Mitchell v. Harris

43 Miss. 314 | Miss. | 1870

Peyton, C. J.:

. Henrietta B. Harris, on the 16th day of April, 1868, obtained a decree in the chancery court of Noxubee county, against George H. Harris, to foreclose a certain mortgage on land, executed by bim to secure the payment of a debt of $5,000 and interest thereon, and to sell the mortgaged premises for that purpose. And R. E. Y. Yates, the clerk of said court, was appointed to execute said decree, who sold the mortgaged property on the 6th day of July, 1868, at auction, for cash, to John H. Mitchell, for the sum of one hundred dollars. The said commissioner, at the next term of the said court, on the 12th day of October, 1868, made his report of said saje to the court, and asked confirmation thereof. The plaintiff and defendant in the foreclosure suit, then excepted to the report, and at the same time filed their petition to set aside the sale and for a re-sale of the property mortgaged, alleging that they knew nothing of the sale until after it was made, nor of the intention of said commissioner to proceed under the decree without instructions so to do from them or one of them, and that they had no reason to believe that he would proceed in a matter wherein they were so deeply interested without giving them notice through the mail or otherwise, and that the said commissioner well knew that to sell at auction in the absence of the petitioner, would result in a sacrifice, in the loss of the claim of one of them, and of the land of the other. That the said commissioner inquired by letter of the solicitors of the complainant in the decree, whether he should proceed, and that the answer was sent to him by mail, that he must not, and that he should take no further steps in the matter until further instructed. That of the petitioners, the plaintiff in the decree offers as her first' and minimum bid for said land, on a re-sale thereof under said decree, the sum of $3,000. They further charge that the said sale and sacrifice were made either by fraud, accident or mistake, and that they were made to the great surprise of the petitioners, who therefore pray that the said sale be set aside, and a re-sale of the said property ordered.

The commissioner in his answer to said petition, admits that he sold the land mentioned in the decree at the time stated,- and that the sale was . made in pursuance of, and in execution of the said decree, and that in making said sale, he conformed in all things to the directions of the said decree and of the law of the land governing such sales. That some time in the month of May, 1868, he informed the solicitors of the complainant, residing at Columbus, in this state, by letter, of the date of the decree, and requiring them to say whether or not he should proceed with the sale. To this letter he never received any answer, nor any instructions in the premises. That said sale was made in an open, fair and public manner, in the presence of many persons. He denies all fraud, collusion, conspiracy or combination on his part, or within his knowledge by any other person, to defraud said petitioners. That he did nothing in said sale but discharge his duty as a public officer, in good faith to the court and the parties to the suit, and without, in anywise, intending to sacrifice the defendant’s property, or destroy the complainant’s security for her debt.

Mitchell, in his answer to the petition, admits that he purchased the lands specified in the decree at the sum of $100, which he paid at the time of the sale, and insists that said sale was fair in every respect; that he purchased in good faith, and expressly denies that he conspired or colluded with any one for the purchase of said land, and insists upon a confirmation of the sale thereof.

Upon the reading of the exceptions to the report and petition for re-sale, the court set aside the sale and ordered a re-sale of the mortgaged property; and from this decree the said John H. Mitchell brings the case to this court by writ of error.

From the facts of this case it will be readily perceived that the propriety of the action of the court below in setting aside the commissioner’s sale and ordering a re-sale of the mortgaged property, presents the only question for our determination, and in the solution of which it may he observed that before the confirmation of the sale the whole subject matter is in fieri, and .under the control of the court, which has full power to regulate the whole matter — to confirm or set aside according to its discretion, and this is a consequence of the rule that no such sale is valid till confirmation. But this discretion is not an arbitrary, but a sound, legal discretion, governed by the established rules of practice and the principles of the court. What would be sufficient grounds for a refusal to confirm must depend in a great degree upon the circumstances of each case. Henderson vs. Herrod, 23 Miss., 434.

As, generally, in sales of this kind, it is the duty of the commissioner charged with the execution of the decree, to report the sale to the next term of the court for confirmation, and in the meantime withhold the conveyance of title from the purchaser until the confirmation of the sale. And thus withholding the title is a necessary corollary from the general rule that no such sale is valid until confirmed by the court. To this rule, however, there may be an exception, resulting from the conduct of the parties to the sale, who may act in such a manner as to give the sale the validity and effect of an order of confirmation by the court. 3 S. & M., 493; 4 ib., 213; 23 Miss., 453.

As it is the aim of the court in every sale, of this character to obtain as great a price for the estate as can possibly be got, the court of equity in England will open the biddings before the report of the sale is absolutely confirmed, upon a mere advance of price. This practice is not generally recognized in this country, and it is not desirable that it should be introduced here. The biddings will not be opened in this state, either before or after confirmation, except for special cause, and not then unless the purchaser, who is free from fault, is fully indemnified by repayment of the purchase money and the costs and expenses to which he has been subjected. This rule is reasonable and just. But after the report of the sale has been confirmed, an increase of price alone, however large, is not sufficient to induce the court to grant an application of that character, although it is a strong auxiliary argument when there are other grounds.

The court of chancery has never interfered with a sale for mere inadequacy of price, unless it is such as to create an inference of fraud, but has uniformly declined to do so. It has always required some special ground to be laid — such as fraud, accident or surprise, which has prevented a fair sale of the property, and worked injustice to some party whose interest is affected by the sale. Without going into an enumeration of the many causes for which public sales have been set aside, yet we see that many of them are founded on the principle that fair competition in the biddings has been prevented, and sacrifice of the property may have been incurred to the prejudice of those interested. This principle rules in cases of sales by auctioneers, executors, administrators, trustees, commissioners, and all others having authority to sell.

A re-sale will be ordered where there has been fraud or misconduct in the purchaser; fraudulent negligence or misconduct in any other person connected with the sale; surprise or misapprehension, created by the conduct of the purchaser or of some other person interested in the sale, or of the officer who conducts the sale. Lefevre v. Laraway, 22 Barbour, 167-173.

■ It appears from the evidence in this case, that property estimated to be worth from five to six thousand dollars, was sold by the commissioner at public sale to the plaintiff in error, for the sum of one hundred dollars. This gross inadequacy of price alone, would perhaps not be sufficient to justify the court in refusing to confirm the sale on that ground only, but when taken in connection with the surprise or misapprehension of the parties interested in the sale, evidently created by the officer, who conducted the same, it was abundantly sufficient in our opinion, to sustain the action of the court, in setting aside the sale of the commissioner, and ordering a re-sale of the mortgaged property.

The testimony shows that the decree of foreclosure was obtained in the chancery court of Noxubee as before stated, and that the plaintiff and defendant resided in the town of Columbus, in Lowndes county, as also did the solicitors of the complainant. And the commissioner says that some time in the month of May 1868, he informed the solicitors of the complainant, by letter, of the date of the decree, and therein required them to say whether or not, he should proceed with the sale. This letter, the said solicitors say th,ey received, and answered immediately through the mail, instructing him not to advertise and sell until he got further orders or instructions upon the subject from them or their client. This letter, however, the commissioner says he never received. The failure to get this letter was a mere accident, as other letters had been received by him from complainant’s counsel through the same medium. From the correspondence which had taken place between these parties upon this subject, the complainant and her counsel had good reason to believe that this answer to the commissioner’s inquiry had been received and acted upon by him, and that the sale would not be made until advised to do so, either by the said complainant or h'er counsel. This inquiry of the commissioner clearly indicated that he was disposed to avail the directions of the complainant or her counsel, and that the sale would not take place before he received further instructions from them in relation to it.

In this state of things, without awaiting instructions from the complainant or her counsel, and without further communication with them or either of them, the commissioner brought on the sale, and sold a valuable tract of land, without the knowledge, and in the absence of the parties interested in the sale, to the plaintiff in error, who at a single bid, without competition, bought the same at the sum of one hundred dollars. The sale under these circumstances, was wholly unexpected by the complainant, and was a surprise to her.

It is the right of every party concerned in inter,est in property, when about to be sold at public auction, to have it offered for sale under such circumstances as afford an opportunity for fair competition amongst all who may be disposed to buy. And in order to effect this, in the case at baj,“under the circumstances, the plaintiff and defendant in the decree, being the parties most interested in the sale, should have had notice of the sale and an opportunity afforded them to attend the same. As these parties reside in another county than that in which the sale was to be had, and finding neither of them or their agent or attorney present on the day of sale, it was the duty of the commissioner, in order to prevent a sacrifice of the property, to have postponed the sale and given notice thereof to the parties interested. Sales of this kind are conducted in the same manner as sheriffs’ sales under execution, and the commissioner or master making the sale has the same power as the. sheriff has to adjourn the sale, whenever from a defect of bidders, the property shall not be likely to command a reasonable price.

It appears from the evidence in the record that the defendant in the foreclosure suit was in insolvent circumstances, and that the mortgaged property was the only security the complainant had for the payment of her debt, and to sustain this sale, under the circumstances, the result would be a loss of the defendant’s property, and complainant’s claim.

We wish it to be distinctly understood, that we base this decision on the ground of surprise to the complainant, created by the conduct of the sale.

Let the decree of the court below be affirmed.