On appeal from the Superior Court, Chancery Division, Cumberland County.
Pressler, Baime and Ashbey. The opinion of the court was delivered by Pressler, P.J.A.D.
This appeal raises a novel issue respecting notice requirements for an adjourned sheriff's sale conducted pursuant to R. 4:65. Although both R. 4:65-2 and R. 4:65-4 are silent on the question, we hold that as a matter of fundamental fairness these rules must be construed as entitling interested parties to actual knowledge of the adjourned date upon which the sale actually takes place.
The facts giving rise to this controversy are largely undisputed. Defendants Thomas and Mary Ann Samojeden were the owners of real property in Vineland, New Jersey, on which Howard Savings Bank held a first mortgage, plaintiff First Mutual Corporation held a second mortgage, and defendant Telmark, Inc. held a third mortgage. In June 1983 Howard Savings instituted a foreclosure action against the owners and
the two junior encumbrancers, both of whom filed answers and joined in the demand that the property be sold. Final judgment was entered in September 1983, which recognized the interests of the junior encumbrances. The judgment was, however, vacated with their consent when Howard Savings renegotiated the mortgage debt with the owners. In January 1984 the second mortgagee, plaintiff First Mutual, filed its foreclosure complaint against the owners. Defendant Telmark, the third mortgagee, filed an answer. The judgment of foreclosure was entered in May 1984. First Mutual's certification of proof showed an amount due on its loan of about $6,000 and Telmark's certification of proof showed about $31,000 due on its loan. First Mutual proceeded to take the requisite steps to effect a sheriff's sale and, insofar as the record shows, both the owners and Telmark were provided with a certified mail notice of a sale scheduled for June 29, 1984, as required by R. 4:65-2, which provides in pertinent part that
If, in any action, real or personal property is authorized or ordered to be sold at public sale, the notice of the sale shall be posted in the office of the sheriff of the county or counties where the property is located, and also, in the case of real property, on the premises to be sold, but need not be posted in any other place. At least 10 days prior to the date set for sale, a notice of sale of real property shall be mailed by registered or certified mail, return receipt requested, by the party who has procured the execution or order for sale to every party who has appeared in the action or served a pleading and to the owner of record of the property as of the date of the commencement of the action whether or not he has appeared in the action. Failure to mail such notice shall not affect the title to the property.
Shortly before the scheduled date, a paralegal in the office of Telmark's attorney telephoned First Mutual's attorney to inquire as to the status of the sale. She was advised, as she asserts in her affidavit, that "at that time . . . Mr. and Mrs. Samojeden had paid the arrearages on the obligation due to the plaintiff and that the foreclosure sale was to be continued on a month to month basis." Accordingly, Telmark did not attend
the sale, which had in fact been adjourned.*fn1 It further appears that following the original date set for the sale, the owners did make monthly payments to First Mutual, which opted, for about a year, to continue to adjourn each monthly rescheduled sale. For reasons which do not appear in the record, First Mutual nevertheless decided not to adjourn the sale scheduled for July 7, 1985, and it was in fact held on that date although First Mutual concedes that neither it nor the sheriff gave any notice thereof, either formal or informal, to any of the interested parties, none of whom had any actual knowledge thereof. First Mutual was the only bidder and purchased the property, which then had an appraised value of approximately $78,000, for $100.
The owner Thomas Samojeden had assumed that no sale would take place so long as he continued to make his monthly payments. His first notice of the July 1985 sale came by way of service upon him of a post-sale writ of possession. He promptly retained counsel who promptly initiated proceedings to set the sale aside. His application was supported not only by his own affidavit stating those of the above facts within his knowledge but also by an affidavit of Telmark's attorney confirming those facts and joining in the owner's request for relief. Samojeden's motion for vacation of the sale was denied, and, accordingly, Telmark made its own application for that relief, asserting that if it had had knowledge of the sale it would certainly have appeared and bid in order to protect its own interest. That application was denied as well, and it is from that denial that Telmark now appeals.*fn2
The sole question before us is whether a notice of sale given pursuant to R. 4:65-2 binds the noticed parties for all time thereafter, irrespective of when the sale is actually held and irrespective of their actual knowledge of the eventual sale date. The trial judge concluded that it does, thereby shifting to those parties the burden of themselves inquiring as to all adjourned dates and ascertaining ...