Equitable Life Assurance Society Of The United State v. First National Bank

602 N.W.2d 291 (1999)

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Nature of the Case

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Facts

Olsons (P) owned a ranch subject to two mortgages of $1,250,000 to Equitable and a second of $870,000 to FNB. They defaulted on both notes, Equitable obtained a foreclosure judgment, and the principal balance of $1,212,500 was deemed the superior lien. The court then ordered the property sold at public auction. The day before the sale, Equitable and FNB entered into an agreement where FNB would purchase the mortgage for $1,300,000. FNB wired funds to Equitable to pay off the debt that afternoon. Prior to getting the notice of confirmation of the funds, Equitable’s attorney contacted the sheriff and told him to cancel the sale, as he was 95% sure the judgment had been paid. Confirmation of the funds was not received until the morning of the sale, and the attorney tried to call the sheriff but only got a busy signal, and the sheriff even checked to see if it was canceled at 11 am and then started the sale at 11:05. The attorney reached the sheriff’s office at 11:15 and was told the sale had commenced. The deputy interrupted the sale with bidding at $1,800,000. The sheriff was told of the cancellation but decided to continue the bidding with the sale at $1,810,000. At the subsequent hearing, the court confirmed the auction. Equitable, FNB and Olsons appealed.