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in coming up to London, and attending the sale, &c. The petition prayed, that the contract of purchase might be rescinded and given up; and that, upon payment to Dixon of the balance of principal and interest, he might be ordered to surrender or convey the mortgaged premises to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 In the matter 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. 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 bidding, 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 to set up the fee for sale. Sir John Cross : 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 7001. 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. 1833. Ex parte of BELL, could do so, without the assent of the assignees, after so much has been done under it. This sale took place under unusual, and, in my In the matter opinion, irregular circumstances; the result is, a gain of 7001. to Dixon; my opinion, therefore, is, that the sale ought to be set aside; not on any abstract principles, but because justice requires it to be done in this particular case. Sir George Rose : When mortgages are sold under an order of the commissioners, it is not the mortgagee, but the assignees who sell. (a) The fact that orders to bid are usually obtained only shows that some doubts existed which rendered it prudent. In the present case it would have saved a petition. No doubt the practice has been to ob tain an order. But who ever doubted that a mortgagee might purchase without? If the parties had continued solvent, Dixon could clearly have taken a conveyance of the equity of redemption, or a release of all the right of the mortgagor. If there were any such principles or reasons preventing mortgagees purchasing as those which prevent trustees or solicitors, the Courts would (a) It was formerly supposed sale, as the mortgagee acts under tually a general order to prevent a petition in every particular case. The assignees conduct the sale of an equitable mortgage, ex parte Smith, 2 Dea. & Ch. 60. When mortgaged property is sold, and the same solicitor is concerned for the assignees and the mortgagee, a separate solicitor should be appointed for the purposes of the sale. Ex parte Rolfe and Milne, 1 D.§ C. 77. 1833. Ex parte ASHLEY. of have acted very unadvisedly in granting orders to bid with the facility they have, it being done almost quite of course. But even supposing that it could be now shown, for the first time, that the law was otherwise, it In the matter would be too much to call on this Court, on a petition in bankruptcy, to decide against the validity of such purchases, when our decision might have a most important effect upon title throughout the whole kingdom. This petition appears to me altogether irregular as to the relief it prays. If the mortgagee carried his order for sale into effect improperly, this Court might interfere; but how? This petition prays the Court to rescind the sale; but it does not follow that would be done, even if we were of opinion the mortgagee had acted improperly in purchasing. In those cases where the Court interferes the sale is never set aside in the first instance, but a re-sale is ordered, and the first purchaser is held to his bargain, unless a better price is obtained on the second sale. (a) But it is doubtful whether we could order a re-sale in this case. All the assignees could do would be to rescind the order, which is now functus officio, and cannot be enforced a second time against the mortgagee. Concerning the second branch of the prayer, this Court has no more jurisdiction to order the redemption of a mortgage than it has to entertain a criminal question. If the mortgagee came here to compel the assignees to convey to him, then indeed would properly arise the question, whether they might set up his purchasing without an order as a defence. But this application is similar to one that the contract should be delivered up to the assignees, which is far too much for them to demand. If there exist in the profession an opinion that a (a) Ex parte Reynolds, 5 Ves. 707. Ex parte Lacey, 6 l'es. 625. BELL. |