No. 143 | 7th Cir. | May 1, 1894
Lead Opinion
(after stating the facts). The rights and liabilities of a purchaser at a judicial sale are measured by the terms and conditions of the decree. If the decree directs a sale subject to liens established or to be established, or subject to debts and liabilities incurred by a receiver in the management of the property, the purchaser at the sale takes the property cum onere, and liability for the claims so reserved by the decree follows the property in the hands of the purchaser, or his assignee. The liability of the appellant for the claim with which it has been charged must therefore depend upon the terms of the decree of November 16, 1885. It is clear that this property was directed to be sold, discharged of all liens and claims against the Danville, Olney & Ohio River Railroad Company, or its receivers. There is no suggestion in the decree that the road Ayas to be sold subject to any lien whatever. The design of the court is patent upon the face of the decree,—that the fund produced by the sale was to be appropriated to the payment of all claims against the receivers before the payment of the matured coupons. The difficulty attending the payment of the appellee’s recovery for damages arises from the fact that the fund obtained by the sale was insufficient, having been absorbed in the payment of other claims against the receiATers before the claim of the appellee had been adjudged by the court. The sale would seem to have been made in exact accordance with the directions of the court, to have been confirmed by the court, and the conditions of the sale to have been fully met by the purchaser. We are at a loss to understand upon what principle the court can, in such case, after confirmation of the sale, and the performance of the conditions of sale, decree a further condition, which, in substance, enhances the price to be paid for the property. If the court had authority to compel the purchaser to pay one thousand dollars in addition to the price bid, it might, with equal propriety, when circumstances demanded, compel him to pay a hundred thousand dollars. The sale, when confirmed by the court, and its conditions met by the purchaser,' created, in effect, a contract between the court and the purchaser, and the court could no more impose an additional term or condition upon that contract than could an individual. Farmers’ Loan & Trust Co. v. Central R. of Iowa, 7 Fed.
It is further insisted that the decree of June 30, 1888, to the effect' that, if there were no moneys in the hands of the receivers for the paymen t of the amount awarded the appellee, the purchasers of the road should pay in a sum sufficient to satisfy the claim and cost, and the decree of February 3,1892, overruling the motion oí Austin Corbin and others, purchasers and assignors to the appellant, for the vacation of the decree of June 30, 1888, and for a rehearing, are res adjudicata, and binding upon the present appellant. The purchasers of the road had no concern with the claim of the appellee. They had no interest to be affected by its allowance or disallowance. The distribution of the purchase money of the property was a matter of indifference to the purchasers, with which they had no right to interfere. Central Trust Co. v. Grant Locomotive Works, 135 U.S. 207" court="SCOTUS" date_filed="1890-04-28" href="https://app.midpage.ai/document/central-trust-co-of-new-york-v-grant-locomotive-works-two-cases-92773?utm_source=webapp" opinion_id="92773">135 U. S. 207, 10 Sup. Ct. 736. It would be otherwise if, by the original decree, the property was sold subject to unascertained claims. Railroad Co. v. Wilson, 138 U.S. 501" court="SCOTUS" date_filed="1891-03-02" href="https://app.midpage.ai/document/louisville-evansville--st-louis-railroad-v-wilson-92973?utm_source=webapp" opinion_id="92973">138 U. S. 501, 11 Sup. Ct. 405. The purchaser was a parly to the suit, and subject to the; jurisdiction of the court, as respects all orders necessary to compel the completion of the purchase, but no further. Having no right to be heard as to the distribution of the fund, the purchaser could not object to the allowance of the claim of the appellee. The purchaser liad not been summoned to meet the claim of the appellee, was not interested to oppose it, was not a party to the intervening petition, and could not have appealed from the decree allowing the claim. It is difficult to perceive the jurisdiction of the court to decree that the purchasers of the road should pay the amount awarded the appellee, in the event that the receiver had no funds to pay.
Afterwards, on the 17th of duly, 1888, Austin Corbin and oihers, assignors to the appellant, moved for a vacation of (hat decree, and for a rehearing of the matter, winch seems to have been held under advisement by the court, from July, 1888, until February, 1892, when the motion was overruled, and a, hearing denied. It is claimed that the intervention of the assignors of the appellant, by iheir motion for a rehearing, made them parties to the proceeding, and therefore they were concluded by the decree of June 30, 1888, and the order of February 3, 1892. The difficulty with this contention is that that decree was interlocutory, and could not have been appealed from. The decree established the equities, and determined that the appellee was entitled to a certain sum of money, to be paid primarily by the receiver, and, if there should proveí to bo no money in his' hands, then by the purchaser. There was no decree against the
We are of opinion, therefore, that the appellant here was not concluded by the decree of June 30, 1888, or by the order of February 3, 1892, overruling the motion for rehearing, and that the present appeal was properly taken from the final decree of June 1, 1893, awarding judgment against the appellant for the amount of the appellee’s claim. The judgment must be reversed.
Rehearing
Upon Petition of the Appellee for Rehearing.
(May 31, 1894.)
The argument for the appellee rests upon misconception of the terms of the decree. It assumes that the court directed the sale of the road at the upset price of $175,000, the purchaser taking title subject to such claims as had been or might be adjudged to be prior in equity to the trust deed. If this were so, the court committed manifest error in directing the application of the proceeds of sale to the payment of any of the adjudicated claims. The contention rests on fundamental-error, rendering vicious the whole argument. The decree directs a sale fixing a minin-mm price to be received, but does not subject the title of the purchaser to any reserved lien. It directs that, of the amount bid, $25,000 should be paid in cash, and that such other proportion of the purchase price should be paid in cash as the court may from time to time direct, to meet claims which the court had adjudged, or might thereafter adjudge, to be prior in equity to the trust deed. The right reserved to resell was upon failure of the purchaser to comply with the order of the court in that regard; that is, in respect to the proportion and amount of the purchase price that should be ordered to be paid in cash. There is no obscurity in the language employed. There was not, as counsel suppose, any reservation of right to resell in case of failure by the' purchaser to comply with any order directing payment of claims in priority to the trust deed. The purchaser conformed to every order in respect to the sale, and paid the whole amount of -the bid in the manner provided