Townshend v. Simon
Townshend v. Simon
Opinion of the Court
The opinion of the court was delivered by
The non-suit in the court below was ordered on the ground that the remedy was not in an action at law, but by a proceeding in Chancery in the foreclosure suit to
It may be assumed, as an established doctrine of the Court of Chancery, that a purchaser under a decree by the act of purchase, submits himself to the jurisdiction of the court as to all matters connected with the sale which relate to him in the character of purchaser. Casamajor v. Strode, 1 Sim. & Stu. 381; Requa v. Rea, 2 Paige 339; Shann v. Jones, 4 C. E. Green 251. The sale may be set aside by an order in the original cause, without a new bill being filed. Brown v. Frost, 10 Paige 243 ; Wetzler v. Schaumann, 9 C. E. Green 60. And the purchaser may appeal from such order, though he be not a party to the cause. Bailey v. Maule, 7 Cl. & Fin. 121; note cited in National Bank of Metropolis v. Sprague, 6 C. E. Green 462. It has also been held, that the purchaser may be compelled to complete the purchase, by a summary order in the original cause. Lansdown v. Elderton, 14 Ves. 512; Wood v. Mason, 3 Sumner 318; Cazet v. Hubbell, 36 N. Y. 677; Silver v. Campbell, 10 C. E. Green 465.
The modern practice of the English courts is, by an order to direct the premises to be re-sold, and the purchaser to pay the costs and expenses of the sale, and also the deficiency (if any) in the price at the second sale. 2 Daniell’s Ch. Prac. 1282. This practice seems to have originated with Lord Eldon in 1811, in Gray v. Gray, reported in 1 Beavan 199 ; and in the note to Harding v. Harding, 4 M. & Craig 514.
But if it be conceded that the Court of Chancery may compel a purchaser, by summary process, to complete his purchase, that is no reason for holding its jurisdiction exclusive. It is only where the right, as well as the remedy, is purely the creature of equity, without any legal obligation for its foundation, that the jurisdiction of the courts of equity is exclusive. On the ordinary agreement to purchase, Chancery may decree specific performance, and upon a sale under foreclosure the purchaser may be put in possession by writ of
A stipulation for a re-sale in case of default of the purchaser to comply, and for his liability for the expenses and loss on the second sale, has long been in use as one of the usual conditions of sale. Sir Edward Sugden recommends that it never be omitted. 1 Sugden on V. & P. 57 [39.] It has always been regarded as a substantial security for the fulfilment of the agreement to purchase, on which an action at law is maintainable. In such action the measui’e of damages is the difference between the defendants’ bid at the first sale, and the sum realized at the second sale, together with the costs and expenses incident to the re-sale. Ockenden v. Henly, E. B. & E. 485; Cobb v. Wood, 8 Cush. 228 ; Webster v. Hoban, 7 Cranch 399. The difference in price on the resale is, in law, so far regarded as a liquidated debt as to be proveable as such in bankruptcy. Ex parte Hunter, 6 Ves. 94.
The only cases I have been able to find in which the right of an officer, selling under judicial proceedings, to sue the purchaser at law on a condition of this kind, has been questioned, are Wood v. Mann, 1 Sumner 319, and Miller v. Collyer, 36 Barb. 250. In Wood v. Mann, Justice Story expresses the opinion that a court of law would not entertain jurisdiction of such a suit, where the sale was made under a decree of a court of equity. The subject under consideration was the power of a court of equity to enforce, by summary process a security voluntarily given in a court by a person, •who, on his own application, was substituted in the place of the purchaser, on which an order was made that the person so substituted pay the purchase money within a specified
The practice of the Court of Chancery, by summary process, to compel the purchaser to complete the purchase, is founded on the assumption of a contract, on his part to that effect. This is apparent from the observations of Lord Cottenham in Harding v. Harding, 4 M. & Craig 514. The notion that the contract is with the court, is too fanciful to merit much consideration. It is regarded as such a contract as may be made the ground for a bill for specific performance in the name of the officer. Ely v. Perrine, 1 Green’s Ch. R. 396; Bowne v. Ritter, 11 C. E. Green 458. In Michener v. Lloyd, 1 C. E. Green 41, Chancellor Green treats a claim against a purchaser at a sale by commissioners in partition, selling under an order of the court for a deficiency at a second sale, as a claim for damages sustained by the breach of the contract contained in the conditions of sale. He also held that the contract was with the commissioners; that they alone had the right to enforce it, and that the remedy was properly in a court of law, by action on the contract. In Shinn v. Roberts, Spencer 435, the action was at law, by commissioners in partition against a purchaser not complying with the conditions of sale, to recover the difference in the price at the first and second sales. The case was contested by able and experienced counsel. No point was made on the argument as to the ability of the commissioners to sue, and Carpenter, J., in the opinion of the court, declares that he had no difficulty on the subject of the right of the commissioners to maintain the action. In Cobb v. Wood, 8 Cush. 228, it was expressly decided by the Supreme Court of Massachusetts, that an administrator selling lands under a license of a probate court, might recover at law against a purchaser who bid in the property, and signed the memorandum of sale, and then refused to comply; and that the sum recoverable was the difference in the price at the first and second sales. In Sanborn v. Chamberlin,
That relief may be had by another method, and in another court, does not exclude the jurisdiction of courts of law. The remedy in that forum, by action, is frequently less expensive, and more convenient than in the Court of Chancery, and the measure of compensation as indemnity is the same in both courts. In such an action, the defendant is subjected to no inconveniences as to defences which would not equally lie in the way of a purchase at a sale under common law process. The purchaser cannot complain that there is a more summary method of dealing with him in the premises, and of compelling him to abide by his contract. Bowne v. Ritter, supra.
The suggestion that the sale to the defendant might have been disapproved of by the Chancellor, and that the sheriff, on his own motion, may be prosecuting this suit, is entitled to no weight. If the sale was improperly conducted, to the prejudice of defendant as purchaser, he might, by summary application to the Chancellor, have been discharged from his
Nor will any embarrassment arise as to the disposition of the moneys that may be recovered in this action. The sheriff is the representative and trustee of the persons interested in the process under which he makes the sale, the complainant, the other encumbrancers, and the owner whose property he is-empowered to sell. So strictly is he regarded as a trustee,, that he has no power to relieve a purchaser from a sale which is advantageous to the parties to the suit, or yield any substantial right affecting either the complainants or the defendant. It was so held by Chancellor Zabriskie in Shann v. Jones, 4 C. E. Green 251. The money recovered in this suit will be money made under the process in his hands. It will represent, when taken with the sum obtained at the second sale, what the officer has realized out of the property, and what he would "have received, immediately, if the defendant-had kept his engagement. It was said by Carpenter, J., in Shinn v. Roberts, in speaking of a similar suit by commissioners in partition : “ The money recovered, after deducting expenses and a reasonable remuneration, will be the moneys-of the parties in interest, and its payment over would be-enforced by the proper tribunal.” In Cobb v. Wood, the action was held to be maintainable by an administrator selling under an order for the payment of debts, though the amount obtained at the second sale was sufficient to pay all the debts and the costs of administration; the recovery being for the-benefit of the widow and heirs of the deceased.
The action was well brought, and the non-suit should beset aside, and a new trial ordéred; costs to abide the event..
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- TOWNSHEND v. SIMON
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