This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
Immediate sale ordered, when.
(h) Wade v. Wilson, (1882) 22 Ch. D. 235.
(i) Provident Clerks, §c. Asson. v. Lewis, (1892) G7 L. T. 644.
(k) R. S. C. 1883, O. LV. r. 5a. (l) O'Kelly v. Cuhrrhouse, (1887) W. N. 36.
(m) Smith v. Robinson, (1853) 1 Sm. & G. 140; 22 L. J. Ch. 4K2 : and see Seton, 6th ed. 1919.
(n) Phillips v. Gutteridge, (1859) 4 D. & J. 531: Foster v. Harvey, (1863) 4 D. J. & S. 59.
(o) Marriott v. Klrkham, (1862) 3 Git 536 ; 31 L. J. Ch. 312 ; Newman v. Selfe, (1864) 33 Beav. 522. As to a sale being ordered against the Crown, see Scott v. Robarts, (1856) 4 W. R. 499, and cases there cited.
It was formerly much doubted whether sale or foreclosure was the proper remedy for an equitable mortgagee; and a distinction was sometimes drawn between a case where the mortgagee had an agreement for a legal mortgage and a case where he had a mere equitable charge. Now, under the Conv. Act, 1881, s. 25, combined with the definition of a "mortgage" contained in s. 2, sub-s. vi., as including "any charge on any property for securing money or money's worth," the Court has power to order a sale of property subject to an equitable mortgage, whether the deposit of deeds is or is not accompanied by an agreement to execute a legal mortgage (x).
Equitable mortgagee, sale or foreclosure.
As a general rule, no party to the suit ought to bid for the estate without the previous permission of the Court (y);
Who may bid.
(p) See Hiorns v. Holtom, (1852) 16 Jur. 1077 ; Wickham v. Nicholson, (1854) 19 Beav. 38 ; Probert v. Price, (1853) 1 Eq. R. 51.
(q) Hurst v. H., (1852) 16 Beav. 372 ; 22 L. J. Cb. 538 ; and see Smith v. Robinson, (1853) 1 Sm. & Gr. 140 ; 22 L. J. Ch. 482.
(r) Wade v. Wilson, (1882) 22 Ch. D. 235 ; 52 L. J. Ch. 399.
(s) Greeny.Biggs,(1885)"W.N. 128.
(t) S. W. District Bank v. Turner, (1882) 31 W. R. 313.
(u) Charleivood v. Hammer, (1884) 28 Sol. J. 710.
(x) Oldham v. Stringer, (1884) 33 W. R. 251; Wade v. Wilson, sap.; Davies v. Wright, (1886) 32 Ch. D. 220.
(y) Elworthy v. Billing, (1841) 10
And the party permitted to bid will not be allowed to conduct the sale (z); and where, without such permission, the party conducting the sale purchased, and under a feigned name, the Court, even after the purchase had been confirmed, ordered the estate to be put up again at the price for which he had bought it; and if there should be no higher bidding, he was to be held to his bargain (a). A residuary legatee (b), or tenant for life, or owner of a reversionary interest in the estate, may (subject to the above restriction) purchase on a sale by the Court; and Lord Eldon, although disapproving of the rule, has referred to its existence as free from doubt (c). But leave to bid has been refused to an executor in an administration suit (d) ; so also, to a receiver (e), and to a guardian ad litem (f), and to trustees (g). The stringency of the rule may, however, be relaxed where all parties who are sui juris consent, and an advantageous sale cannot be otherwise effected (h). If leave to bid is not given by the order for sale, an application for leave must be made by summons in chambers (i), which must be served on all parties interested (k). The vendors are not liable for the acts of other parties to the action in employing a person to make fictitious biddings (/).
Si. 98; 10 L. J. N. S. Ch. 176 ; Sug. 14th ed. 99. But the sale will not necessarily be set aside on the ground of his having bid: Wilson v. Greenwood, (1819) 10 Si. 101, n. Under the Partition Acts leave maybe given ; see sup. p. 1140.
(2) Domville v. Berrington, (1837) 2 Y. & C. 723 ; 7 L. J. N. S. Ex. Eq. 58 ; and see Yerrall v. Cathcart, (1879) 27 W. R. 645. And the rule will not be departed from, even -where the persons having the conduct are guilty of delay (Ex p. McGregor, (1851) 4 De G. & S. 603); but it may perhaps be relaxed where the property is clearly insufficient to pay the debt, and sale has already been attempted, -without producing any bond fide bid : Spaight v. Patter-son, (1846) 9 Ir. Eq. R. 149; Steele v. Devonport, (1847) 11 ib. 339.
(a) Sidny v. Hanger, (1841) 12 Si. 118. Such an order may be brought under the review of the House of Lords by a purchaser, although he is not a party to the cause; Bailey v. Maule, (1825) 7 C. & F. 121, n.
(b) Hooper v. Goodwin, (1815) G-. Coop. 95.
(c) See Williams v. Attenborough, (1823) T. & R. 76; 1 L. J. (O. S.) Ch. 138.
(d) Geldard v. Randall, (1845) 9 Jur. 1085.
(e) Alven v. Bond, (1841) Fl. & K. 196.
(/) Dodson v. Bishop, (1862) Seton, 6th ed. 341.
(g) See Tennant v. Trenehard, (1869) 4 Ch. at p. 546 ; 38 L. J. Ch. 169.
(h) Campbell v. Walker, (1800) 5 Ves. 678, 682 ; Farmer v. Bean, (1863) 32 Beav. 327 ; Tennant v. Trenehard, sup.
(i) R. S. C. O. LV. r. 2 (14).
(k) For form of summons, see Dan. C. F. 5th ed. 645.
The effect of leave to bid is not, as has been sometimes erroneously supposed, to place the person obtaining leave in a fiduciary position towards the Court ; such person assumes only the duties and obligations as to disclosure and good faith which are incumbent upon an ordinary purchaser from an ordinary vendor (m). It seems that leave to bid, once given, unless in terms confined to bidding at a specific auction, removes the disability and puts the parties at arm's length as regards the property, so as to enable the person obtaining leave subsequently, and after failure of the auction, to become the purchaser (m).
Effect of leave to bid.
In general, the plaintiff, or other person having the carriage of the decree, conducts the sale (n), in which case his solicitor is considered, as between the vendors and the purchaser, to be the agent of all the parties to the action (o); but where in an administration action an order is made for the sale of any property vested in any executor, administrator, or trustee, the conduct of the sale will be given to him unless the Court otherwise directs (p). The Court, however, may, if it be for the benefit of the parties to the action, and a sufficient case is made out, give the conduct of the sale to a person other than the plaintiff(q), e.g., the defendant (r); and, in determining the question, does not necessarily consider the extent of the interests of the several parties, nor the possession of the title deeds; inasmuch as every party to the suit is bound to facilitate the sale (s). Interference by other parties with the person having the conduct of the sale may be restrained by injunction (t). Under the Conv. Act, 1881, s. 25 (2) (3), the conduct of a sale in a foreclosure or redemption action may be given to any defendant; and it has accordingly been given in several cases to the person having the most interest in obtaining a large price (u). But there is no definite rule to the effect that the conduct of the sale should be given to the mortgagor or subsequent incumbrancers, at any rate, where the property affords an ample security. Thus, the conduct has been given to the plaintiff, the first mortgagee, where the property was amply sufficient to satisfy his and the second mortgagee's mortgages (x). The conduct has also been given to a fourth mortgagee on his bringing into Court a sum of money sufficient to guarantee the plaintiffs, the first mortgagees, against loss (y). "Where mortgagees sell under the Court's direction, they are not liable for the acts of other parties to the action, but stand in the same position as ordinary vendors (z).