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Hardyston National Bank of Hamburg v. Tartamella

Decided: July 14, 1970.


For affirmance -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None. The opinion of the court was delivered by Weintraub, C.J.


The trial court held a mortgagor had an unqualified right to redeem the property within the ten-day period provided by R. 4:65-5 for objections to the sheriff's sale. We certified the appeal of the successful bidder before argument in the Appellate Division.

There appear to be but four reported decisions in which the question whether a mortgagor has an absolute right to redeem before confirmation was either mentioned or decided.

The question was expressly left open in Union Building and Loan Ass'n v. Childrey, 97 N.J. Eq. 20, 24 (Ch. 1924). The first reported ruling was in Ghee v. Davenport, 2 N.J. Super. 532 (Ch. Div. 1949), affirmed by the Appellate Division for the reasons given by the trial court, 4 N.J. Super. 518Page 510} (1949). It was held that although the right to redeem is cut off by a judicial sale, the sale is not complete until confirmed by the court, and hence it follows that the right to redeem persists until such confirmation.

In so holding, Ghee drew upon statements in other cases which admittedly involved other issues. So the court noted that in Federal Title, &c., Guaranty Co. v. Lowenstein, 113 N.J. Eq. 200 (Ch. 1933), which held that confirmation could be refused unless the mortgagee agreed to a fair-value credit on the debt, the Vice Chancellor said the sale was "not a perfect contract, made by competent parties, but is a bargain dependent upon the approval of the court to render it 'valid and effectual in law.'" (113 N.J. Eq. at 205.) Ghee referred also to Vanderbilt v. Brunton Piano Co., 111 N.J.L. 596, 601 (E. & A. 1933), in which the question was whether retroactive effect could be given to a statute relating to a suit for a deficiency after foreclosure. The Court of Errors and Appeals there said "that a foreclosure sale is not fully a sale until confirmed by court order." Ghee also referred to Wootton v. Pollock, 119 N.J. Eq. 128 (E. & A. 1935), where the question was whether the period of limitations for the deficiency suit ran from the date of the sale or from the date of confirmation. In holding the time ran from the date of confirmation, Wootton cited the observation in another case that the mortgagor's "equity of redemption was not yet absolutely foreclosed [by the judicial sale], but was merely suspended" (119 N.J. Eq. at 131). That quotation came from Marts v. Cumberland Mutual Fire Insurance Co., 44 N.J.L. 478 (Sup. Ct. 1882), which held a judicial sale did not constitute a "sale" terminating coverage under an insurance policy. The full statement in Marts from which Wootton took the excerpt we just quoted reads that "Her equity of redemption was not yet absolutely foreclosed, but was merely suspended, to be terminated if the purchaser should comply with the conditions of sale; to be restored to full vigor if he failed." (44 N.J.L. at 482.)

The issue again arose in Crane v. Bielski, 27 N.J. Super. 448 (App. Div. 1953). There the court disagreed with Ghee and held the judicial sale immediately terminated the equity of redemption so that the mortgagor could thereafter redeem only for adequate cause. But the Supreme Court reversed for other reasons and expressly declined to say whether there was an absolute right to redeem within the period within which objections could be made to the sale. 15 N.J. 342, 346 (1954).

In Crane the Appellate Division seems not to have decided whether, prior to the adoption of our rules of Court in 1948, the mortgagor had the absolute right to redeem before confirmation. Rather it apparently rejected Ghee on the ground that an order confirming a sheriff's sale was no longer required under the rules of Court and hence it must follow that a sale is fully effective at once. 27 N.J. Super. at 458-461. But this misconceived the impact of our rules. We eliminated the motion to confirm and the order of confirmation, not to change the rights of the parties as they theretofore existed, but only to eliminate the paper work of a formal motion and order confirming a sheriff's sale which had become routine and of no practical value.*fn1 To that end only, 1948 Rule 3:77-5 (now R. 4:65-5) provided that the sheriff shall deliver the deed "in pursuance of the sale, unless a motion for the hearing of an objection to the sale is served upon him within 10 days of the sale or at any time thereafter before the delivery of the conveyance." Thus we shifted the burden of going forward to the objector and obviated the entry of a formal order confirming the sale unless an objection was made to the sale.

We add that with respect to sales made by one other than a sheriff, the rules continued the preexisting practice of a motion by the selling officer for an order of confirmation

on 10 days' notice to all persons in interest. 1948 Rule 3:77-7. That rule in its present form, R. 4:65-6(b), reads:

Any person making the sale, other than a sheriff, shall apply for the court's confirmation of the sale on 10 days' notice, given personally or by ordinary mail to all persons in interest who reside in the State and 20 days' notice similarly given to all persons in interest who reside outside this State; but the court may by order dispense with notice or make any other provision with respect thereto.

The rule applies to a foreclosure sale of lands in more than one county. See In re Rhodes, 100 ...

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