NEWMAN, J.
This case is before us a second time. Plaintiff brought an action to recover money resulting from the foreclosure of a trust deed by “advertisement and sale.” ORS 86.735; ORS 86.770. It holds two mortgages that are subordinate to a trust deed of which defendant Security Bank of Coos County (“Security Bank”) is the beneficiary and defendant Stone is the trustee. The principal issue is whether, as the trial court held, defendants are liable to plaintiff for a portion of Security Bank’s bid at the trustee’s sale. The court granted plaintiffs motion for summary judgment. We affirm.
In Bank of Myrtle Point v. Security Bank of Coos Co., 67 Or App 512, 678 P2d 772, rev den 297 Or 339 (1984) (“Bank of Myrtle Point /”), we held that the trial court erred in granting defendants’ motion for summary judgment, and we reversed and remanded. We stated the facts then in the record:
“In 1977, Mr. & Mrs. McCollom (grantors) executed a trust deed with Security Bank as beneficiary to secure a promissory note in the sum of $12,000. Thereafter, the grantors executed and delivered to plaintiff two mortgages on the same land described in the trust deed. The mortgages are subordinate only to the trust deed. Security Bank had other outstanding loans to the grantors.
“In 1980, Security Bank consolidated the original loan of $12,000 with the other loans into one promissory note. The grantors defaulted on the consolidated loan, and Security Bank elected to foreclose the trust deed, asserting that the trust deed secured the consolidated loan. The trustee’s notice of default and election to sell and the published notice of sale recite that the trust deed secures a debt of $39,279. Plaintiff advised Stone [the trustee under the McCollom trust deed and counsel for Security Bank] that the trust deed gave Security Bank only priority to the extent of the principal sum of $12,000, plus interest and foreclosure expenses. Stone proceeded with the foreclosure, which culminated in a trustee’s sale of the property to Security Bank on September 29,1982. Plaintiffs attorney attended the sale but did not bid. No bids being made, Stone stated that he was authorized by Security Bank to bid $51,783, and he accepted that bid. On October 14, 1982, Stone delivered his trust deed to Security Bank, and it was recorded.
“Plaintiff then made written demand on defendants for [187]*187the amount by which the bid exceeded the sum [which was] secured by the trust deed [and prior to plaintiffs mortgages]. After that demand, defendants elected to readvertise and resell the land. In order to accomplish that, Security Bank conveyed the land back to Stone by its ‘deed of reconveyance,’ and Stone again initiated foreclosure proceedings. This time, the notice of default and election to sell recited that the debt secured is $12,000 plus interest and expenses. This action followed.” (Footnote omitted.)
Plaintiff filed its motion for summary judgment with supporting affidavits just before the first trial, but the trial court had not yet considered them at the time when it granted defendants a summary judgment. Moreover, in Bank of Myrtle Point I, plaintiff did not assign as error the court’s failure to grant its motion for summary judgment, but only that the court erred in granting defendants a summary judgment. Nonetheless, in Bank of Myrtle Point I, we stated in a note that “[o]n remand, if plaintiff renews its motion for summary judgment, it should be granted.” 67 Or App at 516 n 2.
On remand, plaintiff renewed its motion for summary judgment. Defendants answered, asserting affirmative defenses and a setoff, and submitted supporting affidavits. The trial court considered plaintiffs motion and the record before it and stated:
“The Answer with Affirmative Defenses filed September 7,1984, and the affidavits in opposition to plaintiffs Motion for Summary Judgment filed July 2, 1984, create genuine issues of material facts; however, the Trial Court is bound by the footnote directive of the Court of Appeals in Bank of Myrtle Point v. Security Bank of Coos County, 67 Or App 512 at 516 (1984)
“ ‘2. On remand, if plaintiff renews its motion for summary judgment, it should be granted’.
“The Trial Court understands that the issue of plaintiffs motion for Summary Judgment had not previously been ruled upon nor was it argued on appeal. Plaintiffs Motion for Summary Judgment will be allowed.”
The court granted plaintiff a summary judgment for $27,279.82 with interest. Defendants assign as errors that the court 1) allowed the motion for summary judgment and 2) entered judgment in that amount and did not give defendants [188]*188a hearing on the question of the amount of plaintiffs damages before it entered that judgment.
We affirm, but for different reasons than those that the trial court gave. Defendants argue that the footnote should not decide this case. We agree. On reexamination, we recognize that our footnote in Bank of Myrtle Point I was wrong. The trial court had not ruled on plaintiffs motion for summary judgment, and plaintiff had not assigned as error that the court had not granted it. It was not before us in Bank of Myrtle Point I. We will not decide this case on the basis of the footnote.
Nonetheless, the trial court did not err when it granted plaintiff a summary judgment, because there were then no genuine issues of material fact and plaintiff was entitled to summary judgment as a matter of law. ORCP 47. The record then included defendants’ answer and affidavits in opposition. Defendants’ answer affirmatively alleged that 1) “defendants’ belief with respect to the priority of the October 3,1977 Trust Deed and the May 21,1980 promissory note was mistaken” and Security Bank’s bid at the foreclosure sale and the trustee’s acceptance of it “was a result of mistake”; 2) plaintiff was “estopped” from challenging the correctness and validity of the September 29,1982, foreclosure sale, because it was present at the sale, had an opportunity to bid for the property and did not do so and also knew that Security Bank did not intend to make a cash payment but only an offset bid against the grantor’s debt; and 3) Stone, as trustee, had reconveyed the property to Security Bank and then resold it at a second foreclosure sale for $10,000. By way of setoff defendants alleged that the market value of the property on September 29, 1982, was between $23,000 and $25,000. Defendants’ affidavits supported the allegations of their answer.
Defendant argues that the record before the trial court on plaintiffs motion for summary judgment raises several genuine fact issues:
“1. whether the trustee and beneficiary were mistaken as to the amount of the secured debt; 2. whether the mistaken belief gives rise to the relief of readvertisement and resale of the subject property; 3. whether plaintiff is entitled to damages when it was aware of the consolidation of the debts in May of 1980; and 4. whether plaintiff is entitled to damages considering the fact that plaintiff was given the opportunity to bid at the first sale, but offered no bid.”
[189]
Free access — add to your briefcase to read the full text and ask questions with AI
NEWMAN, J.
This case is before us a second time. Plaintiff brought an action to recover money resulting from the foreclosure of a trust deed by “advertisement and sale.” ORS 86.735; ORS 86.770. It holds two mortgages that are subordinate to a trust deed of which defendant Security Bank of Coos County (“Security Bank”) is the beneficiary and defendant Stone is the trustee. The principal issue is whether, as the trial court held, defendants are liable to plaintiff for a portion of Security Bank’s bid at the trustee’s sale. The court granted plaintiffs motion for summary judgment. We affirm.
In Bank of Myrtle Point v. Security Bank of Coos Co., 67 Or App 512, 678 P2d 772, rev den 297 Or 339 (1984) (“Bank of Myrtle Point /”), we held that the trial court erred in granting defendants’ motion for summary judgment, and we reversed and remanded. We stated the facts then in the record:
“In 1977, Mr. & Mrs. McCollom (grantors) executed a trust deed with Security Bank as beneficiary to secure a promissory note in the sum of $12,000. Thereafter, the grantors executed and delivered to plaintiff two mortgages on the same land described in the trust deed. The mortgages are subordinate only to the trust deed. Security Bank had other outstanding loans to the grantors.
“In 1980, Security Bank consolidated the original loan of $12,000 with the other loans into one promissory note. The grantors defaulted on the consolidated loan, and Security Bank elected to foreclose the trust deed, asserting that the trust deed secured the consolidated loan. The trustee’s notice of default and election to sell and the published notice of sale recite that the trust deed secures a debt of $39,279. Plaintiff advised Stone [the trustee under the McCollom trust deed and counsel for Security Bank] that the trust deed gave Security Bank only priority to the extent of the principal sum of $12,000, plus interest and foreclosure expenses. Stone proceeded with the foreclosure, which culminated in a trustee’s sale of the property to Security Bank on September 29,1982. Plaintiffs attorney attended the sale but did not bid. No bids being made, Stone stated that he was authorized by Security Bank to bid $51,783, and he accepted that bid. On October 14, 1982, Stone delivered his trust deed to Security Bank, and it was recorded.
“Plaintiff then made written demand on defendants for [187]*187the amount by which the bid exceeded the sum [which was] secured by the trust deed [and prior to plaintiffs mortgages]. After that demand, defendants elected to readvertise and resell the land. In order to accomplish that, Security Bank conveyed the land back to Stone by its ‘deed of reconveyance,’ and Stone again initiated foreclosure proceedings. This time, the notice of default and election to sell recited that the debt secured is $12,000 plus interest and expenses. This action followed.” (Footnote omitted.)
Plaintiff filed its motion for summary judgment with supporting affidavits just before the first trial, but the trial court had not yet considered them at the time when it granted defendants a summary judgment. Moreover, in Bank of Myrtle Point I, plaintiff did not assign as error the court’s failure to grant its motion for summary judgment, but only that the court erred in granting defendants a summary judgment. Nonetheless, in Bank of Myrtle Point I, we stated in a note that “[o]n remand, if plaintiff renews its motion for summary judgment, it should be granted.” 67 Or App at 516 n 2.
On remand, plaintiff renewed its motion for summary judgment. Defendants answered, asserting affirmative defenses and a setoff, and submitted supporting affidavits. The trial court considered plaintiffs motion and the record before it and stated:
“The Answer with Affirmative Defenses filed September 7,1984, and the affidavits in opposition to plaintiffs Motion for Summary Judgment filed July 2, 1984, create genuine issues of material facts; however, the Trial Court is bound by the footnote directive of the Court of Appeals in Bank of Myrtle Point v. Security Bank of Coos County, 67 Or App 512 at 516 (1984)
“ ‘2. On remand, if plaintiff renews its motion for summary judgment, it should be granted’.
“The Trial Court understands that the issue of plaintiffs motion for Summary Judgment had not previously been ruled upon nor was it argued on appeal. Plaintiffs Motion for Summary Judgment will be allowed.”
The court granted plaintiff a summary judgment for $27,279.82 with interest. Defendants assign as errors that the court 1) allowed the motion for summary judgment and 2) entered judgment in that amount and did not give defendants [188]*188a hearing on the question of the amount of plaintiffs damages before it entered that judgment.
We affirm, but for different reasons than those that the trial court gave. Defendants argue that the footnote should not decide this case. We agree. On reexamination, we recognize that our footnote in Bank of Myrtle Point I was wrong. The trial court had not ruled on plaintiffs motion for summary judgment, and plaintiff had not assigned as error that the court had not granted it. It was not before us in Bank of Myrtle Point I. We will not decide this case on the basis of the footnote.
Nonetheless, the trial court did not err when it granted plaintiff a summary judgment, because there were then no genuine issues of material fact and plaintiff was entitled to summary judgment as a matter of law. ORCP 47. The record then included defendants’ answer and affidavits in opposition. Defendants’ answer affirmatively alleged that 1) “defendants’ belief with respect to the priority of the October 3,1977 Trust Deed and the May 21,1980 promissory note was mistaken” and Security Bank’s bid at the foreclosure sale and the trustee’s acceptance of it “was a result of mistake”; 2) plaintiff was “estopped” from challenging the correctness and validity of the September 29,1982, foreclosure sale, because it was present at the sale, had an opportunity to bid for the property and did not do so and also knew that Security Bank did not intend to make a cash payment but only an offset bid against the grantor’s debt; and 3) Stone, as trustee, had reconveyed the property to Security Bank and then resold it at a second foreclosure sale for $10,000. By way of setoff defendants alleged that the market value of the property on September 29, 1982, was between $23,000 and $25,000. Defendants’ affidavits supported the allegations of their answer.
Defendant argues that the record before the trial court on plaintiffs motion for summary judgment raises several genuine fact issues:
“1. whether the trustee and beneficiary were mistaken as to the amount of the secured debt; 2. whether the mistaken belief gives rise to the relief of readvertisement and resale of the subject property; 3. whether plaintiff is entitled to damages when it was aware of the consolidation of the debts in May of 1980; and 4. whether plaintiff is entitled to damages considering the fact that plaintiff was given the opportunity to bid at the first sale, but offered no bid.”
[189]*189Only the first of those, however, raises a fact question; the latter three raise purely legal questions. Moreover, assuming that the assertions in defendants’ affidavits are true and they were both mistaken as to the priority of Security Bank’s entire secured claim against the property, plaintiff nonetheless is entitled to summary judgment.
Defendants do not dispute the factual assertions in plaintiffs affidavit that Security Bank authorized Stone to bid $51,783 in its behalf, that Stone made the bid and that, as trustee, he accepted it.1 Security Bank’s bid and its acceptance [190]*190by Stone constituted a sale of the property, ORS 86.755, which terminated plaintiffs interest in it. ORS 86.770(1). The sale was “for cash” within the meaning of ORS 86.755(1), which Security Bank, as purchaser, was obligated to pay at the time of the sale, ORS 87.755(4); Bank of Myrtle Point I, supra, 67 Or App at 516, and plaintiff was entitled to the excess of the bid over Security Bank’s prior secured interest and the costs of sale. ORS 86.765(3).
Citing Olmsted v. Melville, 93 Colo 567, 27 P2d 589 (1933), in which the defendant and the beneficiaries had made a clerical mistake in computing the amount of the bid, defendants argue that their shared mistake as to the amount of Security Bank’s prior secured interest allowed the trustee to void the sale and readvertise and resell the property. We do not find defendants’ authority persuasive. Olmsted does not adequately consider the statutory interests of persons other than the bidder, including junior lienholders and the grantors whose interests in the property are cut off by a sale. ORS 87.770. Furthermore, both for trustee’s and sheriffs sales under trust deeds and mortgages, see ORS 86.715, a bidder is bound by a bid at the sale in the absence of fraud or misrepresentation.
“A mistake on the part of the mortgagee or his attorney in bidding more than he intended will not itself justify an application or action by the mortgagee to set aside the sale.” 2 Wiltsie, On Mortgage Foreclosure 1452, § 904 (5th Ed 1939).
“The making of such a bid at a non-judicial foreclosure sale ‘finally fixes the value of the property therein sold’ and clearly obligates the trustee who conducts the sale to account * * * for the excess.” Aneill Ranch v. Petit, 64 Cal App 3d 277, 294, 134 Cal Rptr 456 (1976). (Citations omitted.)
See also Osborne, Mortgages 740, § 344 (2d Ed 1970); 2 Wiltsie, [191]*191supra, at 1432, § 891. None of the parties has raised issues of fraud or misrepresentation. Regardless of a mistake in the amount of its bid, Security Bank is bound by it.
Stone was not entitled under these circumstances to set aside the sale and readvertise and resell the property.
“It is well settled that the trustee in a deed of trust owes duties both to the mortgagor and the holder of the debt. Hence he must act with strict impartiality.” Kratovil and Werner, Modern Mortgage Law and Practice 45, § 3.03(c)(1) (2d Ed 1981).
Stone was under an obligation as trustee to perform statutory duties in his conduct of the sale and application of its proceeds, see Nelson and Whitman, Real Estate Finance Law 549, § 7.21 (2d Ed 1985), not only to the beneficiary, but also to those with recorded subsequent liens and to the grantors. ORS 86.765. Even assuming that, with the consent of plaintiff and the grantor, he could have released Security Bank from its bid and readvertised and resold the property, he lacked that consent. He had no authority to readvertise and resell.2
Moreover, plaintiff is not estopped from recovery because it knew that defendants had sought consolidation of debts or because plaintiff had an opportunity to bid at the sale but did not do so. Neither plaintiffs failure to bid nor its knowledge of defendants’ mistake as to priority affects its interest in the proceeds of sale.3 ORS 86.765. Plaintiff is entitled, to the extent of its secured interest, to the amount that Security Bank’s bid at the first sale exceeded its prior secured interest and the costs of sale.
In their second assignment, defendants assert that, even if plaintiff is entitled to the excess of Security Bank’s bid at the sale, the court improperly calculated the amount of that excess. They argue that (1) the market value ($23,000 to $25,000) and not the bid amount is the sum from which Security Bank’s secured debt and costs should be subtracted to determine the excess and (2), even if the bid amount is controlling, the excess is not $27,279.82 but only $23,588.14. [192]*192Defendants base the latter argument on the assertions that, notwithstanding their mistake as to the priority of Security Bank’s interests, its bid of $51,783.22 was incorrectly computed and should have been $47,793.22,4 and that the amount of the secured debt, with interest, attorney and trustee fees and the costs of sale total $24,175.08. The arguments are without merit. The amount of the accepted bid, not the market value or intended bid, establishes the ceiling on the “proceeds of sale” to be distributed under ORS 86.765. Defendants do not dispute plaintiffs assertion that Stone, on behalf of Security Bank, bid and that he, as trustee, accepted the single sum of $51,783.22.5 Defendants cannot argue now that Security Bank’s bid was less. Accordingly, if we accept defendants’ position that the secured amount is $24,175.08, the resulting difference of $27,608.14 is more than the judgment that the court granted. There was, therefore, no genuine issue of material fact about the amount of plaintiffs’ judgment about which defendants can complain. The court did not err in setting the amount of plaintiff s judgment and in not holding a further hearing on the amount of the damages.
Affirmed.