Bailey v. Hendrickson

• Decision Date: 27 September 1913
• Citation: 25 N.D. 500,143 N.W. 134
• Parties: BAILEY v. HENDRICKSON.
• Court: North Dakota Supreme Court

25 N.D. 500

143 N.W. 134

BAILEY

v.HENDRICKSON.

Supreme Court of North Dakota.

June 11, 1913.

Rehearing Denied Sept. 27, 1913.

Syllabus by the Court.

A direction in writing by the attorneys for a mortgagee to the sheriff to bid a specified amount for the premises on a foreclosure by advertisement construed and held to be, in legal effect, a written bid for the amount stated, authorizing the sheriff to strike it off to the mortgagee if no one bid a greater sum.

Mere inadequacy of price at a foreclosure sale is not a ground on which to set aside a foreclosure, in the absence of fraud, undue advantage, or prejudice. Grove & Fultz v. Loan Co., 17 N. D. 352, 116 N. W. 345, 138 Am. St. Rep. 707.

Where the mortgagee, at a sale under a foreclosure of a second mortgage by advertisement, bids the amount due upon his mortgage, with costs of foreclosure, and is the highest bidder, the amount so bid cannot be held an inadequate price under the circumstances, and the adequacy or inadequacy of the price is not measured by exactly the same considerations that would determine the question were it at a public auction for other purposes, as it cannot be assumed that the law contemplates that a mortgagee, to protect his debt and security, must advance, under such circumstances, an amount perhaps several times the debt for the protection of the small sum secured. To hold that he must do so would, in many cases, impose a burden upon him which would render his security valueless.

The presence and participation of more than one bidder at a foreclosure sale by advertisement, when proper and legal notice has been given thereof, is not necessary to a legal sale. It is sufficient if the public has been fully advised of the sale by legal publication of notice, and has the right and opportunity to attend and bid.

Section 2279, Rev. Codes 1905, prescribes the qualifications that a newspaper must possess to entitle it to publish legal notices, and it is not for the court, in the absence of fraud, to overturn the legislative judgment on the subject, and set aside a foreclosure sale, where the advertisement was published in a newspaper qualified under said section, because it may not have had as great a circulation in the vicinity of the land as some other paper published in the county.

The mortgagor, on foreclosure of a mortgage by advertisement under a power of sale, the advertisement being published in a newspaper published in the county in which the land is situated, and qualified under the provisions of section 2279, Rev. Codes 1905, to publish legal notices, is charged with knowledge of the foreclosure proceedings, and the fact that he has no actual knowledge thereof is not, under ordinary circumstances, evidence of fraud or bad faith, and the notice so published has the same binding force that a foreclosure by action has when the defendants therein are personally served with process. Grove & Fultz v. Loan Co., 17 N. D. 352, 116 N. W. 345, 138 Am. St. Rep. 707.

Six publications in six successive weeks, the last publication being the day before the sale, in a foreclosure under power of sale contained in the mortgage, fills the requirements of section 7459, Rev. Codes 1905, which requires that notice be given by publication six times, once in each week for six successive weeks.

The fact that the mortgagor paid interest on a first mortgage after the institution of foreclosure proceedings under a second mortgage, and that the mortgagee so foreclosing did not ascertain that fact and prevent his doing so, and the further fact that the mortgagor paid taxes on the premises after commencement of foreclosure proceedings, is not a reason for vacating the sale, and particularly when it is not shown that the mortgagee had knowledge of these facts, and when, if known, he had a right to assume that the mortgagor, who had full knowledge of the second mortgage, was intending to pay or redeem from it.

In the absence of proof that the mortgagee knew that the mortgaged premises were cultivated or rented during the year of redemption, the fact that he did not collect the rent due from the tenant during such period, and that the same was paid by the tenant to the mortgagor and retained by him, is not evidence of bad faith or fraud on the part of the mortgagee in the conduct of his foreclosure proceedings.

The fact that the party who owned and foreclosed a mortgage held it under an assignment, which he did not place of record until some months after taking it, but did record it some time prior to the commencement of foreclosure proceedings under the power of sale, in the absence of other circumstances, does not show fraud or lack of good faith on his part, particularly when it appears that the mortgagor never attempted to pay the debt, and proceeded in total disregard of the mortgage, and was in no manner prejudiced by the failure to record the assignment.

Where mortgaged premises consist of a quarter section, constituting one distinct farm or tract, it is not necessary to a valid foreclosure sale under a power that less than the whole tract be sold, particularly where it was first offered in tracts of 40 acres each, then in tracts of 80 acres each, without bidders.

Failure to append the name of the holder of the mortgage to a notice of foreclosure under a power, when it is signed by the sheriff and by an attorney as attorney for the assignee, and the notice discloses the name of the assignee foreclosing, does not render the sale invalid.

Where all the proceedings in a foreclosure under a power of sale contained in the mortgage are regular and in full compliance with law, the fact that some of the acts might have been done as they were done for the purpose of preventing the mortgagor from acquiring knowledge of the foreclosure proceedings is not evidence of bad faith on the part of the mortgagee, in the absence of any showing of an intent to conceal the foreclosure, or of knowledge by the mortgagee that the mortgagor did not have actual knowledge of the proceedings.

Appeal from District Court, Bottineau County; Leighton, Judge.

Action by Claude Smith Bailey against Karl S. Hendrickson to set aside a sale under foreclosure by advertisement. Judgment for the plaintiff, and defendant appeals. Reversed, with directions to enter judgment for the defendant.

Fisk, J., dissenting.

This is an action brought January 20, 1910, to vacate a foreclosure sale by advertisement of a second mortgage given by Claude Smith Bailey, the plaintiff herein, upon the N. E. quarter of section 19, in township 163 N., range 83 W., in Bottineau county, and to be allowed to pay such mortgage. It is here for trial de novo. We find the facts to be:

(1) That on the 21st day of August, 1905, the plaintiff was the owner in fee of said premises, and that on that date he executed a second mortgage to one R. H. Grace thereon to secure the payment of the sum of $54, evidenced by promissory notes, the last of which became due November 1, 1906.

(2) That such mortgage was recorded in the office of the register of deeds of Bottineau county on the 28th day of August, 1905.

(3) That on the 13th day of September, 1906, said Grace assigned the said mortgage, with the notes secured thereby, to the Mohall State Bank, and that such assignment was recorded in the office of the register of deeds of Bottineau county on the 30th day of November, 1906.

(4) That said Mohall State Bank on the 30th of November, 1906, assigned said mortgage to the defendant, Karl S. Hendrickson, together with the notes secured thereby, and that the assignment thereof was recorded in the office of the register of deeds of Bottineau county on the 6th day of March, 1908.

(5) That on the 18th day of March, 1908, a foreclosure proceeding by advertisement was instituted on said mortgage. The body of the notice of sale recited the giving of the mortgage and the two assignments mentioned, and their recording as hereinbefore stated, together with the dates, the hour, and books, and pages of record.

(6) That such notice of foreclosure sale was not signed by said Hendrickson, but was signed only by the sheriff of Bottineau county and “Bosard & Ryerson, Attorneys for Assignee, Mohall, N. D.,” and that the publication of such notice was made in the Lansford Times, a newspaper published at Lansford, Bottineau county, conforming to the requirements of section 2279, R. C. of 1905, and entitled to publish legal notices, for six consecutive weeks, in the issues of March 20 and 27, 1908, April 3, 10, 17, and 24, 1908, and the sale was made on the date advertised, namely, April 25, 1908, and at the proper place. That the firm of Bosard & Ryerson was located at Mohall, in the eastern part of Renville county, on the same line of railway on which Lansford is located. That both Lansford and Mohall are approximately 50 miles from Bottineau, the county seat.

(7) That on the 20th day of April, 1908, said firm of Bosard & Ryerson wrote the sheriff of Bottineau county, informing him that the sale was set for Saturday, the 25th day of April, that they had written the Lansford Times to forward him the affidavit of publication and bill for printing, and authorizing him to bid the property in for the amount due.

(8) That the publication was made in the Lansford Times for the reason that it was only a few miles from Mohall and on a direct mail line therefrom, and that it was a matter of convenience to said firm of attorneys to have their legal notices published in the Lansford Times, and that they had practically all their legal notices published therein as a matter of convenience and to save delay, and for no other reason. It does not appear that the defendant himself knew in what paper publication was made or the date of sale.

(9) That the sheriff first offered the land for sale in tracts of 40 acres each. That he received no bids therefor. That he then offeredthe same in legal subdivisions of 80 acres each, but received no bids therefor. That...