Manoog v. Miele

In December 1958, Charles Miele (defendant) secured certain parcels of real estate with a $45,000 mortgage. In May 1962, Miele defaulted on his mortgage payments. In October, Charles Manoog (plaintiff) issued notice of his intent to foreclose on the property and took possession of the premises. Prior to the foreclosure proceedings, Manoog listed the property with a real estate broker and entered into an agreement with a third party for the purchase of the real estate for $45,000. The purchase contract contemplated a $35,000 mortgage with a 6 percent interest rate for a 10-year term. There were eight parties present at the foreclosure sale, including the third-party purchaser. However, Manoog was the sole bidder. Manoog purchased the property for $40,000, creating a deficiency of approximately $5,500, which Miele would be responsible to pay. This $5,500 deficiency reflected credits Manoog had received prior to the date of foreclosure from the third-party purchaser as part of the sale transaction, which Manoog had included in the calculation to Miele’s benefit. At trial, Miele requested that the trial court instruct the jury that Manoog’s bidding at the foreclosure sale for an amount less than the purchase price of the sales contract constituted bad faith and that his actions chilled the bidding process. The trial court refused to provide the instruction and instead instructed the jury that whether the parties acted in good faith was a question of fact. In response, Miele raised an exception.