52 S.W.2d 965 | Ark. | 1932
Lead Opinion
Appellant filed a complaint in the Grant Chancery Court on September 26, 1931, to foreclose a deed of trust executed to it by Virgil Ballentine and wife on May 1, 1922, to secure the payment of a $600 loan. The deed of trust described three forty-acre tracts of land. A decree foreclosing the deed of trust was rendered for the want of an answer on October 26, 1931, and on January 16, 1932, exceptions to the commissioner's report of sale under this decree were heard by the court. The court found that notice of the sale had been given for the time and in the manner required by law, and that the sale had been conducted in accordance with the notice and the decree of foreclosure. The commissioner testified that only one bid was received, this being a bid for $300 for the three tracts of land, which bid was made by appellant. The debt, as adjudged in the decree of foreclosure, was $676.93.
J. R. Matthews, a real estate dealer, testified that he was familiar with the market value of the mortgaged lands and other lands in that vicinity, and that Mr. Ballentine had asked him to sell the entire 120-acre tract of land for $700, but he had been unable to get an offer for it, and that three to four hundred dollars was the fair value of the land, inasmuch as the only house on it — a *142 four-room house — had tumbled down and the cleared land presented the appearance of not having been worked for several years and had grown up in brush.
No other testimony was offered, and the court made the finding that the bid was "wholly inadequate," inasmuch as a $600 loan had been made on the property and the judgment was for $676.93. This appeal is from the decree refusing to confirm the commissioner's report of sale for the reason stated.
It is said in the briefs in explanation of the decree appealed from that the court did not confirm the report of sale for the reason that appellant's bid did not equal the amount of the loan secured. This, we think, was error.
There is no intimation of fraud or other inequitable conduct on appellant's part relating to the sale, except only that appellant did not bid the amount of the debt secured by the deed of trust.
The rule has long been established in this State that mere inadequacy of consideration, however gross, unaccompanied by fraud, unfairness or other inequitable conduct in connection with the sale, is, of itself, insufficient to justify the court in setting the sale aside and refusing confirmation. Of the numerous cases to this effect one of the latest is that of Free v. Harris, 181 Ark. 646,
No brief has been filed on behalf of appellee, but the suggestion has been advanced in our consultation that the chancellor knew — as we and all others know — that the present is a period of great depression and for that reason the chancellor had the discretion to refuse to confirm the sale and to order a resale, and the case of Winfree v. Jones,
That case, however, was not one in which the parties thereto were seeking to enforce contractual rights. It was a suit for partition of lands among the heirs who had inherited it, which land could not be partitioned in kind because of the large number of heirs, and a sale of the property had been ordered to effect the division. It appeared from the recitals of the decree ordering the sale that the chancellor had been induced to make this order by the statement of one of the heirs made in open court that he would see that the lands brought their fair market value. This the heir failed to do, and the lands were sold for a grossly inadequate price, the sale having been made on a day when twenty banks in the State had closed their doors.
The instant case is not one for partition, as was the case of Winfree v. Jones, supra, but is one to enforce the contractual right of having the mortgaged land sold in satisfaction of the mortgage debt. This relief had been *144
awarded by the court and a sale ordered, and a sale was had pursuant to the direction of this decree, and the question presented by this appeal is that of the right to have the report of the sale confirmed. We think that right exists and should be enforced. McGown v. Sandford, 9 Paige (N.Y.) 290; Pewabic Mining Co. v. Mason,
Now, the law is equally as well settled that, while approval of sales will not be withheld because of inadequacy of consideration, yet, when the consideration is grossly inadequate, the court will seize upon slight circumstances of fraud or unfairness to afford relief. Union Planters' Bank Trust Co. v. Pope, 176 Ark. 1027,
The report of sale should, therefore, have been approved, and the decree denying that right will be reversed, and the cause will be remanded with directions to that effect. *145
Dissenting Opinion
I do not agree with the majority in holding that the chancellor should have confirmed the sale. The mortgage and note were executed in May, 1922. Payments of $21 each were to be made semiannually. This $21 payment included interest and a payment on the principal. The last payment was not due until May, 1955. The appellees paid for seven and one-half years. All the payments were made up to and including the payments of November, 1929. After the November, 1929, payment no other payments were made. The Federal Land Bank in its complaint alleged that there were three payments due and unpaid, and that, under the terms of the mortgage, it had on July 1, 1931, declared the entire debt due, and soon thereafter filed suit to foreclose the mortgage, making the mortgagors and Bruce Vanlandingham and his wife parties defendants. It was alleged the Vanlandinghams were cultivating part of the land. The defendants did not answer or appear, and the court on the 26th day of October, 1931, entered a decree for $676.93 and for costs, and provided that the whole amount should bear interest at the rate of 8 per cent. per annum. The note and mortgage provide that the defaulted installment shall bear interest at the rate of 8 per cent. per annum, but they do not provide for 8 per cent. on the installment not due. In addition to the testimony of John R. Matthews, quoted in the majority opinion, he testified that the forty-acre tract he owned adjoining the Ballentine place was worth $5 per acre. If the Ballentine land was worth as much as the adjoining land, it would be worth $600 at a time when there was practically no market for land. This witness also testified that Mr. Ballentine was sick and confined to his bed with what he thought was tuberculosis six months ago when he was on the land. The majority opinion cites numerous authorities, but in my opinion none of them sustain the decision of the court in this case.
In the case of George v. Norwood,
The next case relied on is Free v. Harris,
Henderson, Chancery Practice, page 862, is cited. That author says: "It is the duty of the officer directed to make a sale of property under a judgment or decree of court to put it up for sale at such a time and under such circumstances as to make it bring the best price, without injuring the party entitled to the proceeds of the sale by delaying the payment of his debt. This duty must be carefully observed by the master, because if, in violation of his duty, he is proceeding to sell property, under a decree in chancery, at an improper time or under improper circumstances, when such sale must necessarily result in a sacrifice of the property, as during the raging of a pestilence, or while there is a threatened invasion, which will destroy all chance of a fair competition by deterring bidders from attending the sale, it will unquestionably be the duty as well as the right of the chancellor to interfere." The case of McGown v. Sanford, 9 Paige (N.Y.), referred to in the majority opinion, *147 says in substance that the chancery court cannot arbitrarily suspend the ordinary operation of the laws. In that case the debt had been due more than two years, and the court said, of the mortgagee, she may be ruined by having her own property sacrificed by a forced sale upon execution, if she is deprived of the amount due to her for six months longer. In the case of Pewabic Mining Co. v. Mason, it appears that the sale was made after the defendants had prolonged the litigation for more than six years. The final decision in that case in favor of the sale was announced on Jan. 13, 1890, and the sale was not made until Jan. 24, 1891, more than a year after the decision. The defendants' answer in that case was filed in 1884. The last-named decision does not in my opinion support the decision in this case. In fact, I have been unable to find any case that supports the decision in this case. This debt was contracted in May, 1922. Payments were made for seven and a half years, the last payment being made October 31, 1929. It is a matter of common knowledge that farmers could not sell their crops in 1930 for as much as it cost to produce them. It is also a matter of common knowledge that the Federal Land Bank would not lend more than 50 per cent. of its value; therefore appellees' land in 1922, when the loan was made, must have been worth $1,200 or more. At the time the sale was made, December 12, 1931, there was no market for land. It could not be sold for one-fourth its value. These things did not require any evidence. They are all matters of which the court will take judicial notice. "The court will bring to its aid and consider, without proof of facts, its knowledge of those matters of public concern which are known by all well-informed persons. * * * Courts may properly take judicial notice of facts that may be regarded as forming part of the common knowledge of every person of ordinary understanding and intelligence. Other common statements of the rule are that the court will take notice of whatever is, or ought to be, generally known within the limits of their jurisdiction; and that they ought not to assume ignorance of, *148 or exclude from their knowledge, matters which are known to all persons of intelligence." 23 C.J., p. 58 et seq.
"A court cannot blind its eyes to the knowledge of a fact which is notorious throughout its jurisdiction." Brass v. Texarkana Ft. Smith Ry. Co.,