1833. Ex parte similar cases in the courts of common law and of equity, in both of which courts the rule is, that an application for security for costs from a petitioner abroad is a matter of course, if made before any proceeding by the defen- In the matter dant; and that, in the present case, there had not been any proceeding. Mr. Stewart, for the petitioner, admitted the rule to be as stated by Mr. Montagu, but said that, in the present case, there had been a proceeding, the assignees having examined, before the commissioner, a witness with respect to the petition, and had this day made an application to the Court to compel the registrar to attend at the hearing with the examination. And of this opinion was the Court, who said that requiring a security for costs was strictissimi juris; and that the examination, and the application this day as to the registrar's attendance, were to be considered as a proceeding. Dismissed with costs. of DAVIS. In the matter of SKINNER. THIS was a petition by the pledgee of policies of insurance, praying a sale, and leave to bid. Mr. Swanston, for the assignees, stated they were desirous of being allowed to fix a reserved bidding. Mr. Montagu for the petitioner:-Applications by assignees for reserved biddings are often made, but constantly refused, as was the case in Sir George Duckett's VOL. I. G C. R. July 3, 1833. On the sale of property pledged, the assignees cannot have a reserved bidding. 1833. In the matter of SKINNER. bankruptcy, where the property to be sold was of very great value. Allowing a reserved bidding would enable the assignees to prevent a sale by fixing an unreasonable sum. Moreover, assignees have no right to interfere with a mortgagee or pledgee, except to redeem. PER CURIAM-We cannot permit assignees to have a mere reserved bidding. If they desire actually to bid for this property, they may have permission; but then they must recollect that the property may be knocked down to them like any other bidder. Reserved bidding refused. C. R. Ex parte ASHLEY. In the matter of BELL. Dec. 9, 10, THIS 1833. not rescind a was a petition by the assignees to rescind a sale The Court will of mortgaged property sold under the fiat, for which the mortgagee had bid and become the purchaser, without previous leave of the Court. purchase by the mortgagee, be cause he bid without leave of the Court. The facts of the case are as follow: Part of the bankrupt's real property was mortgaged to Dixon for a term of one thousand years to secure 5,000l., which the commissioners, upon the application of Dixon, ordered to be put up to sale in the usual manner. Whereupon the assignees agreed with Dixon that the fee simple of the premises should be sold instead of the term only. The assignees wished to have a reserved bidding, but Dixon refused to agree thereto. At the sale the premises were knocked down to the agent of Dixon for 4,4001. The assignees refused to confirm the sale, and gave notice to Dixon that they would pay off the principal and interest, which he refused to accept, unless they would pay the auctioneer's charges, the costs of obtaining the order for sale, and the costs and expences of his solicitor in coming up to London, and attending the sale, &c. The petition prayed, that the contract of purchase might be rescinded and given up; and that, upon payment to Dixon of the balance of principal and interest, he might be ordered to surrender or convey the mortgaged premises to the assignees; and that Dixon might be ordered to pay all costs. Mr. Swanston and Mr. Bethell for the petition : The sale must be set aside, the mortgagee having bid without previous leave of the Court, ex parte Hammond, Buck, 464. The practice of obtaining leave is founded on very good reason; for if the mortgaged estate sells for more than the mortgage money, the mortgagee, being, as to the surplus, a trustee for the mortgagor, is bound to obtain the highest possible price, in order that there may be a surplus; while, as a purchaser, he of course will endeavour to pay as little as possible. If he had a power of sale he could not buy of himself; and what difference in this respect is there between a power of sale by agreement of the parties and by order of the commissioners? By the established course of practice of obtaining orders to bid on the one side, and by the absence of all authority for a contrary course on the other, it has become a rule that a mortgagee can never, without leave, become a purchaser in bankruptcy when he has obtained an order for sale. It is a rule in equity, that no person shall bid, without leave, at a sale of property in the produce of which he is interested. And this rule is so strict as to extend to cases to which the reason does not 1833. Ex parte In the matter of BELL. 1833. Ex parte of BELL. reach, so that the guardian cannot purchase the estate of the infant. Mr. Montagu and Mr. Anderdon for the mortgagee were stopped by the Court. 4 THE CHIEF Judge: There is nothing stated, either in the petition or affidavits, to induce the Court to think that there has been any such impropriety of conduct on the part of this mortgagee as to call upon us to rescind the sale. The charges and objections are— 1st. He bid without the previous order of the Court, with some unfair intentions. 2d. That he thereby obtained an unfair advantage. If the second charge had been made out, that is, if the mortgagee had been guilty of unfair conduct, and had thereby obtained an unfair advantage, I would have rescinded the sale. As to the first charge, what is advanced in its support? 1st. That he did not obtain leave. 2d. That he did not assent to the assignees having a reserved bidding. (a) 3d. That he employed another to bid on his behalf. Neither the second nor the third objections are enough to induce me to rescind the sale. As to the first, that he did not previously obtain leave, it is certainly stated in all the books of practice, and confirmed by numerous cases, that the practice is to obtain a previous order; but in all those books the (a) See re Skinner, ante page 81. If the assignees buy in the mortgaged premises upon a reserved hidding, it seems that the mortgagee may hold them to the purchase; but if, instead of insisting on his right, he apply for a re-sale, he waives his right, ex parte Baldock, 2 Dea. & Ch. 60. 1833. Ex parte ASHLEY. statement is accompanied by an expression of doubt as to its necessity. And the reason of the doubt of the Vice-Chancellor in ex parte Hammond, Buck, 464, was, because out of bankruptcy it was not necessary; besides In the matter which, in that case the application was on behalf of the mortgagee. It is quite clear that out of bankruptcy it is no objection to title that a mortgagee has become a purchaser. And no principle can be stated as the foundation of the practice in bankruptcy, except that Sir Edward Sugden, in his work on Vendors and Purchasers, states, that it may be said he could not be both vendor and purchaser without leave of the Court. But that ground is not enough to induce me to set aside the sale, although it may be enough to induce us to refuse our assistance when he comes here for specific performance, by calling on the assignees to convey to him, or goes before the commissioner to prove for the balance. The rule requiring the mortgagee to procure an order to bid, if it exist at all, is merely technical, otherwise the Court would not grant orders for that purpose so very readily as they do. In this case he bought the fee, and not his mortgage term; his title did not enable him the fee for sale. to set up The petitioners complain of an irregularity only: they do not come to set aside the sale merely because the mortgagee purchased, but because it was so very usual to obtain leave to bid that not doing so amounted to a most irregular deviation from the usual practice. I do not impute any fraud to Dixon, but the effect of this irregularity is that he gains 7007. It has been stated that Dixon might abandon the order for sale, and stand upon his rights as mortgagee; but I do not conceive he of BELL. |