Guay v. Brotherhood Building Ass'n

177 A. 409, 87 N.H. 216, 97 A.L.R. 1053, 1935 N.H. LEXIS 7
CourtSupreme Court of New Hampshire
DecidedJanuary 1, 1935
StatusPublished
Cited by23 cases

This text of 177 A. 409 (Guay v. Brotherhood Building Ass'n) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Guay v. Brotherhood Building Ass'n, 177 A. 409, 87 N.H. 216, 97 A.L.R. 1053, 1935 N.H. LEXIS 7 (N.H. 1935).

Opinion

Page, J.

The first exception of the defendants is to the refusal of the master to consider, as an element of damages resulting from the premature foreclosure, the difference between the price at which the property was bid in at the foreclosure sale and the amount then due on the first mortgage lien. They rely upon the general statement (41 C. J. 1036) that when a mortgagee makes a premature or unauthorized sale upon foreclosure he is liable to the mortgagor for the value of the land at the time of sale, less the amount of the prior mortgage debt.

An examination of the American cases cited to sustain that statement discloses the fact that in none of them did the mortgagor, as in this case, elect to have the sale annulled. Instead of that the mortgagor elected to let the sale stand and to sue at law for the damages suffered from the wrongful taking of his equity. In one of them the doctrine of election was distinctly stated. “Plaintiff, by bill in equity, might have had the trustee’s sale set aside and thus restored its equity of redemption. But it was not bound to pursue this remedy, for it had a right to maintain its action at law to recover damages for breach of the contract to extend the time of payment, and ... in its action at law the measure of its damages is the value of its equity in the property. Plaintiff was deprived of this equity by the premature and wrongful sale .. . and nothing short of the money value of that of which it was deprived by the wrongful action of defendant could afford it adequate compensation.” Missouri Real Estate Syndicate v. Sims, 121 Mo. App. 156, 166. To the same intent is another of the cases cited, Warren v. Susman, 168 N. C. 457.

In the case before us the defendant corporation could have held Mrs. Trudeau to damages measured by the value of the equity of *218 redemption only by electing to permit her to retain the fruits (or the burdens) of her wrongful taking of its equity. When it elected, instead, to have its equity returned, it waived the right to damages equivalent to the value of the equity. It ought not to be necessary to declare the point that one cannot recover both the thing itself and its value in money.

But the defendants complain that the plaintiff did not recover the property. Literally speaking this may be true. However, the court made a decree annulling the sale by Mrs. Trudeau and ordering the restoration of the property to the corporation, thus giving it precisely all that it had elected to claim. It is true that just before the decree was entered the first mortgagee foreclosed and deprived the defendants of any practical enjoyment of the judicial restoration of the property; but the plaintiff and his testatrix have done nothing to prevent the effective restoration; the act of prevention was by the bank which foreclosed the first mortgage, and that act rested back upon the act of the corporation in giving a mortgage to the bank.

The defendants cite several of our own decisions as authority for the proposition that if property wrongfully taken is not or cannot be restored the party deprived of it may have its value in damages. These cases (Merrill v. Houghton, 51 N. H. 61; Chartier v. Marshall, 56 N. H. 478) establish the right of money damages in case of non-restoration only when the lack of power to restore is due to the defendant’s own wrong. If Mrs. Trudeau had alienated the property so she could not restore it, she might have been compelled to answer in damages measured by the value of the equity. But the obstacle in the way of the defendants getting the property back was not a conveyance by Mrs. Trudeau but a conveyance the defendant corporation had made by way of mortgage to the bank.

If the defendants have any claim against the plaintiff, it is not upon the principles already discussed. .They cannot claim damages of the full value of the equity for a wrongful sale by Mrs. Trudeau, since they elected another remedy. Nor can they claim the value of the equity because of her not restoring them to possession if they failed to get possession because the corporation had given the first mortgage. The only ground upon which they can claim any damages has already been pointed out to them (86 N. H. 344, 347), and what has just been said is no more than an amplification of what was said when these parties were formerly before us.

The master’s refusal to consider the difference between $25,000, the worth of the property, and $19,000, the amount of the first lien, *219 was entirely proper. If we assume the accuracy of those figures and that the difference of $6,000 represents the value of the corporation’s equity above the first mortgage on the date of the premature sale by Mrs. Trudeau, the assumption will not profit the defendants. If the sale had not been avoided at the instance of the corporation, it might have followed from the assumption, that Mrs. Trudeau retained in ownership and possession an equity of the defendants worth $6,000, subject to her own claim, so that she would have had to credit that amount on the note given her by the corporation. If then the bank had foreclosed and Mrs. Trudeau had discovered that the assumed equity of $6,000 above the first mortgage had partly or wholly disappeared, it might be that she would have had to stand on her credit and take the loss. But as the defendants chose to get their equity back (and did get it back as far as the court and she could accomplish its restoration), any loss of the equity would have to fall upon them, and they could not shift it to her estate. The reason for a credit of the assumed value of the equity, if it ever could have existed, vanished when the defendants sought and obtained an order of the court restoring the equity to them. They should have noted that the equity was subject to the rights of the first mortgagee. It was so when Mrs. Trudeau took it from the corporation, and the corporation got back from her everything she took except the actual possession of the property.

And it is to be remarked that the plaintiff gave back, if not the actual possession of the premises, at least every right of conditional repossession that went with the equity of redemption with which the parties were dealing. The corporation could have had possession as against both the plaintiff and the bank if they had met their obligation to the bank, and it should be remembered that it was for nonpayment of the corporation’s obligation, not Mrs. Trudeau’s, that the bank foreclosed and the defendants were not permitted the actual possession of the premises.

So we come to the only point of causation that could justify a recovery of damages, that raised by the fourth exception. It was stated in the former opinion that “unless the foreclosure of the first lien mortgage and the ensuing loss of the mortgagor’s title by reason of it resulted from the wrongful possession taken and held by the testatrix, the ground of estoppel that her wrong made performance of the condition impossible is not available.” The same causal connection is required to establish damages as to establish estoppel. So, in the former opinion it was said: “Causal relation between the wrong *220 and the loss must be shown.

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Bluebook (online)
177 A. 409, 87 N.H. 216, 97 A.L.R. 1053, 1935 N.H. LEXIS 7, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guay-v-brotherhood-building-assn-nh-1935.