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Crane v. Bielski

Decided: September 28, 1953.

HENRY W. CRANE, PLAINTIFF-RESPONDENT,
v.
MARY BIELSKI, WIDOW, AND GENEVIEVE BUSH, UNMARRIED, DEFENDANTS-APPELLANTS AND CROSS-RESPONDENTS; WILLIAM ROSOFF AND NETTIE ROSOFF, HIS WIFE, PURCHASERS AT FORECLOSURE SALE, RESPONDENTS AND CROSS-APPELLANTS



Goldmann, W. A. Smith and Ewart. The opinion of the court was delivered by Ewart, J.A.D.

Ewart

[27 NJSuper Page 450] These appeals are from an order made by the Chancery Division of the Superior Court on May 20, 1953 setting aside a foreclosure sale made by the Sheriff

of Union County on April 8, 1953 at which the cross-appellants William and Nettie Rosoff had purchased the mortgaged premises on their bid of $12,200. The action of the court in setting aside the sale was based upon a verified petition of the defendant Mary Bielski, owner of the mortgaged premises, and the defendant Genevieve Bush, her daughter, who had signed the bond accompanying the mortgage, which petition alleged that the sale was for an inadequate price and that the petitioners (defendants in the foreclosure suit) had no notice of the sale date. The petition was supported by further affidavits of the petitioners. Affidavits in opposition were filed by William Rosoff, purchaser at the sheriff's foreclosure sale; by Myles C. Morrison, the attorney who conducted the foreclosure proceedings for the plaintiff; by Sheriff Campbell; and by Robert R. Daly, an attorney who was consulted by the defendants prior to the sale.

The order setting aside the sale found: (1) that the bid of $12,200 made by cross-appellants William and Nettie Rosoff was not an inadequate price as alleged in the petition and affidavits filed; (2) that the failure of the defendants to attend the sheriff's sale on April 8, 1953 was the result of a misunderstanding and mistake on their part; and (3) that by reason of the said misunderstanding and mistake the sheriff's sale to the cross-appellants William and Nettie Rosoff be set aside, but upon these conditions: (a) that the defendants pay the full amount of the judgment and costs to the plaintiff Crane on or before June 5, 1953, in default whereof the said sheriff's sale should be and is confirmed; (b) that the defendants shall pay to Kein & Scotch the sum of $350, "which sum is herewith allowed to Kein & Scotch as a counsel fee and title fee for services rendered to William Rosoff and Nettie Rosoff, his wife, in the premises, provided redemption is made by Mary Bielski and Genevieve Bush"; and (c) that the defendants shall repay to William and Nettie Rosoff the full amount theretofore deposited by them with the sheriff at the time of the sheriff's sale, together with interest at the rate of 6% from the date of the deposit to the date of repayment.

From this order setting aside the sheriff's sale on the conditions mentioned, defendants Bielski and Bush appeal upon the grounds: (1) that the portion of the order allowing a counsel fee and title fee for services rendered to the purchasers at the sheriff's sale was improper and contrary to the rules, and (2) that the provision in the said order directing the defendants to pay interest on the deposit made by the purchasers with the sheriff at the time of the sale is inequitable and imposes an improper penalty upon them.

William and Nettie Rosoff were not parties to the suit but were the successful bidders at the sheriff's sale. They have filed a cross-appeal from the order setting aside the sale on the grounds: (1) that there was no mistake involved in the foreclosure proceedings or sheriff's sale sufficient to entitle the mortgagors to have the sale set aside; (2) that the mistake, if any, was unilateral and caused solely by the neglect of the mortgagors themselves, or their attorney; and (3) that the mistake, if any, did not prejudice the defendants.

A perusal of the record in this case discloses the following undisputed facts: The complaint in the foreclosure suit was filed November 19, 1952, due service was made upon defendants, and the suit was prosecuted to final judgment. At the sheriff's sale there was due the plaintiff to the date of the sale, including the amount of the judgment, interest thereon, costs and sheriff's fees, the sum of $7,748.44. The sale was not attended by either of the defendants, but there was competitive bidding at the sale and the bid of $12,200 made by the cross-appellants Rosoff would have produced a surplus of some 4,450 odd dollars over the amount required to be raised by the execution. The sale was originally advertised by the sheriff to be held on March 25, 1953. Defendants had notice of that date of sale and on March 19, 1953 first consulted Attorney Robert Daly. Mr. Daly's office arranged a two-week adjournment of the sale, which was ultimately held on April 8, 1953 at 2:00 P.M. While Attorney Daly claims to have notified the defendants by telephone prior to April 8, 1953 of the fact that the sale was to be

held on the latter date, defendant Bush claims that she had no notice that the sale was to be held on the date mentioned until she received a letter from Attorney Daly written by him on April 7, 1953, which letter was received by her on the evening of April 8, 1953 and after the sale had taken place. Attorney Daly states that notwithstanding his communication by telephone to the defendant Bush that the sale was to be held April 8 and that he could do nothing for her in the matter, she continued to telephone him about it thereafter and that he wrote the letter of April 7, 1953 to her to make clear his position. In any event, whether the defendants had actual notice that the sale was going to be held on April 8, 1953, it clearly appears that they did have notice that the sale was originally advertised to be held March 25, 1953 and that the adjournment of the sale was secured by Mr. Daly's office at their behest. Neither the defendants, nor Attorney Daly, nor any one else representing the defendants, attended at the sheriff's sale.

No allegations have been made respecting any irregularity in the foreclosure suit, or the conduct of the sheriff in advertising the sale, or in the holding of the sale other than the claim of the defendants that by mistake and misunderstanding they did not know that the sale was going to be held on April 8, 1953, and that by reason of their ignorance of that fact they failed to attend the sale or to be represented at the sale. There is no charge of fraud or sharp dealing or improper action by the purchasers at the sale or by any one else connected with the sale.

Upon the factual situation disclosed above, was the Chancery Division warranted in setting aside the sale over the protest of the purchasers Rosoff?

It is well established in this State and public policy ordains that the power to set aside judicial sales based upon competitive bidding should be sparingly exercised. As said by Justice Heher in Karel v. Davis , 122 N.J. Eq. 526, at page 529 (E. & A. 1937):

"For obvious reasons, public policy ordains that the power to set aside judicial sales based upon competitive bidding should be

sparingly exercised. The integrity of the process, designed as it is to secure the highest and best price in cash then obtainable for the property, demands that a sale so conducted shall be vacated only when necessary to correct a plain injustice. Thus it is that in such matters the court is enjoined to exercise a sound discretion, guided by considerations of justice and equity and not by whim or caprice."

Cf. Morrisse v. Inglis , 46 N.J. Eq. 306 at page 309 (E. & A. 1889), and Guarantee Trust Co. v. Fitzgerald Hotel and Development Corp. , 97 N.J. Eq. 277, at page 279 and 280 (E. & A. 1924). In the case last cited, Chief Justice Gummere states that it had long been the settled doctrine and practice of the courts of this State that judicial sales, made without irregularity or fraud, and which have not been affected by accident or mistake, will not be set aside for mere inadequacy of price, and quotes from the opinion of Mr. Justice Magie in the case of Morrisse v. Inglis as follows:

"This well-known practice is in accord with the policy of our law respecting such sales, which are required to be made, after advertisement sufficient to give publicity, by public outcry to the highest bidder. It is of the greatest importance to encourage bidding by giving to every bidder the benefit of bids made in good faith, and without collusion or misconduct, and, at least, when the price offered is not unconscionably below the value of the property. Nothing would more evidently tend to discourage and prevent bidding than a judicial determination that such a bidder may be deprived of the advantage of his accepted bid whenever any person is willing to ...


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