116 Va. 755 | Va. | 1914
delivered the opinion of the court.
On December 1, 1910, J. T. Strickland, the appellant, conveyed a house and lot on Seventh street, in the city of Roanoke, to S. E. Rohrer and Sadie Rohrer, his wife, for the consideration of $2.500. The purchasers paid $500 down and executed a note for the residue, $2,000, payable one year after date, secured by deed of trust on the property, to one W. P. Weaver, a son-in-law of the creditor, as trustee. The note was not paid at maturity, and four
The trustee’s sale was on January 5, 1912, and on February 5, following, Strickland recovered a judgment against Mrs. Rohrer, in her own right and as administratrix of her husband, in the Circuit Court of the city of Norfolk, for $1516.13, with interest and costs, being the difference between the note for the purchase money and the price that the property brought at the trustee’s sale. Four days after the recovery of the judgment, Strickland filed the original bill in this case to subject certain other real estate belonging to Mrs. Rohrer and the estate of her husband to its payment.
The unconscionableness of this transaction fully appears from the foregoing summary of undisputed facts, and does not call for either elaboration or comment. Res ipsa loquitur. The arm of the chancellor would indeed be all too short if it could not reach out and prevent the injustice and oppression that would result from granting the prayer of the original bill.
Counsel for appellee are in error in supposing that this is a collateral attack upon a domestic judgment, which, of course, is not permissible. The attack is not collateral, but direct by cross-bill, founded upon equitable grounds for relief. Story’s Eq. Pl. sec. 398; Little Rock &c. Ry. Co. v. Wells, 61 Ark. 354, 33 S. W. 208, 30 L. R. A. 560, 54 Am. St. Rep. 216.
The question is controlled by statute (Code, sec. 3300), which declares that if a defendant who is entitled to the defenses contemplated by section 3299, by special plea of
Nor is authority wanting for the general proposition that where the price obtained for property at a trustee’s sale is so grossly inadequate as to shock the conscience of the chancellor, the sale will be set aside. Especially is that true when the trustee is the son-in-law of the creditor, the only bona fide bidder at the sale.. In such circumstances the burden rests upon the creditor-purchaser to repel the presumption of unfairness which attaches to such a sale. Yet in this instance, as remarked, neither the creditor nor the trustee testified, nor did they call any other witness to repel the presumption of misconduct on their part, raised by the conditions surrounding the transaction.
In Rossett v. Fisher, 11 Gratt. (52 Va.) 492, Moncure, J., in delivering the opinion of the court, at pp. 498-499, observes: “A trustee in a deed of trust is the agent of both parties, and bound to act impartially between them; nor ought he to permit the urgency of the creditors to force the sale under circumstances injurious to the debtor at an inadequate price. 1 Lorn. Dig. 323; Quarles v. Lacy, 4 Munf. (18 Va.) 251. He is ‘bound to bring the estate to the hammer,’ as has been said by Lord Eldon, ‘under every possible advantage to his cestui que trust;’ and he should use all reasonable diligence to obtain the best price. Hill on Trustees, 479, marg., and cases cited.” Wilson v. Wall, 99 Va. 353, 38 S. E. 181.
In Minor on Eeal Property, sec. 49.7, it is said, the trustee must exercise “in all things, in respect to the cestui que trust, the most transparent good faith. ’ ’ See. authorities n. 1, also sec. 665.
It is likewise well settled that a trustee in the exercise of a reasonable discretion, may adjourn the sale from
“Moreover, if it appears that going on with the sale at the appointed time will result in a great sacrifice of the property, it is his (the trustee’s) positive duty to adjourn the sale, and if he fails to do so he takes the risk of having it vacated.” 27 Cyc. 1475. The text is supported by the authorities cited in n. 8, 9.
Such sale “will be vitiated by any fraud against the rights of the debtor or any collusion between interested parties of a nature to cause a sacrifice or depreciation of the property. . . It is the duty of the mortgagee or trustee to use every reasonable care and exertion to make the property bring the highest price obtainable.” Idem 1477.
“If a trustee finds that there is no bidder present except the creditor, or only sham bidders, he should adjourn the sale.” Fairfax v. Hopkins, 8 Fed. Cas. No. 4614, 2 Cranch C. C. 134; Meyer v. Jefferson Ins. Co., 5 Ka. App. 245; Vail v. Jacobs, 62 Mo. 130, 133; Johnston v. Eason, 3 Ired. Eq. 330, 336; Briggs v. Briggs, 135 Mass. 396.
It has also frequently been held that a court of equity will grant relief where property is'sold at a grossly inadequate price, and the owner has failed to attend the sale through mistake or inadvertence of himself or his agent. Holdsworth v. Shannon, 113 Mo. 508, 21 S. W. 85, 35 Am. St. Rep. 723; Williamson v. Bale, 3 Johns. Ch. 290; Bixly v. Vead, 18 Wend. 611; Seaman v. Riggins, 2 N. J. Eq. 214, 34 Am. Dec. 200; Howell v. Hester, 4 N. J. Eq. 266; Wetzler v. Schaumann, 24 N. J. Eq. 60.
The books abound with illustrations of the principle that courts of equity will seize upon the fact of accident
The circumstances that, pending litigation, the property has passed into the hands of a purchaser for value and without notice constitutes no bar to granting the alternative relief prayed for by the appellant, Mrs. Rohrer, in her amended cross-bill, namely, that “she is entitled at least to have the purchase price of $2,000 credited on the original $2,000 purchase money bond,” and that Strickland will only be permitted to enforce his judgment for whatever balance may remain after applying such credit.
It appears, however, that the resale of the property made by Strickland for $2,000 was in monthly installments of $20 each, and that it is doubtful whether all of it can be collected.' We are, therefore, of opinion that substantial justice will be done by crediting the original purchase money note-by $1,800 (that being the fair market value of the lot as ascertained by the verdict of the jury and approved by the first decree of the court below) to be applied as of the date of the trustee’s sale.
Upon these considerations the decree of the Law and Chancery Court of the city of Roanoke must be reversed, and the case remanded for further proceedings not in conflict with the views expressed in this opinion.
Reversed.