Case ID: ill_12/html/0130-01.html
Source: Caselaw Access Project
Author: {"author": "Caton, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John M. McConnel, Appellant, v. Joshua Gibson et al., Appellees.
    APPEAL FROM CASS.
    The Court will look at the material averments of a bill aiid from' thence determine its true character, and if the averments show that the complainant is entitled to relief, and the prayer will authorize the Court to grant the relief which he shows himself entitled to claim, no matter what name is given to the bill.
    A commissioner in chancery, appointed to sell, cannot become a purchaser at his own sale, either in his own name or in the name of a third person: if he should do so, the sale will be set aside at the instance of the person whose rights have been sold, if the application for that purpose is made within reasonable time.
    A fiduciary cannot be both seller and buyer at the same time, and a sale under such circumstances may be avoided, but not by the fiduciary.
    A sale fraudulently made, on a day different from that named in the notice of sale, Would furnish ground for setting aside the sale.
    A bill which seeks to set aside a sale, and an order confirming such sale, upon the ground of fraud, if filed within a reasonable time after the fraud is discovered, is not obnoxious to a demurrer.
    This was a suit in chancery brought by Saunders as treasurer of T. 18 FL, E. 12 W.,■ of Cass county, against W. W. Babb, and this appellant and others, in the Cass Circuit Court, to foreclose a mortgage, given by Babb to one John T. Jones who was school commissioner of Morgan county. Said mortgage is set out in this record and is upon a tract of land in T. 15 FT., E. 12 W.
    The appellant was made a party to this suit, and it was charged that Babb, subsequently to the giving of the mortgage to Jones, had given a mortgage to appellant upon the same-land.
    
      Appellant filed Ms answer to said Mil and alleged, that he had a mortgage given by Babb and set it out, showing that the land named in his mortgage was in T. 18 1ST., R. 12 W.
    The hill filed by Saunders set out the same land described in McConnel’s mortgage, and a decree was subsequently rendered in the case to sell the land described in McConnel’s mortgage to pay the debt due to Jones, and no notice was taken of the fact that the land mortgaged to Jones was a different tract of land, and did not appear from Jones’ mortgage to be situated in Cass county. A final decree to sell said land was made at the May term of the Cass Circuit Court in 1841, and one Edward Tull was appointed Master in Chancery to sell said land. At the October term, 1841, Tull reported that he had sold the land to one Lippincott for $950 00, and paid Jones’ debt and costs with the money, hut had not made a deed to the purchaser. At the May term, 1848, one Atwater was appointed to complete said sale by making a deed to Lippincott At the May term, 1845, of said Court, Atwater reported that he had completed.said sale by the making of a deed, which report was approved -by the Court, and thus on the 19th of May, at said May term, the decree of sale was finally carried into effect, and the suit was ended. On the 7th of March, 1849, McConnel and Babb, .two of the original defendants in said cause, filed this bill, called by them a “petition,” in the Cass Circuit Court, praying that .the orders of the Court, approving the making of the sale and of the deed be reviewed, and that they be set aside, for the following causes: 1st. Said petitioners, long after the 19th of May, 1845, and not before, ascertained that said Tull, who had been appointed by the Court to sell said land, had fraudulently and falsely reported to the Court, that he had advertised said land in the nearest newspaper, andhad sold it to Lippincott on the 27th of September, 1841, as the highest bidder, when in fact Tull was himself secretly the purchaser, and knocked it down to Lippincott fraudulently, and that the land was advertised in a paper out of the county 55 miles distant, when there was a nearer paper 25 miles distant ; and that no money was paid for the laud. 2'd, The laud was sacrificed at the sale by Tull, which was made at a different time and place than that specified in the notice of sala That these facts were unknown at the time and have been recently discovered.
    
      The defendants severed in their defence, some of whom demurred, one moved to dismiss, and another pleaded, that more than five years had elapsed between the final decree, and the filing of the petition. The Circuit Court, Woodson, Judge, presiding, at March term, 1850, dismissed the hill.
    M. McCohkel, for Appellant.
    This petition should be regarded as an original bill in the nature of a bill of review, impeaching the order of the Court affirming the sale and deed, for fraud, which hill may be filed without leave of the Court. Story’s Pleading in Equity, p. 340, § 426, and note 2, also p. 342, § 428.
    The limitation fixed as to the time for sueing out a writ of error, has no application to this case. This bill is not filed to reverse the order of the Court, for anything apparent of record. Story’s Pleading in Equity, p. 325, § 410, and pages 583-4, § 575, also p. 591, § 784; Hawley v. Cramer, 4 Cowen, p. 718; Coxe v. Smith, 4 John. Ch. Rep. 271; Hanison, admtr, &c., v. Picket, 2d Hill, 353.
    The allegations of the bill, being that the officer of the Court of Chancery had been guilty of fraud in the sale of the land, and had become the purchaser at his own sale, at a reduced price, to the injury of defendant Babb who owned the land, and of McConnel a mortgagee, the facts not coming to their knowledge until the filing of this bill; and all these allegations being admitted by the pleadings, the bill should not have been dismissed, but the sale should have been set aside. 4 Cowen’s Rep., p. 781; 5 H. S. Condensed Rep., 142 ; 3 Gilman’s Rep., 2 ; Story’s PI. in Equity, p. 625, § 815.
    Wi. Thomas, for Appellees.
   Caton, J.

We must look at the substance of this bill, and the grounds of equity set up in it, to determine its true character. It commences in the form of a petition, but subsequently assumes the form and substance of an original bill or of a bill of review, and is by the pleader sometimes called one thing, and sometimes another; but we must look at the material averments of the bill and from them determine its true character. Although the pleader may have given it a wrong name, still if the averments show that the complainant is entitled to relief, and the prayer will admit of our granting that which he shows himself entitled to claim, he ought not to be turned out of Court unheard.

Although many of the supposed irregularities in the sale and report may be quite unimportant, so far as the validity of the sale is concerned, y et some of the facts stated in the bill are of a more serious character, and if true, must vitiate the sale and consequently the order of the Court confirming the report of that sale. The bill states substantially that Tull, the commissioner, was in fact the purchaser at his own sale. That although Lippincott was the ostensible purchaser, in fact he purchased not for his own benefit, but for that of Tull. This, if true, was a fraud in law, and will avoid the sale, at the instance of the party whose property was sold or of one holding under him, if their remedy is sought within a reasonable time after the fraud is discovered. The law will not allow a man, who acts in a fiduciary capacity, to be both buyer and seller at the same time. It is true that such a sale is not absolutely void, for it may be confirmed by the party whose interest is affected or title transferred by such sale; and this acquiescence may undoubtedly be presumed, by the absence of any complaint for an unreasonable length of time, after the mode of sale is known. The purchaser cannot avoid the sale, for he shall not be allowed to complain of his own fraud or misconduct. These principles are too familiar to require authority for their support.

There is a charge also, that the sale was fraudulently made on a day different from that stated in the notice, and different from the time stated in the report. If these things were done for a fraudulent purpose, then they would afford sufficient ground for setting aside the sale and vacating the order confirming the report.

The true, object of this bill, is to set aside the sale, and to review, reverse and vacate the order of the Court confirming the report of the sale, whereby the final sanction of the Court was given to the sale. This is asked upon the ground of fraud. The bill shows, that a fraud was practiced upon those interested in the mortgaged premises, and upon the Court, which, had it been known to the Court at the time, would have prevented that Court from making the order approving the report of the sale, and would have induced the Court to have set it aside. This bill comes precisely within the definition of an original bill in the nature of a bill of review, as laid down by this Court in the case of Gregg et al., v. Gear, 3 Gilman, 2; and in Story’s Eq. P., § 426. The bill was filed in a reasonable time after the fraud was discovered. It was therefore not obnoxious to the demurrer. - The same relief substantially might, and undoubtedly would have been, obtained by a purely original bill, setting forth the fraud, and seeking to set aside the sale alone, without asking to have the final order of the Court approving of the report and confirming the sale to be reviewed and reversed; for a decree setting aside the sale, would necessarily have destroyed the effect of that final order. The difference between such a bill and the one before us, is only nominal when founded upon such facts as are stated here.

The authorities above referred to, show that the leave of the Court was not necessary to file the bill. It should not therefore have been dismissed for that reason.

So of the objection as to parties. The bill shows that all who could have had any interest adverse to the relief sought, or indeed in the question at all, were brought in.

The decree of the Circuit Court is reversed with costs and the suit remanded with leave to the- defendants to answer to the merits of the bill.

Decree reversed.