29 Ind. App. 596 | Ind. Ct. App. | 1902
In an action brought by certain persons composing the firm of D. McDonald & Co., who are among the appellees herein, against the Plymouth Cycle Manufacturing Co., also an appellee, wherein the plaintiffs recovered a judgment at law for a ceilain sum, the appellee Leander J. Southworth, upon the order of the court, became receiver for the defendant company, and as such took charge of its assets. The receiver made a final report to the court, showing a balance of $1,241.11 in his hands. In this report the receiver stated that John II. Bass, who
The appellant has presented by his assignment of errors the action of the court upon the demurrers to his cross-complaint. The cross-complaint showed that on the 18th of June, 1896, the appellee, the Plymouth Cycle Manufacturing Co., a corporation organized under the laws of this State, executed to the firm of Bass & McDonald, of which the appellant is the surviving partner, a chattel mortgage on all the property owned by the mortgagor,
It was alleged that at the same time Bass & McDonald, pursuant to the order of the court, turned over and surrendered to the receiver all the property and the accounts and bills receivable so mortgaged, assigned, and pledged to them, under an agreement with the receiver, and by and through an order of the court; that the lien of Bass & McDonald was transferred to the proceeds of sale of the property, and of the collection of the accounts and bills receivable; that the receiver in accordance with the order of the court, duly advertised the mortgaged property for sale on the 10th of December, 1896, and on that date offered it for sale at public auction, in bulk and for cash, to the highest bidder; that at said sale Bass & McDonald bid for all the property covered by the mortgage the sum of $15,000, this being the highest amount bid therefor, and it was by the receiver openly struck off and sold to Bass & McDonald for that sum, and the sale was reported to the court; that on the 6th of December, 1896, Josiah Parkhurst, Dudley Parkhurst, and J. W. Wilkinson, composing the firm of Parkhurst & Wilkinson, and one Gf. G. Brandenburg, claiming to be creditors of the defendant company, filed their objections to the confirmation of the sale, stating in their objections that the price for which the property was sold was much below the value thereof, and it would bring a much larger sum upon a resale, and thereupon petitioned the court to set aside said sale, and in their petition offered and proposed to the court, in writing, that if the court would set aside the sale to Bass & McDonald, and fix a time not less than twenty days from December, 1896, for the resale of the property, and cause the sale to be advertised in metropolitan and bicycle papers of general circulation, they would guarantee to the receiver that they would bid or cause to be bid therefor at least ten.per cent, more at said sale than was bid at the
It was averred that by the setting aside and postponing of the sale of December 10, 1896, Bass & McDonald were greatly hindered and delayed in selling and disposing of the property, and prevented from making sale of it in bulk to would-be purchasers, and were further prevented from getting possession thereof in satisfaction of their debt, and manufacturing the same into bicycles in time to meet the demand of the market for the coming season, and were damaged to the amount of said deposit so forfeited; that the property so mortgaged and pledged to Bass & McDonald was wholly insufficient to pay said indebtedness and judgment in their favor secured by the property, and there is still due and unpaid to them, after the application of all the proceeds of said sale of the property and all other properly belonging to the company and in the hands of the receiver, or so pledged, mortgaged, or assigned to them, the sum of $33,000 upon said judgment and decree of fore
It is further averred that the costs and expenses of the receivership subsequent to said sale have exceeded $2,000, which have been paid out of the proceeds of the sale of the property so mortgaged and pledged to Bass & McDonald; that said costs and expenses should have been taken and paid out of the $2,000 so forfeited, in preference to the proceeds of the sale of the property and notes and accounts in the hands of the receiver; that the receiver has on hand and ready for distribution upon final report of his trust •$1,241.11, which is wholly insufficient to pay the unpaid balance of said judgment, and which the other creditors of the Plymouth Cycle Manufacturing Co. are demanding that the receiver shall pay to them upon their claims. Prayer, that the receiver be ordered to pay over said balance to the cross-complainant, “to be applied upon said un
We are not called upon to determine as to the propriety of the action of the court in setting aside the first sale and ordering a resale, or as to the propriety of the conditions upon which the application was sustained and the resale was ordered. Uo ground for a resale seems to have been presented, except the mere alleged inadequacy of the price; the good faith of the applicants being vouched for by a guaranty or pledge of the sum deposited by them with the clerk. If that action of the court were before us for review, we need not now decide whether or not we would approve it as a proper exercise of the court’s discretion. In case of a judicial sale, undoubtedly the court has a measure of discretion as to ordering' or refusing a resale. Pewabic Mining Co. v. Mason, 145 U. S. 349, 12 Sup. Ct. 887, 36 L. Ed. 732. In Sowle v. Champion, 16 Ind. 165, it was said that the rule, seems to be well settled that-inadequacy of price is insufficient to invalidate a judicial sale, unless there be additional circumstances to justify it; and in Benton v. Shreeve, 4 Ind. 66, it was said that gross inadequacy of price is not sufficient, of itself, to set aside a judicial sale, but may be a controlling element in connection with other circumstances. See, also, Roe v. Ross, 2 Ind. 99; Swope v. Ardery, 5 Ind. 213; Bertenshaw v. Moffitt, 6 Ind. 464; Dawson v. Jackson, 62 Ind. 171; Harlan v. Stout, 22 Ind. 488; Seller v. Lingerman, 24 Ind. 264; In re Third Nat. Bank, 4 Fed. 775, 9 Biss. 535; Harris v. Gunnell (Ky. App.), 9 S. W. 376; Jones on Mort., §1639 et seq. and §1668 et seq.; Rorer on Jud. Sales, §578 et seq.
However, we have to do only with the accomplished facts as shown by the appellant’s petition. There was not, in fact, any upset bid, but the sale was set aside and a resale was ordered upon a deposit of a certain sum upon a condi
A portion of the costs, and expenses appears to have been paid out of the deposit, and a portion out of the proceeds of the sale; the remainder of the purchase price being credited upon the judgment, leaving a certain large part of the judgment unsatisfied. The appellant does not seek payment to him of the amount so held by the receiver without an application thereof to the satisfaction pro tanto of his judgment over, which would be, it would seem, an inequitable relief; but by his petition he seeks to have that balance in the receiver’s hands applied upon the judgment, thereby reducing his judgment over: The undertaking on which the resale was ordered was substantially that the deficiency on this first sale should be diminished, thereby making smaller the amount of the mortgagee’s judgment over, and the forfeited fund should be applied to accomplish such result. Furthermore, it was alleged in appellant’s petition that the costs and expenses of the receivership subsequent to the first sale amounted to more than the amount deposited and forfeited. It is equitable to apply the forfeited money to such costs and expenses. It does not appear that the mortgagees, who purchased the property at the judicial sale, were in any manner chargeable with any fault; but it does appear that without their default in any regard they alone, and not the general creditors, have been injured by the granting of the resale, and the failure of those who procured it to fulfill their undertaking to procure the higher bid.
Whatever may be said as to the propriety of ordering the resale in the manner and on the terms adopted, we are of the opinion that, having so proceeded, the court should