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it should be clearly proven that it was a bona fide effort by the bidding joint owner to purchase the property for himself, with the expectation and obligation to pay for it if he was the successful bidder. We therefore conclude that the court did not err in holding that there was no such bybidding in this case as to authorize the release of defendants from the obligations of their contract."

In National F. Ins. Co. v. Loomis (1845) 11 Paige (N. Y.) 431, the court said: "The principle upon which employment of puffers, by the person for whom a sale at auction is made, is disallowed as a fraud upon fair purchasers, is that the persons who thus bid are not in fact real bidders, but are the mere instruments of the vendor to deceive the other bidders. . Any person who is a real bidder at a judicial sale has a right to bid either in person or by his agent duly authorized. And I know of no principle which renders it necessary that a person bidding at an auction, as the agent of another, should disclose to other bidders the name of the person for whom he is bidding, unless the person for whom he acts is the vendor, who is professedly selling property instead of buying it. Here it was a matter of no consequence to other bidders whether the agents of the insurance company, who were strangers, bid in their own names, or as the agents of the corporation which was authorized to purchase at the sale. And it is wholly improbable that either of the appellants, who appear to have been well acquainted with the property, were induced to give more than they believed the property was worth, merely because they saw two strangers bidding upon it, without disclosing the fact that they were bidding for the insurance company. Both of these agents swear that they had obtained estimates of the value of the several pieces of property, and that they intended in good faith to purchase the property, for the company, if it was not sold for more than the maximum prices which they had fixed for their limits. And even if they occasionally bid against each other, by

mistake, that was no fraud upon other bidders; but it was an injury to the company for which they were acting, if the company, in consequence of such overbidding each other by its agents, gave a larger price for the property bought by such agents."

In East v. Wood (1878) 62 Ala. 313, the court held that the purchasers at an administrator's sale of land could not defeat a recovery on the purchasemoney notes, or rescind, because a person interested in the estate, but with whom the administrator had no connection, employed a person who was obnoxious to the purchasers to bid against them, by reason of which, through the desire of the purchasers to keep such person out, they bid more than the value of the land.

c. Puffing as proximate cause of bid.

It has been said that, in a bill to rescind a purchase at auction on the ground that puffers were employed, the purchaser must allege that he was thereby induced to give more than he had previously intended. Tomlinson. v. Savage (1849) 41 N. C. (6 Ired. Eq.) 430.

But the better view seems to be that the employment of a puffer is a legal fraud, and not merely a fraud in fact, so that prejudice is presumed. Curtis v. Aspinwall (1873) 114 Mass. 187, 19 Am. Rep. 332; Morehead v. Hunt (1826) 16 N. C. (1 Dev. Eq.) 35. And see generally the cases cited supra, II. a.

In Veazie v. Williams (1845) 3 Story, 624, Fed. Cas. No. 16,907, reversed in (1850) 8 How. (U. S.) 134, 12 L. ed. 1018, a suggestion was made that if the bid last preceding the successful bid was that of a bona fide bidder, earlier bids by puffers might be disregarded. The chancellor, speaking obiter in National Bank v. Sprague (1869) 20 N. J. Eq. 159, expressed himself as favorably impressed by this view.

But, in Rafferty v. Norris (1900) 12 Pa. Super. Ct. 450, the court held that the employment of a bidder at a public sale, merely for the purpose of raising the price, vitiated the sale, and it was immaterial whether the pur

chaser bid more in consequence of the puffer's bid, or whether there were intervening bona fide bids between the puffer's last one and the purchaser's first one, or that the price at which the property was struck off was more than $1,000 beyond the last bid of the puffer.

Where several lots sold separately at auction are of the same general value, the employment of a puffer to enhance the price of the first lot sold invalidates the sale of the others, though there is no puffing therein. Morehead v. Hunt (1826) 16 N. C. (1 Dev. Eq.) 35, wherein the court said: "The rule laid down by the complainant's counsel is certainly a wise one, that at the sale of a horse and an ox, puffing the sale of the horse is not puffing the sale of the ox, because the bidding for the one does not, in the estimation of the bidders, enhance the value of the other; but this is like the bidding for a yard of clothit enhances the price of each yard in the whole piece. The law makes no distinction without a difference. Morehead, therefore, stands in the same situation as if he had been contending with puffers, and the last bid but his own had been made by one of them; for in reality the bidders all became puffers, mere machines in the hands of these men, who, after having set them going, might well retire from the work and enjoy the spoils." See to the same effect, Springer v. Kleinsorge (1884) 83 Mo. 152. And see the reported case (OSBORN V. APPERSON LODGE, ante,

117).

So, in Curtis v. Aspinwall (Mass.) supra, it was said: "Where, as in the case at bar, a large tract of land is cut up into lots, and sales of the lots are made at the same time, as parts of the same transaction, we think the same rule applies. The designed and natural effect of by-bidding upon the lots first sold is to mislead the judgment of the buyers as to the value of the whole tract, and to induce them to bid more than they would upon a fair sale. There is a presumption that the last bidders are influenced and injured by the previous fictitious bids, and they may avoid

the sale without further proof that they are influenced and injured, if there is no evidence tending to control or rebut such presumption. But this presumption may be rebutted. If the by-bidding had no effect or influence upon the purchaser's bid, the latter cannot avoid his contract. As in other cases where deceit or fraud is used in a sale, the purchaser cannot avoid it if he was not induced or influenced by the fraud to enter in the contract." d. Conditions precedent to rescission.

As in other cases wherein it is sought to rescind for fraud, the purchaser at an auction sale who desires to rescind because the price was enhanced by puffing must act with reasonable promptness on discovering the fraud.

Thus, in McDowell v. Simms (1852) 45 N. C. (Busbee, Eq.) 130, 57 Am. Dec. 595, the court held that a rescission of a sale of land purchased at an auction sale would not be granted, where the purchasers did not bring their action until a year and six months after the discovery of the bybidding.

In Latham v. Morrow (1846) 6 B. Mon. (Ky.) 630, it was held that where the purchaser at an auction sale executed the contract and took possession of the land and resided thereon for five years, and in the meantime its value had decreased to about 50 per cent of the price bid by the vendee, he could not come into a court of equity and ask for a rescission. The court said: "In view of these principles, and of the doubtful nature of the inquiry complained of, taken in connection with the evidence of long acquiescence and satisfaction with the contract, and the suspicion fairly arising that the complaint of fraud would never have been urged but for the general depreciation in the price. of land, and the fact that there is not even an allegation of recent discovery, when the complaint is at last made, we conclude, without deciding the abstract question as to the right of the vendor at auction to employ a single by-bidder to prevent a sacrifice below a fair and fixed price, that this con

tract should not be rescinded on the sole ground of fraud."

In Backenstoss v. Stahler (1859) 33 Pa. 251, 75 Am. Dec. 592, the court held that the employment of puffers at an orphans' court sale is a good ground for setting aside the sale, if the purchaser, when he bids off the property, is ignorant of it, and makes the objection before the confirmation; but after that, and the receipt of the deed, with the possession and the occupancy of the property under it, it is too late.

In Veazie v. Williams (1850) 8 How. (U. S.) 134, 12 L. ed. 1018, the auction sale in controversy occurred in 1836. the fraud was discovered in 1840, and a bill to set aside the sale was filed in 1841. It was held that there was no such delay as to defeat recovery.

So, it is necessary to put the seller in statu quo so far as is possible. Minturn v. Main (1852) 7 N. Y. 220. Thus, in Staines v. Shore (1851) 16 Pa. 200, 55 Am. Dec. 492, it was held that

where the vendee is induced by fraud to buy a horse at an auction he should return or offer to return the horse as soon as he discovers the fraud, but, if he does not discover it until after the horse dies, his defense will be perfect without any offer to return.

e. Minority rule.

Two early cases adhere to the former English chancery rule that the employment of a by-bidder does not vitiate an auction sale if the purpose is to prevent a sacrifice of the property, and not to enhance the price unreasonably. Davis v. Petway (1859) 3 Head (Tenn.) 667, 75 Am. Dec. 789; Reynolds v. Dechaums (1859) 24 Tex. 174, 76 Am. Dec. 101.

It is to be noted that, with respect to auction sales of personal property, the foregoing rule is abrogated in Tennessee by the adoption in that state in 1919 of the Uniform Sales Act, § 21 of which adopts the majority rule.

W. M.

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Mortgage, § 29-duty of mortgagee to account for rents.

1. One who takes possession of property as mortgagee must account for the rents for the benefit of junior lien holders, even though he later acquires the equity of redemption by purchase.

[See annotation on this question beginning on page 138.]

Mortgage, § 21 liability of mortgagee entering otherwise than as such.

2. A mortgagee coming into possession of the mortgaged property under a title derived from the mortgagor, or in any method other than as mortgagee, is not chargeable with the rents and profits of the mortgaged premises for the benefit of junior lienors. Mortgage, § 29 right of junior mortgagee to accounting.

3. A junior mortgagee may enforce an accounting of rents and profits from a senior mortgagee in possession

to the same extent that such accounting might be enforced by the mort

gagor.

[See 19 R. C. L. 334.]
Mortgage, § 21
profits.

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right to rents and

4. Rents and profits are the incidents of possession of the equity of redemption of the mortgaged property, and may be collected by the owner thereof until the period of redemption expires.

[See 19 R. C. L. 319; 3 R. C. L. Supp. 930; 5 R. C. L. Supp. 1032. See also annotation in 14 A.L.R. 640.]

Mortgage, § 29

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not mortgagee.

(321 Ill. 283, 151 N. E. 880.)

person in possession mortgagee so far as the right to fore-
close the mortgage is concerned.
[See 19 R. C. L. 522.]

5. A mortgagor of real estate who, after selling the equity of redemption and taking a junior mortgage for the purchase money, takes possession by the sufferance or consent of the receiver appointed under the first mortgagee and the owner of the equity of redemption after foreclosure under the second mortgage, is not a mortgagee in possession liable to account for rents and profits for the benefit of the holder of junior liens, although he had executed the first mortgage as security for a note payable to his own order, and merely pledged it, together with the note, as collateral security. Mortgage, § 74 - pledgee as mortgagee.

6. A pledgee of a note and mortgage securing it as collateral security is the

Mortgage, § 21 effect of mortgagor's
possession on rights of pledgee.
7. Possession by the mortgagor in a
mortgage securing a note payable to
his own order and pledged with the
note as collateral security, of the
mortgaged premises, by consent of a
receiver under such mortgage and the
owner of the equity of redemption un-
der a junior mortgage taken by him-
self and foreclosed, and the collection
of rents by him, do not warrant a
decree requiring the pledgee of the
first mortgage to rebate it to the ex-
tent of such rents.

Receivers, § 1 absence of bond-
validity.

8. The appointment of a trust company as receiver without bond as autorized by statute is not error.

ERROR to the Second Branch of the Appellate Court, First District, to review a judgment reversing a judgment of the Circuit Court for Cook County (Wilson, J.) in favor of complainant in a suit to foreclose a trust deed given as a mortgage. Reversed.

The facts are stated in the opinion of the court.

Messrs. Slottow & Leviton, for plaintiff in error:

Unless the occupation is as mortgagee in possession, which was assumed by the appellate court, but was not the fact, rents cannot be charged against the mortgage.

Rogers v. Herron, 92 Ill. 583; Gaskell v. Viquesney, 122 Ind. 244, 17 Am. St. Rep. 364, 23 N. E. 791; Plain v. Roth, 107 Ill. 588; Anglo-Californian Bank v. Field, 154 Cal. 513, 98 Pac. 267; Gault v. Equitable Trust Co. 100 Ky. 578, 38 S. W. 1065; Gray v. Nelson, 77 Iowa, 63, 41 N. W. 566; 27 Cyc. 1839; 2 Jones, Mortg. 7th ed. 1915, § 1114, p. 734.

The rents in question accrued during the period of redemption from the foreclosure of the second mortgage after the deficiency decree had been satisfied. Meyerowitz was the owner of the equity and had transferred his title to George J. Williams, and he is the only person who could possibly call into question the receipt of the rents by his grantee.

Schaeppi v. Bartholomae, 217 Ill. 105, 1 L.R.A. (N.S.) 1079, 75 N. E. 447; Standish v. Musgrove, 223 Ill. 500, 79 N. E. 161; Stevens v. Hadfield, 178 Ill. 532, 52 N. E. 875; Davis v. Dale, 150

Ill. 239, 37 N. E. 215; Bothman v. Lindstrom, 221 Ill. App. 262; Stevens v. Pearson, 202 Ill. App. 22; Baldwin v. Tuttle, 215 Ill. App. 57.

Complainant, the bona fide pledgee, had a first mortgage lien, and to the extent of the lien which was less than the amount of the indebtedness, from George J. Williams, the pledgeor, he had a right to foreclose the mortgage,

as owner.

Peacock v. Phillips, 247 Ill. 467, 32 L.R.A. (N.S.) 42, 93 N. E. 415; Tooke v. Newman, 75 Ill. 215; Baxter v. Moore, 56 Ind. App. 472, 105 N. E. 588; Jenkins v. International Bank, 111 Ill. 462; Union Brewing Co. v. Inter-State Bank & T. Co. 240 Ill. 454, 88 N. E. 997; Buchanan v. International Bank, 78 Ill. 500; Anderson v. Olin, 145 II. 168, 34 N. E. 55; Loewenthal v. McCormick, 101 Ill. 143; Naef v. Potter, 226 Ill. 628, 11 L.R.A. (N.S.) 1034, 80 N. E. 1084; Hoffacker v. Manufacturers' Nat. Bank, Md. 23 Atl. 579; Fisher v. Meister, 24 Mich. 447; 19 R. C. L. § 322, p. 522.

There was no merger of the certificate of sale with the equity of redemption received by George J. Williams from Meyerowitz.

Davis v. Dale, 150 Ill. 239, 37 N. E.

215; Sutherland v. Long, 273 Ill. 309, 112 N. E. 660; Williams v. Williston, 315 Ill. 178, 146 N. E. 143.

Unless a mortgagor or owner of the equity has the right to an accounting, a junior mortgagee has none.

2 Jones, Mortg. 7th ed. 1915, § 1118a, p. 740.

The pledgee of the note as collateral is for all practical purposes its owner, without regard to latent equities.

&

Jones, Collateral Securities Pledges, 3d ed. 1912, § 89, p. 105; Hosmer v. Campbell, 98 Ill. 572.

The pledgee for valuable consideration cannot be subjected to latent equities.

Mullanphy Sav. Bank v. Schott, 135 Ill. 655, 25 Am. St. Rep. 401, 25 N. E. 640; Silverman v. Bullock, 98 Ill. 11; Miller v. Larned, 103 Ill. 562; Dillard v. Propst, 212 Ala. 664, 103 So. 863.

Payment, by rent or otherwise, to the pledgeor cannot affect the pledgee, Richard L. Williams, who has not received the rents or the payments.

Mayo v. Moore, 28 Ill. 428; Withers v. Sandlin, 36 Fla. 619, 18 So. 856; 2 Jones, Mortg. 7th ed. 1915, § 847, p. 363.

The note carries the mortgage and all rights appertaining thereto.

Union Mut. L. Ins. Co. v. Slee, 123 Ill. 57, 13 N. E. 222; 2 Jones, Mortg. 7th ed. 1915, § 834, p. 331.

Messrs. William Slack and Abram E. Adelman, for defendant in error:

In a pledge of personalty, the legal ownership of the property remains with the pledgeor, and only a special property passes to the pledgee.

Union Trust Co. v. Ridgon, 93 Ill. 458; Sheppard v. Berkshire L. Ins. Co. 161 Ill. App. 467.

A mortgagee in possession is in equity accountable for rents and profits of the estate and is bound to apply them in reduction of the mortgage indebtedness.

2 Jones, Mortg. 7th ed. pp. 733, 739, 740, §§ 1114, 1118, 1118a; 1 Hilliard, Mortg. p. 440; Rooney V. Crary, 11 Ill. App. 213; Fitts V. Davis, 42 Ill. 391; Strange v. Allen, 44 Ill. 428; Wood v. Whelen, 93 Ill. 153; Ten Eyck v. Casad, 15 Iowa, 524; Harrison v. Wyse, 24 Conn. 1, 63 Am. Dec. 151; Clark v. Paquette, 67 Vt. 681, 32 Atl. 812.

A mortgagee in possession is not allowed to have commission for collection of rents.

Harper v. Ely, 70 III. 581.

Once a mortgage, always a mortgage.

Bearss v. Ford, 108 Ill. 16; Halbert v. Turner, 233 Ill. 531, 84 N. E. 704; De Voigne v. Chicago Title & T. Co. 304 III. 177, 136 N. E. 498; Williams v. Williston, 315 Ill. 178, 146 N. E. 143.

It was error to appoint the Chicago Title & Trust Company receiver, without requiring the complainant to give bond, and without a finding in the order of appointment, dispensing with the giving of bond, as required by statute.

Watson v. Cudney, 144 Ill. App. 624; Ayers v. Graham S. S. Coal & Lumber Co. 150 Ill. App. 137; Schoencke v. Chicago Title & T. Co. 178 Ill. App. 387; Gibberman v. Stangal, 208 Ill. App. 298; James H. Rice Co. v. McJohn, 244 Ill. 264, 91 N. E. 448.

The order appointing the receiver was interlocutory, and may be reviewed upon final disposition of the

case.

Vandalia v. St. Louis, V. & T. H. R. Co. 209 Ill. 73, 70 N. E. 662; Bagley v. Illinois Trust & Sav. Bank, 199 Ill. 76, 64 N. E. 1085; Farson v. Gorham, 117 Ill. 137, 7 N. E. 104.

There was error in not permitting the defendant to give bond, and in not removing the Chicago Title & Trust Company, upon his motion.

Ellguth v. Litzinger, 199 Ill. App. 381.

It was error to deny the motion to tax the costs of the two erroneous receiverships against the complainant.

34 Cyc. p. 367; Einstein v. Lewis, 54 Ill. App. 520; Myres v. Frankenthal, 55 Ill. App. 390; Torrence v. Shedd, 202 Ill. 498, 67 N. E. 168; James H. Rice Co. v. McJohn, 244 Ill. 264, 91 N. E. 448.

Stone, J., delivered the opinion of the court:

Plaintiff in error filed a bill to foreclose a trust deed given as a mortgage by George J. Williams on certain property in the city of Chicago, and hereinafter referred to as a mortgage. The circuit court of Cook county on December 13, 1923, entered a decree finding that plaintiff in error, complainant therein, was entitled to foreclosure of his lien for the sum of $47,697.80, less certain rents collected by the Chicago Title & Trust Company subsequent to December 30, 1921. De

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