Mealey v. Page, 41 Md. 172

Mealey v. Page

41 Md. 172 | Md. | 1874

Alvey, J.,

delivered the opinion of the Court.

In this case, the original sale having been made by the executor, under and by virtue of a power in the will of the testator, and the purchaser having signed a written memorandum of sale, whereby he agreed and bound himself to comply with the terms of sale upon the ratification thereof by the Orphans' Court; and the sale having been reported and finally ratified, and the purchaser making default in complying with the terms of sale, whereupon the Court, in pursuance of the provisions of the Act of 1870, chapter 82, ordered the property to be re-sold at the risk of the defaulting purchaser, and the amount bid at the re-sale exceeding that bid at the first sale, the question is, to whom does the excess belong ? This depends upon another question, and that is, whether the property sold at the re-sale was sold as the property of the first purchaser, or as that belonging to the estate of the testator, without reference to any rights or liabilities growing out of the first sale.

The first sale was not set aside, nor xvas it asked to be set aside; but, on the contrary, all the proceedings leading to the order for re-sale, treated and regarded the first contract of sale as subsisting and binding on the original purchaser. It was in default of his compliance with the terms of sale, and as a summary mode of enforcing the contract of sale, that the re-sale was ordered. The re-sale was at the risk of the original purchaser, precisely as it would have been if the executor, instead of resorting to the summary remedy, had filed an original bill in equity for the enforcement of the contract and a sale of the property for the payment of the purchase money. In such case, the sale decreed for payment of purchase money would have been at the risk of the original purchaser, and the property *184would have been sold as his, and any surplus proceeds of sale, after payment of the costs and expenses attending the second sale, and the commissions on the amount of the proceeds thereof, and the amount of purchase money, with interest due on the first sale, would properly belong to the first purchaser; and if the proceeds of such re-sale, after the deduction for costs, expenses and commissions, had been insufficient to pay the amount due on the first purchase, the original purchaser would have remained liable for any balance that might have been left unpaid. So here, in this'summary proceeding, the same result is produced. The property was sold as that of the original purchaser, and at his risk, he being entitled to any excess in the proceeds of sale, over and above the costs and expenses of the re-sale, the commissions on the amount of the proceeds thereof, and the amount of the purchase money due. on former sale; and in the event that the property had sold for an amount less than sufficient to pay all these, he would have remained liable for the balance, and been subject to summary proceeding for the collection thereof. This is the nature of the summary proceeding for re-sale in a Court of Equity, (7 Md., 342 ; 30 Md., 235 ; 31 Md., 168,) and it seems to have been the object of the Act of 1870, chapter 82, to adopt the same proceeding in regard to sales of real or leasehold estates made under the jurisdiction of the Orphans’ Court.

It has been contended by the appellee that, because the appellant was without means of payment, and had given no security for the payment of the purchase money, his claim to the excess of the purchase money, realized on the re-sale over the amount bid by himself at the first sale, ought not to be maintained, as thereby he would be allowed to speculate upon and take advantage of the event that the property produced more on the second than on the first sale, while if it had been the reverse he would have paid nothing, and the loss in the difference of price would have *185been sustained by the estate represented by the appellee. It is even contended that the appellant never, in fact, intended to pay for the property, and that his conduct in regard to the sale was in truth but a fraudulent device whereby to enable him to speculate upon the chances of re-sale. But, he this as it may, it cannot affect the present claim of the appellant. The grounds alleged against the appellant’s claim may have formed very sufficient reasons for rejecting or refusing to ratify the sale made to him ; hut as that sale was allowed to be finally ratified by the Court, the appellant is entitled to occupy the position of purchaser of the property. Trustees and executors can easily, and should, protect themselves, and the estates they represent, from such imposition and practices as the appellee alleges here, by observing with strictness the powers under which they act. They can, and should, in all cases where there are doubts of the good faith, or solvency of the purchaser, require security for the compliance with the terms of sale, and that before the sale is ratified. By observing this precaution all danger of imposition, such as is here complained of, is at once effectually avoided.

Instead of rejecting altogether the appellant’s claim to the surplus proceeds of the re-sale, the Orphans’ Court should have disposed of the product of that sale in the following manner: First, by deducting the costs and expenses attending the re-sale, including a reasonable fee for services of counsel in filing petition and procuring the necessary orders thereon for re-sale; secondly, by deducting the executor’s commissions on the whole amount of the proceeds of the re-sale; thirdly, then the amount of the original purchase money, with interest thereon from the date of the first sale to the time of the receipt of the purchase money by the executor from the purchaser at the second sale; and lastly, after all these deductions, whatever balance of such proceeds of re-sale may have remained, should *186have been awarded to the appellant. And in order that such disposition of the fund may be made, we shall reverse the order appealed from, and remand the cause to the Orphans’ Court.

(Decided 3rd December, 1874.)

Order reversed, and cause remanded.