[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 366 April 17, 1928. The opinion of the Court was delivered by The appeal in this case is from an order of his Honor, S.W.G. Shipp, Circuit Judge, requiring the Master of Florence County to convey to the petitioner-respondent, S.R. Floyd, certain mortgaged premises sold by the said Master upon compliance by Floyd with the terms of sale. For a full understanding of the matters involved in the cause, it will be necessary to report the "statement," the order of Judge Shipp, and the exceptions to that order. In addition to the facts appearing in the "statement," other material facts are these: Mr. Arrowsmith, the successful bidder at the first sale of the lands, was attorney of record in the foreclosure proceedings for the mortgagor-defendants and for certain junior mortgagees; he was also mortgagee in the mortgage set up by D.E. Ellerbe, Esq., as Receiver, and he had personally guaranteed the payment of a mortgage executed to George McCown. The decree of foreclosure provided for the sale of the mortgaged premises and the payment of the plaintiff's judgment amounting to $4,369.60, and the retention of the surplus for distribution among the judgment creditors of the mortgagors.
We shall endeavor to pass properly upon all the exceptions without stating them separately.
The foreclosure of a mortgage is a proceeding in equity. The terms of sale are within the discretion of the Circuit Judge. It is proper to require the successful bidder to make a cash deposit of a part of his bid. 42 C.J., § 1831. Hand v. Railway Co., 13 S.C. 467. Tyer *Page 375 v. Milling Co., 32 S.C. 598; 10 S.E., 1067. Barnwell v.Marion, 62 S.C. 446; 40 S.E., 873. Porter v. Realty Co.,134 S.C. 34; 131 S.E., 768. Such a deposit is a proper safeguard against spurious bidding upon the one hand and an aid in carrying into effect the terms of sale upon the other. But, as stated in Hand v. Railway Co., supra:
"Whatever convenience may result from possessing the means of eliminating spurious bids during the progress of the bidding may be counterbalanced by a tendency to deter parties from bidding, and thus chilling the bids."
We think it is not only proper, but a wise practice, to require a cash deposit to be made by the successful bidder upon the acceptance of his bid, but such deposit should be reasonable. We think the tendency is toward providing too often for an unreasonable deposit, which cannot but operate to chill the bidding. The amount of such deposit must depend, to a large extent, upon the exigency therefor.
It is well established in this State that the successful bidder at a Master's sale has a reasonable time to investigate the title to the property sold, and a resale before he has had a reasonable time to conduct such investigation is a nullity. Miller v. Goodwin, 113 S.C. 365;101 S.E., 834. Smith v. Smith, 97 S.C. 242; 81 S.E., 499; 52 L.R.A. (N.S.), 751; Ann. Cas., 1916-C, 763. Under the decisions mentioned, there seems to be no doubt but that the Court can require a reasonable deposit as "earnest" money, or as evidence of good faith on the part of the bidder. But the Court may not require a compliance with the terms of sale before the successful bidder has had a reasonable time to investigate the title. To require a deposit without stipulating that it is to be earnest money, or evidence of good faith, is to require a compliance in part without giving the bidder the time to which he is entitled to make his investigation of the title. *Page 376
In the case at bar, the terms of sale, as provided in the decree of foreclosure, required the payment of all the purchase price in cash. Undoubtedly, the Master was bound by these terms, and could make the sale upon on other terms. But the provision for the deposit was only a detail relating to the enforcement of the decree. It was not an essential part of the terms of sale.
It is settled in this State that an order requiring a deposit to be made upon a resale does not change the terms of sale provided in a former decree of foreclosure, which did not require the making of such deposit. Porter v. Realty Co.,supra.
If one Circuit Judge may pass an order requiring a deposit without changing the terms of sale provided in a former decree, we see no reason why an order might not be passed eliminating from a former decree a provision requiring a deposit. Had an order, therefore, been passed at or before 4 o'clock p. m. of the day of sale, dispensing with the cash deposit, we think such an order would not have charged the terms of sale providing for the payment of the purchase price in cash. Had such an order, consented to by the attorneys of record, been presented to a Circuit Judge, who had jurisdiction of the matter, we do not doubt but that such order would have been passed, in view of the surrounding circumstances. As stated in the recent case of Poole v. Bradham,143 S.C. 156; 141 S.E., 267, "no reason appears why the Court should not give effect now to what it would have done then."
Since the cash deposit, required by the terms of the decree, was intended to aid in effecting a compliance with those terms, such deposit was for the benefit of the lien creditors who are parties to the action. No person, other than the parties to the action, had any real interest in the matter, and had no vested right to have the mortgaged premises sold. It was of little, if any, concern to them if the *Page 377 compliance was had within ten days or within any other stated period.
While, as indicated, the Circuit Judge correctly held that the Master is bound by the terms of sale, and may not vary the same, it does not necessarily follow that the parties to the action may not under proper circumstances waive a provision in the decree made for their especial benefit.
Parties to an action may, by agreement of counsel, waive a statutory provision. Josey v. Burris, 89 S.C. 111;71 S.E., 469. That being true, we see no reason why they cannot waive a provision incorporated in a decree for their benefit.
In Ex Parte Hill, 55 S.C. 446; 33 S.E., 483, an action was commenced by a nonresident against a resident of this State. On motion of one of the defendants, the Circuit Judge granted an order requiring the plaintiff to deposit with the clerk of Court the sum of $100 within 60 days to cover whatever costs might be allowed against him, with the provision that, if the plaintiff failed so to do within the time specified, his complaint should be dismissed. The plaintiff failed to comply, and thereafter another Circuit Judge passed an order adjusting the rights of the parties. Thereupon the plaintiff in the suit moved to set aside the decree on the ground that the Court had no jurisdiction of the subject-matter, and that the succeeding Judge had no jurisdiction to overrule the order of his predecessor on the Circuit. The attorneys who made the motion for the order requiring the deposit submitted affidavit stating that they had waived said requirement, and went into the trial of the cause without having the plaintiff to make the required deposit. The Circuit Judge held that the attorneys had a right to waive their right to have the deposit made as required by the order of the Court. Upon appeal to this Court, the appellant relied solely upon the fact that the plaintiff failed to comply with the order requiring security for costs. To show that the Circuit Judge did not have jurisdiction of the case, this Court said: *Page 378
"They, however, had the right to waive compliance with the requirement that the money should be deposited within the time mentioned in the order,"
— and cited as authority for the holding made Garrett v.Niel, 49 S.C. 560; 27 S.E., 512. Fonville v. Richey, 2 Rich., 10.
We think these authorities are conclusive of the proposition that the parties to an action may waive a provision in an order of Court incorporated for their benefit.
The decree of foreclosure herein provided, among other things, "that the mortgaged premises hereinbelow described be sold at public auction by H.A. Brunson, Esq., Master, at the courthouse in Florence County, S.C., on the first Monday in December, 1926, to the highest bidder for cash." Suppose for the moment that the Master had not sold said premises on said date, could the respondent or any one else not a party to the action be heard to complain? Notwithstanding this direction in the decree, could not the parties to the action have agreed to "call off the sale"? Had they done so, would respondent's rights have been invaded? This Court has held that the Master in the agent of both plaintiff and defendant. Jenkins v. Hogg, 2 Tread. Const., 821. The Master and the attorneys of record are all officers of the Court. The purpose of the Court in decreeing a foreclosure and ordering a sale was to benefit the parties to the action, and not to hurt them. To hold as did the Circuit Judge, that the parties to an action may not agree with the Master to waive a provision for the benefit of said parties, is to cling to a technicality. If, by waiving the provision for a deposit, a compliance with the terms of sale be rendered less likely, the parties to the action only are the ones to suffer. Others will not be heard to complain.
There is another reason why the order of the Circuit Judge cannot be affirmed. The decree of foreclosure provided that the provision for the cash deposit be applicable to the 4 o'clock sale. There was no deposit made at *Page 379 that sale. The deposit was not made until some time before noon on the following day. If it was absolutely necessary that a deposit be made by the purchaser at the first sale before 4 o'clock of that day, then it was equally necessary that the purchaser at the second sale make the required deposit immediately. Otherwise it was wholly unnecessary to have a resale, for the manifest purpose of requiring the deposit and providing for the resale was to have in hand the deposit before 4 o'clock, or immediately thereafter. No time being specified for the deposit, it must have been intended to be made immediately upon the resale.
The respondent has in no sense been taken by surprise. He had an opportunity to purchase the mortgaged premises at the first sale, but failed to do so, presumably for the reason that the price was too high. When the second sale was had, proper announcement was made that the resale was being made conditionally; that the purchaser at the first sale had been given until 12 o'clock on the following day to make the required deposit, and the bid of the successful bidder at the resale would be accepted only in the event of failure on the part of the first purchaser to make the required deposit by that time. The required deposit having been made by 12 o'clock on the following day, the bid of the respondent's assignor was never accepted. There was no resale in fact; no contract between the parties.
To sustain the Circuit Judge would be to deprive the parties to the action of the difference between $7,350 and $5,900, and to give that difference to the respondent. This the Court cannot sanction.
For the reasons herein stated, it is the judgment of this Court that the order of the Circuit Judge be reversed, and that the Master execute and deliver to the purchaser at the first sale a good and sufficient deed to the mortgaged premises upon his complying fully with the terms of sale.
MR. CHIEF JUSTICE WATTS and MESSRS. JUSTICES COTHRAN, STABLER and CARTER concur. *Page 380