Clark v. Simmons

• Decision Date: 02 January 1890
• Citation: 150 Mass. 357,23 N.E. 108
• Parties: CLARK v. SIMMONS.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

150 Mass. 357

23 N.E. 108

CLARK v. SIMMONS.

Supreme Judicial Court of Massachusetts, Plymouth.

January 2, 1890

COUNSEL

Hosea Kingman, for appellant.

R.O Harris, for appellee.

OPINION

KNOWLTON J.

On the facts found, the plaintiff does not attack that part of the decree which adjudges that the fourth mortgage of Brewster to Howland, assigned to the defendant, is good against the plaintiff, and the only question before us arises on the defendant's contention that the sale made by him under the power contained in the first mortgage is valid. It has repeatedly been held, in this commonwealth and elsewhere that a mortgagee who attempts to execute a power of sale contained in the mortgage is bound to exercise good faith and to use reasonable diligence to protect the rights and interests of the mortgagor under the contract. Montague v. Dawes, 14 Allen, 369; Drinan v. Nichols, 115 Mass. 353; Thompson v. Heywood, 129 Mass. 401; Briggs v. Briggs, 135 Mass. 306. If he fails to do his duty in this respect, a mere literal compliance with the terms of the power will not render the sale valid against the mortgagor in favor of one charged with knowledge of the delinquency, although it may be sufficient if the purchaser is a stranger who buys in good faith. In determining whether in a particular case, a mortgagee has acted in good faith, and with a due regard for the interests of the mortgagor, the nature of his authority must be considered. He has a right, after giving the prescribed notices, to have the mortgaged property sold at auction for the payment of his debt. It is his duty, for the benefit of the mortgagor whom he represents, so to act, in the execution of the power, as to obtain for the property as large a price as possible. Ordinarily the parties stipulate in the mortgage what kind of notices of the sale shall be given, and ordinarily a mortgagee is not required to give a notice of a different kind. So far as the mortgage leaves him a power of selection of methods of giving notice and of making the sale, he is to act reasonably, and exercise a sound discretion. The contract implies that, upon the notice prescribed, an auction sale can be had,--that is, that bidders will be attracted so that the property can be sold. A sale at auction necessarily involves the presence of one or more persons who are willing to buy. If the notices given fail to bring such, a power to sell at auction cannot be executed. If the mortgagee is not authorized to purchase, and no bidders are present, it is quite obvious that no sale can be made. And if the only person present who will buy at all will offer only a small part of the well-known value of the property, the conditions which, under the contract, are impliedly essential to the execution of the power are wanting, and it is the duty of the mortgagee either to abandon his attempt to sell, or to adjourn the sale until he can obtain the presence of bidders. Good faith...