Ryan v. Wilson

64 N.J. Eq. 797 | N.J. | 1903

The opinion of the court was delivered by

Dixon, J.

This is an appeal from a decree of the prerogative court affirming an order of the Mercer county orphans court, in which the court refused to confirm a sale of two factories-in the city of Trenton belonging to the estate of Samuel K. Wilson, deceased, and which the orphans court had ordered the executors to sell for the payment of debt's.

The statute under which the proceedings for sale were taken (P. L. of 1898 p. 715) requires by section 85 that after the sale is made, it shall be reported to the orphans court, and, if the court shall approve of the' sale, it shall confirm the same as valid and effectual in law, and direct that a conveyance be executed.

In the opinion delivered in the prerogative court this requirement of confirmation -was regarded as having no substantial effect, the view being that the court should confirm the sale, unless facts were shown which would justify the annulling of a judicial sale that did not need confirmation by. a court to render it valid. This view was supposed to be sanctioned by the decisions in Delaware, Lackawanna and Western Railroad Co. v. Scranton, 7 Stew. Eq. 429, and Bethlehem Iron Co. v. Philadelphia and S. S. Railroad Co., 4 Dick. Ch. Rep. 356. The statute under consideration in those cases enacted that certain judicial sales should be reported to the court and, if approved by the court, should be confirmed, with a proviso that no sale should be confirmed, until the court was satisfied that the property had been sold at the highest and best price the same would then bring in cash. The opinions delivered by the court of chancery in those cases are thought to imply that a sale governed by that statute must be confirmed, if the highest and best price obtainable at the sale had been secured, unless the circumstances were such as to warrant the setting aside of a sale which would be valid without confirmation.

Without passing upon the correctness of that construction, we deem it inapplicable to the case now before us. Here the power of confirmation or rejection is untrammeled by the proviso which was supposed to narrow the scope of inquiry in the cases cited, and is committed without limitation to judicial discretion. By force of the -statute the “sale” reported to the court is not a perfect contract made by competent parties, but is a bargain dependent upon the approval of the court to render it “valid and effectual in law.” Such approval should, in our judgment, be given or withheld upon consideration, not merely of matters pertinent to the avoidance of a complete contract, but of all matters pertinent to the question of accepting the proposal presented. Among those matters is evidently the propriety of the mode in which the auction was conducted. As was said by Vice-Chancellor Pitney in Bliss v. New York Life Insurance Co., 6 Dick. Ch. Rep. 630, if the sale is so managed as to discourage bidders and to result in a considerable sacrifice, that circumstance would justify the court in refusing to confirm the sale, even though the purchaser had nothing to do with such mismanagement. The court must regard the interests of those parties whose property it undertakes to sell, as well as the expectations of those who propose to buy.

We think the interests of the present owners were not duly protected at the sale under consideration. The property to be sold consisted of two factories, equipped with machinery for the manufacture of woolen goods. Of this machinery the manufacturing machines, in distinction from the appliances to transmit the power, were easily removable and were such as are salable separately. About a year before the sale these machines were appraised at $120,000 and the rest of the apparatus at $30,000, and the substantial accuracy of that appraisement is supported by the testimony of an expert taken in the proceedings now pending. Beside these values, the buildings and land are said to be worth $20,000 and the encumbrances upon the whole are about $10,000. With these estimates before them, the executors offered for sale each mill and its contents as an entirety, and the highest bid received for both is only $30,300. The number of persons attending the sale was fifty or sixty, of whom only five or six bid on the property as it was offered. No attempt was made to sell the separable machines in distinct parcels. While it is impossible to tell with certainty whether the bystanders would have become bidders for such parcels, we think the dictates of reasonable prudence required the executors to test that question. There is surely a probability that among so many attendants, some, unable or indisposed to buy an entire mill, would be able and inclined to buy single machines, and when the difference between the estimated value and the offers received was so great, every practicable effort should have been made to avoid or lessen the impending sacrifice.

In order to permit further effort in the direction suggested, we concur in the refusal to confirm the sale reported.

. For affirmance—Ti-ie Ci-iiee-Justice, Van Syckel, Dixon, Collins, Eort, Garretson, Hendrickson, Adams, Vredenburgh, Voorhees, Vroom—11.

For reversal—None.