in- 
terest of the principal debtor has been exhausted.'^ 

If there has subsequently been a valid partition between such ten- 
ants by a recorded conveyance, the court would doubtless require the 
mortgagee to resort in the first instance to the portion conveyed in 
severalty to the principal debtor; and it has been held that the court 
will direct a partition, if the parties have not made one, so that the 
share of the principal debtor shall first be applied on the debt.^* 

But an unregistered deed does not afford complete evidence of title 
in severalty in the former cotenants to a creditor holding an incum- 
brance on the undivided estate. "This is putting the creditor to the 
disadvantage of the danger of sacrificing a part of the mortgaged es- 
tate by selling a title that does not exist, or of the existence of which 
the evidence is doubtful, and thus endangering the ultimate security 
of his debt."«= 

§ 1631. Deduction of value of parcel released before charging other 
portions. — If the mortgagee, having notice of successive alienations 
of parts of the mortgaged premises, has released a part which is pri- 
marily liable for the payment of the debt, he can not charge the other 
portions of the premises with the payment of it without first deduct- 
ing the value of the part released,^^ and he must make this deduction 

'"'Gresham v. Ware, 79 Ala. 192. 280; Clark v. Pontaln, 135 Mass. 

'^Lorey v. Overton, 42 N. J. Eq. 464; Beard v. Fitzgerald, 105 Mass. 

330, 11 Atl. 15. 134; George v. ■Wood, 9 Allen 

« Wheat V. MoBrayer, 16 Ky. L. (Mass.) 80, 85 Am. Dee. 741; Chase 

195, 26 S. W. 809. v. Woodbury, 6 Cush. (Mass.) 143; 

»= Evans V. Fields (Miss.), 11 So. Parkman v. Welch, 19 Pick. (Mass.) 

224. 231; James v. Brown, 11 Mich. 25; 

"■Birnle v. Main, 29 Ark. 591; Harrison v. Guorin, 27 N. J. Eq. 

Iglehart v. Crane, 42 111. 261; Mat- 219; Mount v. Potts, 23 N. J. Eq. 

teson V. Thomas, 41 III. 110; Taylor 188; Hoy v. Bramhall, 19 N. J. Eq. 

V. Short, 27 Iowa 361, 1 Am. Rep. 663, 97 Am. Deo. 687; Vanorden v. 



339 OKDEH OF SALE § 1631 

before proceeding to sell the other portions.'' If the value of the prop- 
erty released equals the entire debt, he must bear the loss, as he can not 
then resort to the first lot sold;** if it is equal to a part of the debt 
only, he may resort to the lot sold for the deficiency. But if the mort- 
gagor had no title to the lot released, or it could in any way be shown 
that the owners of the other lots were not prejudiced by the release, 
this rule would not apply.'" 

In such cases, in order to ascertain the value of the different parts 
of the land, and the amount due on the mortgage, a reference is or- 
dered."" A mortgagee, however, does not, by a partial release without 
consideration, impair his right to enforce his mortgage against the re- 
mainder of the property, unless he had actual notice of the previous 
transfer of the remainder or of some portion of it by the mortgagor. 
The same rule about notice already stated applies equally here. A 
reference in his release to a conveyance of another part of the land, by 
the mortgagor is, however, constructive notice of it."^ 

Where a creditor has a lien on two parcels of land, he may release 
one without impairing his claim upon the other, if he has no notice 
or reason to believe that such a release will interfere with the equi- 
table rights of others."^ In order to affect the mortgagee, he must 
have actual notice of the subsequent transfer of part of the mortgaged 

Johnson, 14 N. J. Eq. 376; Gaskill v. ises primarily liable, lie thereby re- 
Sine, 13 N. J. Bq. 400, 78 Am. Dec. leases pro tanto the portion second- 
105; Reilly v. Mayer, 12 N. J. Eq. arily liable. When the mortgage is 
55; Blair v. Ward, 10 N. J. Eq. 119; sought to be enforced against the 
Mickle V. Eambo, 1 N. J. Eq. 501; owner of the latter, he can claim an 
Shannon v. Marselis, 1 N. J. Eq. abatement of his liability to the ex- 
413; Stevens v. Cooper, 1 Johns. Ch. tent of the value of that portion 
(N. Y.) 425, 7 Am. Dec. 499; Cheese- which should have made the pri- 
brough V. Millard, 1 Johns. Ch. (N. mary fund." Followed in Boone v. 
Y.) 409, 7 Am. Dec. 494; Patty v. Clark, 129 111. 466, 21 N. E. 850. 
Pease, 8 Paige (N. Y.) 277, 35 Am. See ante §§ 727, 731. 
Dec. 683; Skeel v. Spraker, 8 Paige ''Hall v. Edwards, 43 Mich. 473, 
Ch. (N. Y.) 182; Guion v. Knapp, 6 5 N. W. 652; Hill v. Howell, 36 N. 
Paige (N. Y.) 35, 29 Am. Dec. 741; J. Eq. 25; Schrack v. Shriner, 100 
Stuyvesant v. Hone, 1 Sandf. Ch. Pa. St. 451. 

(N. Y.) 419; Taylor v. Maris, 5 »« Woodward v. Brown, 119 Cal. 

Rawle (Pa.) 51; Miller v. Rogers, 283, 51 Pac. 2, 63 Am. St. 108. See 

49 Tex 398; Lyman v. Lyman, 32 also Crisman v. Lanterman, 149 Cal. 

Vt. 79, 76 Am. Dec. 151; Deuster v. 647, 87 Pac. 89, 117 Am. St. 167. 

McCamus, 14 Wis. 307. In Iglehart »» Taylor v. Short, 27 Iowa 361, 1 

V. Crane, 42 111. 261, the court says: Am. Rep. 280. 

"Prom this rule, as to the order in " Gaskill v. Sine, 13 N. J. Eq. 400, 

which mortgaged premises are to be 78 Am. Dec. 105. 

charged, it follows as a corollary °' Booth v. Swezey, 8 N. Y. 276. 

that, if the mortgagee with actual ""Guion v. Knapp, 6 Paige Ch. (N. 

notice of the facts releases from the Y.) 35, 29 Am. Dec. 741; Stuyvesant 

mortgage that portion of the prem- v. Hone, 1 Sandf. Ch. (N. Y.) 419. 



§ 1632 FOKECLOSUEE SALES UNDEK DECREE 240 

premises, before his release of a portion will bar his right to foreclose 
upon the remainder.'^ 

If the mortgagee, having also personal security for his demand, by 
his fault and negligence loses this, a purchaser of the land may com- 
pel him to deduct from the mortgage debt the value of the security 
lost, so that the mortgage can be foreclosed only for the balance.'* 

But where by the terms of the mortgage the mortgagee has agreed 
to release any portion of the mortgaged land upon receiving a certain 
price per foot, and the mortgagor divides the land into lots and sells 
two of them by warranty deed to different purchasers, who build 
dwelling-houses upon the lots, and one purchaser obtains a release of 
his lot upon paying to the mortgagee the stipulated price per foot for 
the land, the other purchaser can not restrain the mortgagee from 
selling his lot under the mortgage, the lots remaining unsold not be- 
ing, worth enough to pay the mortgage debt; but such purchaser is 
entitled to redeem on paying the stipulated price per foot.°^ 

§ 1632. Homestead. — The fact that the mortgage covers a home- 
stead and also other property, which is subject to a subsequent judg- 
ment lien, gives the debtor no right to have the latter property first 
applied to the pajrment of the mortgage debt, so that he may save his 
homestead, according to the weight of authority."" But in some states 

™ Brldgewater Roller Mills Co. v. v. Harbin, 18 S. Car. 425; White v. 

Baltimore Bldg. &c. Assn., 124 Fed. PoUeys, 20 Wis. 503, 91 Am. Dec. 

718; Blair v. Ward, 10 N. J. Eq. 119; 432; Jones v. Dow, 18 Wis. 241. See 

Stuyvesant v. Hall, 2 Barb. Ch. (N. also Dodds v. Snyder, 44 111. 53; 

Y.) 151; King v. McVickar, 3 Sandf. Fraser v. Seeley, 71 Kans. 169, 79 

Ch. (N. Y.) 192. Pac. 1081. But see LaRue v. Gil- 

^ Moody v. Haselden, 1 S. Car. bert, 18 Kans. 220. 
129. See also Cohn v. Senders, 175 In Iowa a distinction is taken be- 

Mo. 455, 75 S. W. 413; Fowler v. tween a subsequent sale of the mort- 

Barksdale, Harp. Eq. (S. Car.) 164; gaged land and a subsequent mort- 

Glst v. Pressley, 2 Hill Eq. (S. Car.) gage of it as regards the effect upon 

318; Gadberry v. McClure, 4 Strob. the homestead right. Equitable Life 

Eq. (S. Car.) 175; Bank of Ham- Ins. Co. v. Gleason, 62 Iowa 277, 17 

burg V. Howard, 1 Strob. Eq. (S. N. W. 524. Thus, in Dilger v. 

Car.) 173. Palmer, 60 Iowa 117, 10 N. W. 763, 

°= Clark V. Fontain, 135 Mass. 464. 14 N. W. 134, it was held, upon a 

■« See ante §§ 731, 1286, where the subsequent sale with covenants of 

reasons for the rule are stated: warranty of the portion of the mort- 

Plain V. Roth, 107 111. 588; Brown v. gaged premises not embraced in the 

Cozard, 68 111. 178; Chapman v. homestead, the mortgagor could not 

Lester, 12 Kans. 592; Webster v. insist that the property so con- 

Bronston, 5 Bush (Ky.) 521; Searle veyed should be first sold to satisfy 

V. Chapman, 121 Mass. 19; Hallman the mortgage. The homestead, on 

v. Hallman, 124 Pa. St. 347, 16 Atl. the contrary, must first be sold. 

871; Flttman's Appeal, 48 Pa. St. This distinction is placed on the 

315; Bowen v. Barksdale, 33 S. Car. ground that the conveyance in this 

142, 11 S. E. 640; State Sav. Bank case is the voluntary act of the 



241 



ORDER OF SALE 



§ 1633 



the courts have required the mortgagee to exhaust his remedy against 
the nonexempt property included in the mortgage before resorting 
to the mortgagor's homestead or other exempt property.*^ 

In a case where the mortgage embraced the homestead and a busi- 
ness lot, and the homestead had been sold to satisfy the mortgage debt, 
and there were judgment liens upon the business lot, the court de- 
clined to set aside the foreclosure sale. Chief Justice Dixon said: 
"However Just and reasonable it might be for the court to compel a 
sale of the business lot first, and thus save the homestead, if that were 
the only . question, yet we think the mortgagor's equity to hold his 
homestead fully countervailed by the equities of his creditors, who 
must look to the business lot for their satisfaction, and who have no 
lien upon the homestead. Until the legislature shall have declared the 
obligation to preserve the homestead superior to that of paying one's 
honest debts, we must hold the equity of the creditor at least equal 
to that of the debtor in cases like this."'' 

The power to compel a mortgagee to resort in the first instance to 
one of several parcels mortgaged, or to one part of the mortgaged prop- 
erty, is exercised only for the protection of, the equities of different in- 
cumbrancers or sureties, and never for the benefit of the mortgagor, 



mortgagor, while ia the other case 
the conveyance is the legal result 
of the mortgage. 

In South Carolina it is held that 
the extent of the homestead should 
be judicially ascertained before judg- 
ment of foreclosure is passed. Adger 
V. Bostick, 12 S. Car. 64. There the 
judgment creditor has the equitable 
right to compel the mortgagor to 
first exhaust so much of the debtor's 
land as embraces the homestead. 
State Sav. Bank v. Harbin, 18 S. 
Car. 425. 

In Texas no mortgage on the 
homestead is valid except for the 
purchase-money thereof or improve- 
ments thereon. Const. 1876, art. 16, 
§ 50. But where a mortgage was 
given upon land, a specific part of 
which was a homestead, and a por- 
tion of the loan secured was used to 
pay off vendors' Hens on the home- 
stead upon foreclosure of the mort- 
gage, it was held that the mortgagee 
was subrogated to the right of the 
holders of the vendors' liens as to 
such specific part, and on foreclosure 
was entitled to sell the whole tract, 

16 — Jones Mtg. — ^Vol. III. 



except the homestead, and, if suf- 
ficient was not realized to satisfy 
the mortgage debt, then to sell the 
homestead to satisfy so much of the 
decree as should not exceed the sum 
used to pay off such vendors' liens. 
Ivory V. Kennedy, 57 Fed. 340; 
Pridgen v. "Warn, 15 S. W. 559, 79 
Tex. 588, followed. 

^ McLaughlin v. Hart, 46 Cal. 638; 
Gaither v. Wilson, 164 111. 544, 46 
N. E. 58 (under statute); Frick Co. 
V. Ketels, 42 Kans. 527, 22 Pac. 580; 
LaRue v. Gilbert, 18 Kans. 220; Colby 
V. Crocker, 17 Kans. 527, 530; Armi- 
tage V. Toll, 64 Mich. 412, 13 N. W. 
408; Miller v. McCarty, 47 Minn. 321, 
50 N. W. 235 (reviewing the cases). 
In McArthur v. Martin, 23 Minn. 74, 
and Horton v. Kelly, 40 Minn. 193, 
41 N. W. 1031, this rule was adopted, 
at least where the second lien has 
been acquired by proceedings in 
invitum, and not by the contract of 
the debtor. 

. <« Jones V. Dow, 18 Wis. 241. See 
also Schreiber v. Carey, 48 Wis. 208, 
4 N. W. 124. 



§ 1633 FOEECLOSDKE SALES UNDER DECREE 242 

who has voluntarily waived his right of exemption.*" The fact that 
part of the property is a homestead does not change the equity rule 
that a party having security on two funds shall first exhaust his 
remedy upon the fund he alone is secured upon, when there is another 
party having security on the other.^ 

But, on the other hand, it has been held that the courts will not 
place burdens on the homestead not created by the parties themselves 
or by the law; and therefore that, where a first mortgage executed by a 
husband and wife covers a homestead and other land standing in the 
name of the wife, and afterward the wife alone executes a mortgage 
upon all the land covered by the first mortgage except the homestead, 
the first mortgagee will not be required to exhaust the funds derived 
from a sale of the homestead before resorting to the land covered by 
the second mortgage, in order that both debts may be paid. The se- 
curities will not be marshaled where the effect will be to place an ad- 
ditional liability against the homestead, to which the husband and 
wife had not assented." 

Even under a statute which requires that other property shall be 
exhausted before resort is had to a homestead covered by the mort- 
gage, a foreclosure sale under a mortgage embracing a homestead es- 
tate will not be set aside because the land was first offered in separate 
parcels corresponding with the government subdivisions, and no bids 
were received, when the whole of the land including the homestead was 
offered and sold.* 

If a mortgage be executed by a husband alone, so that it has no 
validity against the homestead estate, and this be set apart and the 
remainder of the land sold under foreclosure proceedings, the mort- 
gagee's lien is exhausted.* It seems, too, that in such case the home- 

" Ivory V. Kennedy, 57 Fed. 310; gage on real and personal property, 

Searle v. Chapman, 121 Mass. 19; the mortgagee will not be compelled 

Pom. Eq. Jur., § 1414; Story Eq. to resort to the realty before suing 

Jur., § 640. a purchaser of the personalty, to 

' In re Sauthoft & Olsen, 7 Biss. the prejudice of the mortgagor's 

(U. S.) 167; Hall v. Morgan, 61 homestead. Harris v. Allen, 104 N. 

Miss. 47. Car. 86, 10 S. E. 127. 

'Mitchelson v. Smith, 28 Nebr. 'Brumbaugh v. Shoemaker, 51 
583, 44 N. W. 871. This same rule ap- Iowa 148, 50 N. W. 493; Burmeister 
plies where dower has been assigned v. Dewey, 27 Iowa 468. Offering the 
to the widow in some part of the lands other than the homestead in 
mortgaged premises; the mortgagee separate tracts, and endeavoring 
may be required to sell the other thus to sell before offering and sell- 
mortgaged land before resorting to ing in a body, is exhausting the 
that set off as dower. Askew v. other property, within the meaning 
Askew, 103 N. Car. 285, 9 S. E. 646. of the statute. 
In case a debt is secured by mort- * Marks v. Wilson, 115 Ala. 561, 22 



243 CONDUCT OF SALE § 1633 

stead property in excess of the statutory limit may be subjected to the 
satisfaction of the mortgage, but the pleading must put in issue the 
value of the property.^ The life interest of a husband in the lands of 
his deceased wife is subject to a mortgage executed by the husband 
and wife on the land, as is also the interest of the remainder-man, and 
should be first sold to pay the mortgage debt." 

Where a first mortgage was made by a husband and wife with a 
release of their homestead right, and a second mortgage of the same 
premises was made without such a release, the wife not joining, and 
the homestead was declared as having been selected upon a certain 
part of the land, upon a foreclosure of the first mortgage it was held 
that the second mortgagee could not insist that the homestead should 
be first sold.'' 

The mortgagee should be made a party to the proceedings for set- 
ting off the homestead, or he will not be estopped from denying the 
right upon foreclosure.* 

§ 1632a. Duty of mortgagor to assert homestead right. — But this 
is a right which the mortgagor must seasonably assert for himself. 
The mortgagee is under no obligation to see that the debtor's home- 
stead right is not lost by the sale. "The mortgagee owes him no duty 
to assert it for him, or to institute proceedings to protect it. The 
equity is simply one which the law will protect upon seasonable appli- 
cation of the mortgagor, where the mortgagee proceeds to enforce his 
mortgage." The rule, moreover, being founded on a mere equity, will 
not be enforced to the displacement of a countervailing equity, or 
where, for any special facts, it would be inequitable to enforce it.' 

IV. Conduct of Sale 

Section Section 

1633. Presence of oflScer conducting 1636. Resale Tor failure or refusal 

sale. to comply with bid. 

1634. Adjournment. 

1635. Who may purchase at fore- 

closure sale — Right of mort- 
gagee. 

§ 1633. Presence of oficer conducting sale. — The sale is made by 
public auction to the highest bidder, unless otherwise ordered by the 

So. 134; Lear v. Tatten, 14 Bush 'Armitage v. Toll, 64 Mich. 412, 

(Ky.) 101. 31 N. W. 408. 

"Whitlock V. Gosson, 35 Nebr. *Goodall v. Boardman, 53 Vt. 92. 

829, 53 N. W. 980. "Miller v. McCarty, 47 Minn. 321, 

° Buckley's Assignee v. Stevenson, 50 N. W. 235. 
30 Ky. L. 952, 99 S. W. 961. 



1633 



FOEECLOSUEE SALES UNDEE DECREE 



244 



court. It IS conducted by a master in chancery, special commission or 
other ofiScer designated by the decree or by statute,^ though he may 
employ an auctioneer to act for him in his presence.^ If the sherifE is 
designated to make the sale, it may be made by his duly appointed 
deputy.' 

The officer's presence is required in order that the parties interested 
may have the benefit of the discretion and judgment which he should 
exercise for their benefit, in order to obtain a fair price for the prop- 
erty.* The sale must be made by the master or commissioner appointed 
in person or under his immediate direction, and he can not generally 
delegate his authority to another. ° There is often special occasion for 
the exercise of a reasonable discretion in the matter of adjournments; 
for unexpected occurrences may at the last moment threaten a sacri- 
fice of the property, unless he exercises his right to adjourn the sale 



^Heyer v. Deaves, 2 Johns. Ch. 
(N. Y.) 154; Shepard v. Whaley, 13 
N. Y. S. 532. A court of equity may 
appoint a master in chancery or a 
special commissioner to make a sale. 
Deck V. Whitman, 96 Fed. 873; Mc- 
Dermot v. Barton, 106 Cal. 194, 39 
Pac. 538; Rumsey v. People's R. Co., 
154 Mo. 215, 55 S. W. 615; American 
Inv. Co. V. Nye, 40 Nebr. 720, 59 N. 
W. 355, 42 Am. St. 692; McLarty 
V. Urquhart, 153 N. Car. 339, 69 S. 
E. 245; Mayer v. Wick, 15 Ohio St.' 
548. If the decree fails to designate 
any one to make the sale, the 
clerk of court may make the sale, 
under his general powers as com- 
missioner of the court. Griflln v. 
Smitn, 5 Ind. Ter. 89, 82 S. W. 684. 
A general statutory provision des- 
ignating the sherifE or other officer 
to conduct judicial sales, does not 
generally prevent the appointment 
of a master or special commis- 
sioner, unless it specially provides 
that foreclosure sales be made by 
such oflScer. Taylor v. Ellenberger, 
134 Cal. 31, 66 Pac. 4; McDermot v. 
Barton, 106 Cal. 194, 39 Pac. 538; 
Knickerbacker v. Eggleston, 3 How. 
Pr. (N. Y.) 130; Mayer v. Wick, 15 
Ohio St. 548; McLarty v. Urquhart, 
153 N. Car. 339, 69 S. E. 245. But 
see Blitz v. Moran, 17 Colo. App. 253, 
67 Pac. 1020; Armstrong v. Hum- 
phreys, 5 S. Car. 128. 

^ Blossom V. Milwaukee &c. R. Co., 
3 Wall. (U. S.) 196, 18 L. ed. 43. 



One of two trustees appointed to 
sell property can not employ a bro- 
ker to conduct the sale, and charge 
his expenses out of the proceeds. 
Without consent of his cotrustee. 
Moore v. Councilman, 115 Md. 629, 
81 Atl. 122. 

= Hodgdon v. Davis, 6 Dak. 21, 50 
N. W. 478; Union Trust Co. v. Da- 
vis, 64 Nebr. 340, 89 N. W. 1052; 
Richardson v. Hahn, 63 Nebr. 294, 
88 N. W. 527; Passumpsic Sav. 
Bank v. Maulick, 60 Nebr. 469, 83 
N. W. 672, 83 Am. St. 539; Bell v. 
Omaha Sav. Bank, 1 Nebr. (Unoff.) 
88, 95 N. W. 486; Benson v. Rein- 
shagen, 72 N. J. Eq. 358, 72 Atl. 
954. 

■"Powell V. Tuttle, 3 N. Y. 396. 
In this case, a sale made by one 
loan commissioner was set aside, 
the law required that the sale 
should be made by two commis- 
sioners, but only one was present. 
The circumstances were such that 
the sale should have been post- 
poned, and the Court of Appeals 
held that the decision of the ques- 
tion whether the sale should go on 
or be put off was a judicial act, and 
that the parties interested were en- 
titled to have had that question de- 
termined by both commissioners. 

"Penn Mut. L. Ins. Co. v. Creigh- 
ton Theater Bldg. Co., 64 Nebr. 228, 
74 N. W. 583; Heyer v. Deaves, 2 
Johns. Ch. (N. Y.) 154. 



345 CONDUCT OF SALE § 1634 

to another day. This is one of the duties 'whieh he can not properly 
delegate to another. If a sale be made in the absence of the sheriff, 
whose duty it is to conduct it, by his agent or bailiff informally ap- 
pointed, and the sheriff executes a deed to the purchaser, the deed will 
pass the title, and will be good in a collateral proceeding as the act 
of an officer de facto, but will be set aside on a direct application made 
in the course of the same proceeding." It has even been held that a 
sale by one loan commissioner in the absence of his associate is irregu- 
lar, though the deed be executed by both.'' 

The property must be offered to the highest bidder, and bids re- 
ceived so long as they are offered ; and after waiting a reasonable time 
for another, and none being made, it should be struck off to the highest 
bidder.^ The officer selling has no power to substitute one purchaser 
for another, or to reject the highest bid, except for substantial reasons.* 
But the purchaser may transfer his bid, and the sheriffs deed may be 
made to the transferee.^" A sale under a foreclosure decree is void if 
conducted in a manner prohibited by statute, or in a manner which 
would not have been in the power of the court to authorize.^^ 

§ 1634. Adjournment.^^ — If at the time and place of sale there 
be no bidder present other than the mortgagee or his attorney, it is the 
duty of the auctioneer or officer making the sale to adjourn it.'' The 
application for an adjournment usually comes from some one or more 
of the parties interested; but it may be the duty of the officer to ad- 
journ the sale without the request of any one, and even against the 
wish of a party in interest.'* Upon petition of a party in interest, the 
court may order a postponement of the sale, for any good cause shown, 
or evidence that a sale on the day appointed would be unfair or oppress- 

° Meyer v. Patterson, 28 N. J. Eq. is closed. State Bank v. Brown, 

249, sub. nom.; Meyer v. Bishop, 27 128 Iowa 665, 105 N. W. 49. 
N. J. Eq. 141. "Austin v. Ballard, 84 Kans. 619, 

'York V. Allen, 30 N. Y. 104; 01m- 114 Pac. 1084. 
sted V. Elder, 5 N. Y. 144; Powell "Bechtel v. Wier, 152 Cal. 443, 

V. Tuttle, 3 N. Y. 396; Pell v. Ul- 93 Pac. 75, 15 L. R. A. (N. S.) 549. 
mar, 21 Barb. (N. Y.) 500. But see "See post ch. xl, §§ 1861-1875. 
King V. Stow, 6 Johns. Ch. (N. Y.) ''Strong v. Catton, 1 Wis. 471. 
323. "Astor v. Romayne, 1 Johns. Ch. 

'Bicknell v. Byrnes, 23 How. Pr. (N. Y.) 310; McGown v. Sandford, 

(N. Y.) 486. See also May v. May, 9 Paige (N. Y.) 290. See also Rich- 

11 Paige (N. Y.) 201. ards v. Holmes, 18 How. (U. S.) 

"Vannerson v. Cord, Sm. & M. 143, 15 L. ed. 304; Russell v. Rich- 

Ch. (Miss.) 345; Spalding v. Mur- ards, 11 Maine 371, 26 Am. Dec. 532; 

phy, 63 Nebr. 401, 88 N. W. 489. "Ward v. James, 8 Hun (N. Y.) 526; 

But the sheriff may for satisfactory Tinkom v. Purdy, 5 Johns. (N. Y.) 

reasons refuse a bid, or repudiate 345. 
one accepted, before the transaction 



§ 1634 FORECLOSURE SALES UNDER DECREE 246 

ive or would result in material loss.^° The officer making the sale 
may properly adjourn it by direction of the complainant's solicitor, for 
the purpose of enabling the mortgagors to pay the debt; and he may 
make several short adjournments for this purpose, and finally, upon 
payment, may discontinue the sale altogether.^' The officer has discre- 
tionary power to adjourn the sale from time to time, for want of bid- 
ders or inadequacy of price which would sacrifice the property.^'' But 
if he exercises it in an arbitrary or unreasonable manner, the sale will 
be set aside and a resale ordered.^* 

Due notice must be given of any adjournment of the foreclosure 
sale.^' The adjourned day of sale should be announced at the time of 
the adjournment;^" but if this can not be done on account of an in- 
junction, a general adjournment may be made, and a day advertised 
afterward.^^ If the first day is by mistake set upon a Sunday, the 
postponement may be effected by an advertisement before the day ar- 
rives.^^ If the day fixed for sale be afterward appointed a legal holi- 
day, an adjournment should be made. In such case the advertisement 
is not rendered invalid.^^ If a referee is appointed to conduct the sale, 
and, at the time and place advertised for the sale, plaintiff's attorney, 
without authority from the referee, orders the sale to be postponed on 
account of the latter's absence, the sale must be readvertised by the 

" Bound v. South Carolina R. Co., After declaring the sale postponed, 

55 Fed. 186; Farmers' Loan &c. Co. with consent of the bidder to whom 

V. Oxford Iron Co., 13 Fed. 169; the property was knocked down, 

Merzbach v. Hadley, 109 Cal. 614, and giving notice of adjournment 

42 Pac. 157; Old Colony Trust Co. to the printers for publication, the 

v. Great White Spirit Co., 181 Mass. sheriff has no right to execute a 

413, 63 N. E. 945; Astor v. Romayne, deed as though a valid sale had 

1 Johns. Ch. (N. Y.) 310. been made. Miller v. Miller, 48 

"Blossom V. Milwaukee &c. R. Mich. 311, 12 N. W. 209. 

Co., 3 Wall. (U. S.) 196, 18 L. ed. "Breese v. Busby, 13 How. Pr. 

43. (N. Y.) 485. 

" Blossom V. Milwaukee &c. R. " Sanborn v. Petter, 35 Minn. 449, 

Co., 3 Wall. (U. S.) 196, 18 L. ed. 29 N. W. 64; Stearns v. Welsh, 50 
43; Reese v. Dobbins, 51 Iowa 282, ■ How. Pr. (N. Y.) 186, affd. 7 Hun 

1 N. W. 540; Birbeck Inv. Co. v. 676; La Farge v. Van Wagenen, 14 

Gardner, 55 N. J. Bq. 632, 37 Atl. How. Pr. (N. Y.) 54; Pier v. Storm, 

767; Public Schools v. New Jersey 37 Wis. 247. 

West Line R. Co., 30 N. J. Eq. 494; '"La Farge v. Van Wagenen, 14 

Kelly V. Israel, 11 Paige (N. Y.) How. Pr. (N. Y.) 54. 

147. But see Chamberlain v. Lar- "La Farge v. Van Wagenen, 14 

ned, 32 N. J. Eq. 295. The sheriff How. Pr. (N. Y.) 54. 

need not adjourn the sale merely be- '' Westgate v. Handlin, 7 How. 

cause the mortgagee is the only Pr. (N. Y.) 372. 

bidder. Equitable Trust Co. v. ■» White v. Zust, 28 N. J. Eq. 107. 
Shrope, 73 Iowa 297, 34 N. W. 867. 



347 CONDUCT OF SALE § 1635 

referee.''* A sale made in violation of an agreement for adjournment, 
may be set aside and a resale ordered.^^ 

If the day of sale be fixed in the announcement of the adjournment, 
and other notice of the adjourned sale name a different day, the sale 
will be irregular.^' 

The adjournment may be made to a different place than that named 
in the original notice, unless the place be fixed by law or by the de- 
cree -p though a sale adjourned to a place different from that named 
in the decree has been confirmed.^' 

It is the better and safer practice to advertise the adjourned sale, 
though this is not always essential to the legality of the sale.^" 

Omission to publish notice of the adjourned sale, though required 
by statute, is an irregularity merely, which may afford good ground 
for vacating and setting aside the sale made, but one which the 
parties are competent to waive, and which must be regarded as waived 
after the sale has been confirmed without objection.^" If an adjourn- 
ment be made at the request of the owner of the equity of redemption, 
under an agreement to allow commissions and expenses of the post- 
poned sale, these are a personal claim against him, and can not be 
taken out of the proceeds of the sale to the detriment of any one else.^^ 

§ 1635. Who may purchase at foreclosure sale — ^Rlght of mort- 
gagee. — The objection to the mortgagee's buying at the sale, when 
the mortgaged property is sold under judicial process, has much less 
force than it has when the sale is made under a power ;^^ for the ju- 
dicial sale is made by an officer designated by the court or by statute 
for the purpose, and the mortgagee for whose benefit it is made has 
not the actual control and management of the sale, as he has in case 
of a sale under a power. Accordingly, in those states in which the 
sale under a power is taken out of the hands of the mortgagee and 
placed under the direction of a sheriff or other officer, the restriction 
against the mortgagee's buying is at the same time generally re- 

='Shepard v. Whaley, 13 N. Y. S. =» Farmers' Bank v. Clarke, 28 

532. Md. 145. 

^Demaray v. Little, 19 Mich. 244; ^"Stearns v. Welsh, 7 Hun (N. 

Nevius V. Egbert, 31 N. J. Eq. 460; Y.) 676; Bechstein v. Schultz, 45 

Williams v. Doran, 23 N. J. Eq. 385; Hun (N. Y.) 191. This Is by rule 

Corwith V. Barry, 69 Hun 113, 53 N. of court In New York, 

y. St. 53, 23 N. Y. S. 200. =° Bechstein v. Schultz, 120 N. Y. 

=» Miller v. Hull, 4 Den. (N. Y.) 168, 24 N. E. 388. 

104. =' Neptune Ins. Co. v. Dorsey, 3 

■"Richards v. Holmes, 18 How. Md. Ch. 334. 

(U. S.) 143, 15 L. ed. 304. »^ See post §§ 1876-1886. 



§ 1635 



FOEECLOSUEE SALES UNDEE DECEEE 



248 



moved.'' And so the beneficiaries under a trust deed may become 
purchasers at a sale thereunder.'* 

As against the purchaser at foreclosure, the holder of the equity 
of redemption is entitled to rents and profits collected during the 
period of redemption which remain in the receiver's hands after pay^N 
ing tlie deficiency decree and other items allowed by the court.'° 

Where the authority is not given to the mortgagee by statute or 
by judicial construction to buy at a sale under decree of court upon 
his own mortgage, it is sometimes provided in the decree that he 
may become a purchaser, and he may generally obtain leave to pur- 
chase for himself.'" It is generally for the interest of the mortgagor 
and others interested that he should have the right to buy, as it often 
happens that he will pay more for the property than any one else will 
pay; and it is often equally important to the mortgagee to have this 



^'^ Stover V. Stark, 61 Nebr. 374, 
85 N. W. 286. See post § 1882. 

'* Freeman's Appeal, 74 Conn. 247, 
50 Atl. 748. See also Cliillicothe 
Paper Co. v. Wheeler, 68 111. App. 
343. 

^ Stevens v. Hadfield, 178 111. 532, 
52 N. E. 875, affg. 76 111. App. 420. 

"' Conger v. Ring, 11 Barb. (N. 
Y.) 356; Domville v. Berrington, 2 
Y. & C. 723. A mortgagee may be- 
come the purchaser, and acquire the 
title subject only to the right of re- 
demption. Caldwell v. Caldwell, 173 
Ala. 216, 55 So. 515. See also 
"Windes v. Russell, 150 Ala. 625, 43 
So. 788. The complainant in fore- 
closure has the same right to bid at 
the sale as any other person, and the 
fact that he becomes the purchaser 
does not in any way prejudice his 
rights. Innes v. Linscheid, 126 111. 
App. 27. In New York, by rule of 
court, a provision is Inserted in 
every decree for the sale of mort- 
gaged premises, unless otherwise 
specially ordered, that the plaintiff 
may become the purchaser. Ten 
Eyck V. Craig, 62 N. Y. 406, 421, 
37 Am. Dec. 233, per Andrews, J., 
in Felton v. Le Breton, 92 Cal. 
457, 28 Pac. 490, it was said: "A 
court of equity has the same right 
to determine in advance of the sale, 
in any particular case, that the cir- 
cumstances are such as will jus- 
tify it to authorize the trustee to 



become a purchaser, as it has after 
the sale to approve a purchase 
made by a trustee under statutory 
authority. When the sale is made 
under the direction of a court of 
equity, by officers appointed by the 
court, it is not a sale by the trus- 
tee, and the rule forbidding him to 
purchase at his own sale has no 
application." In this case, on the 
execution of a trust deed to secure 
a loan from the grantee to the 
grantor, one who had been attor- 
ney for both parties, and who acted 
for the grantee in making the loan, 
induced the grantee to include in 
the deed a sum due from the grantor 
to him for legal services, and agreed 
that no part of such sum should be 
paid until the loan was repaid in 
full. The grantee afterward, desir- 
ing to terminate the trust, was ad- 
vised by the attorney that he could 
not purchase at a sale under the 
power contained In the deed, but 
that he might do so on foreclosure 
by action, and take the land dis- 
charged of the trust. The action to 
foreclose was conducted by the at- 
torney for the grantee. The 
grantee, being authorized by the de- 
cree, purchased at the foreclosure 
sale for less than the amount of his 
loan. It was held that he took the 
land discharged of any trust on ac- 
count of the sum secured for the 
benefit of the attorney. 



349 CONDUCT OF SALE § 1635 

power, in order to prevent a sacrifice of his own iuxerests.'^ But un- 
der the technical rule against his purchasing, no one not interested in 
the equity of redemption can take advantage of his purchasing;^* and 
a person entitled to do so can only redeem. He acquires the same title 
against third parties as does any other purchaser. The fact that prop- 
erty so acquired may be or is treated as personal estate in the distri- 
bution of the property of his intestate does not aSect his holding of 
the lands as to others. He acquires the fee, and can dispose of it by 
deed, which deed will carry the same title as would the deed of any 
other purchaser.^" If such administrator is a creditor of the estate to 
an amount exceeding the purchase-price of the mortgaged land, and 
he pays for the land so purchased by crediting the estate with this 
amount, the heirs of the intestate, asserting their right to charge 
the administrator as a trustee for them of the title acquired by such 
purchase, should not be required to pay to him the full amount of 
his debt against the estate, but only so much of it as he had applied 
in making the purchase.*" 

The attorney for plaintiff, acting fairly and honestly, may buy in 
the premises for his own benefit and hold the same, except as against 
his own client;*^ and the presumption is that he is making the pur- 
chase on his own account.*^ But it has been held that the attorneys 
for plaintiff in foreclosure of a mortgage made to a trustee for the 
benefit of bondholders of a public service corporation, being also the 
attorneys of the receiver of such corporation, are disqualified from 
purchasing the mortgaged property at the receiver's sale, for their 
own benefit, without the consent of the bondholders.*' 

An officer of a corporation may purchase corporate property at a 
sale on foreclosure of a mortgage thereof, and the sale is not nec- 
essarily void even though such mortgage was originally made to him, 
and was assigned by him to another to be foreclosed ; especially where 
he had an interest to protect as holder of a subsequent judgment 
against the corporation, and the party objecting had abundant notice 
of the sale, and there was no fraud or unfairness.** 

"Holcomb V. Holcomb, 11 N. J. N. Y. S. 919; McCotter v. Jay, 30 N. 

Eq. 281; Galvln v. Newton, 19 R. Y. 80. But see Gardner v. Ogden, 

I. 176, 36 Atl. 3. 22 N. Y. 327, 78 Am. Dec. 192. 

''Edmondson v. Welsh, 27 Ala. "^Chappel v. Dann, 21 Barb. (N. 

578. Y.) 17. See also Squler v. Norris, 

«> "Watson V. Grand Rapids & I. 1 Lans. (N. Y.) 282. See post 

R. Co., 91 Mich. 198, 51 N. W. 990. §§ 1878, 1879. 

"Lewis V. Welch, 47 Minn. 193, *=Kreitzer v. Crovatt, 94 Ga. 694, 

49 N. W. 665. 21 S. E. 585. 

*• Holland Trust Co. v. Hogan, 17 "Preston v. Loughran, 12 N. Y. 



§ 1635 POEECLOSUKE SALES UNDER DECREE 250 

A subsequeiit mortgagee may purchase at a sale under a senior 
mortgagee to protect his own mortgage. There is no equitable con- 
sideration that puts a person bidding upon premises at such a sale, 
because he holds a second mortgage upon the premises, in any different 
position than a person bidding who has no second mortgage or other 
lien upon the premises.*'' Two mortgagees, who have separate liens 
on the mortgaged land, which each claims to be superior to the other, 
may purchase the premises for their joint benefit, and are not obliged 
to bid against each other. *° 

A creditor of the mortgagor may purchase at foreclosure sale.*^ 
And several creditors of the mortgagor, whether they be all the bond- 
holders secured by the mortgage or a part of such bondholders, may 
fairly combine to purchase the property at the mortgage sale. Other 
creditors are not, by such combination, deprived of the right to bid at 
such sale.** The heirs of a deceased mortgagor, occupying no relation 
of trust toward the decedent or his creditors, may purchase the prop- 
erty at foreclosure sale, and they are unaffected by fraudulent conduct 
of the administrator.*" 

The mortgagee's heirs or personal representatives may purchase at 
the sale.^" A purchase by an executor or administrator in his indi- 
vidual name and right is not absolutely void, but only voidable by 
persons interested in the estate of the mortgagee.^^ An executor or 
administrator of the mortgagee purchasing at the foreclosure sale 
holds the title for the benefit of the estate, and the. land is treated as 

S. 313. See also Twin-Lick Oil Co. 119 N. Y. S. 177; Marquam v. Ross, 

V. Marbury, 91 U. S. 587, 589, 23 L. 47 Ore. 374, 83 Pac. 852. 

ed. 328. In Hoyle v. Railroad Co., «Huber v. Crosland, 140 Pa. St. 

54 N. Y. 314, the Commission of 575, 21 Atl. 404. 

Appeals stated that a director of a " Turner v. Llttlefield, 142 111. 

railroad company could not become 630, 32 N. E. 522. 

a purchaser of property of the cor- "KrophoUer v. St. Paul, Minn. & 

poration, except subject to the right Manitoba R. Co., 1 McCrary (U. S.) 

of the corporation to elect to dis- 299; Santa Marina v. Connolly, 79 

affirm the sale and have a resale. Cal. 517, 21 Pac. 1093; Marie v. Gar- 

But it was not said that the sale was rison, 83 N. Y. 14. 

void, only that the corporation might ^ Bank of Pine Blufl v. Levi, 90 

ask for a resale if they believed the Ark. 166, 118 S. W. 250. 

property would sell for more; and ""Briant v. Jackson, 99 Mo. 585, 

it was further stated that, where 13 S. W. 91. The executors of a de- 

the director himself was the judg- ceased partner may buy in firm 

ment creditor, he had a clear right property for his estate. Heffron v. 

to sell the property of the corpora- Knickerbocker, 57 111. App. 336. 

tion, and it was not decided that he » Phillips v. Love, 57 Kans. 828, 

might not then purchase in his own 48 Pac. 142; Briggs v. Chicago, K. 

right. &c. R. Co., 56 Kans. 526, 43 Pac. 

"Watson v. Grand Rapids & I. 1131; Merket v. Smith, 33 Kans. 66; 

R. Co., 91 Mich. 198, 51 N. W. 990; Beck v. Uhrich, 16 Pa. St. 499. 
Rodger v. Bowie, 134 App. Div. 596, 



251 CONDUCT OF SALE § 1635 

personal property.^^ And it has been held that an executor or ad- 
ministrator, holding a second mortgage and purchasing the property 
at a sale under a prior mortgage, acquires the fee as against third 
persons, although the property is considered as personalty upon dis- 
tribution.''^ 

An appraiser of the property may purchase at the sale where it ap- 
pears that he had no idea of making the purchase at the time he made 
the appraisement, and that he appraised the property at as high a price 
as it should have been appraised."* But it seems that the auctioneer 
conducting the sale can not properly purchase at his own sale.^^ The 
fact that the purchaser at foreclosure sale is the son of one of the mort- 
gagees and the nephew of the other, raises no presumption of fraud.''* 

The relation of the life-tenant to the remainder-men is not of such 
a fiduciary nature that he can not purchase the property at a fore- 
closure sale; and his vendee, for valuable consideration, and without 
knowledge of any fraud, takes a good fee-simple title.''' 

A mortgagee who becomes a purchaser under a decree made upon 
his own complaint is not allowed to object to the title on the ground 
that persons in possession of the property without title were not made 
parties.^' And even if there be a defect in the proceedings he is sup- 
posed to have full notice of it, though actual notice be not shown, 
and is not allowed to object on account of it.^" 

If the foreclosure proceedings are for any cause ineffectual, and a 
mortgagee purchases and enters into possession under such void pro- 
ceedings, his relation to the mortgaged premises is that of a mort- 
gagee in possession."" He is accountable to one who establishes a 
right to the property for rents and profits, and may be allowed for 
payments for taxes and repairs."^ 

When the mortgagee has the right to purchase, the mortgage debt 
is not extinguished for any unsatisfied balance, any more than it is 
in case a stranger becomes the purchaser."^ 

"' Stevenson v. Polk, 71 Iowa 279, ""■ Owens v. Hornthal, 156 N. Car. 

291, 32 N. W. 340; Briggs v. Chi- 19, 72 S. E. 5. 

cago, K. &c. R. Co., 56 Kans. 526, 43 "German-American Deposit Co. 

Pac. 1131; Lockman v. Rellly, 95 v. Dletz, 132 Pa. St. 36, 18 Atl. 1090. 

N. Y. 64, 71; Valentine v. Belden, "Ostrom v. McCann, 21 How. Pr. 

20 Hun (N. Y.) 537. (N. Y.) 431. 

»= Watson V. Grand Rapids &c. R. ™ Boyd v. Ellis, 11 Iowa 97. 

Co., 91 Mich. 198, 51 N. W. 990. «» Cooke v. Cooper, 18 Ore. 142, 22 

"Barlow v. McClintock, 10 Ky. Pac. 945. 

L. 834, 11 S. W. 29. See also Ison "Wood v. Kroll, 4 N. Y. S. 678. 

v. Kinnaird, 13 Ky. L. 569, 17 S. W. »' Edwards v. Sanders, 6 S. Car. 

633. 316. 

==Windes v. Russell, 150 Ala. 625, 
43 So. 788. 



§ 1636 FORECLOSUEE SALES UNDER DECREE 252 

A purchaser of land subject to a mortgage which he has agreed 
to assume and pay is not precluded from purchasing at a sale under 
the mortgage within the rule against mortgagees buying.*^ Where a 
grantee of mortgaged property assumed payment of the debt, his pur- 
chase at foreclosure sale was held to amount only to a redemption, as 
against his grantee who did not assume the mortgage.** 

The usual provision in a decree of foreclosure, that any of the par- 
ties to the suit may purchase on the sale, does not authorize one de- 
fendant to bid in property belonging to another, and to hold it against 
the latter contrary to equity."^ But it has been held that any of the 
defendants may purchase the mortgaged property of a codefendanf 

The mortgage debtor may purchase at the foreclosure sale;'^ and 
his wife has the same right as any person to purchase at such sale, 
and to hold the property free from liability on account of her hus- 
band's debts, provided she does so in good faith and with her own 
money."' Where the wife signs the mortgage merely to relinquish her 
dower and secure her husband's debts, she may acquire title under 
foreclosure the same as any other person."' 

A tenant in common with the plaintiff, having no special duties to- 
ward him, may purchase the premises for his own benefit. ''° A life 
tenant stands in no such fiduciary relation to the remainder-men that 
he can not purchase the property at a foreclosure sale. He owes them 
no duty, and is not charged with any trust. '"^ 

§ 1636. Eesale for failure or refusal to comply with bid. — If a pur- 
chaser at foreclosure sale fails or refuses to complete his purchase, a 
second sale of the property may be ordered,^ ^ upon application to the 
court.'^ An order of court is not necessary where immediate pay- 

•^i McNeill V. McNeill, 36 Ala. 109, "Streeter v. Shultz, 45 Hun 406, 

76 Am. Dec. 320. 10 N. Y. St. 115. 

" Dillivan v. German Sav. Bank " German-American Deposit Co. 

(Iowa), 124 N. W. 350. v. Dietz, 132 Pa. St. 36, 18 Atl. 1090. 

«» Bennett v. Austin, 81 N. Y. 308. " Stuart v. Gay, 127 U. S. 518, 32 

»»Neilson v. Neilson, 5 Barb. (N. L. ed. 191, 8 Sup. Ct. 1279; Aukam 

Y.) 565. See also Rodger v. Bodie, v. Zantzinger, 98 Md. 380, 56 Atl. 

134 App. Div. 596, 119 N. Y. S. 177. 820; Scliaefer v. O'Brien, 49 Md. 

"Toliver v. Morgan, 75 Iowa 619, 253; Chancellor v. Gummere, 39 N. 

34 N. W. 858; Bensieck v. Cook, 110 J. Eq. 582; Barnwell v. Marion, 62 

Mo. 173, 19 S. W. 646. S. Car. 446, 40 S. B. 873; Childs v. 

"Houston v. Nord, 39 Minn. 490, Frazee, 15 S. Car. 612. 

40 N. W. 568; Mooring v. Little, 98 "Application may be made for a 

N. Car. 472, 4 S. B. 485. rule that the purchaser show cause 

'" Toliver v. Morgan, 75 Iowa 619, why the property should not be re- 

34 N. W. 858. See also Hesseltine sold at his cost and risk. Stuart 

V. Hodges, 188 Mass. 247, 74 N. B. v. Gay, 127 V. S. 518, 32 L. ed. 191, 

319. 8 Sup. Ct. 1279; Ash v. Southern 



253 , CONDUCT OF SALE § 1633 

ment of the bid is required and the purchaser does nothing toward 
complying. The ofBcer may reofEer the property for sale at once.''* 
The defaulting purchaser should have notice of the resale.'^ But he 
is relieved of all liability on account of his original bid, by the order 
for resale.'" In South Carolina the officer may not resell unless the 
order of sale gives him this authority.- The order is the officer's war- 
rant of authority.'"^ 

A sale may be kept open so as to enable the mortgagee or officer 
making the sale to put up the property again, in case the peTson bid- 
ding it off fails to make good his bid. Notifying the persons brought 
together by the published notice that the sale would thus be held open 
is all that is requisite; and a sale made in accordance with such noti- 
fication will not be set aside at the instance of the first bidder, in the 
absence of equities, and merely for the reason that it was made after 
the time when it was advertised to take place." 

If the purchaser refuses to make good his bid, the officer conduct- 
ing the sale may properly open the sale and sell the property again. 
A purchaser refused to complete his bid, on the ground that imme- 
diately thereafter he had discovered that there was a mortgage for 
eight thousand dollars on the premises undischarged of record, and 
that he did not have time to ascertain the status of the mortgage. The 
referee on the same day resold the premises to another purchaser for 
a less price. It appeared that the sum unpaid on the mortgage was 
as stated by the referee. The court, in its discretion, properly re- 
fused to vacate the second sale and permit the first purchaser to com- 
plete his bid, and such refusal was held not appealable.'^ 

Chemical &c. Co., 107 La. 211, 31 see Judge y. Booge, 47 Mo. 544. 

So. 656. The sheriff may move to " Schaefer v. O'Brien, 49 Md. 253; 

set aside the sale because of non- Rowley v. Feldman, 173 N. Y. 607, 

payment. Ash v. Southern Chem- 66 N. E. 1116; Tyer v. Charleston 

ical &c. Co., 107 La. 211, 31 So. 656. Rice Milling Co., 32 S. Car. 598, 10 

If the original order provided for a S. B. 1067. 

resale, application to the court is ™ Phelan v. Downs, 173 N. Y. 619, 

unnecessary. Miller v. Owens, 203 66 N. E. 1115. 

Fed. 648, 122 C. C. A. 44. "aCalder v. Maxwell (S. Car.), 82 

"Converse v. Clay, 86 Mich. 375, S. E. 997. 
49 N. "W. 473; Hewlett v. Davis, 3 "Wilson v. Thorn, 11 Ky. L. 945, 
Bdw. (N. Y.) 338; Thompson v. 13 S. W. 365; Hughes v. Swope, 88 
McManama, 2 Disn. (Ohio) 213, 13 Ky. 254, 1 S. W. 394; Isbell v. Ken- 
Ohio Dec. 131. See also Mead v. yon, 33 Mich. 63. See also Baring 
Brunnemer, 42 Hun 656, 6 N. Y. St. v. Moore, 5 Paige (N. Y.) 48. 
38 (right to resell reserved in ad- "Judson v. O'Connell, 14 N. Y. 
vertisement) ; Homes Ins. Co. v. S. 92. 
Jones, 45 How. Pr. (N. Y.) 498. But 



§ 1637 



FOKECLOSUEE SALES UNDER DECREE 



254 



V. Confirmation of Sale 



Section 

1637. Sale incomplete until confirm- 

ation — Defects — Ratifica- 
tion. 
1637a. Objections to confirmation. 

1638. Discretion of court in con- 

firmation — ^Notice — Order. 



Section 

1639. Resale upon application of 

party affected by fraud, un- 
fairness or misconduct. 

1640. Reopening sale on advanced 

bid before confirmation. 

1641. Inadequacy of price as objec- 

tion to confirmation. 



§ 1637. Sale incomplete until confirmation — ^Defects — Ratification. 

— Until confirmed by the court the sale is incomplete.^ The accept- 
ance of the bid confers no title upon the purchaser,'' and not even any 
absolute right to have the purchase completed. He is nothing more 
than a preferred bidder, or proposer for the purchase, subject to the 
sanction of the court afterward.^ When this is given, it relates back 
to the time of sale, and carries the legal title from the delivery of the 
deed and the equitable title without a deed.* The bidder is under no 
obligation to accept the deed from the ofScer conducting the sale, until 
the sale is reported to and confirmed by the court." Equities in the 
property pendente lite or after a valid sale do not prevent a con- 
firmation of the sale." In a few states the foreclosure sale is made 
by a special writ of execution issued to the sheriff, and no report of 



^Cady V. Barnes, 208 Fed. 361; 
Wells V. Rice, 34 Ark. 346; Dills v. 
Jasper, 33 111. 262; Young v. Keogh, 
11 111. 642; Harwood v. Cox, 26 111. 
App. 374; Mills v. Ralston, 10 Kans. 
206; Busey v. Hardin, 2 B. Mon. 
(Ky.) 407; Allen v. Poole, 54 Miss. 
323; Gowan v. Jones, 18 Miss. 164; 
Tooley v. Grldley, 3 Smedes & M. 
(Miss.) 493, 41 Am. Dec. 628; Hay's 
Appeal, 51 Pa. St. 58, 61; Mebane v. 
Mebane, 80 N. Car. 34, 44 Am. Dec. 
102; Gerhardt v. Ellis, 134 Wis. 191, 
114 N. W. 495; Allen v. Elderkin, 
62 Wis. 627, 22 N. W. 842; Welp v. 
Gunther, 48 Wis. 543, 4 N. W. 647; 
Woehler v. Eildter, 46 Wis. 301, 1 
N. W. 329, 50 N. W. 1099; Daniell's 
Ch. 1454. But in New York it 
seems formal confirmation is not 
required. Ward v. Ward, 145 Fed. 
1023, 74 C. C. A. 146, and title to 
the property passes to the purchaser 
on delivery of the deed. Stimson v. 
Arnold, 5 Abb. N. Cas. (N. Y.) 377; 
Fort V. Burch, 6 Barb. (N. Y.) 60; 
Fuller V. Van Geesen, 4 Hill (N. Y.) 
171; Terpenning v. Agricultural 



Ins. Co., 14 Hun (N. Y.) 299. For 
statutory provision in regard to con- 
firmation of sales in New Jersey, 
see ante § 1350. An order of con- 
firmation not appealed from cuts 
off the right of redemption. Odd 
Fellows' Savings &c. Bank v. Har- 
rigan, 53 Cal. 229. 

= See Hatch v. Shold, 62 Nebr. 
764, 87 N. W. 908. 

° Blossom v. Milwaukee &c. R. 
Co., 3 Wall. (U. S.) 196, 18 L. ed. 
43; Wells v. Rice, 34 Ark. 346; Dills 
v. Jasper, 33 111. 262; Young v. 
Keogh, 11 111. 642; Mills v. Ralston, 
10 Kans. 206; Busey v. Hardin, 2 B. 
Mon. (Ky.) 407; Allen v. Poole, 54 
Miss. 323; Gowan v. Jones, 10 Sm. 
& M. (Miss.) 164; Tooley v. Grid- 
ley, 3 Sm. & M. (Miss.) 493, 41 Am. 
Dec. 628. See also Jones v. Will- 
iams, 155 N. Car. 179, 71 S. E. 222, 
36 L. R. A. (N. S.) 426. 

* Stang V. Redden, 28 Fed. 11. 

"Dills v. Jasper, 33 111. 262; Mar- 
tin V. Kelly, 59 Miss. 652. 

"Pendleton v. Spear, 56 Ark. 194, 
19 S. W. 578. 



255 CONFIEMATION § IBST" 

the sale or confirmation of it is required. Such a sale is not purely 
a judicial sale, which is founded upon proceedings in equity, or upon 
an equitable action. In those states in which foreclosure is obtained 
by a suit at law, as by scire facias, or by proceedings of a mixed nature, 
the sale is either ministerial or only quasi judicial. 

The confirmation cures all mere irregularities in the proceedings 
to obtain the sale, and in the conduct of it,^ but does not make good 
a defect arising from want of jurisdiction of the court either of the 
case or of any party interested ; and, moreover, fraud, accident, or mis- 
take, which will invalidate a contract generally, are grounds for set- 
ting aside the sale after confirmation.' If, however, the deed be de- 
livered without confirmation, long continued possession under it will 
make the title valid.' 

Even the question of the validity of a mortgage may be deter- 
mined under exceptions to the ratification of the sale; and after such 
exceptions have been overruled, and the sale has been ratified, no 
action can be brought to test its validity.^" But the mortgagor at 
this stage of the proceedings has no right to redeem. ^^ It has been 
held that a sale upon foreclosure is ratified by a subsequent payment 
by the mortgagor upon the balance of the judgment, and acceptance 
of a receipt reciting that the payment was made upon the amount due 
after crediting the amount realized by the sale.^^ 

The usual order nisi, that the sale stand confirmed unless cause to 
the contrary be shown within a specified time, is a sufficient order of 
confirmation of the sale.^^ An appeal may be taken from such 

' Bkblad v. Hanson, 85 Kans. fully illustrated by Mr. Justice Beck- 
541, 117 Pac. 1028 (note and mort- with, in Dills v. Jasper, 33 111. 262; 
gage not filed); Cross v. Knox, though Mr. Justice Caton, in the 
32 Kans. 725, 5 Pac. 32 (failure to previous case of Jackson v. War- 
sell parcels in order directed) ; ran, 32 111. 331, had asserted that a 
Beard v. Morris, 14 Ky. L. 97, 19 valid and binding contract is made 
S. W. 598; Bresee v. Ormsby, 91 when the hammer falls, and that the 
Nebr. 399, 136 N. W. 256; Paula v. purchaser is entitled to a deed. 
Scofield, 80 Nebr. 100, 113 N. W. Confirmation does not validate a 
993 (irregularities in appraise- void sale. Jenkins Land &c. Co. v. 
ment) ; Wardrobe v. Leonard, 78 Atwood, 80 Nebr. 806, 115 N. W. 305. 
Nebr. 531, 111 N. W. 134, 126 Am. » Gowan v. Jones, 18 Miss. 164. 
St. 619 (sale after death of plain- "Albert v. Hamilton, 76 Md. 304, 
tiff without revivor) ; Price v. Clti- 25 Atl. 341. See also Childs v. Far- 
zens' State Bank, 23 Okla. 723, 102 guson, 181 Fad. 795 (collateral at- 
Pac. 800; Strand v. Griffith, 63 tack of confirmation). 
Wash. 334, 115 Pac. 512 (failure to J' Payne v. Long-Bell Lumber Co., 
post and publish notice) ; Johnson 9 Okla. 683, 60 Pac. 235. 
V. Bartlett, 50 Wash. 114, 96 Pac. "Zable v. Masonic Sav. Bank, 13 
838; Terry v. Furth, 40 Wash. 493, Ky. L. 197, 16 S. W. 588. 
82 Pac. 882. See post § 1637a. "Torrans v. Hicks, 32 Mich. 307. 

*The statement in the text is See also Forest Lake Cemetery v. 



§ 1637a FOEECLOSUKE SALES UNDEK DECKEE 256 

order.^* But the correctness of the foreclosure decree can not be 
considered on an appeal from an order of confirmation.^" 

§ 1637a. Objections to confirmation. — ^While objections to the re- 
port of the referee, or other officer making the sale, remain on file un- 
disposed of, the foreclosure sale is not complete or absolute.^" Any 
objections to confirmation of the sale must be duly made before con- 
firmation,^' and the defects must be specifically pointed out.^' Juris- 
diction to confirm a sale necessarily implies jurisdiction to overrule 
objections to it.^° 

In general, mere clerical errors, where the sale substantially con- 
forms with the decree, are not available as objections to confirmation f 
and such errors may be corrected, on proper petition.^^ An er- 
roneous or imperfect description of the premises in any of the pro- 
ceedings is not a sufficient ground of objection to confirmation un- 
less it be alleged and shown that the party objecting will be preju- 
diced.^^ The fact that a copy of the decree was not attached to the 
order of sale,^^ or that the sherifE's return was not made within the 
time prescribed,^* are insufficient objections to confirmation. 

Mere technical objections to confirmation will be disregarded where 

Baker, 113 Md. 529, 77 Atl. 853. If " Keene &c. Sav. Bank v. Johnson, 
it be ordered that a foreclosure sale 1 Nebr. (Unoff.) 69, 95 N. W. 504. 
be confirmed unless objections are "Hutchinson v. Smidt, 4 Nebr. 
filed, and such objections are filed (Unofe.) 850, 96 N. W. 601. 
for the sole purpose of deciding who " Primrose v. Wright, 102 Md. 105, 
is entitled to the surplus money, an 62 Atl. 238; Passumpsic Sav. Bank 
order disposing of the surplus v. Maulick, 60 Nebr. 469, 83 N. W. 
amounts to a confirmation of the 672, 83 Am. Dec. 539. See also Dart- 
sale as against the objectors. Lam- mouth Sav. Bank v. Foley, 2 Nebr. 
bert V. Livingston, 131 111. 161, 23 (Unoff.) 459, 97 N. W. 1033 . 
N. E. 352. "Primrose v. Wright, 102 Md. 105, 

"Koehler v. Ball, 2 Kans. 160, 83 62 Atl. 238; Walsh v. Colby, 153 

Am. Deo. 451; Detroit F. &c. Ins. Mich. 602, 117 N. W. 207, 126 Am. 

Co. V. Renz, 33 Mich. 298; Trilling St. 546. An erroneous return may 

V. Schumitsch, 67 Wis. 186, 30 N. W. be amended. Diamond State Loan 

222. See also Escritt v. Michaleson, Assn. v. Collins, 4 Pen. (Del.) 77, 

73 Nebr. 634, 103 N. W. 300. 60 Atl. 861. 

"Tichy V. Simecek, 5 Nebr. "Hutchinson v. Smidt, 4 Nebr. 

(Unoff.) 81, 97 N. W. 323. See also (Unoff.) 850, 96 N. W. 601; Cooper 

Davis V. Simon, 61 Fla. 588, 55 So. v. Foss, 15 Nebr. 515. An erroneous 

548. description in the report of sale is 

" Howard v. Bond, 42 Mich. 131, 3 insufficient ground of objection. 

N. W. 289. Stephenson v. Allison, 123 Ala. 439, 

"Gillespie v. Morasman, 2 Nebr. 26 So. 290. 

(Unofe.) 162, 95 N. W. 1127. Objec- «'Gallentine v. Cummings, 4 Nebr. 

tions may be urged upon motion (Unoff.) 690, 96 N. W. 178. 

to confirm. Scandinavian-American '"Philadelphia Mtg. &c. Co. v. 

State Bank v. Downs, 76 Wash. 62, Buckstaff Bros. Mfg. Co., 61 Nebr. 

135 Pac. 807. 54, 84 N. W. 416; Philadelphia Mtg. 



357 COUFIEMATIOH § 1638 

the matters complained of did not prejudice the objecting party.^'* 
An irregularity in the posting or publication of notice has been held 
an insufficient objection to confirmation, where the defect was not 
prejudicial to the interests of the.parties.^^ And so a failure to sell 
the premises in parcels as directed is a defect which may be cured by 
confirmation.^^ It has been held that the death of the complainant 
or purchaser before confirmation is not a valid objection.^^ The fact 
that a party to the foreclosure, who became the purchaser, violated an 
injunction before the sale in regard to the property foreclosed, is not 
alone sufficient ground for refusing confirmation.^" 

Confirmation can not be objected to on the ground that there would 
be no default in the payment of interest if the sum retained as a 
bonus by the mortgagee at the time o£ the loan was applied to the 
payment of the legal interest upon the sum actually advanced. Usury 
can not be taken advantage of in this way. "In determining whether 
there has been a default the court must be governed by the terms of 
the mortgage itself, irrespective of the question of usury. After a 
default thus made, a sale or its ratification can be prevented on this 
ground only by paying, or at least offering to pay, the sum actually 
loaned, with legal interest."^" The usurious interest, when once paid, 
may be recovered back by an action at law, or in equity may be elim- 
inated from the claim, upon the objection of others whose rights its 
allowance would injuriously affect.'^ 

§ 1638. Discretion of court in confirmation — ^Notice — Order. — It 

rests wholly in the discretion of the court whether the sale shall be 
confirmed or set aside,^^ and this power will be exercised prudently 

&c. Co. V. Hutchins, 61 Nebr. 2, 84 (death of complainant and his so- 

N. W. 416; Amoskeag Savings Bank licitor). 

V. Robbins, 53 Nebr. 776, 74 N. "W. ^ Union Sav. Bank v. Lincoln 

261; Hartsuff v. Huss, 2 Nebr. Normal University, 4 Nebr. (Unoff.) 

(Unoff.) 145, 95 N. W. 1070. 70, 93 N. W. 408. 

^ Vradenburg v. Johnson, 70 Nebr. '" Smith v. Myers, 41 Md. 425, 434. 

793, 98 N. W. 54. ^ Smith v. Myers, 41 Md. 425, 434. 

='Farnsworth v. Hoover, 66 Ark. '''"Wyandotte State Bank v. Mur- 

367, 50 S. W. 865; Strand v. Griffith, ray, 84 Kans. 524, 114 Pac. 847; 

63 Wash. 334, 115 Pac. 512; Johnson Goodell v. Harrington, 76 N. Y. 547; 

V. Bartlett, 50 Wash. 114, 96 Pac. Hale v. Clauson, 60 N. Y. 339; Crane 

833. v. Stiger, 58 N. Y. 625; Buffalo Sav- 

^' Cross V. Knox, 32 Kans. 725, 5 ings Bank v. Newton, 23 N. Y. 160; 

Pac. 32; Beard v. Morris, 14 Ky. L. Koechl v. Gate Development Co., 149 

97, 19 S. W. 598. App. Div. 239, 133 N. Y. S. 763, af- 

'''Cronkhite v. Buchanan, 59 Kans. firmed 205 N. Y. 591, 98 N. E. 1106; 

541, 53 Pac. 863, 68 Am. St. 379 Moore v. Triplett, 96 Va. 603, 32 

(death of purchaser); Powell v. S. E. 50; Hansucker v. Walker, 76 

Pierce, 168 Mich. 427, 134 N. W. 447 Va. 753; Berlin v. Melhorn, 75 Va. 

17 — Jones Mtg. — Vol. III. 



§ 1638 FOEECLOSUEE SALES UNDEE DECEEE 258 

and fairly in the interest of all concerned, according to the circum- 
stances of each particular case.'^ An order directing or refusing a 
resale is not subject to review or appeal.^* The court should be satis- 
fied that the sale has been made in accordance with the requirements 
of the decree/^ and especially that notice of the sale was given as re- 
quired.^° If the sale has been regular in all respects, and there are no 
extrinsic circumstances or equities requiring the interference of the 
court, the motion to confirm should be allowed.^^ The mortgagee 
is entitled to a confirmation of the sale, and satisfaction of his decree, 
without regard to the equities acquired in the mortgaged premises 
by a purchaser from the mortgagor pendente lite.^' Confirmation of 
the sale can only be regularly made after lotice of the motion for it 
to the parties adversely interested that they may show cause against 
it.^° "Notice of the motion is given to the solicitors in the cause, and 
confirmation nisi is ordered by the court — to become absolute in a time 
stated, unless cause is shown against it. Then, unless the purchaser 
calls for an investigation of the title by the master, it is the master's 
privilege and duty to draw the title for the purchaser, reciting in it 
the decree for sale, his approval of it, and the confirmation by the 
court of the sale, in the manner that such confirmation has been or- 

639; Roudabush v. Miller, 32 Grat. 588, 55 So. 548; McCarty v. Ham- 

(Va.) 454; Brock v. Rice, 27 Grat. burger, 112 Md. 40, 75 Atl. 964; 

(Va.) 812; Hudgins v. Lanier, 23 Stirling v. McLane, 103 Md. 47, 63 

Grat. (Va.) 494; Griswold v. Bardon, Atl. 205; Murphy v. Gunn, 54 Nebr. 

146 Wis. 35, 130 N. W. 952. See also 670, 74 N. W. 1065. See also Meux 

Stark V. Royce, 44 Wash. 287, 87 v. Trezevant, 132 Cal. 487, 64 Pac. 

Pac. 340; Koop v. Burris, 95 Wis. 848; Aukam v. Zantzinger, 98 Md. 

301, 70 N. W. 473. 380, 56 Atl. 820; Nye v. Rogers, 55 

=='In the following cases the cir- Nebr. 353, 75 N. W. 854; Keeble v. 

cumstances were held to justify de- McLemore (Tenn.), 64 S. W. 305. 

nial of confirmation, or the setting « State v. Doane, 35 Nebr. 707, 53 

aside of the sale. Cooper v. Ryan, N. W. 611; Berkley v. Lamb, 8 

73 Ark. 37, 83 S. W. 328; Slack v. Nebr. 392, 1 N. W. 320; State Bank 

Cooper, 219 111. 138, 76 N. B. 84; v. Green, 8 Nebr. 297, 2 N. W. 228; 

Tierney v. Oleson, 90 Nebr. 177, 133 Goodell v. Harrington, 76 N. Y. 547; 

N. W. 191; Baldwin v. Burt, 54 Hale v. Clausen, 60 N. Y. 339; Crane 

Nebr. 287, 74 N. W. 594; Guthrie v. v. Stiger, 58 N. Y. 625. 

Guthrie, 4 Nebr. (Unoff.) 365, 93 N. '= Moore v. Titman 33 111. 358. 

W. 1131; Clement v. Ireland, 129 N. »Perrien v. Fetters, 35 Mich. 233. 

Car. 220, 39 S. E. 838; Stark v. =' New England Mortgage Securi- 

Royce, 44 Wash. 287, 87 Pac. 340; ty Co. v. Smith, 25 Kans. 622; 

Kremer v. Thwalts, 105 Wis. 534, Moore v. Pye, 10 Kans. 246; Chal- 

81 N. W. 654. See also Hill v. Pettit, liss v. Wise, 2 Kans. 193. 

23 Ky. L. 2004, 66 S. W. 190. In the =« Pendleton v. Spear, 56 Ark. 194, 

following cases, the circumstances 19 S. W. 578. 

were held insufficient to prevent con- ^ Branch Bank v. Hunt, 8 Ala. 

firmation. Davis v. Simon, 61 Fla. 876. 



259 CONl-IKMATION § 1639 

dered."*" An order of confirmation can not be properly made before 
the coming in of the report.*^ 

The confirmation is usually made by a formal order. It is the prac- 
tice, generally, for the master or other officer who makes the sale to 
fully complete it so far as he can, by delivery of the deed and pay- 
ment of the proceeds, before obtaining the order of court; but con- 
firmation may be made in the first place of the sale, and afterward of 
the deed. In England it is the practice to withhold the deed until the 
final order confirming the sale is made absolute.*^ One whose bid 
is not accepted by the officer, though it is the highest made, can not 
insist upon a confirmation to himself of the sale.^^ 

One who was a party to the deed, and was duly served with proc- 
ess but failed to appear, and allowed a decree of foreclosure to be 
entered and a sale to be made, will not be allowed to object to the 
confirmation, and to set up his lien, unless he can show sufficient cause 
for his delay and default.** 

The order of confirmation is merely interlocutory and subject to the 
court's revision and correction until the final judgment or decree is 
rendered in the case.*' 

Thus where the trustee in a deed of trust brings suit to foreclose the 
trust deed or mortgage and a receiver is appointed to take charge of the 
mortgaged property, and it is referred to a special master to ascertain 
what property is covered by the mortgage and what property so covered 
is in the hands of the receiver ; and the master reports certain property 
as being mentioned in the mortgage, but omits other after-acquired 
property covered by the mortgage, and which was not in the hands of 
the receiver, and the report is confirmed by the court, the order of con- 
firmation was only interlocutory and did not limit the power of the 
court thereafter by final decree to subject the after-acquired property 
to the mortgage debt.*® 

§ 1639. Resale upon application of party affected by fraud, un- 
fairness or misconduct. — A resale may be asked for by any one whose 

*> "Williamson v. Berry, .8 How. 124 Ala. 202, 207, 27 So. 263, per 

(U. S.) 495, 12 L. ed. 1170. Tyson, J., citing Latta v. Kilbourn, 

" Citizens' Savings Bank v. Bauer, 150 U. S. 524, 37 L. ed. 1169, 14 Sup. 

49 Hun 238, 1 N. Y. S. 450. Ct. 201; Kimberly v. Arms, 129 U. 

'^Ex parte Minor, 11 Ves. 559. S. 523, 32 L. ed. 768, 9 Sup. Ct. 

■"Blossom V. Milwaukee &c. R. 355; Mosher v. Joyce, 51 Fed. 444; 

Co., 3 Wall. (U. S.) 196, 18 L. ed. Adklsson v. Dent, 88 Ky. 628, 11 

43. Ky. L. 85, 11 S. W. 950; Ward v. 

"Albert v. Hamilton, 76 Md. 304, Ward, 21 N. Y. S. 795. 

25 Atl. 341; Graves v. Fritz, 24 *Rust v. Electric Lighting Co., 

Nebr. 375, 38 N. W. 819. 124 Ala. 202, 27 So. 263. 

■"Rust V. Electric Lighting Co., 



§ 1639 FORECLOSUEE SALES UNDER DECEBB 360 

rights are injuriously affected by the sale, although he be not a party 
to the suit,*' and though he have no specific lien, provided his rights 
are affected.** Thus it has been held that a sale may be set aside, upon 
motion of a judgment creditor whose lien would be destToyed,*" or 
a general creditor whose debt would be affected,^" or a junior in- 
cumbrancer who was not a party to foreclosure, and whose right of 
action accrued after commencement of the foreclosure proceedings,"^ 
or of any person becoming personally liable for the payment of the 
mortgage debt or a deficiency, who was not made a party to fore- 
closure."^ The circumstances of each particular case must be inquired 
into and acted upon."^ 

The most general principle on which the courts act in setting aside 
the sale and ordering a new one is that equity will not allow any un- 
fairness or fraud, either on the part of the purchaser,"* or of 
any other person connected with the sale."" Thus where prior to a 
foreclosure sale the mortgagee's agent agreed to bid off the property 
for the mortgagors for two thousand and fifty dollars, but instead of 
doing so bid it off for himself for fifteen hundred dollars, an 
order refusing to confirm the sale, and granting of a resale on the 
filing of a bond by the mortgagors conditioned that on a resale the 
property should bring two thousand dollars, was properly granted."* 

It is no ground for refusing to order a resale that the purchaser, 
before confirmation, has conveyed the land, or that there is a sur- 

"Goodell v. Harrington, 76 N. Y. (N. Y.) 243; American Ins. Co. v. 

547; Kellogg v. Howell, 62 Barb. (N. Oakley, 9 Paige Ch. (N. Y.) 496, 38 

Y.) 280; Gould v. Mortimer, 26 How. Am. Dec. 561. 

Pr. (N. Y.) 167, 16 Abb. Pr. 448; ''^Bodine v. Edwards, 2 N. Y. Leg. 

Fuller V. Brown, 35 Hun (N. Y.) Obs. 231, 3 Ch. Sent. 46. See also 

162. See also Brewer v. Landis, Shuler v. Maxwell, 38 Hun (N. Y.) 

Ill Mich. 217, 69 N. "W. 493. 240; Gruner v. Ruffner, 134 App. 

" Goodell v. Harrington,. 76 N. Y. Div. 837, 119 N. Y. S. 942. 

547. See also Bentley v. Beacham, ■''Lefevre v. Laraway, 22 Barb. 

91 Md. 677, 47 Atl. 1024; Rohrbach (N. Y.) 167. 

v. Germania Ins. Co., 62 N. Y. 47, " Murdock v. Empie, 19 How. Pr. 

20 Am. Rep. 451; Kebabian v. Shin- (N. Y.) 79. See also Butters v. 

kle, 26 R. I. 505, 59 Atl. 743. Butters, 153 Mich. 153, 117 N. W. 

"Kellogg V. Howell, 62 Barb. (N. 203; Velt v. Meyer, 105 Wis. 530, 81 

Y.) 280; Corwlth v. Barry, 69 Hun N. W. 653. 

113, 53 N. Y. St. 53, 23 N. Y. S. 200; ^Stahl v. Charles, 5 Abb. Pr. (N. 

May V. May, 11 Paige Ch. (N. Y.) Y.) 348; Gardiner v. Schermerhorn, 

201. See also American Ins Co. v. Clarke Ch. (N. Y.) 101. See also 

Oakley, 9 Paige Ch. (N. Y.) 259, 38 Las Vegas R. &c. Co. v. Trust Co., 

Am. Dec. 561; Chappel v. Chappel, 15 N. Mex. 634, 110 Pac 856; Keba- 

12 N. Y. 215, 64 Am. Dec. 496 (sub- bian v. Shinkle, 26 R. I. 505, 59 Atl. 

sequent judgment creditor). 743. But see Lacey v. Lacey (Ala.), 

='' Puller v. Brown, 35 Hun (N. Y.) 39 So. 922. 

1^2. '"New York Missionary Soc. v. 

"Brown v. Frost, 10 Paige Ch. Bishop, 8 N. Y. S. 60. 



261 coNriEMATiojr § 1640 

plus which is claimed by judgment creditors.^' Neither the pur- 
chaser nor any one else has any right to regard the sale as concluded 
until it is confirmed. 

The application may be made by motion to the court, at any time 
before the report of the sale has been confirmed, notice of which should 
be given to every person who has appeared in the cause, or who has 
any interest in the sale, as well as to the purchaser."* A sale may be 
set aside, under an order upon the purchaser to show cause, procured 
by the mortgagor or other defendant."" A sale may, however, under 
special circumstances, be set aside after confirmation, although more 
and stronger evidence of fraud or misconduct, or other grounds for 
invalidating the sale, is then required."" 

It is not proper for the master or other ofiicer who has made the 
sale to resell the property without an order of court, on the failure 
of the purchaser to comply with the terms of sale; but if he does 
resell upon his own responsibility, there is not necessarily suflBcient 
ground for holding the second sale void."^ 

The court will generally impose terms and conditions upon the 
mortgagor upon directing a resale, especially if the occasion for it is 
in any way attributable to his own negligence.'"' 

The purchaser may object to the confirmation of the sale, and it 
will not be confirmed when it appears that the title is bad, or of 
doubtful validity."^ 

§ 1640. Reopening sale on advanced bid before conflrmation. — Be- 
fore confirmation of the sale the court may open the biddings at the 
instance of one who is bound to make good any deficiency, on his 
offering a large advance upon the bid of the mortgagee, who was the 
purchaser, and paying the costs of the former sale.®* But it must be 
affirmatively shown that a resale will bring a higher price."" It has 
been the practice in England to open biddings upon the offer of a 

"Wolcott V. Schenck, 23 How. gustlne v. Doud, 1 Bradw. (111.) 

Pr. (N. Y.) 385. 588. 

''^ Robinson v. Meigs, 10 Paige (N. "^Miller v. Kendrick (N. J.), 15 

Y.) 41; St. Jolm v. Mayor and Al- Atl. 259. 

dermen of N. Y., 6 Duer (N. Y.) 315, «Trapier v. Waldo, 16 S. Car. 276. 

13 How. Pr. 527; Tyer v. Charles- "Lansing v. McPherson, 3 Johns, 

ton Rice Milling Co., 32 S. Car. 598, Ch. (N. Y.) 424. In this case the 

10 S. B. 1067. offer was an advance of 50 per cent. 

■^ Hubbard v. Taylor, 49 Wis. 68, See also Mott v. Walkley, 3 Edw. 

4 N. W. 1066. (N. Y.) 590. See ante § 1636. 

™ Lansing v. McPherson, 3 Johns. ^ Farmers' Bank v. Quick, 71 

Ch. (N. Y.) 424. Mich. 534, 39 N. W. 752, 15 Am. St. 

"Dills V. Jasper, 33 111. 262; Au- 280. See also Merrill v. Ladendorf, 

123 Wis. 140, 101 N. W. 385. 



§ 1641 FOEECLOSUKE SALES UNDER EECEEE 263 

reasonable advance beyond the last bid f^ but this practice has not pre- 
vailed very much here,"^ and its utility has been doubted or denied 
quite generally.'' The opening of biddings, instead of being a prac- 
tice here, is rather something that is allowed in special cases ; and gen- 
erally something more than inadequacy of price must be shown, un- 
less this be very gross. The opening of biddings is a matter of dis- 
cretion for the court in which the action is pending. The appellate 
court will not interfere with the action of that court in refusing to 
open a mortgage sale, except for an abuse of its discretion, which can 
not be presumed because the applicant offers a substantial advance 
on the price at which the property was sold.*'* 

A sale will not be set aside and a resale ordered, upon a mere ex- 
pression of opinion that a resale of the property would bring a much 
higher price,'" or upon a mere guaranty of an advanced price.'^ 

In Alabama, when the property has been purchased by the mort- 
gagee, a resale will be ordered before confirmation if an advance of 
not less than ten per cent, on the former sale is offered and the money 
deposited in court.''' 

§ 1641. Inadequacy of price as objection to confirmation. — Great 
inadequacy of price may be urged with force against a confirmation 
of the sale, because this is incomplete and depends upon the equitable 
discretion of the court for completion.'^ Until the sale is approved 
by court, the purchaser does not acquire any independent right by his 
purchase; he may be regarded merely as an accepted or preferred 
bidder. The inadequacy of price may be such as to be of itself an in- 
dication of fraud or unfairness, and when taken in connection with 

"'Garstone v. Edwards, 1 S. & S. "Harris v. Gunnell, 10 Ky. L. 

20. Vice-chancellor Leach said: 419, 9 S. W. 376. 

"The court does not confine itself " Littell v. Zuntz, 2 Ala. 256. 

to a particular per cent, although "See post ch. xl, §§ 1906-1922; 

10 per cent, is a sort of general Vanbussum v. Maloney, 2 Mete, 

rule." The advance must be at least (Ky.) 550; Taylor v. Gilpin, 3 Mete. 

£40 to cover expenses. Farlow v. (Ky.) 544; Busey v. Hardin, 2 B. 

"Weildon, 4 Madd. 460. Mon. (Ky.) 407, 411; Williams v. 

"Lefevre v. Lara way, 22 Barb. "Woodruff, 1 Duval (Ky.) 257; Au- 

(N. Y.) 167, 173; Williamson v. kam v. Zantzinger, 98 Md. 380, 56 

Dale, 3 Johns. Ch. (N. Y.) 290, 292. Atl. 820; Horsey v. Hough, 38 Md. 

«* Duncan v. Dodd, 2 Paige (N. 130. An offer to bid $2,400 at a resale 

Y.) 99; Collier v. Whipple, 13 Wend, when the premises brought $2,000 

(N. Y.) 224; Adams v. Hasliell, 10 at the original sale, is no ground 

^I^U''^^^" *°f refusing to confirm. Allis v. 

"Germer v. Ensign, 155 Pa. St. Sabln. 17 Wis. 626. See also Bul- 

464, 26 Atl. 657. lard v. Green, 10 Mich. 268. 

"Fidelity Trust &c. Co. v. Mobile 
Street B. Co., 54 Fed. 26. 



263 



CONFIKMATIOK 



1641 



other circumstances, it is ground for setting the sale aside and ordering 
a resale. But mere inadequacy of price is not sufficient ground for 
setting aside the sale and ordering a resale, in the absence of fraud, 
collusion, unfairness or duress, unless so gross as necessarily to indi- 
cate fraud or imposition.'* But generally an objection to confirma- 
tion on account of the price obtained will be overruled, unless it be 
shown that upon a resale a larger price would be obtained.' ° 

In general a resale may be had for any cause which would be a 
ground for setting aside the sale after confirmation; and causes of 
like nature, which might not be regarded as sufficient for setting 
aside the sale after it has been completed, will be sufficient to pre- 
vent confirmation and subject the property to a resale.'^ "To set 
a sale aside, there must, in addition to inadequacy of consideration, 
be some excuse, such as surprise, ignorance, mistake or inadvertence. 
It will be seen, however, from the cases that a great inadequacy has 
refined the ingenuity of the learned judges in extracting from the 
facts of the cases sufficient to justify annulling the sale."" 

When a party whose interests are injuriously affected by the sale 



""Windes v. Russell, 150 Ala. 625, 
43 So. 788; Bank of Pine Bluff v. 
Levi, 90 Ark. 166, 118 S. "W. 250; 
Connick v. Hill, 127 Cal. 162, 59 
Pac. 832; Central Pacific R. Co. V. 
Creed, 70 Cal. 497, 11 Pac. 772; 
Hunt V. Whitehead, 19 App. D. C. 
116; Garrett v. Moss, 20 111. 549; 
Conclin v. Grand Central Sav. &c. 
Assn., 144 Ky. 237, 138 S. "W. 312; 
Rudd V. Turner, 142 Ky. 2, 133 S. 
W. 993; Hughes v. Riggs, 84 Md. 
502, 36 Atl. 269; "Wing v. Hayford, 
124 Mass. 249 ; King v. Bronson, 122 
Mass. 122; Lalor v. McCarthy, 24 
Minn. 417; McDonnell v. DeSoto 
Sav. &c. Assn., 175 Mo. 250, 75 S. 
W. 438, 97 Am. St. 592; Harlin v. 
Nation, 126 Mo. 97, 27 S. W. 330; 
Kline v. Vogel, 11 Mo. App. 211; 
Jones V. Stairs, 5 Nebr. (Unoff.) 
243, 97 N. W. 1017; Iowa Loan &c. 
Co. V. Nehler, 3 Nebr. (Unoff.) 680, 
92 N. W. 729; "Wetzler v. Schau- 
mann, 24 N. J. Eq. 60; State Realty 
& Mortgage Co. v. Villaume, 121 
App. Div. 793, 106 N. Y. S. 698; 
Housman v. Wright, 50 App. Div. 
606, 64 N. Y. S. 71; O'Donnell v. 
Lindsay, 39 N. Y. Super. Ct. 523; 
McLain Land &c. Co. v. Swofford 
Bros. Dry Goods Co., 11 Okla. 429, 
68 Pac. 502; Ex parte Cooley, 69 S. 



Car. 143, 48 S. E. 92; Trenery v. 
American Mtg. Co., 11 S. Dak. 506, 
78 N. W. 991; Henderson v. Lowry, 
5 Yerg. (Tenn.) 240; Klein v. Glass, 
53 Tex. 37; Nitro-Phosphate Syndi- 
cate Ltd. V. Johnson, 100 Va. 774, 42 
S. E. 995; Dryden v. Stephens, 19 
W. Va. 1; Griswold v. Bardon, 146 
Wis. 35, 130 N. W. 952; Hill v. Hoo- 
ver, 5 Wis. 354; Strong v. Catton, 
1 Wis. 471. See also Wells v. 
Lenox (Ark.), 159 S. W. 1099; Da- 
vis V. Simon, 61 Fla. 588, 55 So. 548; 
Zinkeisen v. Lewis, 71 Kans. 837, 
83 Pac. 28; Edgecombe Park Co. v. 
Finney, 121 Md. 320, 88 Atl. 143; 
McCarty v. Gordon, 112 Md. 40, 75 
Atl. 964; Stirling v. McLane, 103 
Md. 47, 63 Atl. 205; Bowman v. 
Bellows Falls Sav. Inst., 3 Nebr. 
(Unoff.) 583, 92 N. W. 204. 

'= Phillips V. Love, 57 Kans. 828, 
48 Pac. 142; Capital Bank v. Hun- 
toon, 35 Kans. 577, 11 Pac. 369; 
Cross v. Knox, 32 Kans. 725, 5 Pac. 
32; Hoock v. Sloman, 155 Mich. 1, 
118 N. W. 489; Farmers' Bank v. 
Quick, 71 Mich. 534, 39 N. W. 752. 
See also Merrill v. Ladendorf, 123 
Wis. 140, 101 N. W. 385. 

'"See ante § 1640. 

"O'Donnell v. Lindsay, 39 N. Y. 
Super. Ct. 523. 



§ 1643 



rOEECLOSTJEE SALES UNDEE DECEEE 



264: 



has been prevented from attending it through mistake or misappre- 
hension, a resale will be ordered.'' A sale was confirmed against the 
objection of the mortgagee, where the sale was regularly and fairly 
conducted, but the mortgagee's agent failed to attend the sale and bid 
upon the property, and it sold for much less than its yalue.'' 

VI. Enforcement of Sale Against Purchaser 



Section 

1642. Purchaser a qJasi party — 

Rights and liabilities. 

1643. Attachment against purchaser 

—Terms of resale. 

1644. Forfeiture of deposit. 

1645. Defect in title — Bidder reim- 

bursed. 

1646. Defects In title prior to mort- 

gage — Notice. 
1646a. Mistake or misrepresenta- 
tion. 



Section 

1647. Errors in decree or proceed- 

ings. 

1648. Refusal to purchase justified 

by defect — Reference. 

1649. Taxes. 

1650. Estoppel and laches. 

1651. Grounds for refusal to com- 

plete sale — ^Formal irregu- 
larities. 



§ 1642. Purchaser a quasi party — ^Rights and liabilities. — ^TJntil 
a bid is accepted, it is a mere proposal, and may be withdrawn by the 
bidder. After acceptance, it becomes a binding contract, and can not 
be withdrawn or changed except under such circumstances as would 
justify the rescission or reformation of other contracts.'^ One who 
bids off property at a foreclosure sale becomes a quasi party to the suit, 
so that he subjects himself to the jurisdiction of the court, and may 
be compelled to pay the amount bid,^ by its process for contempt, 



"Wetzler v. Schaumann, 24 N. J. 
Eq. 60. In this case property worth 
$4,500 was sold for $2,000. 

™Babcock v. Canfield, 36 Kans. 
437, 13 Pac. 787. 

* Nebraska Loan &c. Co. v. Ha- 
mer, 40 Nebr. 281, 58 N. W. 695; 
Continental Ins. Co. v. Reeve, 135 
App. Div. 737, 119 N. Y. S. 901; 
Jones V. Williams, 155 N. Car. 179, 
71 S. E. 222. 

= Kneeland v. American L. & T. 
Co., 136 U. S. 89, 34 L. ed. 379, 10 
Sup. Ct. 950; Blossom v. Milwau- 
kee &c. R. Co., 1 Wall. (U. S.) 655, 
17 L. ed. 673; Wood v. Mann, 3 
Sumn. (U. S.) 318; Coulter v. Her- 
rod, 27 Miss. 685; Goodwin v. Si- 
monson, 74 N. Y. 133; Cazet v. Hub- 
bell, 36 N. Y. 677; State Bank v. 
Wilchinsky, 128 App. Div. 485, 112 
N. Y. S. 1002; Miller v. Collyer, 36 
Barb. (N. Y.) 250; Graham v. Blea- 
k;e, 2 Daly (N. Y.) 55; Brasher v. 



Cortlandt, 2 Johns. Ch. (N. Y.) 505; 
Requa v. Rea, 2 Paige (N. Y.) 339, 
341; Moody v. Northwestern & Pac. 
Hypotheek Bank, 20 Wash. 413, 55 
Pac. 568. See also Slack v. Cooper, 
121 111. App. 485, order affirmed 219 
111. 138, 76 N. B. 84 (complainant 
purchasing by credit on decree) ; 
Wheeler v. Dake, 129 Mo. App. 547, 
107 S. W. 1105 (sale void for non- 
payment of bid) ; Baecht v. Hevesy, 
115 App. Div. 509, 101 N. Y. S. 413 
(extent of liability). Where the 
sheriff's return shows a sale for a 
certain sum, there is a presumption 
that the money was paid. Kings- 
ley V. Svoboda, 2 Nebr. (Unoff.) 
234, 96 N. W. 518. Where the sale 
was made to the assignee of the de- 
cree, and its confirmation is asked 
by the plaintiff, the fact that no 
money was paid is not a valid ob- 
jection. McLagan v. Witte, 1 Nebr. 
(Unoff.) 438, 96 N. W. 490. All pay- 



365 ENFORCEMENT § 1642 

if necessary.^ He becomes a party by signing the bid.* Such sale is 
not within the statute of frauds." The fact that the purchaser acts 
for another person will not relieve him if he makes the bid in his own 
name." 

Neither lapse of time, nor the death of the original parties to the 
suit, will bar the right of the court to compel his compliance with the 
conditions of sale.' If, however, the delay be unreasonable, and in the 
meantime there has been a material change detrimental to his inter- 
ests, the purchase will not be enforced. On the failure of the pur- 
chaser without good cause to comply with the terms of sale, if it. ap- 
pears that he is unable to perform his contract, the parties interested 
in the sale may, upon motion, obtain an order discharging the sale 
and directing a resale; but if he is responsible the court may order 
him to pay the money into court, and may enforce his submission by 
attachment, or order to stand committed; or may order a resale of 
the estate, and that the defaulting purchaser pay the expenses of it, 
and any deficiency in price arising from it.^ 

Where the property was destroyed by fire after the sale but before 
confirmation, it was held that the mortgagee who purchased the prop- 
erty was not required to pay the full amount of his bid without allow- 
ance for the damage done by fire, where the property was insured for 
the express purpose of indemnifying the mortgagee against loss.* 

When the purchaser of property at a mortgage sale makes default in 
payment and the property is resold, under an order of court, at his 
risk, he is entitled to any excess in the proceeds at the resale just as he 

ments for ground rent, taxes, and 'Ogilvie v. Ricliardson, 14 Wis. 

insurance made subsequent to the 157. See also Lyon v. Elliott, 3 Ala. 

foreclosure sale are payments made 654. 

on the property, for the benefit of ' Cazet v. Hubbell, 36 N. Y. 667; 

the purchaser. Carroll v. Haigh, Merchants' Bank v. Thomson, 55 N. 

108 111. App. 264, affd. 209 111. 576, Y. 7. 

71 N. E. 317. See also concerning 'Camden v. Mayhew, 129 U. S. 

rents and taxes. Sawyer v. Vermont 73, 32 L. ed. 608, 9 Sup. Ct. 246; 

Loan &c. Co., 41 Wash. 524, 84 Pac. 8. Goodwin v. Simonson, 74 N. Y. 133; 

= Andrews v. O'Mahoney, 112 N. Harding v. Harding, 4 Myl. & Cr. 

Y 567 20 N E 374; Burton v. 514; Lansdown v. Elderton, 14 Ves. 
Linn, 21 App. Div. 609, 47 N. Y. 512; 2 Daniell's Ch. Pr. 1460-1462. 
S. 835. See also Nesbit v. Knowl- It was formerly the rule that a for- 
ton-Hall Co., 45 Misc. 510, 92 N. Y. feiture of the deposit was the only 
S. 761. redress against the purchaser. Sa- 

<Goorum v. Tucker (N. J. Eq.), vile v. Savile, 1 P. Wms. 745. 
26 Atl. 456. See also State Bank "Bowdoin v. Hammond, 79 Md. 

v., Wllchinsky, 128 App. Div. 485, 173, 28 Atl. 769. But see Cropper 

112 N. Y. S. 1002 (father signing v. Brown, 76 N. J. Eq. 406, 74 Atl. 

for son). 987, 139 Am. St. 770. 

"Andrews v. O'Mahoney, 112 N. 

Y 567, 20 N. E. 374. 



§ 1G42 FOEECLOSUEE SALES XTNDEE DECREE 2G6 

is responsible for any deficiency, and being therefore a person inter- 
ested in the property is entitled to file exceptions to the resale as re- 
ported.^" Where a purchaser at the foreclosure of a junior mortgage 
defaults and the land is sold under a senior mortgage, he is entitled 
to a refund of his deposit, provided no proceedings have yet been begun 
against him.^^ 

If after a purchaser has made default in making payment, the 
court without notice to him orders a resale, he is discharged from 
any liability to make good the deficiency arising from the last sale.^^ 
The holder of the mortgage by obtaining such resale is deemed to have 
elected to waive the first sale, and to have taken the risk of obtaining 
a better price.^^ 

A mortgagor can not defend against a claim for a deficiency on 
the ground that the premises were at first sold for a sum sufficient 
to pay the mortgage debt; but the purchaser failing to complete 
the purchase, an order was granted directing a resale, whereupon 
there was a deficiency, unless it appear that payment could have 
been enforced against the first purchaser, that the mortgagor re- 
quested the mortgagee to enforce such payment, or that the mort- 
gagee acted fraudulently in the matter. Moreover, the mortgagor 
can not defend in such case, because the mortgagee has the right 
to elect either to proceed against the purchaser to enforce his lia- 
bility upon his bid, or to apply for a resale; and having chosen 
the latter remedy, and the court having ordered a resale, the order 
is conclusive, and releases the mortgagee from any obligation to 
institute proceedings to recover the deficiency of the purchaser.^* If 
upon the first sale only one of two lots embraced in the mortgage is 
sold, and the bidder makes default, the court may order a sale of 
the second lot without confirming the sale to the first bidder, or 
ordering a resale of the first lot at his risk.^° 

Subsequent mortgagees, and others interested in property about 
to be sold under a first mortgage, may agree that, instead of selling 
sufiicient of the property only to satisfy the first mortgage, the en- 
tire premises shall be sold in different parcels, so as to raise a suffi- 

"Aukam v. Zantzinger, 94 Md. Miller v. Collyer, 36 Barb. (N. Y.) 

421, 51 Atl. 93. 250; Home Ins. Co. v. Jones, 45 

"Nesbit V. Knowlton-Hall Co., 45 How. Pr. (N. Y.) 498. 

Misc. 510, 92 N. Y. S. 761. "Goodwin v. Simonson, 74 N. Y. 

"Anthon v. Batcbelor, 22 Abb. N. 133. See also Egan v. Buellesbach, 

Cas. (N. Y.) 423, 16 Civ. Proc. 304, 116 App. Div. 306, 101 N. Y. S. 476. 

5 N. Y. S. 798. « Kershaw v. Dyer, 6 Utah 239, 

"Riggs V. Pursell, 74 N. Y. 370; 24 Pac. 621. 



267 ENFORCEMENT § 1643 

cient sum to pay the second mortgage, and any other liens that 
might exist. If in such case, owing to the refusal of some of the 
bidders to complete their purchase, the amount received by the sale 
is insufficient to pay the whole amount due on the second mortgage, 
the holder of such second mortgage is not estopped by reason of 
such stipulation from bringing an action to foreclose his mortgage 
for the balance due thereon, and he is not bound to proceed in the 
former suit in which he was a defendant to compel the bidders to 
complete their purchase; that duty devolves either upon the first 
mortgagee or the owner of the equity of redemption. While the second 
mortgagee might have taken upon himself that labor, he was not so 
compelled, either by force of the judgment itself or the stipulation 
for the sale of the entire property.^" 

A mortgagee who has bid a much larger sum than the amount of 
the decree of sale can not be relieved from his bid on the ground 
that he had been advised that he would not be required to pay over 
the surplus to the mortgagor; the mistake alleged being one of law 
and not one of fact.^'' 

A sale made by a master under the impression that the bidder rep- 
resented the complainant, when he was in fact a defendant taking 
advantage of the absence of the complainant, may be disregarded 
where the bidder does not pay cash or comply with the terms of the 
sale.^° 

§ 1643. Attachment against purchaser — Terms of resale. — Per- 
formance is enforced by attachment.^^ The proper tribunal to en- 
force the purchaser's undertaking is that in which the decree of sale 
was made, and the application may be by motion.^" The mode of en- 
forcing compliance with the order of court is by attachment against 
the person.^^ This is the proper remedy where the purchaser is ap- 
parently acting in collusion with the mortgagor to hinder or prevent 

>°Jarvis v. Chapin, 13 N. Y. S. Bleakle, 2 Daly (N. Y.) 55; Brashear 

693. v. Cortlandt, 2 Johns. Ch. (N. Y.) 

"Shear v. Robinson, 18 Fla. 379. 505; Requa v. Rea, 2 Paige Ch. (N. 

See post §§ 1650, 1929. Y.) 339; Gordon v. Saunders, Mc- 

" Slack V. Cooper, 121 111. App. Cord Ch. (S. Car.) 151; Clarkson v. 

485, order affirmed 219 111. 138, 76 Read, 15 Grat. (Va.) 288; Lansdown 

N. B. 84. V. Elderton, 14 Ves. 512; Savile v. 

""Richardson v. Jones, 3 Gill & Savile, 1 P. Wms. 745. 

Johns. (Md.) 163, 22 Am. Dec. 293; ''"Wood v. Mann, 3 Sumn. (U. S.) 

Anderson v. Foulke, 2 Har. & Gill 318, 326. 

(Md.) 346; Merchants' Bank v. '^Graham v. Bleakie, 2 Daly (N. 

Thomson, 55 N. Y. 7; Cazet v. Hub- Y.) 55; Miller v. Collyer, 36 Barb, 

bell, 36 N. Y. 677; Miller v. Collyer, (N. Y.) 250. 
36 Barb. (N. Y.) 250; Graham v. 



§ 1643 foeeclosxjEE sales under decree 268 

the sale.^^ The fact that upon the purchaser's default remedy may be 
had by a resale of the lands, or by suit against him for damages, does 
not deprive the court of the right to enforce performance in this sum- 
mary way; the option as to remedy lies with the court or the party 
selling, and not with the purchaser.^^ Even after the purchaser has 
complied with the terms of sale, by paying part cash and giving a bond 
and security for the balance, and the sale has been confirmed by 
court, he may upon his failure to pay the bond be proceeded against 
by a rule made upon him to show cause why the land should not be 
sold for the payment of the purchase-money; and upon that proceed- 
ing a decree may be made for the sale of the land.^* 

In a case where the purchaser refused to complete the purchase 
after having made a small deposit, he was ordered to show cause 
why an attachment should not issue against him. The Chancellor 
said that he had no doubt of the power of the court to coerce a 
purchaser where the conditions of sale had not given an alterna- 
tive; and that in this case the forfeiture of the deposit would not 
be sufficient, either as punishment to the one party or a satisfaction 
to the other. He was ordered to pay the money in six days, or 
that an attachment issue.^° 

The fact that the purchaser has been ordered to complete the 
purchase, after a specific objection to the title or to the parties, 
does not decide a question of title not brought to the consideration 
of the court by objection, and is no protection to the purchaser against 
persons having vested interests, in the equity of redemption, who 
ought to have been, but were not, made parties to the suit.^" 

In order to hold a purchaser for a deficiency upon a resale, the 
terms of the resale should be substantially the same as the terms upon 
which the first sale was made. A resale under different terms would 
not afford a just measure of the liability of a defaulting purchaser. 
If the terms of the resale difier materially from those of the original 
sale, the mortgagee can not collect from the former purchaser a de- 

"^ Graham t. Bleakie, 2 Daly (N. the court does not extend to enforc- 

Y.) 55. ing sales on credit, after the pur- 

^"Wood V. Mann, 3 Sumn. (U. S.) chaser has once complied with the 

318; Cazet v. Huhbell, 36 N. Y. 677. terms of sale by giving security 

See also Dunlop v. Mulry, 40 Misc. that the remedy is at law on the se- 

131, 81 N. Y. S. 260. curity. 

^ Clarkson v. Read, 15 Grat. (Va.) == Brasher v. Cortlandt, 2 Johns. 

288. In Richardson v. Jones, 3 Gill Ch. (N. Y.) 505. 

& Johns. (Md.) 163, 22 Am. Dec. =' "Williamson v. Field, 2 Sandf. 

293, it was held, contrary to the Ch. (N. Y.) 533. 
decision above, that the power of 



269 ENTOKCEMENT § 1644 

ficiency arising under the second sale; and the court may order that 
the purchaser be relieved from his purchase and from paying any de- 
ficiency.^' 

§ 1644. Forfeiture of deposit. — If the purchaser without good cause 
does not complete the purchase, he forfeits the deposit made at the 
time of sale, so far as it may be needed to make up a deficiency in 
price of a resale.^^ A resale is ordered; and if there is a loss in price 
from the former sale, judgment may be had against the purchaser for 
the difference, toward which the deposit will be applied.^' He is also 
chargeable with the expenses of the resale,'" and any taxes imposed 
after his refusal to complete the purchase and before the resale.'^ If 
the purchaser's refusal to complete his contract is because of irreg- 
ularities in the foreclosure, he will not be charged with the expenses 
of correcting such irregularities.^^ The resale should be upon the same 
terms upon which the first sale was made, and if the terms of the re- 
sale vary materially from those of the first sale, the original purchaser 
will be relieved from liability for any deficiency on resale.'^ 

"When it is desired to hold a third person responsible for the loss 
as the real purchaser, instead of the person who bid at the sale, the 
order for resale should require the payment to be made by him, and 
the suit can not be maintained against him when the order requires 
the payment to be made by the bidder.'* If on the purchaser's default 

"Riggs V. Pursell, 74 N. Y. 370. Nesbit v. Knowlton Hall Co., 45 

"Wlllets V. Van Alst, 26 How. Misc. 510, 92 N. Y. S. 761. 

Pr. (N. Y.) 325. '" Knight v. Moloney, 4 Hun (N. 

'"Wood v. Mann, 3 Sumn. (U. S.) Y.) 33. But lie is not chargeable 

318, Fed. Gas. No. 17954; Riggs v. with the expense of curing a formal 

Pursell, 74 N. Y. *70; Miller v. irregularity in the foreclosure. 2 

Collyer, 36 Barb. (N. Y.) 250; Gra- N. Y. "Weekly Dig. 40. A plaintiff 

ham V. Bleakie, 2 Daly (N. Y.) 55; purchasing at his own sale under a 

Whitehead v. Whitehurst, 108 N. judgment in his favor, was not 

Car. 458, 13 S. E. 166. See also bound to pay the costs of the sale in 

Smith V. Cunningham, 69 N. J. Eq. order to obtain relief, where the bid 

622, 61 Atl. 561; State Bank v. Wil- was made by mistake. State Bank 

chinsky, 128 App. Div. 485, 112 N. v. Brown, 128 Iowa 665, 105 N. W. 

Y S. 1002; Egan v. Buellesbach, 116 49. 

App. Div. 306, 101 N. Y. S. 476; ^Ruhe v. Law, 8 Hun (N. Y.) 251. 

Rowley v. Feldman, 74 App. Div. See also Chase v. Chase, 15 Abb. N. 

492, 77 N. Y. S. 453; Phelan v. Cas. (N. Y.) 91. 

Downs, 59 App. Div. 282, 69 N. Y. '^Knight v. Moloney, 4 Hun (N. 

S. 375; Dunlop v. Mulry, 40 Misc. Y.) 33. 

131, 81 N. Y. S. 260; Richardson v. == Riggs v. Pursell, 74 N. Y. 370; 

Searles, 37 Misc. 33, 74 N. Y. S. 771. Baecht v. Hevesy, 115 App. Div. 

But see State Bank of Deep River 579, 101 N. Y. S. 413. 

V. Brown, 128 Iowa 665, 105 N. W. =* Paine v. Smith, 2 Duer (N. Y.) 

49; Leslie v. Saratoga Brewing Co., 298. 
59 App. Div. 400, 69 N. Y. S. 581; 



§ 1645 FOEECLOSURB SALES UNDEK DECREE 270 

a resale be made, without any application to the court, to the same 
purchaser, he is liable only on his bid at the second sale.^° 

§ 1645. Defect in title — ^Bidder reimbursed. — If there be a defect 
in the title, unknown to the purchaser at the time of sale, and of 
which he had neither actual nor constructive notice, the court will not 
ordinarily compel him to take a deed and complete the purchase.^* 
The decisions upon this point are not, however, in harmony, and the 
rule more generally adopted is stated in the following section. It has 
been held that a prior mortgage or other outstanding lien on the 
premises is such a defect as will relieve a purchaser from completing 
the sale.^^ And so an outstanding inchoate right of dower in the 
premises is a defect which will relieve the purchaser.^^ 

Where the purchaser at a foreclosure sale made his bid and signed 
the terms of sale with full knowledge of the visible situation of the 
property and of the contents of an instrument referred to in the 
notice of the foreclosure sale imposing a restriction, he can not refuse 
to complete his contract by reason of such restriction.'^ 

If there be a defect in the title to a part of the land, the court will 
not allow the purchaser to reject that part alone and have a deduction 
from the purchase-price, and take title to the remainder; though he 
may refuse to complete the purchase, and move for return of the de- 
posit made.*" 

" Home Ins. Co. v. Jones, 45 How. 115. The burden of proof of a de- 

Pr. (N. Y.) 498. feet in the title is upon the appli- 

'^'Shiveley v. Jones, 6 B. Mon. cant seeking relief from his pur- 

(Ky.) 274; Fryer v. Rockefeller, 63 chase. Dana v. Jones, 91 App. Div. 

N. Y. 268; Merchants' Bank v. 496, 86 N. Y. S. 1000. A purchaser 

Thomson, 55 N. Y. 7 ; Simar v. Can- will not be relieved for a trivial de- 

aday, 53 N. Y. 298, 13 Am. Rep. 523; feet or encroachment. Ebert v. 

Mills V. Van Voorhies, 20 N. Y. 412; Hanneman, 69 Misc. 223, 125 N. Y. 

People V. Knickerbocker L. Ins. Co., S. 237, judgment affirmed 126 N. Y. 

66 How. Pr. (N. Y.) 115; Ely v. S. 1127. See also Kiernan v. Jersey 

Mathews, 58 Misc. 365, 110 N. Y. S. City, 80 N. J. L. 273, 78 Atl. 228, 31 

1102; Hirsch v. Livingston, 3 Hun L. R. A. (N. S.) 1023. 

(N. Y.) 9, 48 How. Pr. 243; Seaman =' Hirsch v. Livingstone, 3 Hun 

V. Hicks, 8 Paige (N. Y.) 655; Vee- (N. Y.) 9, 48 How. Pr. 243; Seaman 

der V. Fonda, 3 Paige (N. Y.) 94. v. Hicks, 8 Paige (N. Y.) 655. 

See also Builders' Mtg. Co. v. Berko- =* Shiveley v. Jones, 6 B. Mon. 

w:tz, 142 App. Div. 57, 126 N. Y. S. (Ky.) 274; Fitts v. Hoitt, 17 N. H. 

464, affirming order 67 Misc. 595, 123 530; Simar v. Canaday, 53 N. Y. 

N. Y. S. 355; McDonald v. Hoffman, 298, 13 Am. Rep. 523; Mills v. Van 

153 N. Car. 254, 69 S. B. 49. A bid- Voorhies, 20 N. Y. 412, 10 Abb. Prac. 

der with notice of the defect will 152. 

not be relieved. Oakley v. Shaw =°Kingsland v. Fuller, 157 N. Y. 

(N. J. Bq.), 69 Atl. 462; Union 507, 52 N. E. 562. 

Trust Co. V. Electric Park Amuse- " Thompson v. Schmieder, 38 Hun 

ment Co., 168 Mich. 574, 135 N. W. (N. Y.) 504. 



271 EXFOECEMENT § 1646 

The innocent bidder is entitled to be repaid his proper expenses. 
These include the deposit paid by him on the sale, the expenses of 
the examination of the title, and the costs of the motion for re- 
payment.*^ The repayment is made out of the funds in the case, if 
there are any; and if not, the plaintiff must pay the expenses in the 
first instance, but may recover them over in a suit or upon a resale. 
If, however, the defect in the proceedings results from the plaintiff's 
negligence in omitting to make some one interested under the mort- 
gage a party to the suit, as, for instance, the owner of the equity of 
redemption, such expenses can not be deducted from the surplus 
moneys arising from the second sale, as these belong to the owner of 
the equity, and he is not responsible for the irregularity in the sale.*^ 

§ 1646. Defects in title prior to mortgage — Notice. — Defects in the 
title prior to the mortgage do not excuse the purchaser from carrying 
out his purchase. He is bound to take such title as an examination of 
the foreclosure proceedings will show that he will get.*^ He buys the 
title of the mortgagor as it existed at the time of the making of the 
mortgage, and nothing more. The foreclosure cuts off the equity of re- 
demption, and by the sale he gets the mortgage title divested of all 
rights of the mortgagor, and those claiming under him subsequent to 
the mortgage. He takes the risk of the mortgagor's having any title 
that passed by the mortgage.** It is the duty of the purchaser to 
ascertain for himself by an examination of the records what title he 
is about to acquire.*^ If the title by the mortgage purports to be an 

*■ Morris v. Mowatt, 2 Paige (N. Mason v. Wait, 5 111. 127; Lewark 

Y.) 586, 22 Am. Dec. 661. See also v. Carter, 117 Ind. 206, 20 N. E. 119; 

StuU v. Masilonka, 74 Nebr. 309, 104 Norton v. Taylor, 35 Nebr. 466, 53 

N. W. 188 (purchaser entitled to N. W. 481, 18 L. R. A. 88, 37 Am. St. 

amount of decree and interest). 441; Miller v. Finn, 1 Nebr. 254; 

^Raynor v. Selmes, 52 N. Y. 579, Riggs v. Pursell, 66 N. Y. 193; 

reversing 7 Lans. 440. Holden v. Sackett, 12 Abb. Pr. (N. 

"Boorum V. Tucker, 51 N. J. Bq. Y.) 473; Fryer v. Rockefeller, 4 

1L5, 26 Atl. 456; Cool v. Higgins, 23 Hun (N. Y.) 800, 63 N. Y. 268; New 

N. J. Eq. 308, 25 N. J. Eq. 117; York Code Civ. Proc, § 1632; Cor- 

Campbell v. Gardner, 11 N. J. Eq. win v. Benham, 2 Ohio St. 36; Vat- 

4"3. See also Lewis v. Kinnaird, tier v. Lytle, 6 Ohio 477; Sackett v. 

104 Md. 653, 65 Atl. 365 (rent re- Twining, 18 Pa. St. 199, 57 Am. Dec. 

served in leasehold); Baecht v. Hev- 599; Smith v. Painter, 5 Serg. & R. 

esy, 115 App. Div. 509, 101 N. Y. S. (Pa.) 223; Lynch v. Baxter, 4 Tex. 

413 (lis pendens not a cloud on 431. 

title). "Weber v. Herrick, 136 111. 256, 

"Osterberg v. Union Trust Co., 93 26 N. E. 360; Roberts v. Hughes, 81 

U. S. 424, 23 L. ed. 964; Strong v. III. 130; Vanscoyoc v. Kimler, 77 111. 

Waddell, 56 Ala. 471; Boggs v. Fow- 151; Preston v. Breckinridgs, 86 Ky. 

ler, 16 Cal. 559, 76 Am. Dec. 561; 619, 6 S. W. 641; Norton v. Taylor, 

Watson V. Jones, 41 Fla. 241, 25 So. 35 Nebr. 466, 53 N. W. 481, 18 L. R. 

678; Bishop v. O'Conner, 69 111. 431; A. 88, 37 Am. St. 441; Dennerlein v. 



§ 1646a FORECLOSURE SALES UNDER DECREE 373 

estate in fee, when it is in fact only a leasehold interest, although the 
judgment, following the terms of the mortgage, erroneously directs a 
sale of the premises as in fee, the purchaser is bound by the sale, if he 
has notice at the time of the facts, and of the leasehold title of the 
mortgagor. The sale under the judgment transfers whatever title the 
mortgagor had.*" The purchaser can not be relieved on account of 
defects in the property, or in the title to it, of which he had notice, 
and in reference to which he may be supposed, to have bid.*' He is 
not entitled to get what is called a merchantable title.** 

A purchaser at a foreclosure sale is presumed to know the condi- 
tion of the title which he purchases. If the mortgage contains no 
covenant of warranty, and the title proves defective, the purchaser 
has no claim upon the mortgagor to make it good; nor will any 
outstanding and paramount title subsequently acquired by the mort- 
gagor inure to the benefit of the purchaser; although, while the 
relation of mortgagor and mortgagee existed, a title acquired sub- 
sequent to the mortgage would go to strengthen the mortgage security. 
"When that relation is extinguished by foreclosure, the mortgagor is 
under no obligation to protect the purchaser's title.*' So also the 
purchaser is affected with notice of all the defects and irregularities 
of the foreclosure and sale that appear of record, and is bound to take 
notice that a junior mortgagee, or other incumbrancer of record, was 
not made a party to the suit, and therefore may redeem."" Where the 
condition of the mortgaged title is fully set out in the pleadings, and 
the record thereof under which the sale is made, the purchaser is 
chargeable with notice of the facts contained therein, and can not re- 
fuse to complete his purchase on account of defective title or prior 
incumbrances. ° ^ 

§ 1646a. Mistake or misrepresentation. — A purchaser will not be 
relieved by reason of his own mistake, though he will be when misled 
by false representations. The application of a purchaser at a foreclo- 
sure sale to be relieved from his bid, on the ground that the wife of 

Dennerlein, 111 N. Y. 518, 19 N. E. «Boorum v. Tucker, 51 N. J. Eq. 

85, 46 Hun 561; RIggs v. Pursell, 66 135, 26 Atl. 456. 

N. Y. 193 ; White v. Seaver, 25 Barb. « Jackson v. Littell, 56 N. Y. 108. 

(N. Y.) 235; Eccles v. Tlmmons, 95 ™ Alexander v. Greenwood, 24 Cal. 

N. Car. 540. 505; McKernan v. Neff, 43 Ind. 503; 

"Graham v. Bleakie, 2 Daly (N. Piel v. Brayer, 30 Ind. 332, 95 Am. 

Y.) 55. Dec. 699; Horr v. Herringwood, 22 

"Riggs V. Pursell, 66 N. Y. 193, Okla. 590, 98 Pac. 443, 20 L. R. A. 

74 N. Y. 371; Van Rensselaer v. (N. S.) 47. 

Bull, 17 N. Y. S. 117. « Hooper v. Castetter, 45 Nebr. 67. 

63 N. W. 135. 



373 ENFORCEMENT § 1646a 

the mortgagee and owner of the equity of redemption had not been 
cut o£E by the foreclosure proceedings, was denied, although it was ad- 
mitted that the latter would be burdened with the wife's inchoate right 
of dower. ^^ The court said "that, although the purchaser acted under 
a mistake, he alone was responsible for it. He neither sought informa- 
tion nor examination by inquiry. His misapprehension was entirely 
the result of his own carelessness and inattention to his interests." 

But where a bill to foreclose was based upon a mortgage which 
was alleged in the bill to be signed and acknowledged by the wife, 
and was in fact signed by her, but not effectually acknowledged, 
though the decree recited that the mortgage was not acknowledged 
by her, but nevertheless contained the usual clause of foreclosure 
against her, it was held that such a decree did not bar her dower; 
but as it was calculated to mislead the purchaser, the sale would not 
be specifically enforced."^ It has been held that a purchaser at a sale 
under foreclosure of a prior mortgage in which the mortgagor's wife 
did not join is not relieved from liability to complete his purchase by 
the fact that the referee's deed upon a sale under a second mortgage 
in which the wife did join, was not recorded, the sale having been 
confirmed upon a report stating all the f acts.°* 

The purchaser is not, however, bound by his bid if he was in- 
duced to make it through the false representations of persons having 
an interest in the property; as where at a sale under a junior mort- 
gage the purchaser was induced to buy the property through the false 
representations of the attorneys of both the plaintiff and the senior 
mortgagee that the prior mortgage would be paid off out of the pro- 
ceeds of the sale, and that he would take the property discharged of 
such lien. It was held that said false representations of the parties 
were sufficient grounds for vacating the sale.°^ 

•^^ Hayes v. Stiger, 29 N. J. Eq. 196. Paulett v. Peabody, 3 Nebr. 196'; 

The same principle was adopted In Norton v. Taylor, 35 Nebr. 466, 53 

Twining v. Neil, 38 N. J. Eg. 470, N. W. 481, 18 L. R. A. 88, 37 Am. St. 

and in Sullivan v. Jennings, 44 N. J. 441. Maxwell, C. J., delivering a 

Eq. 11, 14 Atl. 104, and Boorum v. dissenting opinion on other points. 

Tucker, 51 N. J. Eq. 135, 26 Atl. 456. upon this point says: "Misrepre- 

The rule of caveat emptor applies, sentations which, if made by the 

and a bidder will not be relieved landowner himself to a purchaser, 

from the consequences of the neg- would be good ground to set a sale 

lect of his own attorney. Craw- aside, are equally so when made by 

ford V. Foreman, 127 Iowa 661, 103 the person appointed by the court 

N. W. 1000. to conduct a sale under a decree; 

^ Ely V. Perrine, 2 N. J. Eq. 396. and experience has shown that the 

"Calder v. Jenkins, 16 N; Y. S. establishment of this rule has in- 

797. duced competition in bidding at 

"Frasher v. Ingham, 4 Nebr. 531; such sales," citing McGown v. Wit- 

18 — ^JoNEs Mtg. — ^VOL. III. 



§ 1647 FOEBCLOSUEE SALES UNDEK DECREE 374 

The purchaser, after having completed the sale and paid over the 
money, can not call upon the mortgagee to make restitution of any 
part of it on the ground that the title has proved defective, and the 
purchaser has been forced to pay a further sum to perfect it. His 
only remedy is to avail himself of the covenants of the several con- 
veyances preceding the conveyance to the mortgagee.^" 

§ 1647. Errors in decree or proceedings. — Errors in the decree or 
in the proceedings under it afford no ground for relieving the pur- 
chaser from the sale after its confirmation.^^ If all persons having 
any claim upon the mortgaged property have been made parties to the 
foreclosure, and the court has jurisdiction, the purchaser vrill be re- 
quired to take the title, although the court may have made an er- 
roneous decision upon the merits, since all parties are bound by the 
judgment, and no one else could question the purchaser's title. ^* Of 
course the purchaser may take objection, even after confirmation, to 
a defect arising from a want of jurisdiction in the court j^" but he 
need not look further than to the judgment, and the deed given in 
execution of it, so long as they stand unimpeached. Erroneous rulings 
in the case upon questions of lavr do not concern him."" Even if the 
decree be erroneous, it can not be attacked collaterally.^^ 

After a decree, and sale under it, the validity of the mortgage can 
not again be called in question."^ If the decree was valid, and the 

kins, 1 Paige (N. Y.) 120; Morris v. fendant to set up his claim to the 
Mowatt, 2 Paige (N. Y.) 586; Veeder proceeds. It was held that this 
V. Fonda, 3 Paige (N. Y.) 94; Sea- order did not affect the sale or re- 
man v. Hicks, 8 Paige (N. Y.) 655; lieve the purchaser therefrom. 
Kauffman v. Walker, 9 Md. 229; "Waugh v. Bailey, 4 N. Y. S. 817. 
Tooley v. Kane, Sm. & M. Ch. '^Ogden v. Walters, 12 Kans. 282; 
(Miss.) 518. Mills v. Ralston, 10 Kans. 206; De 

=" McMurray V. Brasfleld, 10 Heisk. Forest v. Farley, 62 N. Y. 628; 

(Tenn.) 529. Blakeley v. Calder, 15 N. Y. .617; 

^'Splahn v. Gillespie, 48 Ind. 397; Gaskin v. Anderson, 55 Barb. (N. 

Sowles v. Harvey, 20 Ind. 217; Y.) 259, 7 Abb. Prac. (N. S.) 1; Gra- 

Hutchinson v. Wall, 24 J. & S. 104, ham v. Bleakie, 2 Daly (N. Y.) 55. 

4 N. Y. S. 717; Daniel v. Leitch, 13 A purchaser at a foreclosure sale, 

Grat. (Va.) 195; Worsham v. Hard- who is himself a party to the action, 

away, 5 Grat. (Va.) 60; Threlkelds can not question the regularity of 

V. Campbell, 2 Grat. (Va.) 198, 44 the decree, and his remedy is an ap- 

Am. Dec. 384. One of the defendants plication to the court on motion to 

in a foreclosure suit, after default have the suit set aside. Concklin v. 

had been entered and a sale adver- Hall, 2 Barb. Ch. (N. Y.) 136. 

tised, moved to open the default; but ™ Boggs v. Fowler, 16 Cal. 559, 76 

it was subsequently agreed that the Am. Dec. 561. See also Empii'e City 

sale should proceed, and that this Sav. Bank v. Silleck, 180 N. Y. 541, 

defendant might make claim against 73 N. E. 1123. 

the proceeds. The sale was accord- °° Mills v. Ralston, 10 Kans. 206. 

ingly made, and the default was "^ Ogden v. Walters, 12 Kans. 282. 

afterward opened to allow the de- '^Gest v. Flock, 2 N. J. Bq. 108. 



275 ENFORCEMENT § 1648 

execution and deed are regular, a purchaser in good faith acquires 
a good title to the property, although, as against the mortgagor, the 
decree was erroneous."^ Although the order of sale under a decree of 
foreclosure is issued without authority, such irregularity will not affect 
the title of a purchaser without notice thereof, who has paid the pur- 
chase-money and received the deed."* 

A purchaser, however, under the foreclosure of an unregistered 
mortgage, is not such a bona fide purchaser as to acquire any rights 
against one who had taken a conveyance from the mortgagor after the 
mortgage and before foreclosure, and who was in possession at the time 
of the foreclosure sale."^ Although the mortgage has been paid but 
left undischarged of record, one purchasing in good faith at a fore- 
closure sale under the mortgage acquires a good title as against the 
mortgagor and those claiming under him.**" 

§ 1648. Eefusal to purchase justified by defect — ^Reference. — While 
the purchaser under a judicial sale submits himself to the jurisdiction 
of the court, and may be compelled to carry out his contract, he is 
also entitled to the protection of the court in respect to the avoidance 
of the purchase, if by reason of imperfections in the title or other- 
wise he is freed from his agreement."^ He may apply for a reference 
to inquire into the title. The abstract of title and deeds and the 
statement of facts being laid before the referee, the purchaser may 
examine them and file objections. If the report be against the title, 
the purchaser may move to be discharged, and for a return of his 
deposit and for costs."^ If the referee's report shows that a marketable 
title is not offered, or if there be a reasonable doubt as to the sound- 
ness of the title, the court will not compel the purchaser to complete 
the purchase, even if the better opinion be that the title is good."" 
It has frequently been held that a purchaser at foreclosure sale is en- 
titled to a marketable title,^° and a title open to a reasonable doubt is 

See also Welche v. Schoenberg, 45 Ves. 272; Abel v. Heathcote, 2 Ves. 

Misc. 126, 91 N. Y. S. 880. 98, 100; Hodder v. Ruffln, 1 Ves. & 

"Splahn v. Gillespie, 48 Ind. 397. B. 544; Banister v. Way, Dick. 686; 

"Splahn V. Gillespie, 48 Ind. 397. Saunders v. Grey, 4 Myl. & C. 515; 

"'Hawley v. Bennett, 5 Paige (N. Tanner v. Rapford, 4 Myl. & C. 518; 

Y.) 104. Harding v. Harding, 4 Myl. & C. 514. 

°° Atwater v. Seymour, Brayt. See also Montz v. Schwabacker, 119 

(Vt.) 209. Ky. 256, 26 Ky. L. 1214, 83 S. "W. 

"Hoffman's Referees, 240. 569; Jordan v. Poillon, 77 N. Y. 518. 

"'Hoffman's Referees, 241, 242. '"Fleming v. Burnham, 100 N. Y. 

"°Ormsby v. Terry, 6 Bush (Ky.) 1, 2 N. E. 905; Dana v. Jones, 91 

553; Graham v. Bleakie, 2 Daly (N. App. Dlv. 496, 86 N. Y. S. 1000. See 

Y.) 55; Piser v. Lockwood, 30 Hun also Ely v. Mathews, 58 Misc. 365, 

(N. Y.) 6; Stapylton v. Scott, 16 110 N. Y. S. 1102. In an early Eng- 



§ 1648 FOEECLOSUKE SALES UNDER DECEEE 276 

not a marketable title. '^ If the defect is apparent upon the record of 
title the purchaser may rest thereon ; otherwise he must offer evidence 
to show that the title is unmarketable.''^ 

If the master, upon examination of the abstract of title, and the 
facts bearing upon it, reports that the title is defective or doubtful, 
the purchaser may upon motion be discharged, and haye an order 
for the repa3rment of his deposit and for the costs of the reference.'^ 
He will not, of course, be compelled to complete the purchase if the 
proceedings for any reason were void, as for want of jurisdiction in 
the court to entertain the case; or if a party in interest, as, for in- 
stance, one tenant in common of the premises, has not been served with 
process;'* or if an incumbrancer is not made a party to the suit.'^ 
A bidder's liability is terminated if the sale is not reported to the 
court, or approved when reported; or if the master sells the property 
again on Ms own responsibility, and this sale is approved by the court.''* 

If the defect in the title be such that it may be cured, and within 
a reasonable time releases are obtained or other acts done to remedy 
the defect, the purchaser can not refuse to complete the purchase.^' 
On the other hand, delay in taking the deed on account of defects in 
the title, all the parties apparently acquiescing and the purchaser 
holding possession, is no ground for the mortgagor's claiming a right 
to redeem, and to have an accounting by the purchaser for the rents 
received by him.'' 

If, however, a party in interest has not been made a party to the 
suit, though this is a ground upon which the purchaser may be relieved 
from his purchase, he can not hold on to it, and insist upon having his 
title perfected by the application of the proceeds of the sale to the 
payment of the outstanding claim.'"' Neither will a purchaser be re- 
lish case, Lord Eldon held that a '* Cook v. Parnham, 21 How. Pr. 
purchaser is entitled not merely to (N. Y.) 286, 34 Barb. 95, 12 Abb. Pr. 
a marketable title, but one which he 359. 

can take with reasonable certainty. '"Verdin v. Slocum, 71 N. Y. 345. 
Lowes V. Lush, 14 Ves. 547. " Dills v. Jasper, 33 111. 262. 

"Fleming v. Burnham, 100 N. Y. "Graham v. Bleakie, 2 Daly (N. 
1, 2 N. E. 905; People v. Open Board Y.) 55. In Coffin v. Cooper, 14 Vesey 
of Stock Brokers' Bldg. Co., 92 N. 205, Lord Chancellor Eldon said: 
Y. 98; Jordan v. Poillon, 77 N. Y. "Where the master's report is that 
518. See also College Point Savings the vendor, getting in a term, or 
Bank v. Vollmer, 44 App. Div. 619, getting administration, will have a 
60 N. Y. S. 389. title, the court will put him under 

"Title Guarantee Trust &c. Co. v. terms to procure that speedily." 
Fallon, 101 App. Div. 187, 91 N. Y. ™ Belter v. Lyon, 13 Daly (N. Y.) 
S. 497. 422. 

"Graham v. Bleakie, 2 Daly (N. ™Duvall v. Speed, 1 Md. Ch. Dec. 
Y.) 55. See also Ormsby v. Terry, 229, 235. 
6 Bush (Ky.) 553. 



277 ENFORCEMENT § 1650 

quired to complete the purchase when he will not obtain such an in- 
terest in the property as he had a right to suppose from the terms of 
sale he was buying.^" A purchaser with knowledge that the sale is 
subject to a transfer tax may not object to a title on the ground of 
such tax.*"* 

§ 1649, Taxes. — ^Where by the terms of sale the premises are sold 
free from incumbrances, the taxes and assessments to be paid out of 
the purchase-money, and there is a large assessment still unconfirmed 
by the municipal authorities, and which can not be paid, the pur- 
chaser is not bound to complete the purchase and take the property 
subject to the assessment.*^ If, however, the property can be relieved 
of incumbrance by payment of the tax, the court may direct the' master 
to satisfy the claim out of the proceeds of sale, and thus relieve the 
title from the objection.'^ The purchaser himself can not retain from 
his bid a sum suf&cient to pay the taxes.*^ If a mortgagee purchasing 
at foreclosure sale pays subsequent taxes he is entitled to a lien there- 
for, upon the sale being declared void.'* "Where a purchaser at fore- 
closure sale buys "subject to all incumbrances of record," he takes sub- 
ject to taxes which are a lien on the premises at the time of the sale.*'' 

Where a complainant, foreclosing a purchase-money mortgage, was 
not in a position to clear up tax interests against the land at the time 
he brought suit, but was in such position at the final hearing, and the 
note secured by the mortgage stipulated that it should not be payable 
until the payee, complainant, should clear up the taxes and tax titles, 
it was held that the complainant was entitled to a decree of foreclosure 
and sale, by analogy to the rule in cases of specific performance.'" 

§ 1650. Estoppel and laches. — A purchaser may by his conduct 
preclude the opening of the sale. If, during the progress of a fore- 

" Seaman" v. Hicks, 8 Paige (N. chaser made no appearance, a de- 

Y.) 655; Calder v. Maxwell (S. cree cutting off its rights was erro- 

Car.), 82 S. B. 997. neous. Butler v. Copp, 5 Nebr. 

»»a March v. Marasco, 150 N. Y. (Unoff.) 161, 97 N. W. 634. 

S 792. ''^ Lawrence v. Cornell, 4 Johns. 

Tost V. Leet, 8 Paige (N. Y.) Ch. (N. Y.) 542. 

337. See also Easton v. Pickersgill, °= Osterberg v. Union Trust Co., 93 

55 N. Y. 310. Where It is sought to V. S. 424, 23 L. ed. 964. 

avoid a tax sale, in proceedings to *" Dalgardno v. Barthrop, 40 Wash, 

foreclose a mortgage, and the only 191, 82 Pac. 285. 

allegation against the rights of the ""Elmira Mechanics' Soc. v. 

tax purchaser was that said pur- Stanchfield, 160 Fed. 811, 87 C. C. A. 

chaser might be foreclosed of all 585. 

equity of redemption or other inter- *Ligare v. Semple, 32 Mich. 438. 
est in the premises, and such pur- 



§ 1651 rOKECLOSUEE SALES UNDER DECREE 278 

closure sale, he has announced to the other bidders that he had prior 
incumbrances on the property, and that the sale ■would be made sub- 
ject to these, he can not consistently ask to be relieved from his own 
bid, on the ground that he supposed he would be entitled to have the 
surplus money applied to the payment of his prior incumbrances. He 
must be presumed to understand that if others on his own announce- 
ment were bidding for the property, subject to the incumbrances, he 
was competing with them on equal terms.*^ 

A purchaser may also by his own conduct with reference to the 
property practically confirm a sale, so as to preclude himself from 
having the sale opened ; as where he has taken possession of the prem- 
ises iinder a claim of title derived from the sale, paid laborers for 
work upon them, and made arrangements for planting crops for the 
following year.*' 

"Where a holder of bonds secured by trust deed knowingly permits the 
trustee to conduct foreclosure proceedings in such a fraudulent man- 
ner that the decree and sale is void, without making any objection, he 
is guilty of such laches as will preclude him from bringing suit to set 
aside the decree and sale.*" 

An action to reopen or vacate a foreclosure sale will be barred by 
laches where no objection is made concerning the regularity or validity 
of the sale for severalmonths,"" or years,"^ or where the application to 
vacate is not filed within a reasonable time."'' But an owner of the 
equity of redemption who files a bill three days after the order ap- 
proving the sale, attacking the character of the sale, is not barred by 
laches."^ 

§ 1651. Grounds for refusal to complete sale — ^Formal irregular- 
ities. — An irregularity in the foreclosure proceedings which is merely 
formal, and can not result in injury to the purchaser, is no ground for 
his refusing to complete the purchase; and if on his refusal to com- 
plete the purchase a resale is ordered, he is chargeable with the ex- 

«• Ledyard v. Phillips, 32 Mich. 13. Ransom, 170 Mass. 303, 49 N. E. 620 

See ante § 1642, and post § 1929. (sixteen years) ; Alabama &c. R. Co. 

^ Ledyard v. Phillips, 32 Mich. 13. v. Thomas, 86 Miss. 27, 38 So. 770 

" Cutter V. Iowa Water Co., 96 (ten years) ; Brown v. James 

Fed. 777. (Miss.), 24 So. 908; Coe v. Rock- 

"■Bullard V. Green, 10 Mich. 268 man, 126 Wis. 515, 106 N. W. 290 

(six months); Goodwin v. Burns, 1 (five years, by statute). 
Mich. N. P. 228 (six months). ""Thompson v. Browne, 10 S. Dak. 

" Ayers v. McRae, 71 Ark. 209, 72 344, 73 N. W. 194. 
S. W. 52 (four years); Connaugh- '"' Senft v. Vanek, 209 111. 361, 70 

ton V. Bernard, 84 Md. 577, 36 Atl. N. E. 720. 
265 (twenty years); Fennyery v. 



279 DEED AND TITLE CONVEYED § 1651. 

penses of it.** A formal irregularity in foreclosure will be deemed 
to be waived by a defendant who, with notice thereof, surrenders pos- 
session to the purchaser for a valuable consideration."^ 

Judicial sales must be conducted with the utmost fairness and 
good faith; and if a purchaser at a sale under a decree of fore- 
closure of a junior mortgage is by false representations induced to be- 
lieve that the proceeds of the sale will be applied to payment of the 
prior mortgage, and that he would take a clear title, the sale will be 
set aside;"* and so also it will be set aside where the purchaser 
thought he was buying an absolute title to the land, and not one sub- 
ject to the first mortgage."'' The purchaser has a right to insist upon 
the terms of his purchase being complied with. Where by agree- 
ment of the parties the referee sold the premises on time, the pur- 
chaser can not be compelled to pay cash."' 

But where the agent of a first mortgagee just before the sale in- 
quired of the sheriff the amount of the first lien and the sheriff gave 
him the amount of both the first and second liens, and the agent bid 
this amount, which was accepted, and the sale was confirmed, it was 
held that the purchaser was bound by the sale and could not recover 
the excess of his bid over the correct amount of the first mortgage 
lien, for it was no part of the sheriff's duty to inform the creditor of 
the amount of his lien, as the latter had the same means of ascertain- 
ing the facts as the sheriff had."" 

VII. Deed and Title Conveyed 

Section Section 

1652. Deed executed to third person. 1G58. Emblements. 

1653. Delivery of deed. 1659. Rents and profits. 

1654. Title conveyed — Intervening 1660. Mortgagee purchasing. 

liens and incumbrances ex- 1661. Rights under certificate of 
tinguished. purchase — Ejectment. 

1655. Errors in deed. 1662. Sale unaffected by subsequent 

1656. After-acquired title. appeal. 

1657. Fixtures. 



"•Knight V. Moloney, 4 Hun (N. California Bank v. Cerf, 142 Cal. 

Y.) 33; Farmers' Loan &c. Co. v. 303, 75 Pac. 902. 

Bankers' &c. Tel. Co., 119 N. Y. 15, »= Trilling v. Schumitsch, 67 "Wis. 

23 N. E. 173. Where a judgment in 186, 30 N. "W. 222. 

foreclosure did not specify the char- »» Paulett v. Peabody, 3 Nebr. 196. 

acter of the money for which the »' Shiveley v. Jones, 6 B. Mon. 

property should be sold, the sheriff's (Ky.) 274. See also Vanderkemp 

notice of sale designating "gold coin v. Shelton, 11 Paige (N. Y.) 28. 

of the United States" was not such "» Rhodes v. Dutcher, 6 Hun (N. 

an irregularity as would require the Y.) 453. 

setting aside of the sale. Anglo- ™Parm Land Mtg. &c. Co. v. Hop- 
kins, 63 Kans. 678, 66 Pac. 1015. 



§ 1653 



FOEECLOSUEE SALES UNDEE DECEEE 



280 



§ 1652. Deed executed to third person. — It is a recognized practice 
to allow another person to be substituted for the purchaser, and to 
take the deed directly to himself.^ Any equitable rights or liens ac- 
quired by third persons against the original purchaser before the as- 
signment are protected. Where the original purchaser had entered 
into a contract of sale of the premises with another, and had died, in 
the absence of his heir the court ordered a conveyance to the substituted 
purchaser, and the payment of the money into court.^ Where there 
are two or more assignees of the purchaser, the court upon motion 
will decide between them which is entitled to the deed.* 

If the purchase be made by a third person for the mortgagor, who 
pays the price, the mortgagor is entitled to a release of the mortgage 
upon tendering the deed to be signed.* 

§ 1653. Delivery of deed. — The process of divesting a mortgagor 
of his title is incomplete until the execution and delivery of the 
sheriff's deed after the foreclosure sale.° Upon compliance with the 
terms of sale, and expiration of the period of redemption, if any, the 
purchaser is entitled to a deed," duly executed by the proper officer,' 



'McClure v. Englehardt, 17 111. 
47; Splahn v. Gillespie, 48 Ind. 397; 
Ehleringer v. Moriarity, 10 Iowa 78; 
Culver V. McKeown, 43 Mich. 322, 5 
N. "W. 422; Bensieck v. Cook, 110 
Mo. 173, 19 S. W. 642; Massey v. 
Young, 73 Mo. 260; Proctor v. Far- 
nam, 5 Paige (N. Y.) 619; Rorer on 
Jud. Sales, 145; Vale v. Davenport, 
6 Ves. 615; Rigby v. McNamara, 6 
Ves. 515. See also Wood v. Mann, 3 
Sumn. (U. S.) 318, Fed. Cas. No. 
17954; Currier v. Teske, 84 Nebr. 
60, 120 N. W. 1015; Virginia-Caro- 
lina Chemical Co. v. McLucas, 87 S. 
Car. 350, 69 S. E. 670 (liability of 
assignee for Interest on bid). A 
quitclaim deed from a purchaser at 
a foreclosure sale, executed pend- 
ing appeal from an order of con- 
firmation, entitles the grantee to the 
benefit of the sheriff's deed when 
executed. McLean v. McCormick, 4 
Nebr. (UnofC.) 187, 93 N. "W. 697. 

= Pearce v. Pearce, 7 Sim. 138. 

= Proctor V. Farman, 5 Paige Ch. 
(N. Y.) 614. Where no sheriff's 
deed was issued upon foreclosure, 
and the original owner became the 
assignee of the certificate of sale, 
his title was not divested. Keller v. 



Harrison, 151 Iowa 320, 128 N. W. 
851, Ann. Cas. 1913A, 300. 

*Bush V. Macklin, 87 Ky. 482, 9 
S. W. 420. 

^Bickel V. Wessinger, 58 Ore. 98, 
113 Pac. 34. 

' Schaeppi v. Bartholomae, 217 111. 
105, 75 N. E. 447, 1 L. R. A. (N. S.) 
1079; Carroll v. Haigh, 108 111. App. 
264; Reformed Episcopal Church v. 
Mullowney, 164 N. Y. 578, 58 N. E. 
1093; Battershall v. Davis, 23 How. 
Pr. (N. Y.) 383. 

'Farmers' L. &c. Co. v. Bankers' 
&c. Tel. Co., 119 N. Y. 15, 23 N. E. 
173; Ex parte State Bank, 21 N. 
Car. 75. Such execution of the deed 
may be enforced in a suit for the 
purpose, or upon motion where the 
officer is subject to summary orders 
of th3 court. Hawkeye Ins. Co. v. 
Maxwell, 119 Iowa 672, 94 N. W. 
207; Harrison v. Union Trust Co., 80 
Hun 463, 62 N. Y. St. 276, 30 N. Y. 
S. 443, affd. 144 N. Y. 326, 39 N. E. 
353; Union Mut. L. Ins. Co. v. Win 
dett, 36 Fed. 838. See also Knicker- 
bocker Trust Co. V. Oneonta &q. R. 
Co., 134 App. Div. 775, 119 N. Y. 
S. 304; Van Camp v. Weber, 27 S. 
Dak. 276, 130 N. W. 591. Where the 



281 



DEED AND TITLE CONVEYED 



1653 



and recorded in conformity mth statute, where so required.' Mere 
lapse of time after foreclosure sale will not deprive the purchaser or 
those holding under him of their interest in the land, nor prevent 
them from obtaining a deed.* 

The master's deed passes the title to the purchaser at the moment of 
delivery, though the sale has not been confirmed.^" From that time 
the property is at his risk, and having accepted the deed he can not 
repudiate the contract.^^ From that time, and from that time only, 
the cotenancy of a purchaser of the interest of a tenant in common 
sold on foreclosure commences, with the liability of accounting for 
rents and profits, repairs and improvements.^^ The confirmation re- 
lates back to the date of the sale and gives effect to the deed from that 
time.^^ The holder of the deed has prima facie a valid title to the land 
described in it,^* and the deed duly executed is prima facie evidence 
of the truth of its recitals.^' In England the practice is to withhold 
the deed until the final order confirming the sale is made absolute, but 
the confirmation relates back to the delivering of the deed, and gives it 
effect from that time.^^ 



sheriff conducting a foreclosure sale 
executed a deed to the purchaser, 
instead of issuing him a certificate 
of sale, the owner who had not at- 
tempted to redeem could not object 
to the form of the conveyance 
thirty-five years later. Fairview 
Inv. Co. v. Lamberson, 25 Idaho 72, 
136 Pac. 606. 

"Miller v. McLaughlin, 141 Mich. 
433, 104 N. W. 780. 

» Bell v. Diesem, 86 Kans. 364, 121 
Pac. 335. The sheriff may volun- 
tarily execute the deed after a lapse 
of several years, though he had pre- 
viously resisted a mandamus to 
compel him to execute such deed. 
Talbot V. Cook, 57 Ore. 535, 112 Pac. 
709. A deed executed four years 
after the redemption period had ex- 
pired will not be disturbed. Mc- 
Cauley v. Jones, 34 Mont. 375, 86 
Pac. 422, 115 Am. St. 538. 

"Mitchell V. Bartlett, 51 N. Y. 
447, 52 Barb. 319; Fort v. Burch, 6 
Barb. (N. Y.) 60; Fuller v. Von 
Geesen, 4 Hill (N. Y.) 171, 4 How. 
Pr. 182. See also Jones v. Burden, 
20 Ala. 382; Jones v. Hiller, 65 Fla. 
532, 62 So. 583. The legal title can 
not vest until delivery of the deed. 
Mitchell V. Bartlett, 51 N. Y. 447. 
The deed takes effect as of the date 



of the mortgage. Allis v. Foley 
(Minn.), 147 N. W. 670; Farr v. 
Semmler, 24 S. Dak. 290, 123 N. W. 
835. Where neither the decree of 
foreclosure nor the certificate of 
purchase purported to vest title in 
the purchaser, and the purchaser 
neglected to obtain his deed within 
five years after expiration of the 
period of redemption, the purchaser 
acquired no title to the property. 
Bradley v. Lightoap, 201 111. 511, 66 
N. B. 546. In Colorado, by statute, 
a sheriff's deed made in pursuance 
of a certificate of sale upon fore- 
closure, need not be executed under 
an order of court approving the 
sale. De Cunto v. Johnson, 18 Colo. 
App. 220, 70 Pac. 955. For form of 
sheriff's or referee's deed used in 
New York, see 5 Wait's Prac. 225, 
226. 

"Jones v. Burden, 20 Ala. 382. 

^ Davis V. Chapman, 36 Fed. 42. 

^^Lathrop v. Nelson, 4 Dill. (U. 
S.) 194. 

" Simerson v. Branch Bank, 12 
Ala. 205; Jackson v. Warren, 32 III. 
331. 

"=" Avers v. Casey, 72 N. J. L. 223, 
61 Atl. 452. 

"Ex parte Minor. 11 Ves. 559. 



§ 1653 IfOEECLOSUEE SALES UNDER DECREE 283 

The practice in this country in this regard is not tiniform. The bet- 
ter practice is to report the sale and obtain a coniirmation of it be- 
fore the delivery of the deed; but in some states, and especially in 
those in which a time for redemption is allowed after the sale, it is 
the practice to delay the report until the deed is executed and deliv- 
ered.^' If in such case the mortgagor delays to move for the filing 
of the report and the setting aside of the sale until the deed is de- 
livered, he is regarded as waiving all objections to the sale which are 
merely formal.^^ 

When a judgment in foreclosure provides that the purchaser shall 
be let into possession upon production of the referee's deed, the pur- 
chaser acquires no title or right of possession until the delivery of 
the deed to him, and therefore he is not entitled to the rents from the 
time of sale by relation back, although he is charged with interest on 
the purchase-money from that time; until the deed is given, the 
owner of the equity is entitled to the possession of the land and to 
the rents.^° Upon the delivery of the deed the purchaser is entitled 
to the proper process of court for the delivery of possession to him as 
against all the defendants who were before the court.^" When con- 
summated by the deed, the sale passes as against them the entire estate 
held by the mortgagor, whatever it may have been at the date of the 
mortgage; and the purchaser is entitled upon the receipt of his deed 
to the possession of the premises, even though the plaintifE pending the 
action has conveyed the property to one of the defendants.^^ If the 
mortgagee be the purchaser, and before a deed is made receives from 
the mortgagor the amount of the decree, the sale and confirmation 
under it are rendered void.^^ 

The sale under the decree of foreclosure conveys a clear and ab- 

" In Illinois this was the practice foreclosure providing that the pur- 

before the enactment allowing re- chaser shall be entitled to posses- 

demption after the sale. But since sion on the production of his deed, 

this statute the report is not gener- and that the mortgagor and receiver 

ally made until after the deed is shall join in the deed, necessarily 

executed and delivered, and some- implies that the referee shall exe- 

times it is never reported and con- cute a deed to the purchaser, 

firmed at all. Walker v. Schum, 42 Farmers' Loan &c. Co. v. Merchants' 

111. 462. See also Carroll v. Haigh, Telegraph Co., 119 N. Y. 15, 23 N. 

108 111. App. 264. E. 173. 

"Walker v. Schum, 42 111. 462; =°Prisbie v. Fogarty, 34 Cal. 11. 

Fergus v. Woodworth, 44 111. 374, See post §§ 1663-1667. 

379. ^ Montgomery v. Middlemiss, 21 

"Mitchell V. Bartlett, 51 N. Y. Cal. 103; Belloo v. Rogers, 9 Cal. 

447; Strong v. Dollner, 2 Sandt. (N. 123, 125. 

Y.) 444. But see Lathrop v. Nelson, ^•'Applegate v. Kingman, 17 Nebr. 

4 Dill. (U. S.) 194. A judgment in 338, 22 N. W. 765. 



283 DEED AND TITLE CONTETED § 1654 

solute title as against all parties to the suit and their privies.^' From 
the time of record, the sheriff's deed takes precedence over all out- 
standing conveyances and incumbrances executed by the judgment 
debtor, which were not recorded and of which the purchaser had no 
notice.^* "When a junior mortgagee is a party defendant to a fore- 
closure bill in which there is a prayer that he be decreed to redeem, 
and when the priority of the plaintiff's mortgage is found or con- 
ceded, and a sale is ordered in default of payment, declaring the right 
of the debtor to redeem to be forever barred, a similar order as to 
right of redemption by the junior mortgagee is not substantially, or 
even formally necessary. In such case a junior mortgagee, who stands 
by while the sale is made and confirmed, must be deemed, in equity, 
to have waived his right to redeem.^^ A decree in such a suit that 
the sale is to be made subject to the rights of the junior mortgagee 
and of intervening creditors, and reserving to the court the right 
to make further orders and directions, and providing that no sale 
shall be binding until reported to the court for its approval, and a 
subsequent order that the property shall be sold subject to the future 
adjudication as to such rights, and the property conveyed subject 
thereto, while it warrants a contention that the court intended to 
make a future disposition of the claims of such parties, does not 
authorize the junior mortgagee to wait for a period of seven years 
before attempting to enforce his alleged rights; and such delay de- 
prives him of the right to ask the aid of a court of equity in enforcing 
them.^® 

Whether the death of the mortgagor, a party to the foreclosure suit, 
after the, decree and sale under it, but before the officer charged with 
the execution of the decree has executed and delivered the deed, af- 
fects the title under the sale, is a question upon which the Supreme 
Court of Michigan was equally divided. It would seem, however, that 
the death of the mortgagor at that stage of the proceedings would not 
affect the subsequent confirmation of the officer's report and his de- 
livery of the deed.^^ 

§ 1654. Title conveyed — Intervening liens and Incumbrances ex- 
tinguished. — As the title of the purchaser relates back to the time of 

==> Chicago, D. &c. R. Co. v. Fos- Rapids &c. R. Co., 159 TJ. S. 278, 40 

dick, 106 U. S. 47, 68, 27 L. ed. 47, L. ed. 150, 16 Sup. Ct. 1. 

1 Sup. Ct. 10; Lansing v. Goelet, 9 ™ Simmons v. Burlington, Cedar 

Cow. (N. Y.) 346, 391. Rapids & N. R. Co., 159 U. S. 278, 

^Getchell v. Roberts, 75 Nebr. 40 L. ed. 150, 16 Sup. Ct. 1. 

688, 106 N. W. 781. "Hochgraef v. Hendrie, 66 Mich. 

=« Simmons v. Burlington, Cedar 556, 34 N. W. 15. 



§ 1654 



FOEECLOSUKE SALES UNDEE DECKEE 



284 



the execution of the mortgage, it does not matter to him what dis- 
position the mortgagor may afterward have made of the property if 
the foreclosure is perfect. All conditions and reservations and ease- 
ments,^^ as well as all junior liens,''' mortgages or other incumbrances,'" 
afterward imposed upon the property are extinguished, and the pur- 
chaser under foreclosure of the senior mortgage takes the property free 
therefrom. In this respect the purchaser's rights are the same whether 
the sale be under a decree of a court of equity, under a judgment 
in scire facias, or under a power in the mortgage or trust deed. The 
title takes effect by virtue of the original deed; the sale carries that 
title, and cuts off all liens and interests created subsequent to the 



® Stanislaus "Water Co. v. Bach- 
man, 152 Cal. 716, 93 Pac. 858, 15 
L. R. A. (N. S.) 359; Briggs v. Chi- 
cago, Kans. & W. Co., 56 Kans. 526, 
43 Pac. 1131 (railroad right of 
way) ; Leavenworth Lodge v. Byers, 
54 Kans. 323, 38 Pac. 261 (party 
wall); Arterburn v. Beard, 86 Nebr: 
733, 126 N. W. 379; Beardslee v. 
New Berlin Light &c. Co., 207 N. Y. 
34, 100 N. E. 434, reversing 140 App. 
Div. 942, 125 N. Y. S. 112 (right 
to overflow land ) ; King v. McCully, 
38 Pa. St. 76 (right of way); Bull's 
Petition, 15 R. I. 534, 10 Atl. 484. 

™ Logan V. Stleff, 36 Pla. 473, 18 
So. 762 (judgment lien); Englehart- 
Hitchcock Co. v. Central Inv. Co., 
136 Ga. 564, 71 S. E. 787 (liens for 
improvements); Heinroth v. Frost, 
250 111. 102, 95 N. E. 65 (judgment 
lien) ; Davis v. Conn. Mut. Life Ins. 
Co., 84 111. 508 (mechanic's lien); 
Shaw V. Heisey, 84 Iowa 468; Hart 
V. Beardsley, 67 Nebr. 145, 93 N. W. 
423. See also Fletcher v. 416 West 
33d St. Realty Co., 77 Misc. 280, 135 
N. Y. S. 1046 (liens accruing after 
sale). 

=" Fowler v. Hart, 13 How. (U. S.) 
373, 14 L. ed. 186; Capehart v. Mc- 
Gahey, 132 Ala. 334, 31 So. 503; Gil- 
mer V. Smith, 103 Ala. 228, 15 So. 
COS; Simerson v. Decatur Branch 
Bank, 12 Ala. 205; Ford v. Harri- 
son, 69 Ark. 205, 62 S. "W. 59, 86 
Am. St. 192; Felton v. Le Breton, 
92 Cal. 457, 28 Pac. 490; Englehart- 
Hitchcock Co. v. Central Inv. Co., 
136 Ga. 564, 71 S. E. 787; Heinroth 
V. Frost, 250 111. 102, 95 N. E. 65; 



State Bank v. Wilson, 9 111. 57; 
Duesterberg v. Swartzel, 115 Ind. 
180, 17 N. B. 155 (subject to redemp- 
tion) ; Coleman v. Witherspoon, 76 
Ind. 285; Schnantz v. Schellhaus, 37 
Ind. 85; Hamilton v. State, 1 Ind. 
128; Heinss v. Henry, 127 La. 770, 
54 So. 24; Ball v. New Orleans, 52 
La. Ann. 1550, 28 So. 109; Payne v. 
Eaton, 27 La. Ann. 160; McNeil v. 
Hauck, 24 La. Ann. 328; Huzzey v. 
Heffernan, 143 Mass. 232, 9 N. B. 
570 (without redemption); Bovey- 
De Laittre Lumber Co. v. Tucker, 
48 Minn. 223, 50 N. W. 1038; Bain- 
bridge V. Woodburn, 52 Miss. 95; 
Smith V. Millard, 11 Nebr. 609, 10 
N. W. 529; Hopkins v. Wolley, 81 
N. Y. 77; Continental Ins. Co. v. 
Reeve, 135 App. Div. 737, 119 N. Y. 
S. 901; Caccia v. Brooklyn Union 
&c. R. Co., 98 App. Div. 294, 90 N. Y. 
S. 582; Ross v. Boardman, 22 Hun 
(N. Y.) 527; Nichols v. Tingstad, 
10 N. Dak. 172, 86 N. W. 694; Pin- 
ney v. Merchants' Nat. Bank, 71 
Ohio St. 173, 72 N. E. 884; Roberts 
V. Doren, 10 Ohio Dec. 349; Seidle 
V. Holmes, 185 Pa. St. 549, 40 Atl. 
567; Stewart v. Groce, 42 S. Car. 
500, 20 S. E. 411; Hampshire v. 
Greeves (Tex.), 143 S. W. 147. See 
also Tessier v. Bourgeois, 38 La. 
Ann. 256; Arterburn v. Beard, 86 
Nebr. 733, 126 N. W. 379; Nye &c. 
Co. V. Fahrenholz, 49 Nebr. 276, 68 
N. W. 498, 59 Am. St. 540; Conrad 
V. Susquehanna Bldg. &c. Assn., 2 
Pa. Cas. 499, 4 Atl. 177; Whitehead 
V. Purnell, 2 Miles (Pa.) 434. 



285 DEED AXD TITLE CONVEYED § 1654 

mortgage."^ The purchaser becomes privy in estate -with the mort- 
gagee and not with the mortgagor, except in respect to the estate as 
it existed when the mortgage was executed.^^ The mortgagee is not 
bound by judgments or decrees affecting the mortgaged property ren- 
dered in suits begun by third persons after the execution of the mort- 
gage, unless the mortgagee is made a party to it, and the rights of a 
purchaser at a foreclosure sale are the same as those of the mortgagee, 
and relate back to the mortgage.^' A purchaser at a foreclosure sale 
takes title free of an easement upon a part of the mortgaged land used 
by the mortgagor at the time the mortgage was executed, but not re- 
served in the mortgage. It may be presumed that the easement was 
abandoned by the mortgagor when he omitted to mention or reserve 
it from the operation of the mortgage.'* 

Title acquired by foreclosure relates back to the date of the mort- 
gage, so as to cut off intervening equities and rights.^' If all sub- 
sequent purchasers and incumbrancers are made parties to the bill, 
the title under the mortgage foreclosed is perfected to an absolute 
one. In such case the purchaser at foreclosure sale acquires all the 
right, title and interest of the mortgagor at the time of the making of 
the mortgage;'" together with any after-acquired right or title inuring 

»i Champion v. Hinkle, 45 N. J. 277, 45 N. E. 269; Ballinger v. Bour- 

Eq. 162, 16 Atl. 701; Rector v. Mack, land, 87 111. 513, 29 Am. Rep. 69; 

93 N. Y. 488; Pardee v. Steward, 37 Taylor v. Kearn, 68 111. 339; Bibbler 

Hun (N. Y.) 259. v. Walker, 69 Ind. 362; Hamilton v. 

=^Secor v. Singleton, 41 Fed. 725; State, 1 Ind. 128; Poweshiek Co. v. 

Mathes v. Cover, 43 Iowa 512. Dennison, 36 Iowa 244, 14 Am. Rep. 

»= Boutwell V. Steiner, 84 Ala. 307, 521; Ferguson v. Cloon, 89 Kans. 

4 So. 184, 5 Am. St. 375; Coles v. 202, 131 Pac. 144; Duncan v. Ameri- 

Allen, 64 Ala. 98; Logan v. Stieff, can Standard Asphalt Co., 26 Ky. 

36 Fla. 473, 18 So. 762; Mathes v. L. 1067, 83 S. W. 124; Marston v. 

Cover, 43 Iowa 512; Pierce v. Marston, 45 Maine 412; Haynes v. 

Faunce, 47 Maine 507; Powers v. Wellington, 25 Maine 458; Ritger v. 

Heath, 20 Mo. 319; Cromwell v. Mc- Parker, 8 Cush. (Mass.) 145; Brown 

Lean, 123 N. Y. 474, 25 N. B. 932; ■ v. Tyler, 8 Gray (Mass.) 135, 69 Am. 

Shattuck V. Bascom, 105 N. Y. 3^, Dec. 239; Cook v. Bertram, 86 Mich. 

12 N. E. 283 ; Looney V. Simpson, 87 356, 49 N. W. 42; Watkins v. 

lex. 109, 26 S. W. 1065. Hackett, 20 Minn. 106; Hardy v. 

=* Wells V. Garbutt, 132 N. Y. 430, Atkinson, 136 Mo. App. 595, 118 S. 

30 N. E. 978. W. 516; Snyder v. Chicago &c. R. 

=» Logan V. Stieff, 36 Fla. 473, 18 Co., 112 Mo. 527, 20 S. W. 885; 

So. 764; Gamble v. Horr, 40 Mich. Meads v. Hutchinson, 111 Mo. 620, 

561. • 19 S. W. 1111; Herzog v. Union 

=°Secor v. Singleton, 41 Fed. 725; Debenture Co. (Nebr.), 144 N. W. 

Freelon v. Adrian, 161 Cal. 13, 118 814; Arterburn v. Beard, 86 Nebr. 

Pac. 220; Leet v. Armbruster, 143 733, 126 N. W. 379; Currier v. Teske, 

Cal. 663, 77 Pac. 653; Webb v. Win- 84 Nebr. 60, 120 N. W. 1015; Lin- 

ter (Cal.), 65 Pac. 1028; McMillan v. coin v. Lincoln St. R. Co., 75 Nebr. 

Richards, 9 Cal. 365, 70 Am. Dec. 523, 106 N. W. 317, 121 Am. St. 816; 

655; McMahlll v. Torrence, 163 111. Hart v. Beardsley, 67 Nebr. 145, 93 



1654 



FOKECLOSUEE SALES UNDER DECEEE 



286 



in equity to his beneflt.^^ In jurisdictions where the mortgage passes 
the legal title, the purchaser also acquires the title of the mortgagee.'^ 
He obtains the title of all the parties to the suit, whether their title 
be that which is set forth in the bill or not. Whatever the title of the 
parties to the suit may be, that is what the court undertakes to sell, and 
what the purchaser is entitled to have conveyed to him.^* But the title 

S. 386 (description of tract); Peo- 
ple's Trust Co. v. Tonkonogy, 144 
App. Div. 333, 128 N. Y. S. 1055; 
Thompson v. Bender, 51 Tex. Civ. 
App. 81, 111 S. W. 170 (partnership 
property); Eggborn v. Smith, 114 
Va. 745, 77 S. E. 593 (rock, earth 
and waste constituting realty). The 
mortgagee, judgment creditor, or 
other purchaser at foreclosure sale 
acquires only the title and interest 
of the mortgagor. London &c. Bank 
V. Dexter Horton & Co., 126 Fed. 593; 
Bishop V. Van Winkle (Ky.), 117 
S. "W. 345; Schwartz v. Rehfuss, 129 
App. Div. 630, 114 N. Y. S. 92, af- 
firmed 198 N. Y. 585, 92 N. E. 1101. 
The title of a mortgagee purchasing 
is derived from the sale, not from 
the mortgage. Sinclair v. Gunzen- 
hauser, 179 Ind. 78, 98 N. E. 37. If 
the mortgage was of an undivided 
interest in common with others, the 
purchaser acquires the same inter- 
est. Mahoney v. Middleton, 41 Cal. 
41. 

"See post § 1656. 

=« Baldwin v. Howell, 45 N. J. Eq. 
519, 15 Atl. 236; Champion v. 
Hinkle, 45 N. J. Eq. 162, 16 Atl. 701; 
Caccia v. Brooklyn Union &c. R. Co., 
98 App. Div. 294, 90 N. Y. S. 582; 
Marshall v. United States Trust Co., 
93 App. Div. 252, 87 N. Y. S. 147; 
Frische v. Kramer, 16 Ohio 125, 47 
Am. Dec. 368; Ames v. Storer, 98 
Wis. 372, 74 N. W. 101, 67 Am. St. 
813. See also Ferguson v. Cloon, 89 
Kans. 202, 131 Pac. 144 (reversion- 
ary interest of mortgagee); Jones 
V. Williams, 155 N. Car. 179, 71 S. 
E. 222, 36 L. R. A. (N. S.) 426. A 
deed from a trustee in a mortgage 
conveys whatever title he had. 
Chesapeake Beach R. Co. v. Wash- 
ington, P. &c. R. Co., 199 U. S. 247, 
26 Sup. Ct. 25, 50 L. ed. 175. 

™Dutro V. Kennedy, 9 Mont. 101, 
22 Pac. 763; Hart v. Beardsley, 67 
Nebr. 145, 93 N. W. 423; Young v. 



N. W. 423; Wimpfheimer v. Pru- 
dential Ins. Co., 56 N. J. Eq. 585, 39 
Atl. 916; Henninger v. Heald, 52 N. 
J. Eq. 431, 29 Atl. 190; Wells v. 
Garbutt, 132 N. Y. 430, 30 N. E. 978; 
Christ Church v. Mack, 93 N. Y. 
488; People's Trust Co. v. Tonkon- 
ogy, 144 App. Div. 333, 128 N. Y. S. 
1055; Insurance Co. v. Reeve, 135 
App. Div. 737, 119 N. Y. S. 901; 
Commonwealth Mtg. Co. v. De Wait- 
off, 135 App. Div. 33, 119 N. Y. S. 
781; Caccia v. Brooklyn Union &c. 
R. Co., 98 App. Div. 294, 90 N. Y. 
S. 582; Slattery v. Schwannecke, 44 
Hun (N. Y.) 75; Vroom v. Ditmas, 
4 Paige (N. Y.) 526, 531; Sherrod 
V. Vass, 128 N. Car. 49, 38 S. E. 133; 
Brockschmidt v. Archer, 64 Ohio St. 
502, 60 N. E. 623; Carter v. Walker, 
2 Ohio St. 339; Watson v. Dundee 
M. & T. I. Co., 12 Ore. 474; Sellwood 
V. Gray, 11 Ore. 534; De Haven v. 
Landell, 31 Pa. St. 120; West 
Branch Bank v. Chester, 11 Pa. St. 
282, 51 Am. Dec. 547; Beall Co. v. 
Weston, 83 S. Car. 491, 65 S. E. 823; 
Tant V. Gess, 37 S. Car. 489, 16 S. E. 
472; Bradford v. Knowles (Tex. Civ. 
App.), 24 S. W. 1095; Merz v. 
Mehner, 67 Wash. 135, 120 Pac. 893; 
Young V. Davis, 50 Wash. 504, 97 
Pac. 506, 126 Am. St. 910; Eaton v. 
Tallmadge, 22 Wis. 526; Hodson v. 
Treat, 7 Wis. 263. See also Vicks- 
burg V. Vicksburg Water-Works Co., 
202 U. S. 453, 50 L. ed. 1102, 26 Sup. 
Ct. 660 (contractual rights in- 
cluded) ; Hill V. Denton, 74 Ark. 
463, 86 S. W. 402; Bell v. Diesem, 
86 Kans. 364, 121 Pac. 335 (equitable 
title acquired) ; Robinson v. Sulli- 
van, 102 Miss. 581, 59 So. 846 (ven- 
dor's lien included) ; Hendricks v. 
Calloway, 211 Mo. 536, 111 S. W. 60; 
McCarty v. Downes, 146 N. Y. S. 
973; Brody, Adler & Koch Co. v. 
Hochstadter, 144 N. Y. S. 631; In 
re Block Bounded by Chauncey 
Street, 155 App. Div. 483, 140 N. Y. 



287 



DEED AND TITLE CONVEYED 



§ 1654 



conveyed the purchaser is no stronger than that possessed by the 
mortgagor,*" and may be subject to a right of dower*^ or homestead,*^ 
or taxes,*" or any conditions, reservations or restrictions in the deed 
by which the mortgagor acquired title.** The purchaser's title will 
also be subject to easements and servitudes created by the mortgagor*' 
'or leases executed by him, prior to the mortgage.*" The rule of caveat 
emptor applies to a sale on foreclosure, and neither law nor equity 
can aid the purchaser to obtain a title under the sale and deed.*' 

The fact that the purchaser at a foreclosure sale under a first 
mortgage had previously bought the equity subject to a second mort- 
gage, which he did not expressly stipulate to pay, does not prevent 
his acquiring a perfect title against that mortgage by the purchase.** 
The mortgagor is estopped from denying the title he has set forth in 
his mortgage,*' and all the parties to the foreclosure suit are estopped 
from disputing the title acquired by the purchaser under the sale.'"' 
The purchaser occupies the same position, as to the priority of claims 
or liens on the property, that the mortgagee did.'"^ 



Brand, 15 Nebr. 601 (quoting text) ; 
Champion v. Hinkle, 45 N. J. Eq. 
162, 16 All. 701; Mount v. Manhat- 
tan Co., 43 N. J. Eq. 25, 9 Atl. 114; 
Carter v. Walker, 2 Ohio St. 339; 
Zollman v. Moore, 21 Grat. (Va.) 
313; Tallman v. Ely, 6 Wis. 2^4; 
Gillett V. Eaton, 6 Wis. 30. See also 
Coomes v. Fray, 141 Ky. 740, 133 S. 
W. 758; Young v. Davis, 50 Wash. 
504, 97 Pac. 506 (equitable title). 

"Goulding Fertilizer Co. v. 
Blanchard, 178 Ala. 298, 59 So. 485; 
Webb v. Winter (Cal.), 65 Pac. 
1028; Rudd v. Travelers' Ins. Co., 
24 Ky. L. 2141, 73 S. W. 759; Van- 
dervort v. Finnell (Nebr.), 148 N. 
W. 332 (life estate); Currier v. 
Teske, 93 Nebr. 7, 139 N. W. 622 
(life estate); Bushey v. National 
State Bank, 72 N. J. Eq. 466, 66 Atl. 
592 (tax lien); Schwartz v. Reh- 
fuss, 129 App. Div. 630, 114 N. Y. 
S 92 

'^Fletcher v. Hall, 135 Ga. 28, 68 
S. E. 793; Scott v. Lane, 109 N. Car. 
154, 13 S. B. 772; Hughes v. Hodges, 
102 N. Car. 236, 262, 9 S. E. 437. 

«Parrott v. Kumpf, 102 111. 423; 
School Trustees v. Arnold, 58 III. 
App. 103. See also Powers v. Pense, 
20 Wyo. 327, 123 Pac. 925. 

'^ Bushey v. National State Bank, 



72 N. J. Eq. 466, 66 Atl. 592, affd. 
75 N. J. Eq. 296, 78 Atl. 1134. 

"Duclaud V. Rousseau, 2 La. Ann. 
168; Gilchrist v. Foxen, 95 Wis. 428, 
70 N. W. 585. But see Wheeler v. 
Dunning, 33 Hun (N. Y.) 205; State 
Medical College v. Zeigler, 17 Ohio 
St. 52. 

"Dahlberg v. Haeberle, 71 N. J. 
L. 514, 59 Atl. 92; New York L. Ins. 
&c. Co. V. Milnor, 1 Barb. Ch. (N. 
Y.) 353; King v. McCully, 38 Pa. St. 
76; McLemore v. Charleston &c. R. 
Co., Ill Tenn. 639, 69 S. W. 338. 
See also Wells v. Garbutt, 132 N. Y. 
430, 30 N. E. 978; Thompson v. 
Somerville, 16 Barb. (N. Y.) 469. 

«West V. Herrod, 1 Pa. Cas. 330, 
2 Atl. 871; Wilkinson v. Hiyer, 30 
Pittsb. Leg. J. (N. S.) (Pa.) 85; 
Gregory v. Rosenkrans, 72 Wis. 220, 
39 N. W. 378, 1 L. R. A. 176. 

« Hutson V. Wood, 263 111. 376, 105 
N. E. 343. 

"Brown v. Winter, 14 Cal. 31. 

"Vallejo Land Assn. v. Viera, 48 
Cal. 572. 

"McGee v. Smith, 16 N. J. Eq. 
462; White v. Evans, 47 Barb. (N. 
Y.) 179; Holden v. Sackett, 12 Abb. 
Pr. (N. Y.) 473. 

" Davis V. Connecticut Mut. Life 
Ins. Co., 84 111. 508. 



§ 1655 FORECLOSURE SALES UNDER DECREE 288 

If the mortgage was a forgery, and the persons purporting to have 
executed the same were not served by process in the foreclosure suit, 
the purchaser at the foreclosure sale acquired no title, and the land 
may be recovered from him in an action of ejectment by the rightful 
owners.'^ 

After a foreclosure sale a mortgagee has no such ownership of the 
property as will enable him to charge the premises with a lien for 
labor done and materials furnished.^* 

The purchaser acquires the benefit of a covenant of warranty con- 
tained in the deed conveying the property to the mortgagor, and may 
recover for a breach of it.°* 

§ 1655. Errors in deed. — If the master's deed by inadvertence em- 
braces the whole mortgaged premises, of which a portion had been 
released from the operation of the mortgage .and was excepted from 
the operation of the decree, no title to the released portion passes to 
the purchaser.^^ Even if this portion of the premises had been em- 
braced in the decree, but were not offered at the sale, the title would 
not pass by the conveyance.°° The mortgage is extinguished by fore- 
closure, and the fact that property was omitted therefrom by mistake 
in the execution of the instrument, furnishes no ground for reforma- 
tion in equity for either the mortgage or decree in foreclosure."' 

Where a mortgage, by reason of an* error in the description, did 
not cover the entire tract intended to be mortgaged, and the error was 
first discovered after a foreclosure sale and conveyance to a pur- 
chaser who supposed he was buying the whole tract, he was protected 
in the possession of the whole.^^ And it has been held that where there 
is a material defect in the quantity of land acquired by the purchaser, 
or in the value of improvements, he is entitled to a corresponding re- 
duction in the amount of his bid.°' Usually, however, the property 
to which the purchaser acquires title is coextensive with the descrip- 

=^Pray v. Jenkins, 47 Kans. 599, 220; Schwlckerath v. Cooksey, 53 

28 Pac. 716. Mo. 75; Waldron v. Letson, 15 N. J. 

™ Davis V. Connecticut Mut. Life Eq. 126. 

Ins. Co., 84 111. 508. »» Waldron v. Letson, 15 N. J. Eq. 

"Mygatt V. Coe, 44 Hun (N. Y.) 126. 

31. ""Fowler v. Dupassau, 3 Mart. (0. 

°=Laverty v. Moore, 32 Barb. (N. S.) (La.) 574; Bowdoin v. Ham- 

Y.) 347. mond, 79 Md. 173, 28 Atl. 769 

°° Laverty v. Moore, 33 N. Y. 658. (allowance for loss of buildings by 

"Stewart v. Wilson, 141 Ala. 405, l:re after a sale); People's Bank v. 

37 So. 550, 109 Am. St. 33, citing Bramlott, 58 S. Car. 477, 36 S. E. 

Stephenson v. Harris, 131 Ala. 470, 912, 79 Am. St. 855. See also 

31 So. 445; Miller v. Kolb, 47 Ind. Thompson v. Schmieder, 38 Hun 



289 DEED AND TITLE CONVEYED § 165S 

tion contained in the mortgage, the bill to foreclose, and the order or 
writ under which the sale is made.^" 

After the sale is completed and the money paid over by the pur- 
chaser, he can not have the sale set aside and the money repaid by 
reason of a mistake in the mortgage deed, whereby land not belonging 
to the mortgagor was described instead of his own land.°^ Where 
the error or defect in the title conveyed can be cured, the purchaser is 
entitled to an order of court requiring confirmatory deeds, releases or 
other assurances to be executed to him,"^ or he may bring an action 
to quiet his title, or settle conflicting claims to the purchase-money."' 

Upon petition of the purchaser and notice to the persons interested, 
the court may correct a clerical error in the deed of the commissioner 
in describing the premises sold;"* or the court may allow the sheriff, 
who prepared the deed to correct an erroneous recital."" An imma- 
terial error in the description, such as the designation of a sub- 
division as a resubdivision, will not prevent the admission in evidence 
of a sheriff's deed executed upon foreclosure."" And a misdescription 
of the number of acres in a trust deed and the foreclosure decree as 
well as the sheriffs deed is immaterial where the tract was described 
by metes and bounds."^ Where, however, part of the mortgaged prem- 
ises are omitted in the complaint and advertisement as well as the 
deed, the court can not amend or order the sheriff to deliver a deed 
for the portion not advertised or sold."* 

A referee's deed should name the grantee. Blanks for the name 
of a grantee may not be filled by another."'* 

§ 1656. After-acquired title. — Ordinarily the title ordered to be 
sold is only the title which was held by the mortgagor at the date 

(TSr. Y.) 504; Douthit v. Hipp, 23 S. "Longworth v. Johnson, 66 Kans. 

Car. 205 (no allowance for small 733, 71 Pac. 260. 

deficiency). ** Keener v. Wilkinson, 33 Colo. 

«°McGee v. Smith, 16 N. J. Eq. 445, 80 Pac. 1043. See also Downes 

462. V. Wenninger, 207 N. Y. 286, 100 N. 

^ Neal v Gillaspy, 56 Ind. 451, 26 E. 814, reversing 150 App. Dlv. 914, 

Am. Rep. 37. 135 N. Y. S. 1109 (direction of a 

"^Henderson v. Grammar, 66 Cal. boundary). 

332, 5 Pac. 488; Westfall v. Stark, "Anderson v. Casey-Swasey Co. 

24 Ind. 377; Graham v. Bleakie, 2 (Tex. Civ. App.), 120 S. W. 918 

Daly (N. Y.) 55. (undivided interest in 160 acres iii- 

«= Crawford v. Chicago, B. &c. R. stead of 320 acres). 

Co., 112 111. 314; Banks v. Allen, 127 "'Adams v. Reynolds, 65 N. .T. 

Mich. 80, 86 N. W. 383; Waldron v. Eq. 232, 55 Atl. 1003; Bunch v. 

Letson, 15 N. J. Eq. 126; Herrick v. Thomblison (Ore.), 135 Pac. 879. 

Mann 6 N J. Eq. 460. ■''a March v. Marasco, 150 N. Y. 

"Walsh V. Colby, 153 Mich. 602, S. 792. 
117 N. W. 207. 

19 — Jo.\Es Mtg. — Vol. III. 



§ 1657 FOEECLOSDEE SALES UNDEE DECEEE 290 

of the mortgage. °° But a title subsequently acquired by the mort- 
gagor will generally be subjected to the lien of the mortgage when that 
contains full covenants of warranty,'" even if it was given to secure 
the purchase-money of land, the title of which proves defective and 
the mortgagor makes it good from another source, the mortgagee 
having conveyed to him without covenants and without fraud ;'^ and 
even a title acquired by a purchaser from the mortgagor after his 
purchase may, under equitable circumstances, be subjected to the lien 
in the same manner. But in order to subject such after-acquired 
title to sale, the facts should be set forth in the complaint, and the 
decree should expressly cover the after-acquired title.'^ 

Where a man and wife, owning an undivided half interest in a lot, 
gave a mortgage covering the entire lot, without covenants of title or 
warranty, and pending foreclosure, the wife inherited the other half 
interest, it was held that the subsequently-acquired interest of the wife 
did not inure to the purchaser under the mortgage.'^ 

A title acquired by the owner under a tax sale before the sale under 
the mortgage passes to the purchaser. This rule holds good even in 
ease the assessment on which the taxes were levied was made after 
the decree of foreclosure, where the foreclosure sale was made after 
the tax sale ; for it is the duty of the person who was the owner at the 
time the taxes were levied, and became payable, to pay them.'* The 
deed also passes the title or interest of the mortgagor, including that 
arising under any tax certificate or deed held by him at the time of 
the sale." 

§ 1657. Fixtures. — ^The purchaser's deed taking efEect by relation 
at the date of the mortgage passes the property as it then was, with 

"SscoT V. Singleton, 41 Fed. 725; 259; New York Water Co. v. Crow, 

San Francisco v. Lawton, 18 Cal. 110 App. Div. 32, 96 N. Y. S. 899. 

465, 79 Am. Dec. 187; Watliins v. See also Brennan v. Eggeman, 73 

Hackett, 20 Minn. 106; Caccia v. Mich. 658, 41 N. "W. 840. 

Brooklyn Union &c. R. Co., 98 App. " Hitchcock v. Fortier, 65 111. 239. 

Div. 294, 90 N. Y. S. 582; De Haven Otherwise where the mortgage con- 

Y. Landell, 31 Pa. St. 120. tained no covenants of warranty. 

" Land Assn. v. Viera, 48 Cal. Smith v. De Russy, 29 N. J. Eq. 407. 

572; San Francisco v. Lawton, 18 '^Kreichbaum t. Melton, 49 Cal. 

Cal. 465, 79 Am. Dec. 187; Clark v. 50. 

Baker, 14 Cal. 612, 76 Am. Dec. "Brennan v. Eggeman, 73 Mich. 

449; Bozarth v. Largent, 128 111. 95, 658, 41 N. W. 840. 

21 N. E. 218; Bybee v. Hageman, 66 "Barnard v. Wilson, 74 Cal. 512, 

111. 519; Haggerty v. Byrne, 75 Ind. 16 Pac. 307. 

499; Rice v. Kelso, 57 Iowa 115, 7 '"Ames v. Storer, 98 Wis. 372, 74 

N. W. 3, 10 N. W. 335; Brayton v. N. W. 101; Tallman v. Ely, 6 Wis. 

Merithew, 56 Mich. 166, 22 N. W. 244. 



391 DEED AND TITLE CONVEYED § 1657 

all fixtures subsequently annexed by the mortgagor, sucli as an engine 
and boilers used in a flour-mill and permanently attached to the 
premises.'" The rule, that whatever is fixed to the freehold becomes 
a part of it, applies as strictly between the mortgagor and mortgagee as 
between vendor and vendee.'^ And accordingly all fixtures placed on 
mortgaged premises after execution of the mortgage, pass to the pur- 
chaser on foreclosure sale, under the same rule.'^ The purchaser ac- 
quires title to the fixtures as a part of the realty. If they are wrong- 
fully severed by any one after the sale, though before the execution 
of a deed to the purchaser, he may sue for them in trover, take them 
by replevin,^' may recover damages in an action of waste,*" or may en- 
join their removal.*^ The court may in the foreclosure suit, before 
entering a decree of sale, determine whether a building, removed from 
the mortgaged land and sold, is still subject to the lien.*^ 

Where the owner of real estate, with a flour-mill thereon, subject to 
a mortgage duly recorded, procured new machinery therefor on credit, 
upon agreement that the title to the machinery should not pass until 
payment, and the machinery was attached to the realty as intended, it 
was held that the purchaser upon foreclosure took title to the ma- 
chinery as against the vendor of it, notwithstanding the contract and 
failure to pay.*^ 

A mortgagee who comes into possession of the premises, by virtue 
of a decree of strict foreclosure, acquires title to a barn erected on the 

"Sands v. Pfeiffer, 10 Cal. 258; v. Dewey, 54 Barb. (N. Y.) 455; 

Winslow V. Merchants' Ins. Co., 45 Gardner v. Finley, 19 Barb. (N. Y.) 

Mass. 306, 38 Am. Dec. 368. Fix- 317; Miller v. Plumb, 6 Cow. (N. 

tures may of course be reserved by Y.) 665, 16 Am. Dec. 456; Robinson 

agreement. Richards v. Gilbert, 116 v. Preswlck, 3 Edw. Cb. (N. Y.) 

Ga. 382, 42 S. E. 715. See ante §§ 246; Main v. Schwarzwaelder, 4 E. 

428-452. D. Smith (N. Y.) 273; Babcock v. 

"Dutro V. Kennedy, 9 Mont. 101, Utter, 32 How. Pr. (N. Y.) 439, 1 

22 Pac. 763; Gardner v. Finley, 19 Abb. App. Dec. 27; Sullivan v. 

Barb. (N. Y.) 317; Miller v. Plumb, Toole, 26 Hun (N. Y.) 203; Can- 

6 Cow. (N. Y.) 665, 16 Am. Dec. ning v. Owen, 22 R. I. 624, 48 Atl. 

456; Robinson v. Preswick, 3 Edw. 1033, 84 Am. St. 858; Gunderson v. 

Ch. (N. Y.) 246. See also Union Swarthout, 104 Wis. 186, 80 N. W. 

Bank v. Emerson, 15 Mass. 159; 465, 76 Am. St. 860; Lackas v. Bahl, 

Walker v. Sherman, 20 Wend. (N. 43 Wis. 53. 

Y.) 636. "See ante §§ 453-455. 

"Sands v. Pfeiffer, 10 Cal. 258; «» Lackas v. Bahl, 43 Wis. 53. 

Clore V. Lambert, 78 Ky. 224; Wight ''Dutro v. Kennedy, 9 Mont. 101, 

V. Gray, 73 Maine 297; Union Bank 22 Pac. 763. 

V. Emerson, 15 Mass. 159; Lord v. '"Partridge v. Hemenway, 89 

Detroit Sav. Bank, 132 Mich. 510, Mich.' 454, 50 N. W. 1084. See ante 

93 N. W. 1063; Voorhees v. McGin- § 1446. 

nis, 48 N. Y. 278; Snedeker v. War- *=Bass Foundry &c. Works v. Gal- 
ring, 12 N. Y. 170; Bishop v. Bishop, lentine, 99 Ind. 525. 
11 N. Y. 123, 62 Am. Dec. 68; Rice 



§ 1658 



FOEECLOSUEE SALES UNDER DECREE 



293 



premises during the pendency of the foreclosure suit by a stranger 
with permission of the mortgagor.** 

§ 1658. Emblements. — The purchaser is entitled to the crops grow- 
ing at the time of the sale to him, in preference to the mortgagor or 
any one claiming under him whose claim originated subsequently to 
the mortgage;*^ and he is entitled in preference to one who bids off 
the property at a sale subsequently made by the assignee in bank- 
ruptcy of the mortgagor.'" 

After the sale, while awaiting confirmation thereof, and a delivery 
of the deed and possession, the purchaser may, it seems, upon applica- 



« Preston v. Briggs, 16 Vt. 124. 

°° Montgomery v. Merrill, 65 Cal. 
432, 4 Pac. 414; Anderson v. Strauss, 
98 111. 485; Rankin v. Kinsey, 7 
Bradw. (111.) 215; Sugden v. Beas- 
ley, 7 Bradw. (111.) 71 (quoting 
text) ; Heavilon v. Farmers' Bank, 
81 Ind. 249; Jones v. Thomas, 8 
Blackf. (Ind.) 428; Richards v. 
Knight, 78 Iowa 69, 71, 42 N. "W. 
584; Downard v. Groff, 40 Iowa 597; 
Missouri Val. Land Co. t. Barwick, 
50 Kans. 57, 31 Pac. 685; Goodwin 
V. Smith, 49 Kans. 351, 31 Pac. 153, 
17 L. R. A. 284, 33 Am. St. 373 (rule 
applied against mortgagor's ten- 
ant); Beckman v. Sikes, 35 Kans. 
120; GaranHo v. Cooley, 33 Kans. 
137, 5 Pac. 766; Chapman v. Veach, 
32 Kans. 167, 4 Pac. 100; Smith v. 
Hague, 25 Kans. 246; Rardin v. 
Baldwin, 9 Kans. App. 516, 60 Pac. 
1097 (rule applied against tenant); 
Skilton V. Harrel, 5 Kans. App. 753, 
47 Pac. 177; Shockey v. Johntz, 2 
Kans. App. 483, 43 Pac. 993; Perley 
V. Chase, 79 Maine 519, 11 Atl. 418; 
VvTooton V. White, 90 Md. 64, 44 Atl. 
1026 (quoting text) ; Ruggles v. 
First Nat. Bank, 43 Mich. 192, 5 N. 
W. 257; Scriven v. Moote, 36 Mich. 
64; Reily v. Carter, 75 Miss. 798, 23 
So. 435, 65 Am. St. 621; Reed v. 
Swan, 133 Mo. 100, 34 S. "W. 483 
(rule applied against tenant); Hay- 
den V. Burkemper, 101 Mo. 644, 14 
S. W. 767; Wallace v. Cherry, 32 Mo. 
App. 436; Howell v. Schenck, 24 N. 
J. L. 89; Calvin v. Shimer (N. J.), 
15 Atl. 255; Batterman v. Albright, 
122 N. Y. 484, 25 N. B. 856; Sher- 
man V. Willett, 42 N. Y. 146; Shep- 
ard V. Philbrick, 2 Den. (N. Y.) 174; 



Lane v. King, 8 Wend. (N. Y.) 584, 
24 Am. Dec. 105 (rule applied 
against tenant) ; Gillett v. Balcolm, 
6 Barb. (N. Y.) 370; Parker v. 
Storts, 15 Ohio St. 351; Jones v. 
Adams, 37 Ore. 473, 59 Pac. 811, 62 
Pac. 16, 50 L. R. A. 388; Crews v. 
Pendleton, 1 Leigh (Va.) 297, 19 
Am. Dec. 750; Kerr v. Hill, 27 W. 
Va. 576; Gregory v. Rosenkrans, 72 
Wis. 220, 39 N. W. 378; Allen v. 
Elderkin, 62 Wis. 627, 22 N. W. 842. 
See also Nichols v. Lappin, 105 Mo. 
App. 401, 79 S. W. 995; Howell v. 
Schenck, 24 N. J. L. 89. But see 
Aldrich v. Bank of Ohiowa, 64 Nebr. 
276, 89 N. W. 772, 57 L. R. A. 920, 
97 Am. St. 643; Cassell v. Ashley, 3 
Nebr. (Unoff.) 787, 92 N. W. 1035. 
In Batterman v. Albright, 122 N. Y. 
484, 25 N. B. 856, Judge Bradley, de- 
livering the judgment, said: "The 
doctrine peculiar to growing 
crops, originating in considerations 
deemed beneficial to the interests of 
agriculture, has remained sub- 
stantially unchanged, and the rule, 
as stated in Lane v. King, 8 Wend. 
(N. Y.) 584, 24 Am. Dec. 105, was 
not only followed in some of the 
cases before cited, but that case and 
its doctrine have more recently been 
judicially cited and referred to 
with approval in this state." Cit- 
ing Harris v. Frink, 24 N. Y. 31; 
Samson v. Roe, 65 N. Y. 411. In 
Cassilly v. Rhodes, 12 Ohio 88, it 
was held that a tenant of the mort- 
gagor was entitled to the annual 
crops. See ante § 697. 

=» Gillett V. Balcolm, 6 Barb. (N. 
Y.) 370. 



293 DEED AND TITLE CONVEYED § 1658 

tion to the court, have an injunction, restraining the mortgagor and 
others claiming under him from meddling with the crops.'^ But it 
has been held that an injunction will not be granted to restrain the 
mortgagor's vendee from removing timber, where he was not a party 
to the foreclosure.*^ Before confirmation the purchaser's title is not 
sufficient to enable him to maintain replevin for crops that have been 
severed by the person in possession.*® The confirmation of the sale 
relates back to the sale, and entitles the purchaser to the crops from 
that time if no equities prevent and due notice has been given to in- 
terested parties.*" 

If the growing crop be expressly reserved at the sale, it having 
been previously sold by the mortgagee as administrator of the mort- 
gagor, the purchaser acquires no title to it.®^ And if there was a valid 
agreement between the mortgagor and the mortgagee that the crops 
should not be subject to the sale, the purchaser acquires no title.'^ 
But the sherifE or other officer in selling has no authority to reserve 
the way-growing crops. If he does so, but does not make the reserva- 
tion in the deed, it will pass the crops to the purchaser.®^ If the crops 
are harvested before the foreclosure sale, they generally belong to the 
mortgagor or his tenant, and not to the foreclosure purchaser."* But 
there must be an actual severance of the crops, and sale without sev- 
erance before foreclosure can not defeat the foreclosure purchaser.'' 

The rule in regard to crops applies as well to trees and shrubs grow- 
ing in a nursery. "The rule, as between mortgagor and mortgagee, 
as to crops growing on mortgaged premises, is no less favorable to the 

"Frink v. Roe, 70 Cal. 296, 11 Tabacos v. Ganson, 13 Phil. (Pa.) 

Pac. 820; Emerson v. Samsome, 41 472. 

Cal. 552; Missouri Land Co. v. Bar- '^Bayton v. Dakln, 103 Mich. 65, 

wick, 50 Kans. 57, 31 Pac. 685; 61 N. W. 349; Congden v. Sanford, 

Farlin v. Sook, 30 Kans. 402, 1 Pac. Lalor Sup. (N. Y.) 196. 

123; Galbreath v. Drought, 29 Kans. "» Howell v. Schenck, 24 N. J. L. 

711; Ruggles v. First Nat. Bank, 43 89. 

Mich. 192, 5 N. W. 257; Morse v. ""Vogt v. Cunningham, 50 Mo. 

Bank, 47 N. J. Eq. 279, 20 Atl. 961; App. 136; Hayden v. Burkemper, 

Walker v. Hill, 22 N. J. Eq. 513; 40 Mo. App. 346. 

Mutual Life Ins. Co. v. Blgler, 79 »= Anderson v. Strauss, 98 111. 485; 

N. Y. 568. Jones v. Thomas, 8 Blackf. (Ind.) 

■* Van Derveer T. Tallman, 1 N. J. 428; Beckman v. Sikes, 35 Kans. 

Eq. 9. 120, 10 Pac. 592; Wootton v. White, 

^Woehler v. Endter, 46 Wis. 301, 90 Md. 64, 44 Atl. 1026, 78 Am. St. 

50 N. W. 1099. 425. But see White v. Pulley, 27 

"■Ruggles V. First Nat. Bank, 43 Fed. 436; First Nat. Bank v. Beegle, 

Mich. 192, 5 N. W. 257. 52 Kans. 709, 35 Pac. 814, 39 Am. 

"Sherman v. Willett, 42 N. Y. St. 365; Willis v. Moore, 59 Tex. 

146. See also Compania General de 628, 46 Am. Rep. 284; McKinney v. 

Williams (Tex.), 45 S. W. 335. 



§ 1658 FOEECLOSTJKE SALES UNDER DECREE S94 

claim of the plaintifE than that relating to nursery trees, which par- 
take of the same character, and the principle applicable to both in 
such case may be treated as the same."°° Where a mortgagee releases 
the timber on mortgaged lands, but the release is not recorded, the 
purchaser at foreclosure sale under the mortgage receives a good title 
to the timber, although he learns of such release before paying the pur- 
chase-price and receiving his deed.*'' Where the mortgagor fraud- 
ulently cuts down and removes timber after commencement of fore- 
closure proceedings, the timber remains liable to satisfaction of the 
mortgage.'* 

This rule uniformly prevails where the common law on the sub- 
ject of mortgages remains in force. Even in some states in which a 
mortgagee is regarded as a security merely, the title remaining in the 
mortgagor, the rule is the same. In an important case on this sub- 
ject in New York the court says : "Our attention is called to no reason 
why the considerations upon which the doctrine relating to emble- 
ments was founded, and has since been observed, are now any less 
entitled to sanction than formerly. The fact that the right to eject- 
ment is taken away from the mortgagee by the statute, and the mort- 
gage reduced to a mere chose in action, secured by lien upon the land 
while the defeasance remains effectual, does not seem to have any 
essential bearing upon tl:e question, inasmuch as the perfecting of 
title under it has relation to the time it became a lien."'° 

"Batterman v. Albright, 122 N. Y. his grantee, who had entered under 

484, 25 N. B. 856. Bradley, J. said: the title perfected by the sale on 

"It may be observed that the doc- foreclosure, and the conveyance 

trine applicable to growing crops is made pursuant to it." Citing Lane 

distinguishable from that relating v. King, 8 Wend. (N. Y.) 584; 

to other personal property on land, Sherman v. Willett, 42 N. Y. 146; 

as between grantor and grantee Jewett v. Keenholts, 16 Barb. (N. 

and mortgagor and mortgagee. The Y.) 193; Gillett v. Balcom, 6 Barb, 

theory on which it rests is that they, (N. Y.) 370; Aldrich v. Reynolds, 

in some sense, appertain to the 1 Barb. Ch. (N. Y.) 613; Shepard 

realty; and the general, rule, as v. Philbrick, 2 Denio (N. Y.) 174; 

declared from an early day by text Adams v. Beadle, 47 Iowa 439. See 

and judicial writers, is that a party also Sandlin v. Anders (Ala.), 65 

entering into possession by title So. 376; Hamilton v. Austin, 36 

paramount to the right of the tenant Hun (N. Y.) 138. 
takes them. * * * And while the "Barber v. Wadsworth, 115 N. 

plaintiff (a purchaser upon execu- Car. 29, 20 S. E. 178; Beaufort &c. 

tion against the mortgagor, prior Lbr. Co. v. Dail, 111 N. Car. 120, 15 

to the foreclosure sale), as against S. E. 941. 

the mortgagor, and without liability " Higgins v. Chamberlin, 32 N. J. 

to the mortgagee, may have taken Eq. 566; Lull v. Matthews, 19 Vt. 

the nursery trees from the premises 322. 

prior to the time of the foreclosure ""Batterman V. Albright, 122 N. 

of the mortgage, he had no such Y. 484, 25 N. E. 856. 
right as against the purchaser or 



■395 



DEED AND TITLE CONVEYED 



§ 1659 



But in some other states where a mortgage creates no estate in the 
mortgagee, but confers on him only a lien, the mortgagor or his tenant 
may claim the crops which have matured at the time of the fore- 
closure.^ In such states the mortgagor is entitled to the possession 
and use of the land, and to the crops grown thereon, until his right 
is divested by appropriate judicial proceedings. The title to the land 
remains in the mortgagor, and his right to control and dispose of the 
annual crops remains in him, at least until a receiver is appointed 
and obtains possession. The fact that the mortgage debt is due, and 
that the mortgagor is in default, does not of itself divest him of the 
right to control and dispose of the crops. The crop is chattel prop- 
erty, which the mortgagor has a right to sell, and, if he sells the same 
prior to the appointment of a receiver, the purchaser obtains a good 
title.2 



§ 1659. Eents and profits. — Generally, a purchaser at foreclosure 
sale is not entitled to rents or profits accruing before foreclosure,^ 
or during the pendency of foreclosure proceedings.* The rents ac- 



1 Richards v. Knight, 78 Iowa 69, 
42 N. W. 584; Hecht v. Dettman, 56 
Iowa 679, 7 N. W. 495, 10 N. W. 241; 
Caldwell v. Alsop, 48 Kans. 571, 29 
Pac. 1150; Heavilon v. Farmers' 
Bank, 81 Ind. 249, reversing Jones 
V. Thomas, 8 Blackf. (Ind.) 428, 
which was decided when the rule 
in Indiana was that a mortgage 
creates an estate in the mortgagee. 
Gregory v. Rosenkrans, 72 Wis. 220, 
39 N. W. 378; Allen v. Elderkin, 62 
Wis. 627, 22 N. W. 842. In Beck- 
man V. Sikes, 35 Kans. 120, 10 Pac. 
592, the mortgagor planted a crop 
of corn after the foreclosure of the 
mortgage, and it was immature and 
growing when the land was sold 
pursuant to the decree of fore- 
closure, and it was held that the 
crop passed by the sale to the pur- 
chaser. 

= Hecht V. Dettman, 56 Iowa 679, 
7 N. W. 495, 10 N. W. 241; Caldwell 
V. Alsop, 48 Kans. 571, 29 Pac. 1150, 
per Johnson, J. But a mortgage 
sale does not affect the right of a 
tenant of the mortgagor to crops 
growing on the mortgaged land, 
where such tenant was not made a 
party to the foreclosure proceed- 
ings. St. John V. Swain, 14 N. Y. 
S. 743. See ante § 1522. 



= In re Foster, Fed. Cas. No. 4963, 
6 Ben. (U. S.) 268, affd. Fed. Cas. 
No. 4981; Pendola v. Alexanderson, 
67 Cal. 337, 7 Pac. 756; Gandy v. 
Coleman. 196 111. 189, 63 N. E. 625; 
Owsley V. Neeves, 179 111. App. 61; 
Schaeppi v. Bartholomae, 118 111. 
App. 316; Jackson v. King, 62 Kans. 
850, 62 Pac. 655; Thompson v. Rat- 
cliff, 45 La. Ann. 474, 12 So. 524; 
Wathen v. Glass, 54 Miss. 382; Gar- 
rett V. Dewart, 43 Pa. St. 342, 82 
Am. Dec. 570. 

*Standish v. Musgrove, 223 111. 
500, 79 N. E. 161; Silverman v. 
Northwestern Mut. L. Ins. Co., 5 
111. App. 124; Chaffe v. Purdy, 43 
La. Ann. 389, 8 So. 923; Bowman v. 
McKleroy, 14 La. Ann. 587; Thomp- 
son V. Ramsey, 72 N. J. Eq. 457, 
66 Atl. 588; Argall v. Pitts, 78 N. 
y. 239; Talbot's Appeal, 2 Walk. 
(Pa.) 67. See also Lamorere v. Cox, 
32 La. Ann. 1045; Plattsburgh Bank 
V. Piatt, 1 Paige (N. Y.) 464. The 
purchaser is not entitled to rents 
accruing between the time of the 
decree and the sale. Whitney v. 
Allen, 21 Cal. 233. A purchaser at 
an irregular foreclosure is charge- 
able for rent. Johnson v. Davis 
(Ala.), 60 So. 799. 



§ 1659 



FOKECLOSUKE SALES UNDEK DEOEEB 



296 



cruing between the day of sale and the delivery of the deed belong to 
the owner of the equity of redemption, and not to the purchaser, as 
they go with the possession, or the right of possession ; and generally 
the purchaser is not entitled to possession, or to the rents, until he has 
made a demand for possession under his deed." If, however, the pur- 
chaser is already in possession under a former purchase at a sale not 
confirmed, he is entitled to the rents from the date of the confirmation 
of the last report of sale." And it is held that the purchaser is en- 
titled to the rents and profits from the time he becomes vested with 
the title and right of possession.'' 

The purchaser is entitled to rents from the tenants notwithstanding 
they have paid the rent in advance to the mortgagor for a period 
extending beyond the time of the delivery of the deed to the purchaser.* 



" Condon v. Marley, 7 Kans. App. 
383, 51 Pac. 924; Lombard Invest- 
ment Co. V. Burton, 5 Kans. App. 
201, 47 Pac. 154; Taliaferro v. Gay, 
78 Ky. 496; Continental Ins. Co. v. 
Reeve, 149 App. Div. 835, 134 N. Y. 
S. 78; Mitchell v. Bartlett, 52 Barb. 
(N. Y.) 319; Astor V. Turner, 11 
Paige (N. Y.) 436, 43 Am. Dec. 766; 
Clason V. Corley, 5 Sandf. (N. Y.) 
447. See also Longley v. Wilk, 171 
111. App. 419; Cram v. Waddell, 167 
111. App. 44. Tbe mortgagor or 
owner of the equity of redemption 
is entitled to rents during the 
period of redemption. Traer v. 
Fowler, 144 Fed. 810; Schaeppi v. 
Bartholomae, 217 111. 105, 75 N. B. 
447, 1 L. R. A. (N. S.) 1079; Innes 
V. Linscheid, 126 111. App. 27. The 
mortgagor can not claim the rents 
and profits during the redemption 
period as against the mortgagee, 
where there is a deficiency. Russell 
V. Bruce, 159 Ind. 563, 65 N. E. 585. 
But after the deficiency Is ex- 
tinguished, the rents accruing until 
expiration of the period of redemp- 
tion belong to the owner of the fee. 
Townsend v. Wilson, 155 111. App. 
303. The mortgagee owes a duty 
to the mortgagor to see that the 
rents mortgaged are applied toward 
extinguishment of the deficiency. 
Townsend v. Wilson, 155 111. App. 
303. The rents and profits during 
the period of redemption belong to 
the owner of the equity of redemp- 
tion and not to the purchaser, when 



there is no deficiency decree. Stan- 
dish v. Musgrove, 223 111. 500, 79 
N. B. 161. On a resale, the court 
should order an accounting of rents 
and profits accruing between the 
two sales. Las Vegas R. &c. Co. v. 
Trust Co., 17 N. Hex. 286, 126 Pac. 
1009. See ante § 1120. 

« Taliaferro v. Gay, 78 Ky. 496; 
Heidelbach v. Slader, 1 Handy 456, 
12 Ohio Dec. 234. A senior mort- 
gagee in possession as purchaser at 
a foreclosure sale can not be held 
accountable for rents and profits 
before an offer to redeem is made by 
a junior incumbrancer who was not 
a party to the foreclosure. Longino 
v. Ball-Warren Com. Co., 84 Ark. 
521, 106 S. W. 682. 

' Brownfield v. Weieht, 9 Ind. 394; 
Dunton v. Sharpe (Miss.), 11 So. 
168; West v. Herrod, 1 Pa. Cas. 
330, 2 Atl. 871; Page v. Street, 
Speers Eq. (S. Car.) 159; Merz v. 
Mehner, 67 Wash. 135, 120 Pac. 893. 
See also Kaston v. Paxton, 46 Ore. 
308, 80 Pac. 209, 114 Am. St. 871. 

* Harris v. Foster, 97 Cal. 292, 32 
Pac. 246, 33 Am. St. 187; Walker 
V. McCusker, 71 Cal. 594, 12 Pac. 
723; McDevitt y. Sullivan, 8 Cal. 
592; Patton v. Varga, 75 Iowa 368, 
39 N. W. 647; Hatch v. Sykes, 64 
Miss. 307, 1 So. 248; Clement v. 
Shipley 2 N. Dak. 430, 51 N. W. 
414; United States Mtg. Co. v. 
Willis, 41 Ore. 481, 69 Pac. 266; 
Byers v. Rothschild, 11 Wash. 296, 
39 Pac. 688. 



297 DEED AND TITLE CONVEYED § 1661 

Eents payable in advance, and collected in advance by a receiver ap- 
pointed in the action, for a period extending beyond the date of de- 
livery of the deed to the purchaser at the foreclosure sale, may be ap- 
portioned to such purchaser.^ One who has purchased the mortgaged 
property at a foreclosure sale under a junior mortgage, and has re- 
ceived the deed, is entitled to the rents as against a prior mortgagee 
who has bought the premises at a sale under his mortgage, but the 
year for redemption has not expired, although he holds an assignment 
from the mortgagor of all rents due or to become due.^° The senior 
mortgagee acquired no rights to the rents other than those the mort- 
gagor had, and these rights were cut off by the passing of the title 
under the first foreclosure. 

By statute the judgment debtor not redeeming may be made liable 
to the purchaser for the rent of the premises, or for use and occupation 
of the same after the sale;^^ or the purchaser may be entitled to re- 
ceive the rents of the property, or the value of the use and occupation. ^^ 

§ 1660. Mortgagee purchasing. — When a mortgagee purchases at 
a sale of the premises under a decree of court, no deed from the 
trustee appointed to make the sale is requisite to invest him with the 
legal title. The decree of sale does not of course operate as a con- 
veyance of the legal title, but the purchaser, though a stranger, becomes 
the substantial owner of the property from the moment the sale is 
ratified. He is entitled to possession and no one can eject him. But 
when the mortgagee purchases the title, according to the doctrine of 
the common law the legal title is already in him, and the sale confirms 
him in the possession of the property; and without a deed from the 
trustee he can maintain ejectment for the property.^* The mort- 
gagee purchasing may be entitled to rents and profits of the estate prior 
to or pending foreclosure where he has caused the sequestration of such 
rents by procuring the appointment of a receiver.^* 

§ 1661. Eights under certificate of purchase — ^Ejectment. — The 

purchaser has no legal title until the time allowed for redemption has 

» Cowen V. Arnold, 12 N. Y. S. 601. Cusker, 71 Cal. 594, 12 Pac. 723; 

" Patton V. Varga, 75 Iowa 368, Page v. Rogers, 31 Cal. 293. 
39 N. W. 647. "'Lannay v. Wilson, 30 Md. 536. 

"As in Indiana: 2 Rev. Stat. See post §§ 1892, 1893. 
1876, p. 720; Burns' Am. Stat. 1914, "Ray v. Henderson, 210 111. 305, 

§ 782; Gale v. Parks, 58 Ind. 117; 71 N. E. 579; Syracuse City Bank 

Clements v. Robinson, 54 Ind. 599. v. Tallman, 31 Barb. (N. Y.) 201. 

"As in California: Code of Civ. See also Marshall &c. Bank v. Cady, 

Proc. 1906, § 707; Walker v. Mc- 76 Minn. 112, 78 N. W. 978. 



§ 1663 FOEECLOSUEE SALES UNDEE DECEEE 298 

expired.^^ The certificate of sale is not a deed and does not pass title 
to the land itself, but it supersedes the mortgage and is a superior 
lien.^° The purchaser can not maintain ejectment or other possessory 
action, on his certificate of purchase.^ ^ He is not entitled to posses- 
sion until a deed has been executed to him by the ofiicer selling.^' 
He acquires only a lien; no new title vests till the period of redemp- 
tion has passed. His deed will relate back, it is true, to the beginning 
of his lien, in order to cut off intervening incumbrances; but it will 
not carry back the absolute divestiture of title, as is evident from the 
fact that neither judgment debtor nor mortgagor can be called to 
accounts for rents and profits. His title becomes absolute only when 
his right to a deed accrues. The mortgagor still has the estate of a 
mortgagor, with this qualification, that the amount and time of re- 
demption have become absolutely fixed by the decree of sale, and his 
estate will be absolutely divested if he fails to redeem within the 
allotted time.^» 

But the mortgagor, though entitled to the possession until the period 
of redemption has expired, is liable for any injury he may do to the 
premises by cutting and carrying away growing timber.^" He might 
be restrained from committing waste by injunction.''^ 

§ 1662. Sale unaffected by subsequent appeal. — An appeal does not 
affect a sale previously made. The judgment of the court being con- 
clusive so long as it stands unreversed and without appeal, a sale made 
under it before any appeal is taken and the execution of the judgment 

^ Lightcap V. Bradley, 186 111. 510, " LigMcap v. Bradley, 186 111. 510, 

532, 58 N. B. 221; Eockwell v. Ser- 58 N. E. 221; Sanders v. McDonald, 

vant, 63 111. 424; Stephens V. Illinois 63 Md. 503; Blanco v. Foote, 32 

Mut. Ins. Co., 43 111. 327; Delahay Barb. (N. Y.) 535; Semple v. 

V. McConnell, 5 111. 156. British Columbia Bank, Fed. Cas. 

"Von Arx v. Boone, 193 Fed. 612, No. 12659, 5 Sawy. (U. S.) 88. See 

113 C. C. A. 480; Morse v. Rochester also Jouet v. Mortimer, 29 La. Ann. 

Loan &c. Co., 74 111. App. 326; Shobe 206; Bickel v. Wessinger, 58 Ore. 

v. Luff, 66 111. App. 414; Van Camp 98, 113 Pac. 34. 

V. Weber, 27 S. Dak. 276, 130 N. W. "O'Brian v. Fry, 82 111. 87, 274; 

591; Farr v. Semmler, 24 S. Dak. Bennett v. Matson, 41 111. 332. 

290, 123 N. "W. 835. The purchaser's >» Lightcap v. Bradley, 186 111. 510, 

rights under such a certificate are 532, 58 N. E. 291; Stephens v. Illi- 

property rights which are trans- nois Mut. F. Ins. Co., 43 111. 327; 

ferable by assignment. Brueschke Johnson v. Baker, 38 111. 98, 87 Am. 

T. Wright, 166 111. 83, 46 N. E. 813, Dec. 293; Sweezy v. Chandler, 11 

57 Am. St. 125. The sheriff who 111. 445. 

conducted the foreclosure sale may =» Stout v. Keyes, 2 Dougl. (Mich.) 

afterward take an assignment of 184, 43 Am. Dec. 465. 

the certificate. Baker v. Edwards, "^ Phoenix v. Clark, 6 N. J. Eq. 

156 Ind. 53, 59 N. E. 174. 447. See ante §§ 684-698. 



299 DELIVERY OF POSSESSION § 1662 

stayed is not affected by any appeal afterward taken, though that part 
,of the decree directing the sale to be made by a referee, instead of the 
sheriff, be set aside as erroneous.^^ "Although the judgment or decree 
may be reversed, yet all rights acquired at a judicial sale while the 
decree or judgment were in full force, and which they authorized, will 
be protected. It is sufficient for the buyer to know that the court had 
jurisdiction and exercised it, and that the order, on the faith of which 
he purchased, was made, and authorized the sale."^' 

The rule is the same although the purchaser was one of the parties 
to the suit;^* or even if he had notice at the time of the sale that an 
effort would be made to obtain a reversal of the decree.^' The law does 
not require a purchaser to inspect the record and to see that it is free 
from error. All that is required of him is to see that there is a sub- 
sisting judgment by a court having jurisdiction of the case. "If such 
was not the rule, no one would become a purchaser at a judicial sale, 
and all competition would cease, and plaintiffs would become pur- 
chasers at their own price."^" 

An order of confirmation is in its nature so far final that a pur- 
chaser from the party to whom a deed has regularly issued, pursuant 
to such order, is not bound by a subsequent revocation thereof upon 
proceedings commenced after he has acquired title.^^ 

VIII. Delivery of Possession to Purchaser 

Section Section 

1663. Possession delivered to pur- 1665. Possession under paramount 

chaser. title — Wife's homestead 

1663a. Writ of assistance. right. 

1664. Possession as against persons 1666. Payment and performance by 

entering pending suit. purchaser prerequisite. 

1667. Summary proceedings In ad- 
dition to other remedies. 



=" Buckmaster v. Jackson, 4 111. nardello, 1 Wall. (TJ. S.) 627, 17 L. 

104; Evans v. Kahr, 60 Kans. 719, ed. 692; Bank of U. S. v. Voorhees, 

725, 57 Pac. 950, 58 Pac. 467; Bailey 1 McL. (U. S.) 221, Fed. Cas. No. 

V. Fanning Orphan School, 12 Ky. 939. 

L. 644, 14 S. W. 908; Storm v. =^Per Justice Davis, in Gray v. 

Smith, 43 Miss. 497; Runge v. Brignardello, 1 Wall. (U. S.) 627, 

Brown, 29 Nebr. 116, 122, 45 N. W. 634, 17 L. ed. 693. See also Bank 

271; Brevoort v. Brevoort, 70 N. Y. v. Voorhees, 1 McLean (N. Y.) 221. 

136; De Forest v. Farley, 62 N. Y. " Splahn v. Gillespie, 48 Ind. 397; 

628; Blakeley v. Calder, 15 N. Y. Gossom v. Donaldson, 18 B. Mon. 

617; Holden v. Sackett, 12 Abb. Pr. (Ky.) 230, 68 Am. Dec. 723; Hening 

(N. Y.) 473; Breese v. Bange, 2 E. v. Punnett, 4 Daly (N. Y.) 543. 

D. Smith (N. Y.) 474; Chamblee v. == Irwin v. Jeffers, 3 Ohio St. 389. 
Broughton, 120 N. Car. 170, 27 S. =» Fergus v. Woodworth, 44 111. 

E. Ill; Smith v. Dixon, 27 Ohio St. 374, 384. 

471; Armstrong v. Humphreys, 5 S. " Hollister v. Mann, 40 Nebr. 572, 

Car. 128. See also Gray v. Brig- 58 N. W. 1126. 



§ 1663 



FORECLOSURE SALES UNDER DECREE 



300 



§ 1663. Possession delivered to purcliaser. — It has long been the 
practice of courts of chancery in England, adopted also in this country, 
wherever a sale and conveyance of real estate has been decreed, to 
compel the person in possession of the property to surrender it to the 
purchaser, by an order, or by injunction, or by a writ of assistance. 
Lord Hardwicke said that this practice had its origin in the reign of 
James I;^' but Mr. Eden says that this statement is a mistake, as 
many precedents for injunctions to deliver possession after a decree, 
and a commission or writ of assistance to the sheriff, are in the printed 
reports as early as the reign of Queen Elizabeth, and are also found 
in a manuscript book of orders in the time of Henry VIII, Edward 
VI, and Mary.^* But whenever the practice was begun, it has long 
been fully established both in England and in this country,'" and is 
applied to sales under decrees in foreclosure suits. Accordingly, after 
a sale has been made under a decree in a foreclosure suit, the court has 
power to give possession to the purchaser, though the delivery of pos- 
session is not made part of the decree. He is not driven to an action 
of ejectment at law to obtain possession.'^ The power of the court to 

"Roberdeau v. Rous, 1 Atk. 543; 
Penn v. Baltimore, 1 Ves. Sen. 444. 

=» Eden on Injunctions, 261, Water- 
man's ed., 2d vol., 425. 

" Dove V. Dove, 2 Dick. 617, 1 Bro. 
Ch. 375; Huguenin v. Basely, 15 
Ves. 180; Dorsey v. Campbell, 1 
Bland (Md.) 356, 363; Garretson v. 
Cole, 1 Har. & John. (Md.) 370, 387; 
Buffum's case, 13 N. H. 14. 

"Creighton v. Paine, 2 Ala. 138; 
Bright V. Pennywit, 21 Ark. 130; 
Hibernia Sav. &c. Soc. v. Lewis, 117 
Cal. 577, 47 Pac. 602; Kirsch v. 
Kirsch, 113 Cal. 56, 45 Pac. 164; 
Horn V. Volcano Water Co., 18 Cal. 
141, 73 Am. Dec. 569; Skinner v. 
Beatty, 16 Cal. 156; Lambert v. Liv- 
ingston, 131 111. 161, 23 N. B. 352; 
Jackson v. Warren, 32 111. 331; Will- 
iams V. Waldo, 4 111. 264; Trabue v. 
Ingles, 6 B. Mon. (Ky.) 82; Schenck 
v. Conover, 13 N. J. Eq. 220, 78 Am. 
Dec. 95; Bolles v. Duff, 43 N. Y. 469; 
Valentine v. Teller, Hopk. (N. Y.) 
422; Ludlow v. Lansing, Hopk. (N. 
Y.) 231; Kershaw v. Thompson, 4 
Johns. Ch. (N. Y.) 609; Van Hook 
V. Throckmorton, 8 Paige (N. Y.) 
33; Frelinghuysen v. Golden, 4 
Paige (N. Y.) 204; Suffern v. John- 
son, 1 Paige (N. Y.) 450, 19 Am. 
Dec. 440; McGown v. Wilkins, 1 



Paige (N. Y.) 120; Hald v. Day, !6 
Ore. 189, 59 Pac. 189; Dyer v. Kop- 
per, 59 Vt. 477, 9 Atl. 4, 59 Am. Rep. 
742. See also Phillips v. Birming- 
ham Industrial Co., 171 Ala. 445, 54 
So. 603; Harden v. Collins, 138 Ala. 
399, 35 So. 357, 100 Am. St. 42 (de- 
mand for possession). 

Chancellor Kent, in Kershaw v. 
Thompson, 4 Johns. Ch. (N. Y.) 
609, fully examines the question of 
the power of a court of equity to give 
possession of property sold under its 
decree, and, in his luminous opinion, 
says: "It does not appear to consist 
with sound principle that the court 
which has exclusive authority to 
foreclose the equity of redemption 
of a mortgagor, and can call all the 
parties in interest before it and de- 
cree a sale of the mortgaged prem- 
ises, should not be able even to put 
the purchaser into possession against 
one of the very parties to the suit, 
and who is bound by the decree. 
When the court has obtained lawful 
jurisdiction of a case, and has in- 
vestigated and decided it upon its 
merits, it is not sufficient for the 
ends of justice merely to declare 
the right without affording the rem- 
edy. If it was to be understood 



301 



DELIVERY OF POSSESSION 



§ 1663 



issue a process and place the purchaser in possession, is said to rest 
upon the ground that it has power to enforce its own decrees and thus 
avoid circuitous actions and vexatious litigation.^^ A mortgagee who 
enters into possession peacably, as purchaser under foreclosure, can not 
be dispossessed while the mortgage remains unsatisfied.^' 

But if the person in possession was not a party to the suit, and is 
a mere stranger who entered into possession before the suit was oegun, 
he can not be turned out of possession by an execution on the decree.'* 
Had he come into possession pendente lite, he would be bound by the 



that, after a decree and sale of mort- 
gaged premises, the mortgagor, or 
other party to the suit, or perhaps 
those who have been let into the 
possession by the mortgagor pen- 
dente lite, could withhold the pos- 
session in defiance of the authority 
of this court, and compel the pur- 
chaser to resort to a court of law, 
I apprehend that the delay and ex- 
pense and inconvenience of such 
a course of proceeding would greatly 
impair the value and diminish the 
results of sales under a decree. 
* * * The distribution of power 
among the courts would be injudi- 
cious, and the administration of 
justice exceedingly defective, and 
chargeable with much useless delay 
and expense, if it were necessary to 
resort, in the first instance, to a 
court of equity, and afterward to 
a court of law, to obtain a perfect 
foreclosure of a mortgage. It 
seems to be absurd to require the 
assistance of two distinct and sep- 
arate jurisdictions for one and the 
same remedy, viz., the foreclosure 
and possession of the forfeited 
pledge. But this does not, upon due 
examination, appear to be the case; 
and it may be safely laid down as a 
general rule, that the power to 
apply the remedy is coextensive 
with the jurisdiction over the sub- 
ject-matter." 

In New Jersey the practice has 
been adopted; and the propriety of 
it, and the power of the court to 
apply it, are fully established in the 
case of Schenck v. Conover, 13 N. J. 
Eq. 220, 78 Am. Dec. 95; Melick v. 
Pidcock, 44 N. J. Eq. 525. 

In New York it is provided by 
statute that, where any person shall 



continue in possession of any real 
estate sold pursuant to the fore- 
closure of a mortgage, possession 
may be recovered by summary pro- 
ceedings. 2 Bliss Ann. Code, § 1675. 

=^ Ludlow V. Lansing, Hopk. Ch. 
(N. y.) 231; Jones v. Hooper, 50 
Miss. 510. The mortgage must have 
been regularly foreclosed, in order 
to entitle the purchaser to maintain 
an action for possession. New Eng- 
land Mut. Life Ins. Co. v. Wing, 191 
Mass. 192, 77 N. E. 376. And, in 
Florida, it is essential that the de- 
cree shall have been signed and re- 
corded upon the minutes of the 
court, before issuance of a writ of 
assistance. Wilmott v. Equitable 
Bldg. &c. Assn., 44 Fla. 815, 33 So. 
4*7. 

''Gillett V. Romig, 17 Okla. 324, 
87 Pac. 325. Where the mortgagee 
has received a master's deed upon 
foreclosure, and been given posses- 
sion by the mortgagor, the mort- 
gagor's possession thereafter taken 
and retained is illegal and without 
color of right. Johnson v. Anna 
Bldg. &c. Assn., 126 111. App. 592. 

"Thompson v. Smith, 1 Dill. (U. 
S.) 458; Terrell v. Allison, 21 Wall. 
(U. S.) 289, 22 L. ed. 634; Comer v. 
Felton, 61 Fed. 731, 10 C. C. A. 28; 
Anderson v. Thompson, 3 Ariz. 62, 
20 Pac. 803; Paine v. Root, 121 111. 
77, 13 N. E. 541; Benhard v. Dar- 
row. Walker (Mich.) 519; Meiggs 
V. Willis, 8 N. Y. Civ. Proc. 125; 
Boynton v. Jackway, 10 Paige Ch. 
(N. Y.) 307; Van Hook v. Throck- 
morton, 8 Paige Ch. (N. Y.) 33; 
Frelinghuysen v. Golden, 4 Paige Ch. 
(N. Y.) 204; Exum v. Baker, 115 
N. Car. 242, 20 S. E. 448, 44 Am. St. 
449. 



§ 1663a 



FOItECLOSDRE SALES UNDEE DECREE 



302 



decree in the same manner as the defendant is.''' So long as the 
owner of the premises is in possession, and has the right to redeem 
Tinder a prior mortgage, a purchaser under a foreclosure sale of a 
subsequent mortgage can not recover possession from him. He has 
the legal right to retain possession until such equity has been foreclosed 
and sold under the prior mortgage ; and it does not matter that he is 
barred by the statute of limitations from bringing his suit to re- 
deem it.'" 

§ 1663a. Writ of assistance. — The remedy for obtaining possession, 
when this is wrongfully withheld from the purchaser, is an order of 
court, which, if. not obeyed, may be followed by an injunction, or if 
need be by a writ of assistance."' If the order for the delivery of 
possession be not included in the decree, a special order may be entered ; 



'=Herr v. Sullivan, 26 Colo. 133, 
56 Pac. 175; Kessinger v. Whlttaker, 
82 111. 22. 

""Wells V. Pierce, 3 Keyes (N. Y.) 
102. See also Hibernia Sav. &c. 
Society v. Brittan, 20 Cal. App. 531, 
129 Pac. 797; Standish v. Musgrove, 
223 111. 500, 79 N. B. 161; Hartman 
Mfg. Co. V. Luse, 121 Iowa 492, 96 
N. W. 972. See also Clark v. Eltinge, 
38 "Wash. 376, 80 Pac. 556. Gener- 
ally, the right of redemption and 
the right of possession are separate 
and independent rights, and a sale 
of one does not of itself carry the 
other. Hartman Mfg. Co. v. Luse, 
121 Iowa 492, 96 N. "W. 972. 

"Montgomery v. Tutt, 11 Cal. 
190; Herr v. Sullivan, 26 Colo. 133, 
56 Pac. 175; Gorton v. Paine, 18 
Fla. 117; O'Brian v. Fry, 82 111. 87; 
Aldrich v. Sharp, 4 111. 261; Bird v. 
Belz, 33 Kans. 391, 6 Pac. 627; Ker- 
shaw v. Thompson, 4 Johns. Ch. (N. 
Y.) 609; Van Hook v. Throckmor- 
ton, 8 Paige (N. Y.) 33; Freling- 
huysen v. Colden, 4 Paige (N. Y.) 
204; Commonwealth Mtg. Co. v. De 
Waltoff, 135 App. Div. 33, 119 N. Y. 
S. 781; Trenholm v. Wilson, 13 S. 
Car. 174. 

In Alabama an appeal from the 
order directing a writ of assistance 
to issue may be taken by the tenant 
against the purchaser, though a 
writ of error will also lie. Creigh- 
ton V. Planters' &c. Bank, 3 Ala. 
156. By statute, in Alabama, a 
written demand for possession is 



necessary, and a refusal of an oral 
demand does not waive the require- 
ment of a written demand. Hutch- 
ison V. Flowers, 175 Ala. 651, 57 
So. 719. The purchaser's right to 
possession will not be determined 
under a writ of assistance, after he 
has been ousted under a judgment 
of forcible entry and detainer. 
Leach v. Rosebrook, 167 Ala. 482, 
52 So. 521. 

In South Carolina, under the 
Code, the remedy is an order of the 
court, and a writ of habere facias 
possessionem is not necessary or 
proper. Armstrong v. Humphreys, 
5 S. Car. 128. 

The New York Code of Civil Pro- 
cedure, § 1675, provides that where 
a judgment in an action relating to 
real property allots to any person 
a distinct parcel of land, or con- 
tains a direction for the sale of real 
property, or confirms such an allot- 
ment or sale, it may also, except 
where it is expressly prescribed 
that the judgment may be enforced 
by execution, direct the delivery of 
the possession of the property to 
the person entitled thereto. If a 
party or his representative, or suc- 
cessor, who is bound by the judg- 
ment, withholds possession from a 
person entitled thereto, the court, 
besides punishing the disobedience 
as a contempt, may require the 
sheriff to put that person into pos- 
session. 



303 



DELIVERY OF POSSESSION 



§ 1663a 



but the writ of assistance may follow after a refusal to obey the order.^^ 
A writ of assistance issuing from a court of equity, is an appropriate 
process to place a purchaser of mortgaged premises in possession under 
J. decree of sale, after he has received his deed, where possession is 
rlthheld by parties who are bound by the decree.^" 

A motion and order for a writ of assistance may be made at the time 
jf the confirmation of the sale, or after, without actual notice to the 
defendant of the motion.*" It will be granted also at the instance of 
the purchaser, or of the complainant; and it may be issued not only 
against the defendant, but as well against any person in possession 
under him, or holding by any title not paramount to the mortgage,*^ 
who was a party to the foreclosure suit.*^ If a tenant is in possess- 
sion, the deed should be shown him by the purchaser when he makes 
demand of possession, and, upon his refusal to comply, notice of the 
application to court should be given.*^ 

As against a party to the suit the writ will be granted upon 
a motion ex parte, but it would seem that one who has come into 



^^O'Brian v. Fry, 82 111. 87; Kes- 
slnger v. Whittaker, 82 111. 22; 
Oglesby v. Pearce, 68 111. 220. 

»» Terrell v. Allison, 21 Wall. (U. 
S.) 289, 22 L. ed. 634; Creighton v. 
Paine, 2 Ala. 158; Anderson v. 
Thompson, 3 Ariz. 62, 20 Pac. 803; 
Taylor v. Ellenberger, 134 Cal. 31, 
66 Pac. 4; Hefner v. Urton, 71 Cal. 
479, 12 Pac. 486; Prisbie v. Fogarty, 
34 Cal. 11; Skinner v. Beatty, 16 
Cal. 156; Montgomery v. Tutt, 11 
Cal. 190; Wilmott v. Equitable Bldg. 
&c. Assn., 44 Fla. 815, 33 So. 447; 
McLane v. Piaggio, 24 Fla. 71, 3 So. 
823; Harding v. Harker, 17 Idaho 
341, 105 Pac. 788; Vahle v. Bracken- 
seik, 145 111. 231, 34 N. E. 524; Lam- 
bert V. Livingston, 131 111. 161, 23 
N. E. 352; Jackson v. Warren, 32 
111. 331; Higgins v. Peterson, 64 111. 
App. 256; Emerick v. Miller, 159 
Ind. 317, 64 N. E. 28; Watkins v. 
Jerman, 36 Kans. 464, 13 Pac. 798; 
Howard v. Bond, 42 Mich. 131, 3 N. 
W. 289; Hart v. Lindsay, Walk. Ch. 
(Mich.) 144; Magruder v. Kittle, 2 
Nebr. (UnofC.) 418, 89 N. W. 272; 
Strong v. Smith, 68 N. J. Eq. 686, 
60 Atl. 66, 63 Atl. 493; Beatty v. 
De Forest, 27 N. J. Bq. 482; Blau- 
velt V. Smith, 22 N. J. Bq. 31; See 
V. O'Rourke, 10 N. J. L. J. 340; Val- 



entine V. Teller, Hopk. (N. Y.) 422; 
Knight V. Houghtalling, 94 N. Car. 
408; Voigtlander v. Brotze, 59 Tex. 
286; Prahl v. Rogers, 127 Wis. 353, 
106 N. W. 287; Meehan v. Blodgett, 
91 Wis. 63, 64 N. W. 429; Goit v. 
Dickerman, 20 Wis. 630; Loomis v. 
Wheeler, 18 Wis. 524. 

"Coor V. Smith, 101 N. Car. 261, 
11 S. E. 1089; Meehan v. Blodgett, 
91 Wis. 63, 64 N. W. 429; Woehler 
V. Endter, 46 Wis. 301, 1 N. W. 329, 
50 N. W. 1099; Loomis v. Wheeler, 
18 Wis. 524. 

*' Watkins v. Jerman, 36 Kans. 
464, 13 Pac. 798; Bird v. Belz, 33 
Kans. 391, 6 Pac. 627; Strong v. 
Smith, 68 N. J. Eq. 686, 63 Atl. 493; 
Schenck v. Conover, 13 N. J. Eq. 
220, 78 Am. Dec. 95. See also Board 
of Home Missions of Presbyterian 
Church V. Davis, 70 N. J. Eq. 577, 
62 Atl. 447 (writ not available 
against holder of paramount title). 
The writ may issue against the ten- 
ant of the former owner. McCagg 
V. Touhy, 150 111. App. 15. 

"^Anderson v. Thompson, 3 Ariz. 
62, 20 Pac. 803; Gerald v. Gerald, 31 
S. Car. 171, 9 S. B. 792. 

«Fackler v. Worth, 13 N. J. Eq. 
395; New York Life Ins. & Trust Co. 
V. Rand, 8 How. Pr. (N. Y.) 35, 39. 



§ 1664 FOEECLOSUKE SALES UNDEK DECREE 304 

possession, pendente lite, would be entitled to notice of the motion.** 
And before the writ should issue to a purchaser, as against one claim- 
ing to be the owner or claiming the right of possession, notice should 
be given of the application for the writ.*° The writ of assistance is 
the only process necessary for giving possession, and should issue in 
the first instance without a prior injunction, upon proof of the service 
of the order to deliver possession and of refusal to comply with it.*° 
The vendee of the purchaser at the sale is entitled to this remedy 
against the mortgagor in possession;*^ and the assignee of the pur- 
chaser's bid may also have it.*^ A bill to enforce a former decree by 
means of a writ of assistance, is not a new suit but an incident to the 
original suit.*" And objections to the foreclosure decree will not be 
heard upon application for a writ of assistance.^" 

§ 1664. Possession as against persons entering pending suit. — Pos- 
session will be given to the purchaser not only as against all the 
parties to the suit, but also as against any persons who have come 
into possession under them pending the suit.^^ This remedy is not 
allowed as against a lessee of the mortgagor or other person whose 
rights attached prior to the sale, and who was not made a party to 
the foreclosure proceedings."^ But possession acquired by any one 
after the purchaser has received his deed and conveyed the premises 

"Benhard v. Darrow, Walk. Ch. "Lancaster v. Snow, 184 111. 534, 

(Mich.) 519; Lynde v. O'Donnell, 12 56 N. E. 813. 

Abb. Pr. (N. Y.) 286, 21 How. Pr. "Knight v. Hodge, 62 Fla. 516, 56 

34; Commonwealth, v. Ragsdale, 2 So. 942. 

Hen. & Mun. (Va.) 8. See also Ray "Kesslnger v. Whittaker, 82 111. 

v. Trice, 49 Fla. 375, 38 So. 367; 22; Bell v. Birdsall, 19 How. Pr. (N. 

Runyan v. Snyder, 45 Colo. 156, 100 Y.) 491; Strong v. Smith, 68 N. J. 

Pac, 420 (no notice necessary to Eq. 686, 63 Atl. 493. See also Finger 

trespassing grantor) ; Prahl v. v. McCaughey, 119 Cal. 59, 51 Pac. 13. 

Rogers, 127 Wis. 353, 106 N. W. 287 If, however, the interest of the 

(giving of notice in discretion of mortgagor which is the subject of 

court). foreclosure and sale is merely the 

* Ray v. Trice, 49 Fla. 375, 38 So. net income in land, without any in- 

367. terest in or title to the land itself, 

■"" Ballinger v. Waller, 9 B. Mon. the title and the right of possession 

(Ky.) 67; Hart v. Lindsay, Walk, being vested in trustees, a direction 

Ch. (Mich.) 144; Schenck v. Con- to put the purchaser in possession 

over, 13 N. J. Eq. 395, 78 Am. Dec. is not proper. There should be, in 

95; Valentine v. Teller, Hopk. (N. such case, an order that the trustee 

Y.) 422; 2 Daniell's Ch. Pr. 1280. apply the net income to the pay- 

"' McLane v. Piaggio, 24 Fla. 71, ment of the mortgage debt. Wilson 

3 So. 823; Ketchum v. Robinson, 48 v. Russ, 17 Fla. 691. 

Mich. 618, 12 N. W. 877. ""Wiley v. Carlisle, 93 Ala. 237, 9 

^^Keil V. West, 21 Fla. 508; Motz So. 288; Baruch v. Moore, 21 Wash. 

V. Henry, 8 Kans. App. 416, 54 Pac. 628, 59 Pac. 487; State v. Superior 

796; Ekings v. Murray, 29 N. J. Eq. Court, 21 Wash. 469, 58 Pac. 572. 



305 DELIVEEY OF POSSESSION § 1665 

to another will not be interfered with. Neither is one who enters fifteen 
months after the sale deemed as having entered pending the suit, and 
therefore he can not be removed by a writ of assistance, though he 
entered under a party to the suit.^^ Though one enter pending the 
suit, if he did not enter under a party to the suit, or under any who 
had derived title to the premises, or had gone into possession of them 
under a party pending the suit, he can not be turned out of possession 
under the decree ;=* as, for instance, if he purchased after the com- 
mencement of the suit, at a sale under a judgment against the mort- 
gagor recovered before that time.°° But one who obtains possession 
after the commencement of the suit, by collusion with the mortgagor, 
though under a claim of tax title, may be turned out, and possession 
given the purchaser.^* 

It has been held that the purchaser must be put in complete and 
actual possession by the sheriff; and that where the purchaser is 
merely put into temporary possession and ousted the same day, such 
execution of the writ is insufficient, the writ being properly executed 
only when the sheriff or his officers have left the purchaser in quiet and 
settled possession.^^ 

§ 1665. Possession under paramount title — ^Wife's homestead right. 

— If the person in possession shows a right paramount to the mort- 
gage, of course the court will not attempt to decide any question of 
legal title, and the possession must then be sought for by proceedings 
at law.°' Such would be the case when the party in possession claims 
under a lease made before the mortgage under which the sale has been 
made.^° And where the party in possession claims the ownership in 

■^ Betts V. Birdsall, 11 Abb. Pr. Baker, 115 N. Car. 242, 20 S. E. 448, 

(N. Y.) 222, 19 How. Pr. 491. 44 Am. St. 449; Ex parte Jenkins, 

"Van Hook v. Throckmorton, 8 48 S. Car. 325, 26 S. E. 686. See 

Paige (N. Y.) 33. also Ricketts v. Cbicago &c. Loan 

"= Frelinghuysen v. Golden, 4 Paige Assn., 67 111. App. 71. A writ of 

(N. Y.) 204. assistance, being in aid of a decree 

™ Brown V. Marzyck, 19 Fla. 840. of a court of equity, is issuable only 

" Newell V. Whigham, 102 N. Y. when the right is clear, and runs 

20, 1 N. Y. St. 673. in aid of a foreclosure decree with 

™ Fay V. Stubenrauch, 2 Cal. App. one in privity with the mortgagor, 

88, 83 Pac. 82; Roach v. Clark, 150 but it does not run against one as- 

Ind. 93, 48 N. E. 796, 65 Am. St. 353 ; serting an independent title. State 

Board of Home Missions of Presby- v. Superior Court of King County, 

terlan Church v. Davis, 70 N. J. Eq. 63 Wash. 312, 115 Pac. 307, Ann. Cas. 

577, 62 Atl. 447; Chadwick v. Island 1913 D, U19. 

Beach Co., 42 N. J. Eq. 602, 8 Atl. '"'Thomas v. De Baum, 14 N. J. 

650; Kirkpatrick v. Corning, 38 N. Eq. 37. "Where there is evidence 

J. Eq. 234; Schenck v. Conover, 13 that the party in possession was en- 

N. J. Eq. 220, 78 Am. Dec. 95; Wade titled thereto for a fixed period, by 

V. Miller, 92 N. J. L. 296; Exum V. payment of rent since the sale, the 

20— Jones Mtg.— Vol. III. 



§ 1666 FOEECLOSUEE SALES UNDER DECREE 306 

fee, and his rights, if any, are unaffected by the foreclosure decree and 
sale, the writ should be refused.^" The title to the property can not 
be litigated on an application for a writ of assistance."^ If the pur- 
chaser allows the mortgagor to remain in possession under an agree- 
ment to redeem, he is after that in possession under this contract, and 
not as defendant in the foreclosure suit; and therefore he can not be 
removed under a writ of assistance."^ The exercise of the power of 
the court to deliver possession in any case rests in the sound discretion 
of the court, and in cases of doubtful right the possession will be left 
to legal adjudication."^ 

Where a wife is a necessary party to a foreclosure suit by reason 
of a prior homestead right, but has not been joined with her husband 
as a defendant, and she is in possession of the mortgaged premises 
with her husband, a purchaser at the foreclosure sale will not be en- 
titled to a writ of assistance against the husband."* But the fact that 
the wife is entitled to one-third of the proceeds arising from the sale 
does not defeat the purchaser's right of possession."^ 

§ 1666. Payment and performance by purchaser prerequisite. — 

"Until the purchaser has complied with the terms of sale,"" and a deed 
has been executed to him by the selling officer, and confirmed by the 
court, he is not entitled to an order of court to be let into possession."' 
And until the purchaser obtains his deed, he has no legal title upon 
which to maintain an action against strangers to the foreclosure suit."' 

Jssue will not be decided on the v. Driggs, 62 App. Div. 213, 70 N. Y. 

application, but must be left to an- S. 947. 

other tribunal. Loomer v. Klieg- "Myers v. Manny, 63 111. 211; 

man (N. J. Eq.), 88 Atl. 834. Bennett v. Matson, 41 111. 332; How- 

~ Urlau V. Ruhe, 73 Nebr. 807, 103 ard v. Bond, 42 Mich. 131, 3 N. W. 

N. W. 670; Board of Home Missions 289; Clason v. Cor ley, 5 Sandf. (N. 

of Presbyterian Church v. Davis, 71 Y.) 447; Meehan v. Blodgett, 91 

N. J. Bq. 788, 65 Atl. 1117. See also Wis. 63, 64 N. W. 429. In Wlscon- 

Long V. Morris, 176 Ala. 371, 58 So. sin, by rule of court (1857), the 

274 (writ refused against one in purchaser was entitled to be let into 

possession under tax deed). possession before confirmation of 

" Fay V. Stubenrauch, 2 Cal. App. the sale. Loomis v. Wheeler, 18 

88, 83 Pac. 82. Wis. 524. 

"'Toll V. Killer, 11 Paige (N. Y.) "=» Semple v. British Columbia 

228. Bank, Fed Cas. No. 12659, 5 Sawy. 

'"McKomb V. Kankey, 1 Bland 88; Lightcap v. Bradley, 186 111. 

(Md.) 363, note c; Thomas v. Be 510, 58 N. E. 221; Sanders v. Mc- 

Baum, 14 N. J. Eq. 37. Donald, 63 Md. 503; Blanco v. Foote, 

"Hefner v. Urton, 71 Cal. 479, 12 32 Barb. (N. Y.) 535. See also 

Pac^- 4S6. Jouet V. Mortimer, 29 La. Ann. 206; 

« Dill V. Vincent, 78 Ind. 321. Bickel v. Wessinger, 58 Ore. 98, 113 

""Armstrong v. Humphreys, 5 S. Pac. 34. But it seems a mortgagee 

Car. 128. See also Union Trust Co. becoming the purchaser may main- 



307 DELIVEEY OP POSSESSION § 1667 

The purchaser is not entitled to a deed until he has paid the whole 
of the purchase-money. Even if the purchaser be a junior mortgagee, 
and is entitled to a portion of the surplus money, he will be required 
to pay in the whole of it, especially if there are other incumbrancers 
who might, perhaps, have claims upon the surplus superior to his.°* 

The purchaser before obtaining a deed can not maintain an action 
of forcible detainer against one in possession ; and a judgment against 
the purchaser in such suit is no bar to an application by him for a writ 
of assistance to put him in possession.'" 

As already noticed a purchaser is not generally entitled to the rents 
until he receives a deed of the property; but after this has been de- 
livered to him, and he has demanded possession under it, he is entitled 
to the accruing rents. ''^ If he is put into possession of the land im- 
mediately upon the sale and before the payment of the purchase- 
money, he is chargeable with interest upon this to the time of pay- 
ment.'^ 

A purchaser may, upon petition pending confirmation of the sale, 
obtain an injunction against the mortgagor restraining him from com- 
mitting waste.'^ 

§ 1667. Summary proceedings in addition to other remedies. — 

These summary proceedings do not preclude remedy by suit at law in 
ejectment,'* or by forcible entry and detainer, under the statutes of 
some states.'^ In such case the plaintiff must in the first place show 
a valid foreclosure.'^ The validity and execution of the mortgage can 

tain such an action, without a deed. Cal. 553, 23 Pac. 691, 20 Pac. 82; 

Monroe v. Stephens, 80 Ky. 155, 3 Savage v. Dooley, 28 Conn. 411, 73 

Ky. L. 668; Attorney-General v. Pur- Am. Dec. 680; Kessinger v. Whit- 

mort, 5 Paige (N. Y.) 620; Nau v. taker, 82 111. 22; Cook v. Wiles, 42 

Brunette, 79 Wis. 664, 48 N. W. 649. Mich. 439, 4 N. W. 169; Titcomb v. 

«" Battershall v. Davis, 23 How. Fonda &c. R. Co., 38 Misc. 630, 78 

Pr. (N. Y.) 383. N. Y. S. 226; Harp v. Blackington, 

"Cochran v. Folger, 116 111. 194, 5 Wright (Ohio) 386. See also Phil- 

N. E. 383. lips v. Industrial Co., 171 Ala. 445, 

"Castleman v. Belt, 2 B. Mon. 54 So. 603; Sahler v. Signer, 37 

(Ky.) 157; Clason v. Corley, 5 Barb. (N. Y.) 329. 
Sandf. (N. Y.) 447. ™ Smith v. Soper, 12 Colo. App. 

"Haven v. Grand June. R. & 264, 55 Pac. 195; Ensley v. Page, 13 

Depot Co., 109 Mass. 88. Colo. App. 452, 59 Pac. 225; Merrin 

"Mutual L. Ins. Co. v. Bigler, 79 v. Lewis, 90 111. 505; Rice v. Brown, 

N. Y. 568. 77 111. 549; Frazier v. Gates, 61 111. 

"Johnson v. Beard, 93 Ala. 96, 9 180; Davis v. Hamilton, 53 111. App. 

So. 535; O'Connor v. McHugh, 89 94; Brackensieck v. Vahle, 48 111. 

Ala. 531, 7 So. 749; Barker v. Bell, App. 312; Lehman v. Whittington, 

37 Ala. 354; Glidden v. Andrews, 10 8 111. App. 374; Cunningham v. 

Ala. 166; Hyde v. Boyle, 105 Cal. Davis, 175 Mass. 213, 56 N. B. 2. 
102, 38 Pac. 643; Trope v. Kerns, 83 " Dwight v. Phillips, 48 Barb. (N. 



§ 1668 



FOEECLOSUEE SALES UNDEE DECEEE 



308 



not, however, be inquired into.'^ The decree in the foreclosure suit, 
and the sale under it, are conclusive if regular ; and therefore a mort- 
gagor can not defend the action on the ground that the premises are 
his homestead; that defense is available only in the foreclosure suit." 
In some states forcible detainer is not considered an appropriate 
remedy, especially if the purchaser has never been in actual posses- 



sion. 



IX. Setting Aside Sale 



1677. 
1678. 



Section 

1668. Sale set aside for fraud — 

Rights of third persona. 

1669. Application for resale hy 

party In interest. 
1669a. Estoppel of party whose mis- 
conduct caused irregularity. 

1670. Inadequacy of price and other 

grounds. 
1670a. Sale set aside at instance of 
mortgagee. 

1671. Resale where mortgagee pur- 

chases — Disaffirmance by 
mortgagor. 

1672. Neglect of officer selling — De- 

fects and irregularities. 

1673. Insufficient grounds for resale 

— Rights of purchaser. 

1674. Laches — Irregularity waived 

by delay. 

§ 1668. Sale set aside for fraud — Rights of third persons. — A sale 
under a decree of foreclosure may be set aside by a bill in equity 
brought for the purpose, when the sale has been fraudulently con- 
ducted to the prejudice of the plaintiff even when he might have a 
remedy by motion in the original suit.^ He then has a legal and ab- 



Section 

1675. Mistake, surprise or accident, 

as ground for resale. 
lG75a. Mistake in quantity or loca- 
tion of land. 

1676. Absence of parties from sale 

— Infants. 
1676a. Insanity of mortgagor at 
time of sale. 
Few bidders. 

Invalid sale equivalent to as- 
signment. 

1679. Second foreclosure and sale — 

Supplemental bill. 

1680. Redemption by satisfaction of 

prior mortgage. 

1681. Effect of setting aside sale — 

Purchaser protected and re- 
imbursed for improvements. 



Y.) 116. See also Robinson v. Caha- 
lan, 91 Ala. 479, 8 So. 415; Heyman 
V. Babcock, 30 Cal. 367. 

"Hayes v. Shattuck, 21 Cal. 51; 
Smith V. Soper, 12 Colo. App. 264, 
55 Pac. 195. 

"Haynes v. Meek, 14 Iowa 320. 

'» Taylor .v. Bell, 129 Ala. 464, 29 
So. 572; Womack v. Powers, 50 Ala. 
5; Necklace v. West, 33 Ark. 682; 
Dowllng V. Hannant, 78 Mich. 115, 
43 N. W. 1044; Ballow v. Motheral, 
5 Baxt. (Tenn.) 600. A purchaser 
at a void foreclosure sale can not 
maintain forcible entry and de- 
tainer against the children of the 
mortgagee in possession. "Way v. 
Scott, 118 Iowa 197, 91 N. W. 1034. 



'Sanger v. Nightingale, 122 U. S. 
176, 30 L. ed. 1105, 7 Sup. Ct. 1109; 
Investment Registry v. Chicago &c. 
R. Co., 212 Fed. 594; McWilliams v. 
Wlthington, 7 Fed. 326; Fix v. Lo- 
ranger, 50 Mich. 199, 15 N. W. 81; 
Long V. McGregor, 65 Miss. 70, 3 So. 
240; Hewitt v. Price, 204 Mo. 31, 102 
S. "W. 647; Strode v. Hoagland, 76 
Nebr. 542, 107 N. W. 754; Tucker v. 
Jackson, 60 N. H. 214; McMurray v. 
McMurray, 66 N. Y. 175; Vander- 
cook V. Cohoes Sav. Inst, 5 Hun (N. 
Y.) 641; Moore v. Moore, 5 N. Y. 
256, affg. 4 Sandf. Ch. 37; French 
V. Kenworthy, 42 Hun 654, 5 N. Y. 
St. 102; Coley v. Tallman, 43 Misc. 
280, 88 N. Y. S. 896; Livingston v. 



309 SETTING ASIDE SALE § 1668 

solute right independent of the discretion of the court.^ A foreclosure 
sale may be set aside for misrepresentation and deceit practiced upon 
the purchaser/ or upon the junior lien creditor,* or for collusion 
between the mortgagee and the purchaser to the injury of the mort- 
gagor,'' or where the sale was fraudulently made for a larger sum 
than the amount due.^ 

General allegations of fraud, on information and belief without any 
statement of specific facts constituting the alleged fraud are insuffi- 
cient.' The burden of proof, on a counterclaim to set aside a fore- 
closure sale for false representations or fraud, is upon the party 
charging the fraud.* 

When the rights of third persons have accrued, some original 
proceeding is necessary in which these rights may be tried in the 
ordinary way ; they can not be adjudicated in a summary manner upon 
motion.* They must in some way be brought into court, and given an 
opportunity to be heard.^" But ordinarily, if there is nothing to pre- 
vent an application in the original suit, an original bill for this pur- 
pose can not be sustained ;^^ and when the proceedings are regular 
and free from fraud, and the party is only equitably entitled to relief, 
his only remedy is by motion in the foreclosure suit, addressed to the 
discretion of the court, to open the biddings or set aside the sale.^^ 
In allowing him to come in, the court may impose such terms as may 
seem proper. This application may be made by any one injured by 

Painter, 28 How. Pr. (N. Y.) 517, 19 'Cain v. Glmon, 36 Ala. 168; 

Abb. Pr. 28; Moore v. Watson, 4 Arnold v. Gaff, 58 Ind. 543; Betson 

Coldw. (Tenn.) 64; Veit v. Meyer, v. State, 47 Ind. 54; Collier v. Field, 

105 "Wis. 530, 81 N. W. 653. See also 1 Mont. 612; Lockwood v. Mitchell, 

Hunter v. Mellen, 127 Ala. 343, 28 19 Ohio 448, 53 Am. Dec. 438; Up- 

So. 468; Curtis v. Dunkirk Sav. &e. church v. Anderson (Tenn.), 52 S. 

Assn., 148 N. Y. S. 860 (fraudulent "W. 917. 

conspiracy to stifle bidding). Fraud 'Alabama &c. R. Co. v. Thomas, 

affecting a sale under foreclosure 86 Miss. 27, 38 So. 770. See also 

does not warrant the court in vacat- Bell v. Thompson, 147 Cal. 689, 82 

ing the decree of foreclosure. Las Pac. 327. 

Vegas R. &c. Co. v. Trust Co. of St. » Hewitt v. Price, 204 Mo. 31, 102 

Louis County, 15 N. Mex. 634, 110 S. W. 647. 

Pac. 856. "Crawford v. Tuller, 35 Mich. 57. 

"Gould V. Mortimer, 26 How. Pr. "Jewett v. Morris, 41 Mich. 689, 

(N. Y.) 167. 3 N. W. 186. 

'Paulett V. Peabody, 3 Nebr. 196. "Brown v. Frost, 10 Paige (N. 

* Gilbert v. Haire, 43 Mich. 283, 5 Y.) 243; Sked v. Sedgley, 36 Ohio 

N. W. 321; Fuller v. Brown, 35 Hun St. 483. 

(N. Y.) 162, See also Garrett v. "McCotter v. Jay, 30 N. Y. 80; 

Moss, 20 111. 549. Smith v. American Life Ins. &c. Co., 

•Cleveland v. Southard, 25 Wis. Clarke (N. Y.) 307; White v. Coul- 

.479. See also Copsey v. Sacramento ter, 1 Hun (N. Y.) 357. 
Bank, 133 Cal. 659, 66 Pac. 204. 



§ 1668 rOEECLOSURE SALES UNDER DECREE 310 

the proceedings under the decree, although he is not a party to the 
suit.^* 

An original suit to set aside a sale by a party to the foreclosure 
suit should only be sanctioned in exceptional cases, where relief can 
not be obtained by a summary application in the foreclosure suit. Or- 
dinarily it is only the court in the foreclosure suit which is com- 
petent to protect all parties interested in the sale, because protection 
for aU can be given only by ordering a resale upon conditions.^* An 
original suit can not be maintained without making parties to the 
action not only the parties to the foreclosure suit, but as well the 
purchaser at the sale which is called in question.^^ 

A purchaser at a foreclosure sale submits himself to the jurisdiction 
of the court in the foreclosure suit as to all matters connected with the 
sale;^" and he moBeover acquires a suflBcient status to enable him to 
apply to that court to vacate a resale of the same property.^' 

The sale may be set aside by an order made upon a motion in the 
original suit, even after the deed has been delivered, either for im- 
propriety in the sale, or for the purpose of letting in a defense to the 
action.^^ This course is clearly proper if the purchaser has made no 
payment, and no certificate of purchase has been filed for record.^* 
The motion for resale, when founded on facts not apparent upon the 
record, should properly be heard and determined upon affidavit.'" 
The purchaser under the sale sought to be set aside should be made 
a party to the bill, or should be notified of the motion made for that 
purpose. Third persons who have bought of the first purchaser 
should in like manner have an opportunity to be heard.^^ 

Allegations of fraud in procuring the mortgage, and allegations of 
the payment of it, will not support an action against the purchaser 
to set aside the foreclosure sale, when no fraud or mala fides on the 
part of the purchaser is alleged.^^ Such questions are necessarily 
involved in the proceedings leading to the judgment, and, whether 

"Gould V. Mortimer, 26 How. Pr. Brown v. Frost, 10 Paige (N. Y.) 

(N. Y.) 167; Brown v. Frost, 10 243. 

Paige (N. Y.) 243; American Ins. "Terbell v. Lee, 40 Fed. 40. 

Co. V. Oalcley, 9 Paige (N. Y.) 259, "Terbell v. Lee, 40 Fed. 40. 

496, 38 Am. Dec. 561; Niclioll v. "Savery v. Sypher, 6 Wall. (U. 

Nicholl, 8 Paige (N. Y.) 349. S.) 157, 18 L. ed. 822. 

" Mutual Life Ins. Co. v. Sturges, '^ Lawrence v. Jarvis, 36 Mich. 

33 N. J. Bq. 328. 281; Crawford v. TuUer, 85 Mich. 

" Harwood v. Cox, 26 111. App. 374. 57. 

"Van Loben Sels v. Bunnell, 131 =»Ruff v. Doty, 26 S. Ca:^. 173, 1 S. 

Cal. 489, 63 Pac. 773. E. 707, 

"Terbell v. Lee, 40 Fed. 40; 



311 SETTINa ASIDE SALE § 1669 

actually raised or not, are eoneluded by the judginent. Praiid in ob- 
taining the mortgage, being properly a defense to foreclosure, is con- 
cluded by the decree f^ but f laud in obtaining the judgment or decree 
is ground for setting aside the sale.^* 

After a confirmation of the sale and final decree, an application 
to set aside the sale, decree of confirmation and final decree, reasons 
founded on irregularities in making the sale are not available, unless 
a sufBcient excuse is shown for failure to present such reasons in op- 
position to the application to confirm the sale.''^ In general it may be 
said that objections to a sale based upon errors in the proceedings or 
in the decree will not be considered.^" After confirmation, a foreclo- 
sure sale will not be set aside, except for fraud, mistake, surprise or 
other cause for which equity would give like relief if the sale had 
been made by the parties in interest.^'' 

§ 1669. Application for resale by party in interest. — An applica- 
tion for a resale can be made only by some one who is either interested 
in the mortgaged premises, or is under personal liability for a de- 
ficiency,^''^ and he must show that his rights have been injured or his 
interests prejudiced by the sale.^^ A sale will not be set aside at 
the instance of one who was not a party to the suit, when he was 
not made a party through his own negligence in not having his deed 
recorded, and his grantor, who appeared by the record to be the owner 

» Evans v. English, 10 Ky. L. 742, 837, 119 N. Y. S. 942. See also 

10 S. W. 626; Allen v. Frawley, 106 Builders' Mtg. Co. v. Berkowitz, 134 

Wis. 636, 82 N. W. 593. See also App. Div. 136, 118 N. Y. S. 804; 

Murphy v. Farmers' &c. Bank, 131 Lacey v. Lacey (Ala.), 29 So. 922 

Cal. 115, 63 Pac. 368. (wife of mortgagor). The party ap- 

'^ McMillan v. Hunnicut, 109 Ga. plying for resale must have some 

699, 35 S. E. 102; Harshey v. Black- Interest in the premises. Pine BlufE 

marr, 20 Iowa 161, 89 Am. Dec. 520. &c. R. Co. v. James, 54 Ark. 81, 15 

=» Marsh v. Sheriff (Md.), 14 Atl. S. W. 15; Glide v. Dwyer, 83 Cal. 

664; Coles v. Yorks, 36 Minn. 388, 477, 23 Pac. 706; Peters v. Guthrie, 

31 N. W. 353; Dodge v. AUis, 27 119 Ind. 44, 20 N. B. 536; Taylor v. 

Minn. 376, 7 N. W. 732; Smith v. Huey, 11 La. Ann. 614; Day v. Lyon, 

Valentine, 19 Minn. 452. 11 N. J. Eq. 331; Lamb v. San 

=» Taylor v. Ellenberger, 134 Cal. Pedro &c. Co., 8 N. Mex. 632, 9 Pac. 

31, 66 Pac. 4; Holland Trust Co. v. 525; Shew v. Call, 110 N. Car. 450, 

Hogan, 17 N. Y. S. 919; Meyer v. 26 S. E. 33, 56 Ahi. St. 768. 
Utah & Pleasant Val. R. Co., 3 Utah =* Clark v. Wolf, 2 Nehr. (Unoff.) 

280 290, 96 N. W. 495; Joned v. Miller, 

^'Nitro- Phosphate Syndicate v. 2 Nebr. (Unoff.) 582. 92 N. W. 201; 

Johnson, 100 Va. 774, 42 S. E. 995; Lester v. Mann, 62 Hun 615. 24 N. 

^'aBodine v. Edwards, 3 Ch. Dec. Y. St. 501, 1 Silv. Sup. 516, 5 N. Y. 

46 2 N Y Leg. Obs. 231; Gould v. S. 513; Kebabian v. Shinkle, 26 R. 

Mortimer 26 How. Pr. (N. Y.) 167; L 505, 59 Atl. 743; Lloyd v. Frank, 

May V. May, 11 Paige (N. Y.) 201; 30 Wis. 306. 
Gruner v. Ruffner, 134 App. Div. 



§ 1669a FOEECLOSUKE SALES UNDEE DECEEE 313 

of the property when the suit was brought, was properly made a de- 
fendant.^" If the applicant be a subsequent mortgagee who holds his 
mortgage only as collateral security for the debt of a third person, he 
should on equitable grounds be required to exhaust his remedy against 
the principal debtor before he can have the sale set aside.*" The pur- 
chaser at a foreclosure sale is of course a necessary party to a proceed- 
ing to set aside the sale.^"^ Application must be made without delay; 
though relief has been granted even after two or three years, when 
the purchaser hsid not parted with his title, and there was a reasonable 
excuse for the delay.'^ 

A wife having only an inchoate right of dower in the premises 
can not sustain an application made in the lifetime of her husband 
to set aside a foreclosure sale, or the decree of sale, on the ground 
that she was not made a party to the suit, or was not properly served 
with summons.'* If, instead of applying for a resale, the party inter- 
ested agrees with the purchaser for a future redemption of the prem- 
ises, and for the possession in the meantime, the court will not after- 
ward set aside the sale.** 

If no one applies for a resale, and all parties are content that the 
sale shall stand, and justice can be done without it, the court will not 
order a resale of its own motion.*" 

§ 1669a. Estoppel of party whose misconduct caused irregularity. 

— A sale will not be set aside at the instance of a pajty whose own 
misconduct has been the occasion of an irregularity. Thus, where 
a notice of the sale was published to occur on March 9, but as published 
in certain issues of the paper the figure 9 was turned upside down, 
so that it made it appear that the day of sale was March 6, it was 
found that the alteration in the notice was caused or procured to be 
made by the mortgagor, whose property was advertised to be sold, 

'"LeonarcJ v. N. Y. Bay Co., 28 N. But see Wood v. Kroll, 43 Hun 328, 

J. Eq. 192. See ante § 1412. 4 N. Y. St. 622. 

" Soule V. Ludlow, 3 Hun (N. Y.) "^ Fergus v. Woodworth, 44 111. 

503, 6 Thomp. & C. 24; Depew v. 374; Nlcholl v. NichoU, 8 Paige (N. 

Dewey, 2 T. & C. 515, 46 How. Pr. Y.) 349. See also Muckenfuss v. 

(N. Y.) 441. Fiahburne, 68 S. Car. 41, 46 S. B. 

» Slossom V. Milwaukee &c. R. Co., 537. See post S 1674. 

1 "Wall. (U. S.) 655, 17 L. ed. 673; »» White v. Coulter, 1 Hun (N. Y.) 

Terbell v. Lee, 40 Fed. 40; Macfar- 357. But see Cain v. Gimon, 36 Ala. 

lane v. Macfarlane, 50 Fla. 570, 39 168, 

So. 995; Smith v. Brady, 37 La. '^ Toll v. Hiller, 11 Paige (N. Y.) 

Ann. 122; Jewett v. Morris, 41 Mich. 228. 

689, 3 N. W. 186; Duncan v. Co-op. '"Eleventh Ward Sav. Bank v. 

Co., 221 Mo. 315, 120 S. W. 733; Can- Hay, 55 How. Pr. (N. Y.) 444. 
dee v. Burke, 1 Hun (N. Y.) 546. 



313 



SETTING ASIDE SALE 



§ 1670 



for the purpose of avoiding the sale. On a motion of the mortgagor 
to set aside the sale by reason of the defective notice, it was held that 
a party guilty of such misconduct is not in a position to appeal to the 
court for assistance in consummating the wrong, and that the court 
will not aid him in reaping the anticipated fruits of his wrongful 
conduct.^' Furthermore relief will not be granted where mistake or 
surprise was due to the petitioning party's own negligence, or could 
have been prevented by the exercise of reasonable care." 

§ 1670. Inadequacy of price and other grounds. — A sale will not 
be set aside on account of mere inadequacy of price; in addition it 
must be shown that the sale was unfairly conducted, or there was 
fraud or surprise or mistake, which prevented the obtaining of any 
adequate price/^ or the party had no notice of the order of sale, or of 



^ Green v. Corson, 50 Kans. 624, 
32 Pac. 380. Where a debtor pre- 
vents the officer from serving notice, 
he can not have the sale set aside 
because he was not served. Carrere 
V. Aucoin, 127 La. 59, 53 So. 427. 

^Tarkhurst v. Cory, 11 N. J. Ea. 
233; Housman v. Wright, 50 App. 
Div. 606, 64 N. Y. S. 71. 

»» Smith v. Black, 115 U. S. 308, 
29 L. ed. 398, 6 Sup. Ct. 50; West v. 
Davis, 4 McLean (U. S.) 241; Lay- 
ton V. Rhode Island Hospital Trust 
Co., 205 Fed. 276, 125 C. C. A. 263; 
Elgutter V. Northwestern Mut. L. 
Ins. Co., 86 Fed. 500, 30 C. C. A. 
218; Windes v. Russell, 150 Ala. 
625, 43 So. 788; Mahone v. Williams, 
39 Ala. 202; Llttell v. Zuntz, 2 Ala. 
256, 36 Am, Dec. 415; Bank of Pine 
Bluff V. Levi, 90 Ark. 166, 118 S. W. 
250; Colonial &c. Mtg. Co. v. Sweet, 
65 Ark. 152, 45 S. W. 60, 67 Am. St. 
910; May v. Hatcher, 130 Cal. 627, 
63 Pac. 33; Connick v. Hill, 127 Cal. 
162, 59 Pac. 832; Hibernia Sav. &c. 
Soc. V. Behnke, 121 Cal. 339, 53 Pac. 
812; Glide v. Dwyer, 83 Cal. 477, 23 
Pac. 706; Haynes v. Packman, 37 
Cal. xvii, 31 Pac. 745; Hunt v. 
Whitehead, 19 App. D. C. 116; Con- 
nely v. Rue, 148 111. 207, 35 N. E. 
824; Heberer v. Heberer, 67 111. 253; 
Mixer v. Sibley. 53 111. 61; Com- 
stock V. Purple, 49 111. 158; Benton 
V. Shreeve, 4 Ind. 66; Equitable 
Trust Co. V. Shrope, 73 Iowa 297, 
34 N. W. 867; Sigerson v. Sigerson, 



71 Iowa 476, 32 N. W. 462; Wyan- 
dotte State Bank v. Murray, 84 
Kans. 524, 114 Pac. 847; Fraser v. 
Seeley, 71 Kans. 169, 79 Pac. 1081; 
Evans v. Bushnell, 59 Kans. 160, 52 
Pac. 419; Vint v. Monk, 56 Kans. 789, 
44 Pac. 986; Wood v. Drury, 56 
Kans. 409, 43 Pac. 763; Fowler v. 
Krutz, 54 Kans. 622, 38 Pac. 808; 
Means v. Rosevear, 42 Kans. 377, 22 
Pac. 319; Jones v. Carr, 41 Kans. 
329, 21 Pac. 258; Babcock v. Canfield, 
36 Kans. 437, 13 Pac. 787; Wolfert 
V. Milford Sav. Bank, 5 Kans. App. 
222, 47 Pac. 175; Summers v. Crofts, 
145 Ky. 456, 140 S. W. 684; Rudd v. 
Turner, 142 Ky. 2, 133 S. W. 993 
(assessment as evidence of inade- 
quacy); Gleason v. Kentucky Title 
Co., 25 Ky. L. 1546, 78 S. W. 170; 
James v. Webb, 24 Ky. L. 1382, 71 
S. W. 526; Ison v. Kinnaird, 3 Ky. 
L. 569, 17 S. W. 633; Forman v. 
Hunt, 3 Dana (Ky.) 614; Edge- 
combe Park Co. v. Finney, 121 Md. 
320, 88 Atl. 143; James H. Robert- 
son Mfg. Co. v. Chambers, 113 Md. 
232, 77 Atl. 287; McCarty v. Gordon, 
112 Md. 40, 75 Atl. 964; Shaw v. 
Smith, 107 Md. 523, 69 Atl. 116; 
Hughes V. Rlggs, 84 Md. 502, 36 Atl. 
269; Garritee v. Popplein, 73 Md. 
322, 20 Atl. 1070; Marsh v. Sheriff 
(Md.), 14 Atl. 664; Page v. Kress, 80 
Mich. 85, 44 N. W. 1052, 20 Am. St. 
504; Farmers' Bank v. Quick, 71 
Mich. 534, 39 N. W. 752, 15 Am. St. 
280; Johnson v. Cooks, 37 Minn. 530, 



§ 1670 



FOEECLOSTJKE SALES UNDER DECREE 



314 



the confirmation thereof .^^ The fact that a higher price may reasonably 
be expected on a resale is by itself no ground for granting it.*' Great 



35 N. W. 436; Daggett Hardware 
Co. V. Brownlee, 186 Mo. 621, 85 S. 
W. 545; McDonnell v. De Soto Sav. 
&c. Assn., 175 Mo. 250, 75 S. W. 438, 
97 Am. St. 592; Hoffman v. Mc- 
Cracken, 168 Mo. 337, 67 S. W. 878; 
Briant v. Jackson, 99 Mo. 585, IS 
S. W. 91; Gibson v. Sweet, 64 Nebr. 
550, 90 N. "W. 548; Williams v. Tay- 
lor, 63 Nebr. 717, 89 N. W. 261; 
Krieger v. Scheuer (N. J. Eq.), 86 
Atl. 534; Montclair Bldg. &c. Assn. 
V. Farmer (N. J. Eq.), 67 Atl. 852; 
Polhemus v. Princilla (N. J. Eq.), 
61 Atl. 263; Rowan T. Congdon, 53 
N. J. Eq. 385, 33 Atl. 404; Bliss v. 
New York L. Ins. Co., 51 N. J. Eq. 
630, 25 Atl. 381, 30 Atl. 429; Work- 
Ingmen's Mut. Bldg. Loan Assn. v. 
McGillick (N. J.), 28 Atl. 468; 
TTount V. Manhattan Bank, 44 N. J. 
Eq. 297, 18 Atl. 80; Twining v. Neil. 
38 N. J. Eq. 470; Boyd v. Hudson 
City Academical Soc, 24 N. J. Eq. 
349; Howell v. Mills, 53 N. Y. 322; 
Moller V. Watts, 56 App. Div. 562, 
67 N. Y. S. 488; Housman v. Wright, 
50 App. Div. 606, 64 N. Y. S. 71; 
State Realty &c. Co. v. Villaume, 121 
App. Div. 793, 106 N. Y. S. 698; 
Cortland Sav. Bank v. Llghthall, 53 
Misc. 423, 104 N. Y. S. 1022; Frazier 
V. Swimm, 79 App. Div. 53, 79 N. Y. 
S. 787; Kellogg v. Howell, 62 Barb. 
(N. Y.) 280; Lefevre v. Laraway, 
22 Barb. (N. Y.) 167; Thompson v. 
Mount, 1 Barb. Ch. (N. Y.) 607; 
Eleventh Ward Sav. Bank v. Hay, 
55 How. Pr. (N. Y.) 444; Whitbeck 
V. Rowe, 25 How. Pr. (N. Y.) 403; 
Gould V. Libby, 24 How. Pr. (N. Y.) 
440; Bonnett v. Brown, 13 N. Y. S. 
395; American Ins. Co. v. Oakley, 9 
Paige (N. Y.) 259, 496, 38 Am. Dec. 
561; Tripp v. Cook, 26 Wend. (N. 
Y.) 143; McLaln Land &c. Co. v. 
Swofford Bros. Dry Goods Co., 11 
Okla. 429, 68 Pac. 502; Fidelity Ins. 
&c. Co. V. Byrnes, 166 Pa. St. 496, 
31 Atl. 255; Alexander v. Messer- 
vey, 35 S. Car. 409, 14 S. B. 854; 
Donaho v. Bales (Tenn.), 59 S. W. 
409; Fenton v. Bell (Tenn.), 53 S. 
W. 984; Henderson v. Lowry, 5 
Yerg. (Tenn.) 240; Bvants v. Erd- 



man (Tex. Civ. App.), 153 S. W. 
929; Porde v. Herron, 4 Munf. (Va.) 
316; Merrill v. Ladendorf, 123 Wis. 
140, 101 N. W. 385; John Paul Lum- 
ber Co. V. Neumeister, 106 Wis. 243, 
82 N. W. 144; Homestead Land Co. 
V. Joseph Schlitz B. Co., 94 Wis. 600, 
69 N. W. 346; Meehan v. Blodgett, 
86 Wis. 511, 57 N. W. 291; Maxwell 
V. Newton, 65 Wis. 261, 27 N. W. 31; 
Hubbard v. Taylor, 49 Wis. 68, 4 N. 
W. 1066; Kemp v. Hein, 48 Wis. 32, 
3 N. W. 831; Warren v. Foreman, 19 
Wis. 35; Hill v. Hoover, 5 Wis. 354, 
68 Am. Dec. 70; Strong v. Catton, 1 
Wis. 471. For other cases relating 
to inadequacy of price, see Stephen- 
son V. Harris, 153 Ala. 462, 45 So. 
196; Security Trust &c. Co. v. Gal- 
lagher, 25 Del. 548, 84 Atl. 806; Par- 
sons V. Little, 28 App. D. C. 218; 
Crebbin v. Powell, 68 Kans. 162, 74 
Pac. 621; Hoock v. Sloman, 155 
Mich. 1, 118 N. W. 489; Hewitt v. 
Price, 204 Mo. 31, 102 S. W. 647; 
Miller v. Lanham, 35 Nebr. 886, 53 
N. W. 1010; Montclair Bldg. &c, 
Assn. V. Farmer (N. J. Eq.), 67 Atl. 
852 (two parties claiming bid); 
New York L. Ins. Co. v. Murphy (N. 
J. Eq.), 25 Atl. 381; Snyder v. Sny- 
der (Pa.), 90 Atl. 717; Lyle v. Arm- 
strong, 235 Pa. 227, 83 Atl. 578; 
Nitro-Phosphate Syndicate v. John- 
son, 100 Va. 774, 42 S. E. 995 (high- 
est bid as criterion of value). 

In Kneeland v. Smith, 13 Wis. 
591, the court refused to set aside a 
sale fairly made and confirmed, on a 
mere offer to bid f8,000, where the 
former bid was $7,601; and so in 
Allis V. Sabin, 17 Wis. 626, where 
there was an offer to bid $2,400 on a 
resale of premises which at the for- 
mer sale were bid in for $2,000; 
and in Northrop v. Cooper, 23 Kans. 
432, where the sale was fair and the 
property brought only $100, the 
court refused to set aside the sale, 
although it appeared that its actual 
value was from $565 to $933. 

'» Nugent V. Nugent, 54 Mich. 557, 
20 N. W. 584. 

" Garritee v. Popplein, 73 Md. 322, 
20 Atl. 1070; King v. Piatt. 37 N. Y. 



315 SETTING ASIDE SALE § 1670 

inadequacy of price is a circumstance which will always be regarded, 
and slight additional circumstances only are required to authorize the 
setting aside of the sale>^ And it has been held that, before confirma- 
tion, a sale may be set aside upon the single ground of inadequacy 
of price, where the price is grossly disproportionate to the value of 
the property.*^ Although the inadequacy of price be such as to afford 
ground for setting aside the sale, this will not be done unless it be 
shown that a larger price will probably be obtained by a resale.^^ 
Where the petitioners for a resale showed that a much larger price 
would be paid, and offered a substantial deposit as a guaranty thereof, 
the chancellor was held justified in ordering a resale, although the 
evidence upon inadequacy of price was conflicting.** 

Any unfairness or misrepresentation on the part of the purchaser, 
by which a person interested in the property is prevented from at- 
tending the sale and bidding, and the purchaser obtains the property 
at a price considerably below its actual value, is a good ground for 
setting the sale aside.*^ Thus a resale was ordered where, upon the 
foreclosure of a first mortgage for ten thousand dollars, property 
worth fourteen thousand was sold to the first mortgagee for the 
amount of his mortgage, and the second mortgagee alleged that he 
refrained from bidding on account of the representations of the first 
mortgagee, and also of a third person, as to the amount each would 
bid for the property. The petitioner was required to give security to 
obtain a bid of thirteen thousand dollars, and to reimburse the pur- 
chaser for actual betterments made and taxes paid since the sale, with 
interest, before applying any of the proceeds of the sale to the second 
mortgage.*® A similar order was made in a case where property worth 

155; Kellogg v. Howell, 62 Barb. " Montague v. International Trust 

(N. Y.) 280. Co., 142 Ala. 544, 38 So. 1025. 

^'Wood V. Drury, 56 Kans. 409, 43 "Murdock v. Empie, 9 Abb. Pr. 

Pac. 763; Means v. Rosevear, 42 (N. Y.) 283. The conditions imposed 

Kans. 377, 22 Pac. 319; Capital in this case were the return of the 

Bank v. Huntoon, 35 Kans. 577, 11 deposit and the payment of the ex- 

Pac. 369; Dewey v. Linscott, 20 penses, including the auctioneer's 

Kans. 684. fees, and $100 for fees in examining 

"^Ballentyne v. Smith, 205 U. S. the title; and furthermore the giv- 

285, 51 L. ed. 803, 27 Sup. Ct. 527. ing of a bond with sureties to bid 

See also Wright v. Branch (Del.), a certain sum at the resale, and to 

90 Atl. 41. pay the expenses of it. See also 

'"Iowa Sav. Bank v. Blair, 56 Hallam v. Huffman, 5 Kans. App. 

Kans. 430, 43 Pac. 686; Means v. 303, 48 Pac. 602; Van Dyke v. Van 

Rosevear, 42 Kans. 377, 22 Pac. 319; Dyke, 31 N. J. Eq. 176; Hubbard v. 

Farmers' Bank v. Quick, 71 Mich. Taylor, 49 "Wis. 68, 4 N. "W. 1066. 

534, 39 N. W. 752, 15 Am. St. 280. " Dawson v. Drake, 29 N. J. Eq. 

383. 



§ 1670 FORECLOSURE SALES UNDER DECREE 316 

twelve thousand dollars or more was sold for less than two thousand five 
hundred dollars.*' Where the property sold was located in a city where 
several newspapers were published, and the notice of sale was pub- 
lished in a newspaper of small circulation in a distant town in order 
that neither the defendant or the public should have notice of the 
sale and that the property might be sold for less than its value, and 
the price bid was greatly inadequate, there was an element of unfair- 
ness which, coupled with the inadequate price, required that the sde 
should be set aside.** * 

A misapprehension on the part of a bidder as to statements made 
by the mortgagor at the time of the sale whereby he ceased to bid, 
and the premises were sold for much less than the bidder would have 
paid, is ground for setting aside the sale.*" So also is a misunder- 
standing on the part of a second mortgagee in making his bid subject 
to the iirst mortgage, whereby property worth two thousand five hun- 
dred dollars was sold for twenty-five dollars.^" And where the holders 
of third and fourth mortgages were not properly informed concerning 
the day of sale, and could not procure a reasonable adjournment, and 
the property was sold for a sum insufficient to produce anything for 
the third and fourth mortgagees, it was held that a resale would be 
ordered, upon the petitioners giving bond conditioned that a re- 
sponsible purchaser would attend the resale and bid a much larger 
sum.°^ 

A resale should not be granted on the ground of inadequacy of 
price when the property, which was not worth on the day of sale more 
than forty thousand dollars, was bid in by the mortgagee for thirty- 
five thousand dollars, the mortgagor having notice that he would not 
bid above that smn.^^ 

An agreement between bondholders to bid a certain price for the 
property, and if they obtained the property to sell it to others for a 
certain advance price, if not intended to suppress competition at the 
sale and obtain the property at a sacrifice, is a legitimate one.°' An 
agreement between the mortgagee and the debtor that the former 

"Gilbert v. Haire, 43 Mich. 283, =^ White v. Coulter, 1 Hun (N. T.) 

5 N. W. 321. 357. See also New York L. Ins. Co. 

"Macfarlane v. Macfarlane, 50 v. Murphy, 51 N. J. Bq. 630, 25 Atl. 

Fla. 570, 39 So. 995. See post § 381, 30 Atl. 429. 

1672. ■=> Wicker v. Hoppock, 6 Wall. (U. 

"Banta v. Brown, 33 N. J. Eq. 41. S.) 94, 18 L. ed. 752; Kearney v. 

'"Van Arsdalen v. Vail, 32 N. J. Taylor, 15 How. (U. S.) 494, 14 L. 

Eq. 189. ed. 787; Terbell v. Lee, 40 Fed. 40. 

"Strong V. Smith, 68 N. J. Bq. 
650, 64 Atl. 1135. 



317 SETTING ASIDE SALE § 1670a 

should bid off the property at the foreclosure sale, provided the bids 
should not run up above the amount of the mortgage debt, and that 
in such ease the mortgagee would resell the property to the debtor 
at an agreed price, within a time fixed, does not invalidate the sale.^* 

A sale will not be set aside on the ground of mere assertions made 
at the sale by irresponsible persons that the sale "was a mere for- 
mality," especially if the person seeking to have the, sale set aside was 
present at the sale, and he does not show that he was deceived by such 
assertions.^^ 

After a foreclosure sale the only relief for one who claims that 
the sale was for an inadequate price is an application to have the sale 
set aside. If the mortgagee has bought the property, a suit can not 
be maintained against him for the recovery of the difference between 
the price paid and the actual value."" 

§ 1670a. Sale set aside at instance of mortgagee. — A sale may be 
set aside at the instance of the mortgagee. This was done in a case 
where the property was sold for about a third only of its value, which 
was about the amount of the mortgage, and the officer making the sale 
was instructed to bid for the mortgagee to the amount of the mortgage, 
but neglected to do so. The purchaser knew of the mortgagee's inten- 
tion to bid at the sale, and the mortgagee could not collect any part of 
the deficiency from the mortgagor."^ 

A sale will be set aside at the instance of the mortgagee when the 
mortgagor has by his acts prevented a free competition between the 
bidders. Such acts have been called chilling the bidding. Thus 
where a mortgagor, a woman, at a sale of the mortgaged premises, 
publicly announces that she intends to bid, that she is a widow, de- 
pendent on such premises for a support, and requests that no one bid 
against her, thus preventing free competition among the bidders, a 
sale to her for an inadequate price will be set aside.°^ 

" Davis V. Citizens' Bank, 39 La. In this case the bidder offered $1,000 

Ann. 523, 2 So. 401. for a lot of nine negro slaves, an- 

=" Russell V. Pew, 12 Mont. 509, nouncing when he did so that it was 

31 Pac. 75. his purpose to send them as a gift 

™ Leavitt v. Files, 38 Kans. 26, 15 to the wife and children of the de- 

Pac. 891. fendant in execution. His bid was 

'" Haynes v. Backman, 97 Cal. xvii, the only bid. He paid the purchase- 

31 Pac. 745. money, and sent the slaves as pro- 

''Herndcn v. Gibson, 38 S. Car. posed. He therefore told the truth. 

357, 17 S. E. 145, 20 L. R. A. 545, 37 He concealed nothing. He misrep- 

Am. St. 765. The court cites Carson resented nothing. His conduct was 

V. Law, 2 Rich. Eq. (S. Car.) 296, as generous. Yet the court set the 

an apt illustration of this principle, sale aside. 



§ 1671 FOEECLOSUKE SALES UNDER DECREE 318 

A subsequent mortgagee whose right of action accrues after the com- 
mencement of the foreclosure under which the sale is made, and who is 
not a party to such action may petition to have the sale set aside.^' 
A mortgagee who conducted the foreclosure sale and bid in the prop- 
erty can not avoid his liability to complete the purchase, on the ground 
that the sale was illegal or irregular, where the holder of subsequent 
mortgages and the mortgagor made no objection."" 

§ 1671. Eesale where mortgagee purchases — Disaffirmance by 
mortgagor. — When the complainant himself becomes the purchaser, 
the court is always more ready to open a sale than where the property 
has been purchased by a stranger to the suit for the purpose of invest- 
ment; the sale is set aside upon less evidence of fraud, surprise, or 
accident, or of the invalidating circumstance, whatever it may hef^ 
but the mere fact that the mortgagee purchased at the sale for a sum 
much below the value of the property is not by itself evidence of 
fraud.«2 

Where the mortgagee becomes the purchaser at his own sale, in some 
states the mortgagor has the option to afSrm or disaffirm the sale;'' 
but the title of the mortgagee is good until such disaffirmance."* In 
states where the mortgagor has no such option, the mortgagee pur- 
chasing has exactly the same rights aS a stranger purchasing at fore- 
closure."" 

■"> Brown v. Frost, 10 Paige Ch. (N. 106 Ga. 81, 31 S. B. 805; Nichols v. 

Y.) 243. Otto, 132 III. 91, 23 N. E. 411; Jen- 

" Andrews v. O'Mahoney, 112 N. kins v. Pierce, 98 111. 646; Gibbons 

Y. 567, 20 N. E. 374. v. Hoag, 95 111. 45; Mulvey v. Gib- 

""Cain v. Gimon, 36 Ala. 168; bons, 87 111. 367; Thornton v. Irwin, 
Evans v. English, 10 Ky. L. 742, 10 43 Mo. 153; Very v. Russell, 65 N. 
S. W. 626; Nugent v. Nugent, 54 H. 646, 23 Atl. 522; Austin v. Stew- 
Mich. 557, 20 N. W. 584; Kellogg v. art, 126 N. Car. 525, 36 S. B. 37; 
Howell, 62 Barb. (N. Y.) 280; Mott Whitehead v. "Whitehurst, 108 N. 
V. Walkley, 3 Bdw. (N. Y.) 590; Car. 458, 13 S. E. 166; Martin v. 
Gould v. Libby, 24 How. Pr. (N. Y.) McNeely, 101 N. Car. 634, 8 S. B. 
440; Tripp v. Cook, 26 "Wend. (N. 231. 
y.) 143. "Hawkins V. Hudson, 45 Ala. 482; 

«' Glide V. Dwyer, 83 Cal. 477, 23 Herbert Craft Co. v. Bryan (Cal.), 

Pac. 706; Briant v. Jackson, 99 Mo. 68 Pac. 1020; Martin v. McNeely, 

535, 13 S. W. 91. 101 N. Car. 634, 8 S. E. 231. 

"Woodruff V. Adair, 131 Ala. 530, «= Smith v. Lusk, 119 Ala. 394, 24 
o3 So. 515; McCall v. Mash, 89 Ala. So. 256; Boyd v. Ellis, 11 Iowa 97; 
487, 7 So. 770, 18 Am. St. 145; Jones v. Standiferd, 69 Kans. 513, 
Thomas v. Jones, 84 Ala. 302, 4 So. 77 Pac. 271; Ledyard v. Phillips, 47 
270; Gassenheimer v. Moulton, 80 Mich. 305, 11 N. W. 170; Avon-by- 
Ala. 521, 2 So. 652; Blockley v. Pow- the-Sea Land &c. Co. v. Finn, 56 N. 
ler, 21 Cal. 326, 82 Am. Dec. 747; J. Eq. 808, 41 Atl. 360; Brown v. 
Payton v. McPhaul, 128 Ga. 510, 58 Frost, 10 Paige (N. Y.) 243. 
S. B. 50; Standback v. Thornton, 



319 SETTING ASIDE SALE § 1672 

Where a mortgagee, by inducing prospective buyers not to bid at a 
foreclosure sale, was enabled to bid in the lands at much less than 
their value and almost immediately thereafter sold the lands to one 
who was present at the foreclosure sale at an advance of more than 
fifty per cent., he was required to account to the mortgagor for at least 
the amount he actually received for the lands/^ 

"Where a mortgagee agreed that he would bid in the land and allow 
the mortgagor a reasonable time to redeem, and after the sale refused 
to permit the mortgagor to redeem, and it was shown that the mort- 
gagee induced others not to bid at the sale, and the property was sold 
for only a little more than half its value, it was held that this was 
such a fraud upon the mortgagor as entitled him to maintain an action 
to redeem."^ 

§ 1672. Neglect of offlcer selling — Defects and irregularities. — The 

parties interested in the property have a right to expect that it will be 
sold in the usual manner, and in a way to produce a fair competition 
at the sale. They will not be relieved against their own negligence, 
however inadequate may be the price obtained, unless it be so great as 
to show fraud or unfairness in the sale. But relief may be had if 
the property was sacrificed by the neglect, mistake or omission of the 
master or officer conducting the sale,"* as, for instance, in selling the 
whole premises together, when he should have sold in separate parcels 
to realize the highest price."' 

"" Huntzicker V. Dangers, 115 Wis. N. B. 218; Peckham v. Group, 3 

570, 92 N. W. 232. Kans. App. 369, 42 Pac. 944; Hill v. 

"Brown v. Johnson, 115 Wis. 430, Pettit, 23 Ky. L. 2004, 66 S. W. 190; 

91 N. W. 1016. Hall v. Hawley, 49 La. Ann. 1046, 22 

»» Minnesota Co. v. St. Paul Co., 2 So. 205; Abbott v. Peck, 35 Minn. 

Wall. (U. S.) 609, 17 L. ed. 886; 499, 29 N. W. 194; Thomas v. 

Globe L. & T. Co. v. Wood, 58 Nebr. Thomas, 44 Mont. 102, 119 Pac. 283; 

395, 78 N. W. 721; Montclair Bldg. Franklin County Bank v. Everett, 3 

&c. Assn. V. Farmer (N. J. Eq.), 67 Nebr. (Unoff.) 379, 91 N. "W. 495; 

Atl. 852; Conover v. Walling, 15 N. Miller v. Kendrick (N. J. Eq.), 15 

J. Eq. 167; Marsh v. Ridgway, 18 Atl. 259; Roosevelt v. Schile, 95 

Abb. Pr. (N. Y.) 262; Griffith v. App. Div. 524, 88 N. Y. S. 592; WoL 

Hadley, 10 Bosw. (N. Y.) 587; Han- cott v. Schenck, 23 How. Pr. (N, 

cock V. Youree, 25 Okla. 460, 106 Y.) 385; American Ins. Co. v. Oak- 

Pac. 841; Scandinavian - American ley, 9 Paige (N. Y.) 259, 496, 38 Am, 

Bank V. Downs, 76 Wash. 62, 135 Dec. 561. See also Whitbeck v, 

Pac. 807. Rowe, 25 How. Pr. (N. Y.) 403 

""Dozier v. Farrior (Ala.), 65 So. Sale in gross instead of in parcels 

364; Summerville v. March, 142 Cal. is only voidable, and not subject to 

554, 79 Pac. 388, 100 Am. St. 145; collateral attack. Bechtel v. Wier, 

Meux V. Trezevant, 132 Cal. 487, 64 152 Cal. 443, 93 Pac. 75, 15 L. R. A. 

Pac. 848; Hibernia Sav. &c. Soc. v. (N. S.) 549; Thomas v. Thomas, 44 

Bahnke, 121 Cal. 339, 53 Pac. 812; Mont. 102, 119 Pac. 283, Ann. Cas. 

Bozarth v. Largent, 128 111. 95, 21 1913 B, 616. See also Howland v. 



§ 1673 EOEECLOSUEE SALES UNDER DECREE 320 

If the sale is made before sunrise in the morning or after sunset in 
the evening, or other unsuitable hour, it should be set aside as void.''" 
The fact that a sale was made in the city of New York upon the day of 
the charter election, though not for that reason void, yet, taken in con- 
nection with the circumstances that a party interested in obtaining 
the best price possible for the property objected to the sale on that 
day, and made reasonable requests for a postponement, and for a sale 
in a particular manner, was held to justify the court in setting aside 
the sale and ordering the premises sold again.'^ The owner was al- 
lowed to redeem where the sale was made contrary to the sheriffs 
assurance that it would be adjourned.^" 

If a master has violated his instructions limiting the price of the 
property, of which the purchaser had notice, the sale will be set 
aside.' ^ So, if a referee sell on terms not authorized by the decree, 
a resale will be ordered ;''* or if the master give the impression to par- 
ties in interest that the sale will not take place, and they in conse- 
quence do not attend ;'° or if a commissioner appointed to make the 
sale does not pursue the instructions of the court in respect to adver- 
tising the sale;'" or if a receiver sells several distinct parcels of land, 
greatly exceeding in value the debt, in one mass, to the prejudice of 
the debtor;'' or if the officer requires payment of the whole amount 
of the purchase-money within an hour after the sale;'^ or if he sell 

Donehoo (Ga.), 82 S. E. 32 (sale of Y.) 224; Hunt v. Whitehead, 19 

entire tract sustained); Vingut v. App. D. C. 116. 

Ketcham, 102 App. Div. 403, 92 N. "Vanbussum v. Maloney, 2 Mete. 

Y. S. 605 (sale in one parcel mere (Ky.) 550; Polhemus v. Princilla 

irregularity); Goerz v. Barstow, 148 (N. J. Eq.), 61 Atl. 263; Denning v. 

Fed. 562, 78 C. C. A. 248. Smith, 3 Johns. Ch. (N. Y.) 332; 

'"Carnrick v. Myers, 14 Barb. Bally v. Baily, 9 Rich. Eq. (S. Car.) 
(N. Y.) 9. See ilso Wood v. More- 392. See also Marfarlane v. Marfar- 
house, 45 N. Y. 358; Hackley v. lane, 50 Fla. 570, 39 So. 995; Hen- 
Draper, 4 T. & C. (N. Y.) 614; Fred- drix v. Nesbitt, 96 Ky. 652, 16 Ky. 
erick v. Wheelock, 3 T. & C. (N. Y.) L. 746, 29 S. W. 627 (erroneous date 
210. of sale). A sale was set asice where 

"King V. Piatt, 37 N. Y. 155, 35 the notice was not properly 

How. Pr. 23, 3 Abb. Pr. (N. S.) 4"4. posted, and omitted improvements 

'^Hunt V. Whitehead, 19 App. D. on the premises. James H. Robert- 

C. 116; Nevius v. Egbert, 31 N. J. son Mfg. Co. v. Chambers, 113 Md. 

Eq. 460. 232, 77 Atl. 287. 

'"Requa v. Rea, 2 Paige (N. Y.) "Griffith v. Hadlev, 10 Eosw. (N. 

339. The limit of price was $2,600, Y.) 587. See also Arnold v. Gaff, 58 

and the master sold for $1,000. Ind. 543; Wolcott v. Schenck, 23 

"Hotchkiss V. Clifton Air Cure, 4 How. Pr. (N. Y.) 385. 

Keyes (N. Y.) 170; Koch v. Purcell, "Goldsmith v. Osborne, 1 Edv/. 

13 J. & S. (N. Y.) 162. (N. Y.) 560. 

" Collier v. Whipple, 13 Wend. (N. 



321 SETTING ASIDE SALE § 1673 

a lot not equitably liable for a debt;'' or if the land is not properly 
divided into lots.*" 

But the neglect of a master to give to a person interested in the 
foreclosure actual personal notice of the day of sale, in accordance 
with a promise to do so, is not such an official delinquency as would 
justify setting aside the sale.*^ 

§ 1673. Insufficient grounds for resale — ^Rights of purchaser. — 

TJpon an application for a resale the rights of the purchaser will be 
taken into account, and will prevail when the sale has been fair and 
free from fraud, or other circumstances, which give an undoubted 
right to have it set aside.*^ And generally a sale will not be vacated 
because of any defects or irregularities which do not invalidate the 
title of the purchaser or substantially injure the rights of a party 
in interest.^' There must be a good reason for disturbing the sale; 
and when there is no legal right to relief, and the application is 
addressed merely to the discretion of the court, the court will con- 
sider the equities of all the parties, to the end of giving substantial 
justice.** 

It is no good cause for setting aside a foreclosure sale that it was 
advertised in a newspaper of small circulation;*^ nor that the adver- 
tisement was published while the debtor was absent from the city;** 
nor that the debtor was ill at the time of sale, and died soon there- 

"Breesev. Busby, 13 How. Pr. (N. tee Trust &c. Co. v. Jenkins, 40 N. 

Y.) 485. J. Eq. 451, 2 Atl. 13; Walker v. 

»» Miller v. Kendrick (N. J.), 15 Montclair &c. R. Co., 30 N. J. Bq. 

Atl. 259. See this case as to terms 525; State Realty &c. Co. v. Vill- 

imposed upon mortgagor. aume, 121 App. Div. 793, 106 N. Y. 

" Crumpton V. Baldwin, 42 111. 165. S. 698; Knight v. Moloney, 4 Hun 

'* Gardiner v. Schermerhorn, (N. Y.) 33; Kelly v. Wronkow, 111 

Clarke (N. Y.) 101. N. Y. S. 874; Bolin v. Anderson, 8 

*= Stephenson v. Harris, 153 Ala. Ohio Dec. (Reprint) 49, 5 Cine. L. 
462, 45 So. 196; Humboldt Sav. &c. Bui. 328; Terry v. Furth, 40 Wash. 
Soc. v. March, 136 Cal. 321, 68 Pac. 493, 82 Pac. 882; Lloyd v. Frank, 30 
968; Connick v. Hill, 127 Cal. 162, Wis. 306. A resale will not be 
59 Pac. 832; Mann v. Jennings, 25 ordered if the defect or omission 
Fla. 730, 6 So. 771; Moore v. Tit- can be cured without ordering a re- 
man, 33 111. 358; McPherson v. sale. Petermann v. Turner, 37 Wis. 
Wood, 62 111. App. 170; Sowle v. 244. 

Champion, 16 Ind. 165; Cronkhlte "Cole v. Miller, 60 Ind. 463; 

V. Buchanan, 59 Kans. 541, 53 Pac. Wiley v. Angel, Clarke (N. Y.) 217; 

863, 68 Am. St. 379; Rudd v. Turner, Tripp v. Cook, 26 Wend. (N. Y.) 

142 Ky. 2, 133 S. W. 993; Cole v. 143; Kremer v. Thwaits, 105 Wis. 

Madden, 91 Mo. 585, 4 S. W. 397; 534, 81 N. W. 654. 

Young V. Wood, 63 Nebr. 291, 88 N. »=Wake v. Hart, 12 How. Pr. (N. 

W. 528; Kane v. Jonasen, 55 Nebr. Y.) 444. But see Macfarlane v. Mac- 

757, 76 N. W. 441; Johnson v. Colby, farlane, 50 Fla. 570, 39 So. 995. 

52'-I^ebr. 327, 72 N. W. 313; Guaran- =» Routt v. Milner, 59 Mo. App. 50. 

21 — Jones Mtg. — Vol. III. 



§ 1673 FOEECLOSUEE SALES UNDEE DECEEE 323 

after ;*' nor that a financial stringency existed, affecting the price 
of land;^' nor that there was a defect in the order of sale;*' nor 
that the master has failed to report the sale at the next term of the 
court ;'" nor that a copy of the decree did not accompany the order of 
sale;°^ nor that the order of sale was not under seal of the court ;°^ 
nor that the judgment was entered for too large an amount,'^ for the 
court can not inquire whether the judgment was too large or too small, 
or investigate the proceedings in the suit prior to the decree, upon 
an application to set aside a foreclosure sale;'* nor that the original 
mortgagee, who had assigned the mortgage and guaranteed the pay- 
ment of it, but was a party to the foreclosure suit, did not know of 
the time and place of sale, for he was bound to use due diligence in 
obtaining this information, if he wished to protect his interests ;'' 
nor that a party to the suit was too blind to read the newspapers and 
had no notice of the sale, and the property sold for much less than 
its value.'* 

A sale should not be set aside on account of a mere irregularity 
in the sale, as in selling the homestead, together with other premises, 
without inquiring whether the other lands can not first be sold 
separately, unless it be shown that injury was done by such irregu- 
larity.'^ A sale on a decree of foreclosure can not be impeached col- 
laterally for any irregularity in the proceedings;'* or because the de- 
cree was prematurely entered," or not recorded ;'■ or because the mort- 
gage was not duly executed.^ 

A sale may be set aside before confirmation in case the purchaser 
bids and pays to the sheriff a sum greater than the value of the 
premises after deducting prior incumbrances, under an honest and 
genuine mistake as to such prior incumbrances, induced in some 
measure by the record and foreclosure proceedings.^ 

=' Bowles V. Brauer, 89 Va. 466, 16 " Young v. Bloomer, 22 How. Pr. 

S. B. 356. But see post § 1676. (N. Y.) 383. 

^ Nebraska Loan &c. Co. v. Hamer, °' Bullard v. Green, 10 Mich. 268. 
40 Nebr. 281, 58 N. W. 695. See »= Mc Cotter v. Jay, 30 N. Y. 80. 
also Anderson v. White, 2 App. Cas. °° Parkhurst v. Cory, 11 N. J. Bq. 

(D. C.) 408. 233. 

™ Lamson v. Bohrer, 63 Nebr. 105, ■" Lloyd v. Frank, 30 Wis. 306. 
88 N. W. 161; Johnson v. Colby, 52 »»Nagle v. Macy, 8 Cal. 426. 
Nebr. 327, 72 N. W. 313. "'Alderson v. Bell, 9 Cal. 315. 

" Walker v. Schum, 42 111. 462. » McGregor v. Kellum, 50 Fla. 581, 

"Tootle &c. Co. V. Willy, 1 Nebr. 39 So. 697. 
(Unoff.) 711, 96 N. W. 342. = Hayes v. Shattuck, 21 Cal. 51. 

'^ Passumpsic Sav. Bank v. Man- ' Kremer v. Thwaits, 105 Wis. 534, 

lick, 60 Nebr. 469, 83 N. W. 672, 83 81 N. W. 654. On motion to confirm 

Am. St. 539. the sale, the purchaser intervened, 



323 



SETTING ASIDE SALE 



§ 1674 



A sale •will not be set aside for the reason that the special mas- 
ter conducting it departed from the terms of the decree ordering 
the sale, unless it appears that the party complaining has been in- 
jured thereby, and has a right to be heard concerning the matter.* 

§ 1674. laches — ^Irregularity waived by delay. — ^Any irregularity 
in a sale which renders it voidable will be deemed to be waived if it 
is not taken advantage of within a reasonable time, and before inno- 
cent parties acquire rights; unexcused and unreasonable delay bar- 
ring any relief.^ An action to set aside a foreclosure sale on the 



and the sale was set aside on condi- 
tion of payment of costs of the sale 
set aside, interest from its date to 
the time when a resale could be 
had, and costs. 

*01d Colony Trust Co. v. Great 
"White Spirit Co., 181 Mass. 413, 415, 
63 N. E. 945; Farmers' Loan Co. v. 
Oregon Pacific R. Co., 28 Ore. 44, 40 
Pac. 1089; Calvert v. Godfrey, 6 
Beav. 97; Freeman on Void Judi- 
cial Sales, 343. "The case presented 
is not that of a donee of a power 
who is bound to follow strictly the 
provisions of the power, or of an 
ofScer selling on execution, for in- 
stance, who also is bound to follow 
strictly the requirements of the stat- 
ute, but is that of a special master 
in chancery appointed to make sale 
of certain property under a decree 
in a suit in equity. In such a case 
the court can change or modify the 
decree at any time before it is 
carried into effect, and after it is 
carried into effect can confirm or 
ratify the doings of its agent, as in 
the case of receivers and other 
agents, if they have departed from 
or exceeded the authority conferred 
upon them, provided the rights of 
parties interested have not been 
prejudiced or affected injuriously 
thereby." Old Colony Trust Co. v. 
Great White Spirit Co., 181 Mass. 
413, 416, 63 N. E. 945, per Morton, 
J., citing Meeker v. Evans, 25 III. 
322; Nebraska Loan &c. Co. v. 
Hamer, 40 Nebr. 281, 286, 58 N. W. 
695. 

» Martin v. Gray, 142 U. S. 236, 
35 L. ed. 997, 12 Sup. Ct. 186; Bacon 
V. Northwestern Mut. L. Ins. Co., 
131 U. S. 258, 33 L. ed. 128, 9 Sup. 
Ct. 787; New Orleans Nat. Banking 



Assn. V. Le Breton, 120 U. S. 765, 
30 L. ed. 821, 7 Sup. Ct. 772; Har- 
wood V. Railroad Co., 17 Wall. (U. 
S.) 78, 21 L. ed. 558; Cutter v. Iowa 
Water Co., 96 Fed. 777; Terbell v. 
Lee, 40 Fed. 40; McBride v. Gwynn, 
33 Fed. 402; Stephenson v. Harris, 
153 Ala. 462, 45 So. 196; Mason v. 
American Mtg. Co., 124 Ala. 347, 26 
So. 900; Ayers v. McRae, 71 Ark. 
209, 72 S. W. 52; Bryan v. Cales 
(Ariz.), 20 Pac. 311; Bankof Orland 
V. Dodson, 127 Cal. 208, 59 Pac. 584, 
78 Am. St. 42; Ex-Mission Land Co. 
V. Flash, 97 Cal. 610, 32 Pac. 600; 
Barnard v. Wilson, 66 Cal. 251; 
Quirk V. Liebert, 12 App. Cas. (D. 
C.) 394; Quinn v. Perkins, 159 111. 
572, 43 N. B. 759; Connely v. Rue, 
148 111. 207, 35 N. E. 824; Vail v. 
Arkell, 146 111. 363, 34 N. E. 937; 
Cornell v. Newkirk, 144 111. 241, 33 
N. E. 37; Innes v. Linscheid, 126 111. 
App. 27; York v. Boardman, 40 
Iowa 57; Mowry v. Howard, 65 
Kans. 862, 70 Pac. 863; Vint v. 
Monk, 56 Kans. 789, 44 Pac. 986; 
Shiveley v. Jones, 6 B. Mon. (Ky.) 
274; Connaughton v. Bernard, 84 
Md. 577, 36 Atl. 265; Chesbro v. 
Powers, 70 Mich. 370, 38 N. W. 283; 
Lyon V. Brunson, 48 Mich. 194, 12 
N. W. 32; Bullard v. Green, 10 Mich. 
268; Alabama & V. R. Co. v. Thomas, 
86 Miss. 27, 38 So. 770; Meier v. 
Meier, 105 Mo. 411, 16 S. W. 223; 
Ring V. New Auditorium Pier Co., 
77 N. J. Eq. 422, 77 Atl. 1054; 
Farmers' L. &c. Co. v. Bankers' &c. 
Tel. Co., 53 Hun 636, 26 N. Y. St. 
161, 6 N. Y. S. 643; Lockwood v. 
McGuire, 57 How. Pr. (N. Y.) 266; 
Thompson v. Browne, 10 S. Dak. 
344, 73 N. W. 194; Strand v. Grif- 
fith, 63 Wash. 334, 115 Pac. 512; 



§ 1674: FOEECLOSUKE SALES UNDER DECREE 324 

ground of fraud or error must be brought without unreasonable de- 
lay, and laches of several years has been held a bar.* After a delay 
of seven or eight years, the cburt declined to inquire whether the 
price bid was adequate, or whether the property should have been 
sold in smaller quantities/ After a delay beyond the period pre- 
scribed by statute, within which an action to redeem the mortgage 
can be brought, the court has no power to set aside the sale.* By 
statute, in some states, a foreclosure sale will not be disturbed or 
set aside after a period of five years.* 

A mortgagor, by inducing a person to purchase the certificate 
under a foreclosure sale, upon the representation that he had no. 
title to the premises, the time of redemption having expired, is 
thereby estopped from afterward questioning the regularity of the 
foreclosure and sale as against such purchaser.^" 

A foreclosure sale will not be set aside at the instance of the 
mortgagor, for the reason that there was an understanding between 
him and the purchaser, in fraud of third persons, that the mortgagor 
might redeem from the sale,^^ especially if this claim is wholly in- 
consistent with plaintiff's previous acts regarding the sale.^^ By 

Meehan v. Blodgett, 86 Wis. 511, 57 Pac. 512 (nine years) ; Terry v. 

N. W. 291; Trilling v. Schumitsch, Furth, 40 Wash. 493, 82 Pac. 882 

67 Wis. 186, 30 N. W. 222; Babcock (several years). See also Pons v. 

■< Perry, 8 Wis. 277. See also Yazoo &c. R. Co., 122 La. 156, 47 So. 

Bechtel v. Wier, 152 Cal. 443, 93 449. In Hamilton v. Lubukee, 51 

Pac. 75, 15 L. R. A. (N. S.) 549; 111. 415, it was held that a mort- 

Bausman v. Kelley, 38 Minn. 197, 36 gagor, after delaying four years 

N. W. 333, 8 Am. St. 661; McMurray from the time he had knowledge of 

V. McMurray, 66 N. Y. 175; Diefen- the sale and proceedings under it, 

dorf V. House, 9 How. Pr. (N. Y.) could not redeem as against remote 

243. purchasers, on the ground of de- 

" Bower v. Stein, 165 Fed. 232 fective notice of the sale and inade- 

(.nine years) ; Stephenson v. Harris, quacy of price. 

153 Ala. 462, 45 So. 196 (seven 'Roberts v. Fleming, 53 111. 196. 

years) ; Ayers v. McRae, 71 Ark. ' Depew v. Dewey, 46 How. Pr. 

209, 72 S. W. 52 (four years) ; Bene- (N. Y.) 441. 

diet V. Gammon Theological Semi- " Bechtel v. Wier, 152 Cal. 443, 93 

nary, 122 Ga. 412, 50 S. E. 162 Pac. 75, 15 L. R. A. (N. S.) 549; 

(seven years with color of title); Mowry v. Howard, 65 Kans. 862, 70 

Chicago &c. R. Co. v. Garrett, 255 111. Pac. 863; Coe v. Rockman, 126 Wis. 

420, 99 N. E. 643 (thirty years); 515, 106 N. W. 290. See also Pons 

Redmond v. Cass, 226 III. 120, 80 N. v. Yazoo &c. R. Co., 122 La. 156, 47 

E. 708 (thirty years); Rigney v. So. 449. 

Small, 60 111. 416 (nine years); "Curyea v. Berry, 84 111. 600. 

Innes v. Linscheid, 126 111. App. 27 "Randall v. Howard, 2 Black (U. 

(three years); Alabama &c. R. Co. S.) 585, 17 L. ed. 269. 

V. Thomas, 86 Miss. 27, 38 So. 770 "Williams v. Watson, 14 Ky. L. 

(adverse possession ten years) ; 786, 21 S. W. 349. 
Strand v. Griffith, 63 Wash. 334, 115 



325 SETTING ASIDE SALE § 1675 

claiming the right to redeem from a sale, one affirms the validity 
thereof, and is estopped to assail it.^^ 

§ 1675. Mistake, surprise or accident, as ground for resale. — ^When 
mistake or accident on the part of any one interested in the property 
is relied upon as a ground for setting aside a sale, it must be shown 
that the consequence of it was that the property sold for a less price 
than it would otherwise have sold for, and that a material advance 
may be expected on a resale.^* Particular emphasis is placed in such 
cases upon the amount of the advance that can be obtained, the sale 
having been fairly condueted.^^ A court of equity will generally set 
aside a sale for inadequacy of price, where there was surprise or 
accident on one side and advantage taken of it on the other, especially 
where the loss would be irreparable.^" 

A sale may be set aside where the mortgagor had no notice of a 
foreclosure proceedings, or of the time and place of the sale;^^ or 
where he did not understand their nature or purpose;^* or where a 
party in interest reasonably misunderstood his legal rights or liabil- 
ities under the sale.^® 

Where a defendant intended to be present at the sale and was 
prepared to bid for his protection, but was prevented from attending 
by unforeseen circumstances, and the property was sold for less than 

"Bailey v. Abbott, 40 Ark. 275; Trustees v. New Jersey West Line 

Miller v. Ayres, 59 Iowa 424, 13 N. R. Co., 30 N. J. Eq. 494; Hazard v. 

W 436; Zable v. Masonic Sav. Bank, Hodges, 17 N. J. Eq. 123; Kellogg 

13 Ky. L. 197, 16 S. W. 588; Toll v. v. Howell, 62 Barb. (N. Y.) 280, 

Hiller, 11 Paige (N. Y.) 228; Max- affd. 53 N. Y. 609; King v. Morris, 

well V. Newton, 65 Wis. 261, 27 N. 2 Abb. Pr. (N. Y.) 296; Light v. 

W. 31. Zeller, 195 Pa. St. 315, 45 Atl. 1055; 

" St'ryker v. Storm, 1 Abb. Pr. (N. Terry v. Furtb, 40 Wash. 493, 82 

S ) (N Y.) 424. See also Hey v. Pac. 882. But see Horner v. Corn- 

Schooley, 7 Ohio, Part ii, 49; Wol- ing, 28 N. J. Eq. 254; McCotter v. 

fert V. Milford Sav. Bank, 5 Kans. Jay, 30 N. Y. 80. 

App 222 47 Pac. 175. ^^ Russell v. Blakeman, 40 Minn. 

^'Hudg'ins v. Lanier, 23 Grat. 463, 42 N. W. 391; Schilling v. Lint- 

(Va.) 494. For cases in which the ner, 43 N. J. Eq. 444, 11 Atl. 153; 

court refused to set aside a sale for Campbell v. Gardner, 11 N. J. Eq. 

surprise, see Hunt v. Ellison, 32 423, 69 Am. Dec. 598; Hill v. Hoover, 

Ala. 173; Hill v. Hoover, 5 Wis. 354, 5 Wis. 354. 

67 Am. Dec. 70. "Landis v. Olds, 9 Minn. 90; 

'"Gould V Gagger, 18 Abb. Pr. Montclair Bldg. &c. Assn. v. Farmer 

(N. Y.) 32. ' (N. J. Eq.), 67 Atl. 852; Sinking 

"Macfarlane v. Macfarlane, 50 Fund v. Peter, 32 N. J. Eq. 113; 

Fla 570 39 So. 995; Brewer v. Van Winkle v. Stearns, 27 N. J. Eq. 

Landis, 111 Mich. 217, 69 N. W. 493; 238; Campbell v. Gardner, 11 N. J. 

Nugent v. Nugent, 54 Mich. 557, 20 Eq. 423, 69 Am. Dec. 598; Home- 

N W 584; Mitchell v. Harris, 43 opathic Mut. L. Ins. Co. v. Sixbury, 

Miss 314- Polhemus v. Princilla (N. 17 Hun (N. Y.) 424; Hinton v. 

J. Eq.), 61 Atl. 263; Public Schools Leigh, 102 N. Car. 28, 8 S. E. 890; 



§ 1675, FOEECLOSUKE SALES UNDEE DECEEB 326 

its value, the sale was vacated,^" and so where the principal defendants 
were prevented by unavoidable accident from reaching the place of 
sale until after it had been concluded, the court, in granting a resale, 
imposed as terms the deposit of the amount proposed to be bid, and 
the payment of the costs of the former sale.^^ 

A mistake in the proceedings, such, for instance, as a misdescrip- 
tion in the bill, of the land mortgaged, when first discovered after 
decree and sale, is ground for setting aside the decree and sale either 
wholly or as to the land erroneously described, and for maintaining a 
bill of review to correct the error. 

A sale may be set aside on the ground of surprise, where the party 
injured reasonably relied upon the existence of a certain state of 
facts or representations, without negligence or lack of attention, but 
discovers contrary facts too late to protect his interests.^^ Eelief on 
the ground of surprise was granted in a case where the defendant was 
a German woman, who understood little English, and did not under- 
stand the nature of the proceedings against her. She lived upon the 
property and thought that if the house was to be sold a notice of sale 
would be posted on the house. She did not know of the decree or 
of the sale until the property had been sold, when she tendered to 
the sheriff the amount of the execution, with costs, and alleged in 
her petition that she stood ready to pay the same at any time.^* 

A sale may be set aside, upon the application of the mortgagee, 
on the ground of a mistake whereby the land was sold at a grossly 
inadequate price ; as where a mortgagee instructed an agent to attend 
the sale and bid the amount of the mortgage, and through mistake 
or inadvertence he failed to do so, and the land was sold for a small 
part of the amount of the mortgage debt.^* 

Scranton Sav. Bank v. Pier, 1 Lack, 585, 58 N. Y. S. 253; Clement v. 

Leg. N. (Pa.) 87. Ireland, 129 N. Car. 220, 39 S. E. 

"Hoppock V. Conklln, 4 Sanf. 838; Ex parte Jones, 47 S. Car. 393, 

Ch. (N. y.) 582. 25 S. E. 285; Hubbard v. Taylor, 49 

=* Adams v. Haskell, 10 Wis. 123. Wis. 68, 4 N. W. 1066. 

=» Wells V. Lenox, 108 Ark. 366, ^Schilling v. Lintner, 43 N. J. 

159 S. W. 1099; Hunt v. Whitehead, Eq. 444, 11 Atl. 153. 

19 App. D. C. 116; Means v. Rose- " Holdsworth v. Shannon, 113 Mo. 

vear, 42 Kans. 377, 22 Pac. 319; Cole 508, 21 S. W. 85, 35 Am. St. 719; 

V. Madden, 91 Mo. 585, 4 S. W. 397; Cole v. Madden, 91 Mo. 585, 4 S. W. 

Schilling v. Lintner, 43 N. J. Eq. 397; Wetzler v. Schaumann, 24 N. 

444, 11 Atl. 153; Vanarsdalen v. J. Eq. 60; Howell v. Hester, 4 N. J. 

Vail, 32 N. J. Eq. 189; Parkhurst v. Eq. 266; Seaman v. Riggins, 2 N. J. 

Cory, 11 N. J. Eq. 233; Mutual L. Eq. 214; GriflSth v. Hadley, 10 Bosw. 

Ins. Co. V. O'Donnell, 146 N. Y. 275, (N. Y.) 587; Williamson v. Dale, 8 

40 N. E. 787, 48 Am. St. 796. See Johns. Ch. (N. Y.) 2-90; Hoppock v. 

also Kennedy v. Bridgman, 27 Misc. Conklin, 4 Sandf. Ch. (N. Y.) 582; 



'627 SETTING ASIDE SALE § 1676 

It is not a valid ground of objection on the part of the purchaser, 
to the completion of an executory contract for the sale of land sub- 
ject to a specific mortgage, that a special clause in the mortgage mak- 
ing it payable in gold was not disclosed at the time the contract was 
made, provided there was no deceit or misrepresentation, and it ap- 
pears that the silence of the contract did not affect the value of the 
property or influence the purchaser in making his bid, and that it 
will not impose any additional burden on him in case the contract is 
completed.^ ^ 

§ 1675a. Mistake in quantity or location of land. — The purchaser 
may have the sale set aside on account of a mistake as to the location, 
the boundaries, or the quantity of the land described in the notice of 
sale.^° Thus a purchaser should be relieved from his purchase where 
the lot sold contains only eight or nine acres instead of eight-nine 
acres, as described in the notice of sale, and he made his bid in the 
honest belief that it contained the larger quantity.^^ And so a pur- 
chaser was relieved from his purchase where he made a mistake as to 
the location of the lots purchased, he believing that each lot had a 
house upon it, when in fact two houses were upon one lot, and the 
owner proceeded to redeem the lot upon which both houses were 
situated for the sum bid for that lot. Had his mistake been one 
merely as to the value of the lots, he would not be entitled to relief.^* 
But where, by mistake land belonging to one party is mortgaged 
by another as his property, and sold under foreclosure to a purchaser 
without notice of the mistake, the purchaser can not bring suit 
against the sheriff and mortgagee to have the sale set aside or to 
recover the purchase-money, since there is