Case ID: blackf_7/html/0265-01.html
Source: Caselaw Access Project
Author: {"author": "Sullivan, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Bunts v. Cole and Another.
    
      Thursday, November 28.
    If a bidder at sheriff’s sale of real estate prevent others from bidding, by representations respecting the object of his bid, and then buy the property at the sale at a price much below its value, the sale is void as against public policy, and as a fraud upon the judgment-debtor and his creditors.
    If a defendant in chancery submit the cause on bill, answer, and depositions, the filing of a replication is waived.
    ERROR to the La Grange Circuit Court.
   Sullivan, J.

— The bill in this case was filed by Bunts, the plaintiff in error, to set aside, as fraudulent, a sale of a tract. of land made by the sheriff of La Grange county. The bill states that, by virtue of a judgment and execution in favour of one M'-Ilvaine for the sum of about 50 dollars, a tract of land belonging to the complainant, of the value of 700 dollars, was sold by the sheriff of the county of La Grange, and purchased by Francis F. Jewett, at and for a sum barely sufficient to satisfy the judgment; that fraudulent means were resorted to by Jewitt to purchase the land at a price greatly below its real value ; that while the sale was progressing, he represented to persons who were bidding for the land, that the complainant had deserted his wife and children, leaving them in a destitute condition, and that he, as the agent of Allen B. Cole, a son of the complainant’s wife by a former husband, wished to purchase the land for the benefit of complainant’s family; that by means of his representations, &c., persons were induced to refrain from bidding, &c. The bill further states, that Jewitt acted as the agent of Cole in making said purchase, and that the purchase-money was furnished by Gale. Jewitt and Cole are made defendants to the bill.

CoZe, in his answer, admits the sale of the land by the sheriff, and the purchase of it by Jewitt as his agent. He says that a short time before the land was sold, being then a resident of Hamilton county, he visited his mother, the wife of the complainant, in La Grange county; that he found her residing on said land, abandoned by her husband, and supporting herself by her own labour ; that he thereupon determined to purchase the land, intending it for the use of his mother and her children so long as they wished to live on it; that he employed his co-defendant, Jewitt, to purchase the land for him, and furnished him with 54 dollars and 50 cents with which to make the purchase. He admits that the sheriff conveyed the land to Jewitt, and that Jewitt has since conveyed it to him.

The answer of Jewitt admits the purchase of the land at the sheriff’s sale by the respondent, as the agent of Cole, for the sum of 54 dollars. It denies that the respondent made any false representations to prevent others from bidding for the land, but admits that he did, at and pending the sale, make it known to some persons that he was bidding for the land, not for himself but for his co-defendant Cole, whose object was to purchased as a home for his mother. The respondent admits that, while the sale was progressing, a stranger who was present offered a bid for the land, or talked about doing it, but when he was informed that respondent was acting as the agent of C'o/e, he declined bidding. He admits that he received a deed for the land from the sheriff, and says he has conveyed to Cole.

No replications to the answers were filed; depositions were taken; and at the final hearing on bill, answers, and depositions, the Court dismissed the bill.

Frederick Hamilton swore, that he was the sheriff of La Grange county at the time the land was sold, and that the sale was conducted by himself in person; that there were several persons at the sale, but that no one bid except Jewitt and another man who was a stranger to the witness; that when the stranger bid for the land, Jewitt took him aside, they shortly returned, and the stranger then withdrew his bid and would not bid again; that before he was taken away by Jewitt, he appeared to be anxious to bid; that witness described the land to him, and told him the title was good. The witness further says, that Jewitt told him that he was purchasing the land for the benefit of the wife and children of Bunts, on hearing which he, the witness, did not care how cheap the land sold, and so told the stranger.

Jonathan Woodruff swears, that he did not attend the sale and bid, because he was assured by Jewitt, that Mrs. Bunts would pay him a debt that her husband owed him ; that he considered Jewitt to be responsible for the debt, and had it not been for what Jewitt and Mrs. Bunts said, and the arrangement made by them, he should have attended the sale and bid more than Jewitt did. He understood the object they had in view to be, that Mrs. Bunts might get the land as cheap as possible. He further states that neither Jewitt nor Mrs. B. paid him, but that Bunts himself paid the debt.

James H. Holmes testifies, that he did not attend the sale and bid for the land as he intended, because he was assured by Jewitt, that a debt that Bunts owed him should be paid; and, also, because he was told by Jewitt that the land was to be purchased for the use of Mrs. Bunts and her children.

Three witnesses swore that the land with the improvements was worth, at the time of the sale, 500 dollars.

The testimony very clearly proves that the conduct of Jewitt, however humane his motives were, prevented competition at the sale. Through his representations, the property of the complainant was sold at a great sacrifice. His appeals to the sympathies of the bystanders were well calculated to prevent them from bidding for the land. This was against public policy. The law provides, in various ways, for a fair competition in sales made by its authority, and whatever prevents it is a fraud on the sale. Jones v. Caswell, 3 Johns. Cas. 29. It is also a fraud on the debtor and his remaining creditors, by depriving the former of the opportunity of obtaining a full equivalent for the property, which is devoted to the payment of his debts. Ib. If underbidders or puffers are employed at an auction to enhance the price and deceive other bidders, and they are in fact misled, the sale will be held void as against public policy. The reason is, that a fair competition is prevented. The parties do not meet on equal terms. The same equitable principle must prevail, where competition is prevented by any combination or trick, on the part of the bidders, to the serious injury of the debtor. Doolin v. Ward, 6 Johns. R. 194.—Wilbur v. How, 8 Johns. R. 444.

J. B. Howe, for the plaintiff.

W. H. Coombs, for the defendants.

The omission to file a replication cannot, under the circumstances, be assigned for error. The'defendant, having consented to submit the cause on bill, answers, and depositions, must be considered as having waived it. Demaree et al. v. Driskill, 3 Blackf. 115.

We are of opinion, that the sale referred to in the bill was a fraud on the complainant and must be set aside. The purchase was made by Jewitt as the agent of Cole and with his money. Cole is not an innocent purchaser; he is affected by the acts of his agent. He is, however, entitled to be refunded the purchase-money, which was applied to pay the complainant’s debt.

The Court reversed the decree with costs, and decreed that the sheriff’s sale was void, but that Cole should retain a lien on the land for the money paid by him, &c.