Case ID: abb-pr-ns_3/html/0434-01.html
Source: Caselaw Access Project
Author: {"author": "Fullerton, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

KING against PLATT.
    
      Court of Appeals ;
    
    
      December, 1867.
    Judicial Sale.—Election Day.
    A judicial sale—e. g., a sale by a referee in foreclosure—is not void because it was made upon an election day. Such sale is not business of a court within the statute prohibiting such business on election days.
    On the day of a sale in foreclosure of property consisting of lots in New York city, the defendant attended and presented a written request that the corner lot, which was the most valuable, should be sold first. The referee, however, directed the sale to proceed in a different order, and the property was bought in by the plaintiff. It appearing that the request was made in good faith, and in the belief that it would increase the amount realized, and no satisfactory reason for denying the request being shown,-—Held, that the sale should be set aside and a re-sale ordered..
    Appeal from an order of the general term of the Supreme Court, affirming an order denying a motion to set aside a sale in foreclosure, and for a re-sale.
    The decision upon a motion to dismiss this appeal rendered at the March term (1867) of the court, is reported Ante 147; where the facts involved will be found stated in detail. It is sufficient here to say that the appellants, defendants in foreclosure, sought to have a sale which had been made by a reference in foreclosure set aside, on the grounds,—among others, that the sale was made on the day of a charter election; and that the plaintiff used means to prevent competition.
    
      Wm. B. Martin and James Emott, for the appellants.
    I. The plaintiffs will not be injured by a re-sale. (Cudlipp v. Whipple, 13 Wend., 228.)
    II. The plaintiffs are proved to have been chargeable with misconduct in interfering to prevent competition, which has worked an injury to defendant for which there is no remedy but by this appeal.
    III. The following cases show that the courts will secure fairness and free competition at judicial sales, and will give relief against interference from whatever cause it arises, whether from concert or inadvertence. In none of the cases cited was the fraudulent misconduct shown, greater than in the present case. (Jones v. Caswell, 3 Johns. Cas., 2d ed., 32; Thompson v. Davis, 13 Johns., 115 ; Jackson v. Crafts, 18 Id., 113 ; Collier v. Whipple, 13 Wend., 226 ; American Ins. Co. v Oakley, 9 Paige, 261; Brown v. Frost, 10 Id., 246; May v. May, 11 Id., 203; Brisbane v. Adams, 3 N. Y. [3 Comst.], 130; Lefevre v. Laraway, 22 Barb., 173; Requa v. Rea, 2 Paige, 339; Cantine v. Clark, 41 Barb., 631; Gould v. Libby, 24 How. Pr., 445; Troup v. Wood, 4 Johns. Ch., 251; Hamilton v. Hamilton, 2 Rich. [So. Car.] Eq., 355 ; Smith v. Greenlee, Des. [N. Car.], 128; Murdock v. Empie, 9 Abb. Pr., 283; Turning v. Morrice, 2 Brown Ch., 331; Fuller v. Abrahams, 3 Brod. & B., 116; Exp. v. Hughes, 6 Ves. Ch., 623; Sidney v. Ranger, 12 Sim., 118 ; Baudon v. Becher, 9 Bligh, 532; Thornhill v. Glover, 3 Bon. & W., 195; Mortimer v. Bell, Law Rep. Chy. App., 1,10; Green v. Baverstock, 10 Jur., N. S., 47.)
    IV. The sale was upon the day of the charter election. Under the provisions of our statutes (1 Rev. Stat., 5th ed., 418; 1 Laws of 1857, 894,353. Matter of Election Law, 7 Hill, 194), the practice has become established and uniform that no courts are opened nor any business transacted on the days of charter elections. All the courts were closed on the day of this sale. The same rule should have governed the referee. Referees are judicial and not ministerial officers; sales are given to them rather than to sheriffs for that reason; under this judgment for the specific performance of a contract, the duties of the referee were judicial. This has been expressly decided of masters. (Snyder v. Stafford, 11 Paige 71; Knickerbocker v. Eggleston, 3 How. Pr., 130.) And the position and powers of referees are drawn to the closest equality with those of the court, by the Code. A referee should follow the practice of the court, and should not proceed to a judicial sale on a day when the court does not transact any business.
    Y. The plaintiffs and the referee were wrong in refusing to make the sale in the order required by the defendant. 1. There were no other parties in interest whose equities were to be consulted except the plaintiffs and defendants. There was no other question to determine the order of sale than this. What will be most beneficial for the parties ? How can the most money be produced ? The owner of the decree has not the right to control and direct which parcel should be sold first. (Snyder v. Stafford, 11 Paige, 76 ; Collier v. Whipple, 13 Wend., 229.) 3. The referee acts judicially, and he must be free from the control or dictation of the plaintiff. When there are no stronger equities and order of sale required by the defendant is beneficial and will produce the most money, he may direct the order of sale. (Walworth v. Farmers’ Loan Co., 4 Sand. Ch., 51; Knott v. Cottee, 27 Beav., 33.) 4. The general doctrine contended for, that the sale must be made in the usual manner and so as to produce the most money is sustained on authority. (Gregory v. Campbell, 16 How. Pr., 417 ; American Ins. Co. v. Oakley, 9 Paige, 261; Breese v. Busby, 13 How. Pr., 485 ; Woods v. Monell, 1 Johns. Ch., 505; Mohawk Bank v. Atwater, 2 Paige, 61; Yeeder v. Fonda, 3 Paige, 94; Delaplaine v. Lawrence, 3 N. Y., 301.) The reason why a sale is to be made in parcels is to benefit the parties and produce the most money. When a special order advances the same .end, the same rule applies. 5. In such a plot as this the corner lot is the key to the whole. A person intending to purchase a parcel of lots including a comer, would first want to try whether he could get the corner ; if a successful bidder for that, would then compete with the others for the adjacent h t3. The price of the best lot would regulate the price of the others' Such a purchaser would hesitate in taking the side lots before the corner had been sold, and secured by him. By the course pursued, the plaintiffs became the purchasers of the side lots at low prices, and were accumulating the residue of their claim as a reserve, out of which to bid high on the lots last sold; in fact they could have bid $10,269 67 higher on the lots last sold. This advantage to the plaintiff was apparent, at the outset to every purchaser present, and it became clear that no one but the plaintiffs could get the corner lot. This effectually counteracted the benefit that might have resulted to the defendant from a sale in parcels, and made the sacrifice of defendant’s property needlessly severe.
    
      John H. Reynolds, for the respondents.
    I. The fact that the sale took place on the day of a charter election in the City of New York, is no valid objection. There is no law against such a sale, and it was not imjust to the defendant.
    II. None of th^ proofs made any case for interferring with the sale. It was fairly conducted, and there is no proof that the plaintiffs in any way interferred to prevent the competition of bidders. 1. There is no proof that the price was inadequate; but it appears that the property was sold for its full value. There is not a witness in the case that says the property was sold for an under price, on the contrary, every witness who was a bidder, states that the price bid “ exceeded their views.” 2. It is entirely settled that mere inadequacy of price is not sufficient to set aside a sale if it has been fairly conducted, and the parties concerned are capable of Understanding their rights. (Thompson v. Mount, 1 Barb. Ch., 609; Brown v. Frost, 10 Paige, 248; Duncan v. Dodd, 2 Id., 101; American Ins. Co. v. Oakley, 9 Id., 261; Tripp v. Cook, 26 Wend., 157; Mott v. Wakely, 3 Edw. Ch., 592; Woodhull v. Osborne, 2 Id., 617.) 3. The mere speculations in respect to what price the lots would have brought if sold in a different order, are not of any' account, and should be altogether disregarded. They do not appear to be founded' upon any principle of common sense. The order of sale was prescribed by the referee (who was of large experience), against whom nothing is alleged; and the opposing affidavits show that no greater price could have been obtained if any other order of sale had been adopted. 4. The allegation that the plaintiffs, or any person in their behalf, approached any bidder, or interferred with the bidding at the sale is wholly unfounded. There is no proof of any such interference that should be for a moment considered by any court. 5. Mr. King has the unquestionable right to ■bid upon the property, so far that himself and 'associates should be fully protected. It does not appear that any person was deterred from attending the sale by anything said or done by any of the plaintiffs or their agents. 6. There is not the slightest evidence any where in the case that any lot sold for less than its value. The whole property sold for more than the contract price, and for much more than the defendant claimed it to be worth in his answer, and no bidder or a person attending the sale, whose evidence has. been taken, says that any lot sold for less than its value at the time. 7. No person has offered to give any greater sum for the property than it brought at the sale.
   Fullerton, J.

The sale of the defendants property was not void because it took place on the day of the charter election in the city of New York. The statute provides that no court shall be opened, or transact any business in any city or town on the day of election, for other than town or militia officers. (1 Rev. Stat., 5th ed., 148, §§ 4 and 5.)

A judicial sale, although conducted by one of the officers of court, and under its direction, is not the business of a court, within the meaning of this statute. The object of the law referred to, was, undoubtedly, to remove all obstacles which might necessarily interfere with the free exercise of the elective franchise. If the ordinary business of the courts were permitted on election days, the attendance of witness and jurors could be compelled by compulsory process, and in that way they could be forcibly kept from the polls. It was to avoid such' an evil that the statute was passed. A judicial sale of valuable property on an election day, presenting a tempting opportunity for gain, might induce sordid men to forego the privileges of electors, in order to promote their private interests; but their action would be voluntary; and freedom of action was all the law intended to secure.

The propriety of a forced judicial sale, of a large and valuable property, on an election day, when public attention would necessarily, to a great extent, be turned to other objects, after a written notice from the person who was to be most affected by it, that he would consider it “ unjust and oppressive,” was at least very questionable; and, although not of itself perhaps sufficient to warrant the court in setting aside the sale, yet, in connection with the other facts disclosed in this case, cannot fail to create in the .mind an influence unfavorable to the plaintiff.

The property which was the subject of this sale consisted of eight lots, situate on the corner of Fifth Avenue and Fifty-ninth Street, in New York City, at one of the entrances to the Central Park.

The order in which these lots should be sold was considered by the defendant a matter of interest to him, and consequently, on the day of sale, he made a written request that the corner lot, which was conceded to be the most valuable, should be sold first. This request was made with a view to cause the property to bring the largest price, and was therefore a proper and reasonable one. It was not, however, acceded to, and the lots were sold in a different order. I have examined the papers in this case with care, to see what reason was assigned, or could have existed, for this course, and I have been unable to find any that is satisfactory. The referee who sold the property states, in his affidavit, that “ in the exercise of his discretion ” he caused the premises to be sold in parcels, and in the order adopted at the sale.

That the referee acted in good faith, so far as his action is concerned, his well known character for integrity leaves no room to doubt; but no reason for believing that the sale of the corner lot first would have been detrimental to the sale having been furnished by the affidavits, or suggested on the argument, I cannot but think that the referee’s discretion was exercised unwisely. That the defendant’s request was made in good faith, and founded on’ the belief that, if granted, it would have increased the amount which the whole property would have brought cannot be doubted, and in that opinion he is sustained by six other persons who are experienced in the sale of property of a like character in the city of New York.

The case therefore resolves itself into just this:—that while the sale of the corner lot first could do no harm, there was good reason to believe that it would.result in a benefit. Under such circumstances, it is difficult to arrive at any other conclusion than that the defendant was unfairly dealt with. Whatever chance there was, however slight, that the order of sale he requested should be adopted, would prove .beneficial, he was entitled to it, and to deprive him of it was a constructive fraud.

I have not overlooked the affidavits, on the part of the plaintiffs, expressing the opinion that the property would have brought no more than it did, if the corner lot had been sold first: yet I can see no good reason for not trying, at the least, a harmless experiment, to gratify a reasonable request of a failing and unfortunate debtor, which he thought would result to his advantage. I do not agree with the learned counsel for the motion, that the defendant had the right to determine the order of sale, and the authorities quoted do not sustain that position, but, in the absence of all directions by the court, the defendant has a right to be heard on the subject, his suggestions considered, and if, for the best, followed.

But in the light of the other facts in this case, it is difficult to believe that the refusal to accede to this request was the result of indifference or mere caprice.

The plaintiffs bought the whole of the property at the sale. Their right to do so, of course, is not disputed. If it were fairly done, without any undue advantage, a court of equity would not interfere with the sale. But, besides matters already considered, there are facts disclosed in the papers which give rise to serious doubts as to the entire fairness of the plaintiffs’ conduct.

From the whole evidences it satisfactorily appears that the plaintiffs manifested a desire before the sale to purchase the whole of the property, and resorted to the means necessary to accomplish their object.

Raynor, who sustained intimate friendly and business relations with the plaintiffs, and who acknowledged that he would have the selling of the property, as broker, in case the plaintiffs should purchase it, said to a bidder at the sale, that he could purchase the property in one parcel after the sale upon better terms than he could get it then by bidding. Raynor also testifies that he made this communication at the request of one of the plaintiffs.

That this had a tendency to prevent competition at the sale can hardly be denied, and whether this effect was designed or not, it is equally fatal to the validity of the sale.

There is other evidence tending to show that the sale was chilled by the course, pursued by the plaintiffs; but it is unnecessary to pursue the subject further.

The sale having been made against the defendant’s remonstrance, on a day most unfavorable to a large gathering; and the lots having been sold in an order which induces a reasonable belief that it was detrimental to the defendant’s interests, and under circumstances which give rise to apprehension that free competition was interfered with, it ought not to stand.

Whilst the law secures to the creditor his just demand, and sequestrates the property of the debtor to ■ satisfy it, it still sedulously guards his interests, in all the various steps taken leading to a sale of his property. The unfortunate debtor is not beneath its protection. It will not tolerate the slightest undue advantage over him, even by pursuing the strict forms of the law or positive rules. (Story Eq. Jur., § 239.) Occupying the position of advantage, it behooved the plaintiffs to pursue their remedy with scrupulous care, lest they should inflict an injury on one who was comparatively powerless.

A court of equity justly scruitinizes the conduct of a party, placed by the law in a position where he possesses the power to sacrifice the interests of another in a manner which may defy detection, and stands ready to afford relief on very slight evidence of unfair dealings, whether it is made necessary by moral turpitude, or only by a mistaken estimate of others rights.

I feel quite convinced that sufficient reasons exist for setting aside this sale, and that justice wifi be subserved by doing so, for it cannot result in any loss to the plaintiffs. The rights of third parties do not intervene, and the plaintiffs have a lien for the taxes and assessments they have paid. (Kortright v. Cady, 23 Barb., 490). A resale will probably result in satisfying the judgment and all the outlays of the plaintiffs, and that is all they can reasonably ask.

If the parties fail to agree upon the order in which the property shall be sold, either party can apply to the court for instructions to the referee. (Collier v. Whipple, 13 Wend., 229.)

The orders of the general and special terms should be reversed, the sale set aside and a resale ordered.

All the judges were for the reversal of the order and for ordering a resale, except Hunt and Parker, JJ., who were for affirmance.

Order reversed.