Case ID: sc-eq_8/html/0013-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sarah Young, and Others, v. Dr. Thomas Teague.
    The commissioner was directed to sell a tract of land to the highest bidder, and to take a bond for the purchase money, with a mortgage ofthe land as a security. Hdd, that he was also authorized to execute a conveyance to the purchaser, and that the validity of the title did not depend upon a confirmation of the commissioner’s report of tire sale.
    The authority ofthe commissioner in relation to sales depends upon the terms ofthe order of sale : and where he is authorised, directly, or impliedly, to execute a conveyance to the purchaser, the title of the latter is complete without confirmation by the Court; nor can the sale be afterwards set aside, or the biddings opened, upon the offer of an advance in the price, even before a report of the sale has been confirmed, unless for fraud, or under circumstances which would authorize the interférence of the Court in any other case. If it is desired that the Court should reserve a further control of the contract, the order of the sale must be qualified, so as expressly to restrict the authority of the commissioner.
    The English practice, of opening the biddings, upon the offer of an advance, at any time-before the confirmation of a report of the sale, does not apply to sales by the commissioner in this State, where the latter is authorised to complete the contract by executing a conveyance to the purchaser: and even where, by the terms of the order, the contract is left open until confirmed by the Court, the biddings ought not to be opened upon the offer of an advance, unless a deposit of money be made as a security for the performance of the offer.
    It is not a sufficient ground for setting aside a sale by the commissioner, that one ofthe parties interested intended to bid higher, but neglected to do so, or was prevented by a mistake at the time of sale ; if neither the commissioner nor the purchaser contributed to the mistake, and the sale was fair, and regularly conducted: and it makes no difference that some of the parties are minors. Nor will the sale be set aside on the ground, that the.commisioner neglected to take a mortgage, as required by the order of sale, if it appear, that the purchaser was always ready and willing to have complied with the terms of sale, by executing a mortgage: and the Court will do no more, under these circumstances, than to compel the purchaser to execute the security required by the order of sale.
    Motion to set aside a sale of land by the commissioner, and to open the biddings. The land was sold in August, 1828, under an order made in proceedings for partition, and was purchased by the respondent, Dr. Thomas Teague, át the price of $1,008. This application was grounded upon the offer of an advance of $600. on. that price, by Mrs Sarah Young, one of the parties interested, who, it was alleged, had been prevented bidding at the time of the sale by a mistake : and the further ground was also relied on, that the purchaser had forfeited his right to insist on the sale, in consequence of his not having executed a mortgage of the land, to secure payment ofthe purchase money, .as required by the terms of the sale, although he had received a conveyance from the commissioner.
    The motion was made at Laurens, July, 1829, before De Saussure, Chancellor, who, after hearing the evidence, made a decree, by which the sale was set aside, the purchaser’s conveyance directed to be delivered up to be cancelled, and the land ordered to be resold. Mrs. Young was also required to give security, as well for the advance offered by her, as for the further indemnity of the parties.
    Irby, for the respondent,
    gave notice of appeal, and now moved to reverse the decree, as unsupported by principle or preceeent, and as being contrary to both Law and Equity. The English practice of opening the biddings was wholly inapplicable to the course of proceedings at sales by the commissioner in this State. 2 M’C. Ch. 159, note (2). The policy of the practice was more•rii . __ , . , over condemned by the most eminent English jurists, and m one case, that of White v. Wilson, 14 Yes. 153, Lord Eldon went so far as to say, that “ half the estates sold in Chancery were thrown away upon the speculation, that there would be an opportunity of purchasing afterwards by opening the biddings.” But even in England to open the biddings, after titles have been executed and delivered to the purchaser, was a novelty : and this Court is called on, not merely to introduce a practice, the policy of which is decidedly condemned where its existence is recognized, but to extend that practice to a class of cases, to which it has never been any where applied. In this State the. settled practice has always been, to regard all parties as bound by the fall of the hammer, if the sale were fair and regular ; and this was unquestionably the true policy, inasmuch as it left purchasers unembarrassed by apprehensions of losing their bids afterwards. In this case it was conceded, that the sale was fair, regular, and deliberate, and there was not the slightest pretext of deception, management, or fraud of any kind. The sale too has been consumated by the execution of a conveyance, by which the title has been legally vested in the purchaser; and it deserves consideration, whether a citizen can consistently with the provisions of Magna Gharta, and the Constitution, be deprived of his freehold upon a mere motion.
    But if the Court possessed jurisdiction, what ground is there for equitable interference % The alleged mistake was confined to the individual by whom the advance was now offered ,• and after all, it seemed to be no more than a mistake in her own mind as to what she was willing to give for the land. If sales are to be set aside on such grounds, no one would venture to purchase at a commisioner’s sale : for whilst he would be bound by an injudicious bid, it was next to certain he would never be allowed to retain an advantageous bargain.
    "With regard to the non-execution of the mortgage, that was a ground destitute of even a shadow of equity. The mortgage was perfectly immaterial; for as the land was sold for partition, it stood pledged for the purchase money, under the act of 1791, without a mortgage. lFaust, 28. But the commissioner states, that the purchaser was ready and willing to execute the mortgage ; and that he, comm‘s^orier> declined taking it, because lie" thought it an unnecessary expense. Underthese circumstances it would he agross injustice to hold that the purchaser had forfeited his rights, when he has been guilty of no default. Pie is ready now, as he always has been, to execute a mortgage, whenever the commisssioner, who is the agent of the applicants, is willing to receive it; and this is all that can be equitably, required of him.
    Dunlap, and Thompson, contra,
    
    Cited Upton v. Lord Ferrers, 4 Ves. 700, Chetham v. Grugeon, 5 Id. 86, Tait v. Lord Northwick, lb. 655, Countess Gower v.. Earl Gower, 2 Eden, 348, Watson v. Birch, 2 Ves. 52, Morice v. Bishop of Durham, II Id. 57, and Sugden on Vendors, 45, etseq.: and contended, that the applicants were intitled to have the biddings opened on the ground of the advance alone, even if the merits of the application stopped there, as there had been no confirmation of the commissioner’s report of the sale ; but that even if the report had been confirmed, the biddings would be opened on the clear evidence, which had been adduced, of a mistake on the part of one of the bidders at the sale. The fact that the distributees of the estate have lost by a mere mistake or inadvertance a sum equal to more than one'halfof the price agreed to be paid by the purchaser, is not controverted, and presents as strong a case for opening the biddings as is to be found in any of the books.
    The premature execution of titles by the commissioner to the purchaser could not defeat the rights of the parties. The order of sale had not directed the commissioner to execute a conveyance, and if it had, still the whole matter remained subject to the approval of the Court. The Court was bound to exercise a control over the sale, for the purpose of protecting the rights of the parties interested, some of whom in this case were minors; and this control of the Court could neither be divested, nor delegated to an inferior officer.
    With regard to the policy of the practice of opening the biddings, much might he said on both sides ; but that was a question for the Legislature, and not for the Court. The act of 1721, P. L. Ill, had provided, that the Court of Equity should conform to the pi'actice of the English Chancery, and the practice of opening the bid-dings, having existed in that Court from the earliest period of judicial sales, was obligatory upon this Court, until the Legislature should abolish it.
    
      In New York a similar practice prevails, although the English practice has not been authoritatively adopted in that State ; and the cases of Williamson v. Dale, 3 Johns. Ch. R. 290, and Lansing v. M’Pherson, lb. 424, decided in the Court of Chancery of that State, are conclusive of this case, upon the general principles of chancery jurisdiction.
    But the failure of the purchaser to execute a mortgage deprives him.of the right to insist upon any benefit from the sale. The neglect of the commissioner is not an excuse for him. His rights depended upon the completion of his contract according to the terms of the order ; and his not being in default will no more avail him, than it would, if he had no conveyance, because the commissioner refused to execute it. But here he is actually in default, because he might have executed and tendered a mortgage ; and he was bound to have done so, for he was bound to perform his part of the contract. To execute a mortgage now is not sufficient, for it would not avail’against intervening incumbrances ; and the only effectual remedy is to avoid his title ab initio.
    
   Nott, J.

delivered the opinion of the Court.

This was an application to set aside a sale, made by the commissioner under an order of the Court ofEquity ; or to Use the words of the Chancellor, “ in technical language to open the biddings.” The Chancellor granted the application, and the purchaser now moves to reverse the decree : and I am of opinion that the motion ought to be granted.

With all the respect which I feel for the learned Chancellor, and which is so justly due to him, I think the decree erroneous, both in form and substance : and it appears to me, that the error, if it be an error, is in considering this an application, “ in technical language to open the biddings ;” to which proceeding in the English Courts I think it will appear, upon investigating the subject, that it bears no analogy. In England, when a sale of land has been ordered by the Chancellor, the master first opens books for the purpose of receiving offers, or bids, for a given time ; at the expiration of which, the books, or the biddings, are closed, and the master reports his proceedings to the Chancellor. If in the meantime, and before the report is confirmed a higher offer is made, such offer may be received : or, as it is there properly termed, the biddings are opened, although they had been previously closed : and sometimes, even after the report is confirmed, but before the terms are complied with, and the deeds executed, the biddings may be opened up011 terms. But in this State the course of proceeding is different. The commissioners are not limited to receiving bids, or offers; but they are directed sell to the highest bidder, and to execute titles. This, as far as I am informed, has been the invariable practice from the first establishment of the Court of Equity. In the case before us the commissioner was directed to sell the property to the highest bidder, and to take a bond, with security, for the purchase money, and a mortgage of the premises. The order, it is true, was not, in so many words, to execute titles : but that was implied in the instruction to take a mortgage of the premises, for without first executing titles a mortgage could not be given. The commissioner accordingly did execute and deliver titles to the purchaser; and such has been the invariable usage in this State To set aside the sale, and vacate the title of the purchaser, under these circumstances, is certainly therefore not at all analogous to the English proceeding of opening the biddings.

In New York, as far as I am able to collect from their reported' cases, something like a middle course is pursued. The master sells to the highest bidder; but titles are not executed until he reports his proceedings, and the report is confirmed : so that it is rather a contract to sell, than an actual sale, until it is approved by the Chancellor. In that stage of the proceedings, the Court has, in a few instances, set aside the sale under particular circumstances, but yet Chancellor Kent says, expressly, that the English practice of opening the biddings has never been adopted in that State. 3 Johns. Ch. R. 292.

I do not find therefore that a sale made by order of a Court of Equity has ever been set aside, either in England, or in any of the United States, after the teims have been complied with, and the deeds executed, except for fraud or under circumstances which would authorize the interference of the Court in any other case. In England titles are never executed until the report has been confirmed; and it appears to be now a settled rule in that country, that after confirmation of the report, the Court will not open the biddings, upon a higher offer, or for negligence, surprise, or cir~ cumstances of that kind, unless there has been some misconduct on the part of the individual who has the benefit of the confirmation. 1 Bro. C. C. 287, 3 Id. 475, 11 Ves. 57, 14 Id. 151. And in New York, in the only two cases found in the reports of that State, Chancellor Kent relies upon the ground, that deeds had not been executed. 3 Johns. Ch. R. 290, Ib. 424. To set aside a sale therefore, after titles have been delivered, except upon some plain ground of ordinary equitable jurisdiction, is, in my opinion, without authority, or precedent. This brings me to the inquiry, whether the circumstances of this case were such as authorized the Chancellor to set aside the sale, and direct the deeds to be cancelled.

And this may be followed by another question, whether if the sale ought to be set aside, the manner of effecting the object directed by the decree is to be approved.

The two grounds on which the Chancellor professes to set aside the sale, are : 1st. A misapprehension, or mistake, on the part of the applicant, Mrs. Young, as to the manner of bidding at the time of sale. And 2nd, the non-compliance, on the part of the purchaser, with the terms of the sale.

In relation to the first ground, the Chancellor uses this strong language : “ That the sale was conducted by the commissioner, and by the auctioneer acting under his directions, with perfect fairness, ajrpears to me to be unquestionable from a review of the whole evidence.” And again, “It is unquestionably true, that neither the officer, nor Dr. Teague, the purchaser, produced, or contributed to, the unfortunate mistake.” Now it must be remarked, that neither Mrs. Young, nor any other person, was under any obligation, either moral, or legal, to bid for the property; and her interference was merely gratuitous. All that could be required was, that the sale should be fairly conducted, and the terms complied with. The first it is admitted was done ; and the second will by and by be considered. It does appear from the evidence, that Mrs. Young had requested Major Dunlap to bid for her to the amount of the appraised value of the land; and he says that he would have done so, but supposed the last bid to have been by her son. But it also appears, that Mrs. Young herself was present; that she had bid off two other tracts; and that she directed her son to stop bidding, for that he had bid enough. She afterwards said the land was worn out: an(J that had bid as much as she intended to give, and that . . . . ’ . she did not want to go in debt; and if Major Dunlap was surprised, it does not appear that Mrs. Young, or her son, were, for they were both present: she ordered himvto stop bidding, and the land was cried at least ten minutes, says the witness, after the last bid was made, before it was knocked down. The amount of the evidence then is, that Mrs. Young is a capricious woman, who sometimes thought she would buy the land even at the appraised value, and at other times that she had bid as high as she could afford to give; who would have been willing to have taken it at a low price, and was probably -vexed that others bid against her. And who, upon the whole, did not know her own mind, and after it was too late became dissatisfied, although she would not bid higher at the time. But give to the testimony all the weight in favour of the applicants of which it is susceptible, it will not authorize the interposition of the Court to relieve them. It amounts to nothing more than this : that they neglected their own interests, and now wish the Court to do for them, what they ought to have done for themselves. The fact that minors are interested can have no influence upon the question, more than iri the case of a sale by the sheriff, when their interests are concerned. The widow had a greater interest, and her son, who was of age, an equal interest, with the minor children.

The next question is, whether the neglect of the commissioner to take a mortgage, as directed by the order of sale, can affect the rights of the purchaser. And here I admit, most unhesitatingly, that if the purchaser had refused, or neglected, or even now'refused, to comply with the terms of the sale, he would not have been intitled to derive any benefit from the purchase. It appears, however, that he did not refuse, but on the contrary was ready and willing to comply. All that the Court can require, therefore, is, that he should do now, what he ought to have done then ; give a mortgage according to the terms of the sale. The Chancellor himself says, “that sales made by the officers of this Court are subject in a great measure, to the same rules, and principles of justice, and equity, which prevail in other, and more private sales.” In this ojúnion I concur : and what I have stated is that which would be required in the case of a sale by an agent of an individual, and what of course ought to have been done in this case ; that is, to require the purchaser now to comply with the terms of the sale.

The next question is, whether if the sale were properly set aside, it should have been upon the terms directed by the Chancellor. It appears that in England the biddings are never opened but upon a precedent condition, that a deposite of money shall be made as a security for the performance of the offer. In an anonymous case, 6 Ves. <513, the Lord Chancellor mentions with approbation a case during the time of Lord Thurlow, where the master of the rolls said, if the Lord Chancellor was the bidder he should make a large deposit; the deposit being the only hold the Court has on the purchaser : and ordered a deposit of the whole advance. And I lay it down as a rule never to be departed from, that if a sale is ever set aside forthe purpose of letting in a higher bidder, it shall be only upon the condition, that a deposit shall be made, or some adequate security given, by the person making the offer, for the performance of the undertaking. In this case no such terms are required. It is an unconditional decree that the sale be set aside. It is true Mrs. Young is required to give security for the advance which she has offered, and for further indemnity; but it is not made a condition precedent, nor has the Court any means of enforcing that order. There is therefore no security, that on another sale it will sell for more, or even as much as has already been given. I differ therefore in opinion from the Chancellor in the terms, as well as the principles, of the decree.

I might have dismissed this case, but the remarks of the Chancellor, as to the power and duties of the commissioner in relation to sales, seem to me to require a more specific notice ; inasmuch as his views upon this point are intimately connected with what I regard the fundamental error in this case, of considering the application of the complainants a motion, “ in technical language to open the bid-dings.” He says, “ It is the duty of the commissioner, when he has made a sale under the authority of the Court, to make a report, and a return; and thus enable the parties to examine, and say, whether they are satisfied, and also to enable the Court to exercise its judgment on the sale, and decree whether it ought to be confirmed or not :s and unless this be done before the conveyance is made to the purchaser, then the controlling power of the Court is lost, and t]le commissioner substantially exercises the authority of deciding on the regularity of his own sales, and the rights of the parties. This the law has not committed to him, and it is therefore an exercise ofpowei which cannot be binding on the parties. I do not therefore consider the premature execution of a conveyance, without the sanction of the Court, and without even the express sanction of the parties interested in the estate, as barring the complainant’s right to relief.” Now I take it, that the powers of the commissioner are precisely what the decretal order of the Court confers. In this case I have shewn, that the order was to sell to the highest bidder, to take bond, and security, for the purchase money, and a mortgage of the premises, which implied an order to execute the titles. I do not therefore see upon what ground the commissioner can be charged'with having transcended his authority, when he has literally complied with the order of the Court. Neither can I see how it can be said that he has prematurely executed titles, wdien the fulfilment of his duty required that he should do so. Nor does it appear to me that this opinion of the Chancellor comports very well with that part of the decree which makes the non-execution of the mortgage a ground for setting aside the sale.

If the Court of Equity has hitherto been in the habit of conferring on the commissioner the power over sales of property which belongs to the Chancellor, and which can only be safely exercised by him, it is in the power of the Court to correct the evil. It will he only necessary to qualify the order of sale so as to restrict the authority of the commissioner in such manner as the Court shall think fit. The parties will then know what rights they have acquired, what liabilities they have incurred, and what duties they have to perform. And the officers of Court will know what powers they are to exercise, and what control the Court has reserved to itself. It is a subject, however, on which it will, perhaps, be difficult to adopt any general rule : and it must, therefore, as it appears to me, be left to the Chancellor, to adapt the order to the occasion. It would, certainly, be an excessive clog to sales, if the purchaser must wait a year, before he can know whether he can have the benefit of his purchase ; and.I think it at least questionable, whether the present mode will not be found to he attended with as few difficulties as any that can be adopted. If the directions of the-Court are not' pursued, or if there is any fraud m the transaction, the Courts have . .. „ . . a controlling power over it: and if the proceedings are fair and reguiar, why should they interfere I This, however, is a matter on which I am disposed to suffer the Chancellors to make their own rules, without any interference on the part of this Court. And whatever directions they give their officers must pursue.

I will make but one other remark on the subject. Although the property in this instance has been sold for one-third less than its appraised value, it is as good a sale as has generally been made of real property in this State within the last three years. And for the proof of this assertion I refer with confidence to the sales which have been made in this town, and Charleston, and the lands which have been sold throughout the whole State within that period.

On the whole I am of opinion that the decree of the Chancellor must be reversed.

Johnson, J. concurred.

Colcock, J. dissented.

Decree reversed.