248 P. 362 | Mont. | 1926
Lead Opinion
delivered the opinion of the court.
This is an appeal by bidders at administrator’s sales from an order made, on recommendation of the administrator, vacating the sales without directing that another sale, or other sales, be had. The following is a synopsis of the history of the estate up to the time the order appealed from was made:
Charles D. McLure died testate on May 20, 1918, leaving an estate consisting of shares in mining corporations- and a large number of patented mining claims. His will was duly admitted to probate on June 18, 1918, whereupon certain heirs named as executors qualified and entered upon the discharge of their duties. They employed Lowndes Maury, of Butte, as their attorney. Inventories were filed appraising properties in several counties; these appraisements totaled in excess of $600,000. Claims against the estate, filed and approved, amounted to more than $150,000, and in addition to these claims many of the properties listed were mortgaged to secure indebtedness in amounts not apparent from the record. Many of the properties owned by the corporations in which stock was
In 1920 a part of this stock was sold for $53,750 and an offer of $240,000 was made for the balance thereof. Had this offer been accepted, the receipts from the sale would have discharged all of the indebtedness of the estate and left a substantial balance on hand. The executors, however, rejected the offer and, (after twenty-nine months of service, Maury was discharged without payment in full of his fees. Thereafter the executors were removed by the court, and Paul A. Gow was appointed administrator with the will annexed. The outgoing executors having filed their final account without making provision for the settlement of Maury’s claim for attorney’s fees, objections were filed by the law firm of Maury & Melznei’, and proceedings were had which resulted in a judgment in their favor in excess of $20,000, with direction that the judgment be included in a supplemental account. An appeal was taken and the judgment affirmed. (In re McLure’s Estate, 68 Mont. 556, 220 Pac. 527.)
For four years the administrator had endeavored to dispose of the property of the estate by private sale without success; no other property was ever sold and no income derived from the estate property. The administrator became involved in litigation with the Cascade Silver Mines & Mills Company (Gow v. Cascade Silver Mines & Mills Co., 66 Mont. 488, 213 Pac. 1092); operations were thereafter discontinued by the company on its Neihart property; shafts filled with water and tunnels caved; and finally the mill was destroyed by fire.
None of the debts of the estate having been paid and costs of administration having accumulated, on March 27, 1924, the holders of the Maury & Melzner claim petitioned the court for an order of sale of all property of the estate in satisfaction of
Seven 'months after the petition was filed, the court made an order directing the sale of the property of the estate at public auction, after notice and within six months from date, but later postponed to July 1, 1925, on which date, and after due publication of notice in accordance with the provisions of the statute in each of the counties in which property of the estate was situated, sales were conducted in the said several counties.
For the purpose of bidding upon the property, Maury associated himself with one James E. Murray and as to ¡all of the property so offered for sale, with the exception of the “Hope Hill” group in Granite county, became the highest and best bidder therefor, either in his own name or in the name of one Stevenson, as trustee for Maury and Murray. The Hope Hill group was bid in by one James Piatten, who did not join in the appeal and does not appear, tó have been in any manner connected with the appellants. Appellants’ bids aggregate approximately $2,000.
The ¡administrator made due return of these sales to the court, but therein represented to the court that the bids were wholly disproportionate to the value of the property sold, and prayed that the sales be not confirmed. Thereafter the’ bidders, with the exception of Patten, filed their petition praying
On the hearing, Lowndes Maury, appearing for himself and his cobidders, explained the condition of the several properties of the estate, both physically and with reference to liens thereon, and in argument contended that by reason of the fact that the bidders would have to discharge prior liens upon the properties, and, as all of the properties were abandoned so far as mining operations were concerned, such bids were equal to or in excess of the value of the properties. Referring to the stock in the Cascade Silver Mines & Mills Company, mentioned above, the witness detailed the financial condition of the company and the physical condition of its property and explained that the stock had been listed on the Boston Curb for years, where “wash sales” were put through each month in order to keep it there, and that the stock “has not only no market value but no intrinsic value,” but that, with the expenditure of $100,000, it might again be made valuable; that the bid of $250 was not disproportionate to the value of the property, “except that it is in excess thereof.”
Referring to a group of claims known as the “Combination group,” Maury testified that the group is mortgaged for approximately $2,500; that it is six miles from a railroad; that at one time he bid the property in for $30,000, but that since that time “the second-class ore dump had been removed; the machinery has been removed; * * * the tailings dump that
A second group, known as the “Henderson group” and also as the “Pan-Metallic” property, which was bid in both as to claims owned and stock in the Pan-Metallic Company, for $400, is the property on which foreclosure was had in December, 1923. The witness testified that legal and equitable liens against the property amounted to approximately the value thereof, and that — “it is a question whether it is owned by the estate as land or owned by the corporation and the stock owned by the estate, or owned by the corporation and somebody else owns the stock.”
As to four lots with a dilapidated building thereon in Nei-hart, bid in for $200, the witness testified that since the closing of the mines at that place some years ago, the best residence in the town could be bought for $500 and no property there could be sold.
Stock in the Lillian Mining Company, in Madison county, was bid in for $150. The property of the corporation has been sold for taxes, and the purchaser was about to secure deed therefor at the time of the hearing; however, during the hearing the company paid the amount of the lien to the treasurer of Madison county. It does not appear from the record that this redemption added materially to the value of the stock sold.
Stock in the Ingersoll Mining Company, the witness stated, has no value, though a bid of $20 was made upon it; the company owns considerable ground and has in years past spent much money, but never produced anything.
The witness made similar explanations concerning other properties on which bids were made, and testified that during the period of notice of sale he made efforts to interest prospective bidders in the various properties, and that, although mining men acquainted with the properties attended the sales and certain of the creditors of the estate were likewise familiar with them and could have protected their claims by bidding, had
"W. L. Creden, a mining engineer of experience, testified that six years prior to tbe sales be made an examination of tbe Combination group for prospective purchasers; that be found the ore milling ore, the veins spotted with no apparent continuity of ore shoots; that the property was seven miles from a railroad and that hauling that distance would cost $3 per ton; that there would be no net value to the ore even with silver at one dollar whereas the price thereof had fallen to sixty-five cents. This witness testified that the group had no market value.
One Norberg testified that the machinery on the Henderson group had a value of approximately $2,000.
Opposing confirmation, Gow, the administrator, testified that he was a mining engineer of experience; that he had bought an'd sold mining property in the Butte district; that he had endeavored to sell the properties of the estate for four years, without success. He testified that the stock owned by the estate in the Cascade Silver Mines & Mills Company constituted twenty-eight per cent of the stock of the company; that it was appraised at $50,498.60; and that, while the property of the company has been “inactive” for a number of years, he believed that the appraisement was “in line with the value” of the property. He stated that the company had a bonded indebtedness of $33,000 and “some other indebtedness.” He testified that he thought the bid of $250 “ridiculous” considering the value of the property. Referring next to the “Pan-Metallic stock,” the witness stated that this stock was appraised at $150,000, and, as there was a vast quantity of ore in the property, he considered the stock worth the appraised valuation or more. The witness gave his opinion as to the amount of ore in and tailings on the “Combination group” and the values therein. He stated that this property was appraised at $250,000 by competent men, and that he considered the appraisal a reasonable valuation on the property.
William R. MeLure, one of the heirs and deposed executors, placed the “market value” of the properties at approximately the appraised valuation, but, on cross-examination, explained that “my knowledge of the amount of ore there is in the property, and what that ore will bring, that is my value of the property, that is my idea of market value. * * # ”
A. V. Corry, a mining engineer of experience, testified that he examined the Henderson group in 1923, and placed a value of $150,000 upon the property; this valuation was based upon the amount of ore computed to be in the veins, valued at $9.50 gross, less cost of extraction and concentration. On cross-examination he stated that it would cost approximately $150,000 to place a mill upon the premises, but that $1.50 per ton would take care of the operation of the mill and pay for it by the
The administrator testified that he had redeemed the Pan-Metallic property, without giving details other than that an attorney other than the attorneys for the administrator appeared in the matter and now claims a fee of $1,500 for services in this connection, and then explained that the original debt was refunded and remains as a 'lien upon the property — ' in what amount we are not advised.
1. The administrator has moved to dismiss the appeal upon the ground that “the judgment and order attempted to be appealed from is not an appealable judgment or order from which an appeal lies or may be taken under section 9731 of the Revised Codes of 1921.” In support of the motion, counsel assert that “an appeal is authorized by statute only, and unless the subject-matter of an appeal falls fairly within the statute the appeal does not lie.” With the correctness of this assertion there is, and can be, no dispute. (Tuohy’s Estate, 23 Mont. 305, 58 Pac. 722.)
Section 9731 consists of three subdivisions, in which are enumerated all judgments, decrees and orders from which an appeal may be taken. Subdivision 3 authorizes an appeal from certain judgments or orders in probate proceedings, one of which is “a judgment or order * * # against or in favor of directing the partition, sale, or conveyance of real property. * * # ” This appeal is taken from an “order and judgment * * * refusing to confirm the sales of property. * * # ”
Neither the order of sale, the offering for sale in the manner prescribed in the order, nor the bidding in of the property at
The hearing on the return of the sale is, therefore, for the purpose of determining whether the court will direct or refuse to direct a sale of the property and formal conveyance thereof. If the court’s findings are favorable, the court will direct the sale or conveyance of the property; if, on the other hand, the court’s findings are unfavorable, it will merely refuse to confirm the sales as tentatively made without, of course, directing that no sale or conveyance be made, as such an order would be superfluous. The order of the court refusing to confirm is therefore ‘ ‘ a judgment or order * * * against the * * # sale or conveyance * * * ” of the property.
This question has never been befox-e this court, but it has been determined in conformity with the above views in other states having statutes, authorizing appeals, similar to our section 9731 above. (In re Leonis’ Estate, 138 Cal. 194, 71 Pac. 171; In re Bradley’s Estate, 168 Cal. 655, 144 Pac. 136; In re McVay’s Estate, 14 Idaho, 64, 93 Pac. 31; In re Christensen’s Estate, 15 Idaho, 692, 99 Pac. 829; In re Bohanan, 37 Okl. 560, 133 Pac. 44; In re Auerbach’s Estate, 23 Utah, 529, 65 Pac. 488.)
The order appealed from is an appealable order, and the motion to dismiss is therefore overruled.
2. It is first urged by the bidders that the order appealed from is erroneous in that, having vacated the sale as made, the court failed to order a new sale under the original order of sale.
Section 10225 of the above Chapter provides that if, on the hearing on the return of sale, the court finds against the sale, “the court or judge may vacate the sale and direct another to be had. * ® * ” It is clear from the nature of the order of sale and from the wording of this section that when the facts presented warrant the vacating of the sale made, the court cannot merely refuse confirmation and leave the petitioning administrator or “persons in interest” without redress other than to commence a new “action” by the filing of a second petition for an order of sale. The court therefore erred in faffing to direct “another sale,” but if the order is otherwise sustainable this error might be corrected by direction without reversing the judgment and order appealed from.
It is true that section 10226, Revised Codes 1921, gives the right to file written objections to confirmation only to “persons interested in the estate,” and that the administrator is not such a person as is contemplated by the statute; he is but an officer of the court charged with certain duties, and stands in much the same position with reference to the matter as does a sheriff in whose hands has been placed an execution or order of sale in foreclosure proceedings. However, section 10225 above provides that “a hearing upon the return of the proceedings may be asked for in the .return or by petition subsequently, * * * ” and that “upon the hearing, the court or judge must examine the return and witnesses in relation to the same, * * * ” and on finding certain facts “may vacate the sale and direct another to be had,” while section 10226 provides that, when written objections are filed by a person interested in the estate, such “objections * * * may be heard * * * when the return is heard. * # * ” It is therefore apparent that a hearing may be had upon the return and action taken by the court in the absence of written objections by an interested party, either when asked for in the return or “by petition subsequently.” The statute does not declare by whom such subsequent petition may be filed. Here, while the administrator did not ask for a hearing in his return, he prayed that the sales made to these bidders be not confirmed for the reason that the bids made were wholly disproportionate to the value of the property sold, and thereafter the bidders, being the parties most interested in the confirmation of the sales, “by petition subsequently” asked that a hearing be had on the return; this, in our opinion, they had the right to do under the statute above quoted, and their action in doing so vested the court with jurisdiction to make the order appealed from, even though the
4. Finally, it is contended that the order should not be sustained for the reason that the court erred in finding that the bids were disproportionate to the values of the several properties, and for the further reason that no offer of ten per cent in excess of the bids was made and no showing was made that, on a resale, bids exceeding those received by at least ten per cent, exclusive of the expenses of such resale, might be had.
Again reverting to section 10225, we find that the court is permitted to vacate sales on which return is made and direct another sale to be had “if the proceedings were unfair, or the sum bid disproportionate to the value, and if it appears that a sum exceeding such bid at least ten per cent, exclusive of the expenses of a new sale, may be obtained, ° * * ” and, where the findings are the reverse of those indicated, the court must confirm the sale. (Sec. 10227.) The intention of the legislature' is clear. The authority of the court to vacate a sale is dependent upon fact conditions found in confoxmity with the three clauses quoted, the first and second of which are in the disjunctive and the second and third in the conjunctive. The court must find either that the proceedings were unfair, or that the bid was disproportionate to the value, and that on a new sale an advance bid may be obtained. Here the court found that the sales were fairly and legally conducted, but that the bids were disproportionate to the value, and made no finding regarding an advance bid, while it is clearly inferable from the record that no such bid could be obtained until such time as conditions affecting the mining industry have materially changed.
Has the administrator of an estate, or the court sitting in probate, power or authority to postpone the sale of estate property, the sale of which has been declared neces
While the interest of the estate is paramount (State ex. rel. King v. District Court, 42 Mont. 182, 111 Pac. 717), it is the policy of the law that estates be administered with dispatch, to the end that they shall not be wasted by needless expense incident to delay. (In re Dolenty’s Estate, 53 Mont. 33, 161 Pac. 524.) “Mismanagement of the estates of the dead, and the long delays which too often are permitted in the settlement thereof, often come very near spoliation. The courts are charged with the solemn duty of seeing that there shall not be any spoliation either with ill or good intent. (Mr. Justice Milburn, in State ex rel. Eakins v. District Court, 34 Mont. 232, 85 Pac. 1024.)’’ (In re Jennings’ Estate, 74 Mont. 449, 241 Pac. 648.)
The prevention of the enforcement of creditors’ claims “indefinitely” as suggested by the administrator, for any purpose, and particularly on a chance of a revival of the mining industry, is not sanctioned by our laws. While the court may have some discretion to delay the sale of the property of the estate to await a favorable market (see Nelson v. First Nat. Bank, 69 Fed. 798, 16 C. C. A. 425), such discretion should be exercised only after a showing that by a reasonable delay the property may, in the not too distant future, be disposed of to a better advantage, and, under our law, such discretion is exhausted when the court determines the necessity for the sale and orders it to be held at a time fixed in the order. As heretofore stated such an order is a final judgment, and, in the absence of an appeal therefrom, no method is provided by law for its recall or revocation; no course is left open to the administrator other than to comply with the order or obtain such extensions of time as the court may be willing to grant. In the order made the court was liberal in fixing the original date and in extending the time for the sale.
It is urged that sales may be set aside for inadequacy of consideration alone, and that upon this ground the order of the trial court should be upheld. Such a rule is suggested in the King Case with reference to sale of personal property, and may exist also as to real property sales, but can exist only in cases wherein it appears that the bid is so grossly inadequate as to raise a presumption of fraud and unfairness in the conduct of the sale. (See Dunn v. Dunn, 137 Cal. 51, 69 Pac. 847; McGregor v. Jensen, 18 Idaho, 320, 109 Pac. 729; Woerner on American Law of Administration 478.) Here it must be remembered that the property sold was either mining claims or property depending for its value upon mining operations; this class of property differs materially from staple articles of trade or agricultural lands and city lots; it has little stability of value and such a violent depreciation therein as is indicated by the testimony before us does not necessarily prove that the bids made were grossly disproportionate to the actual value of the property sold.
The fact that sales were duly noticed and advertised, and that the sales were fairly and legally conducted after ample time allowed for the securing of bidders, and that the bids received were the highest and best bids made, is some evidence that those bids were not disproportionate to the “value” of the properties on such sales. (See Nelson v. First Nat. Bank, above.)
Again, in determining whether these bids were disproportionate to the value of the properties sold, we must, take into consideration the fact that the administrator, the heirs, and other creditors of the estate had more than eight months between the entry of the order and the time of sale in which to secure the attendance of mining men at the sales,
The testimony on the whole does not show so gross inadequacy in the bids as to warrant a presumption of fraud or unfairness, and the trial court did not so find, but, on the contrary, found that the sales were legally conducted and fairly made, and on this finding, coupled with the admission that an advance bid could not be had on a resale, the order appealed from was clearly erroneous. However, as the bidder James Patten did not join in the appeal, the order cannot be reversed as to the sale made to him.
For the reasons stated the order is affirmed as to the bid of James Patten on the Hope Hill group, and as to all other sales mentioned therein and in the return on order of sale, the order is reversed and the cause remanded to the district court of Silver Bow county with direction to confirm said sales. .
Affirmed. .
Rehearing denied July 17, 1926.
Rehearing
On Motion for Rehearing.
I am not satisfied with the decision of this appeal and am of opinion a rehearing should have been granted.
It seems to me that the court is constituted the conservator of estates, and that even in the absence of objection made to the confirmation of a sale of estate property, the court with propriety should refuse to order a confirmation where, from facts appearing or within its knowledge, the purchase price is wholly inadequate. Under such circumstances, it would seem to me proper for the court to order a resale, in order to protect an estate from despoliation. The questions involved are so important and far-reaching in effect that I think the motion for a rehearing should have been granted.