On appeal from the Superior Court of New Jersey, Chancery Division, Atlantic County.
Brody, Stern and Keefe. The opinion of the court was delivered by Keefe, J.A.D.
The principal issue presented by this appeal is whether a defaulting bidder at a foreclosure sale should be permitted to use the deposit made on the first sale as the deposit on the second sale, contrary to the conditions of sale imposed by the Sheriff.
After the Sheriff of Atlantic County declared that Robert Doherty was the successful bidder at a second execution sale, defendant Bonnie Leek, who had defaulted after being declared the successful bidder at the first sale and was declared an unsuccessful bidder at the second sale, moved to set aside the sale to Doherty. The Chancery Division Judge, finding that the Sheriff's actions were "perfectly justified and perfectly proper," nonetheless set aside the sale to Doherty and declared Leek to be the successful bidder because "the equities in this instance [were] in her favor[.]" Doherty appeals from that determination and we reverse.
The facts are undisputed. In accordance with a Writ of Execution, the Atlantic County Sheriff offered certain real property at a public auction on October 1, 1992. Respondent Bonnie Leek, one of several mortgagees of the property, was the successful bidder at $350,000. In accordance with established procedure, Leek then executed a Conditions of Sale Agreement (Agreement) which required that she pay 10% of the purchase price immediately, with
the balance to be paid within 30 days. In the event that Leek failed to pay the balance of the purchase price as required, paragraph five of the Agreement provided in pertinent part:
If [the purchaser] does not so comply with [the conditions of sale], the property may be again advertised and sold a second time. In case of a resale at a less price than the former bid the purchaser will be held responsible for all losses, expenses or deficiency therein. Also, the deposit to be retained by the Sheriff to be disbursed by Court Order.
Leek deposited $35,000 as required by the Agreement. However, she failed to pay the balance within the 30 day period.
The property was scheduled for resale on January 28, 1993. Leek attended the resale and again entered a bid of $350,000. There were no other bids made above Leek's. Thus, she was declared the successful bidder. Upon the close of the sale, Leek was again asked to execute a Conditions of Sale Agreement (Agreement II) and deposit 10% of the bid price. Leek advised the Sheriff that $35,000 remained on deposit with his office, and requested that her original deposit be applied as a deposit for the current bid. The Sheriff refused to apply the deposit from the first Agreement on which Leek had defaulted because that deposit was, according to paragraph 5 of the Agreement signed by Leek in October, "to be retained by the Sheriff to be disbursed by Court Order."
Agreement II, which Leek was asked to sign on January 28th, contained the same provisions as the first Agreement. Two of those provisions are particularly relevant to the issue presented by Leek at the January 28th sale. Paragraph three provides in part:
The purchaser must pay 10% of the purchase price in cash, certified check, cashier's check or ...