Case ID: pr-fed_9/html/0394-01.html
Source: Caselaw Access Project
Author: {"author": "HaMiltoN, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

EL BANCO POPULAR DE ECONOMÍAS Y PRÉSTAMOS DE SAN JUAN, Complainant, v. E. B. WILCOX, Dft.
    San Juan,
    Equity,
    No. 946.
    On Exceptions to Repost or Special Master.
    Master’s Report — Exceptions.
    1. An exception to a master’s report of a sale of property under decree of this court on the ground that the price obtained was inadequate will not be considered unless it is satisfactorily shown to the court that a higher price would be brought at a resale.
    Master’s Report — Exceptions—Informalities at Sale.
    2. An exception to a master’s report that a sale should be set aside on account of informalities in the proceeding will not be sustained where it is shown that the informalities were not material.
    Master’s Report — Exceptions—Place of Public Sale.
    3. An exception taken to a master’s report on the ground that the sale was not held at the proper place will be sustatined where it is shown that the decree ordered the sale to be held in the court room, and it was advertised to be held at the courthouse door, the point being material on account of this courthouse having several doors.
    Opinion filed January 25, 1917.
    
      Mr. Frank Anbonsanti for complainant.
    
      Mr. J. B. F. Savage for defendant.
   HaMiltoN, Judge,

delivered the following opinion:

This case comes up upon exceptions to the report of the spe' cial master of his sale of the property under a decree of this court. The exceptions set up several alleged defects. There are two classes, and they will be spoken of separately.

The first that need be mentioned is as to the inadequacy of the price. It seems that a previous party to the case said that the property was assessed for $13,000, and the report of sale shows that the property brought $5,000. The mortgage debt, as I understand it, was for a larger amount than the $5,000, so the property did not bring the amount of the mortgage. Tbe general rule and practice is to require rather stricter proof than seems to be made in the case as to values. The best practice when property is alleged to have been sold for less than its value is for an affidavit or offer to be brought in by someone, that he would on a resale bid a certain amount or exceeding a certain amount. Otherwise the application for a resale is purely speculative. The court has no means of telling whether a resale would do any good. The fact that the property brought less than its value is not conclusive, because unfortunately property very often does bring less than its value at a forced sale; that is to say, at a public sale. This is not so much the point as what would happen if there was a new sale. Would it bring any more ? There would be no advantage in going through the same procedure at necessarily increased expense if the result is not going to be different from what it was before, and as to that there ought to be some tangible evidence before the court. So that so far as that ground is concerned it does not seem to be very strongly sustained by evidence.

There is a second ground of exception, in fact there are a number of grounds, but they may be classified in these two ways, and the second class of exceptions refer to informality in the sale itself. That would be a good ground of objection regardless of the amount. If the property sold for its full value and still was a sale that was not ordered by the court, it would be a bad sale. The affidavits seem to set up two or three matters of that sort. In the first place, it is alleged that the sale was begun at the courthouse door and finished upstairs in the court room, as a consequence of the special master’s noticing, rather late, that he should sell in the court room, and not at the courthouse door, under the terms of the decree. That by itself would not be material, I think. If the proper place of sale was upstairs, and within a few minutes of the time set, — ■ because the law makes a reasonable allowance for difference of ■clocks and other circumstances, — no matter what the master had done somewhere else, if he had come to the right place and offered the property in the right way, the sale would be good. So, I do not think that would be material by itself. Another point, really connected with the first one, is that a prospective bidder came to the court room, which was the proper place, and was informed by a person connected with the court that the sale was to be somewhere else, either in front of this building or in front of some other building; and under some misunderstanding he went off and did not appear at the right place or the wrong place, as the case may be. This, however, would come under the principle mentioned first, that unless there is some evidence that he or someone is now prepared to pay more, it would not be material.

The last ground that need be considered is as to the place of sale. The decree of court was that the property be sold in the court room. I would like to say that that particular clause of the decree did not attract my attention at the time it was brought to me for signing. The question has come up once or twice before. I think sales should be at a more public place than the court room. I think they should be at the courthouse door, as is specified in the Statute of 1893, although it is optional with the court to change that. I think it would be very unusual circumstances that would justify a change. For instance, there has been a case in this court where a lot of diamonds were smuggled in and were sold. I think a sale in the court room would be proper in such, case, because articles of that sort could not be handled very well in public; but as a rule the sale should be at the courthouse door. It may be added that an advertisement of a sale at the front door of the courthouse is perhaps uncertain under the circumstances connected with the Federal Building in which this court is held. There are certainly three and possibly five entrances each of which, from different points of view, could be considered the front door, and an advertisement of front door would therefore not be satisfactory. Architecturally the front door faces the bay, and commercially probably the front door is the east entrance, while in point of usage the northwest entrance, leading to the postoffice, is the one generally used. The decision of which is the front door in this case is unnecessary, however, as the decree called for a sale in the court room itself. The advertisement ran in the paper for I think the right length of time. It seems to me that there is no good ground of exception to the length of time of the advertisement; it substantially complies with the order. But the advertisement said that the sale would be at the courthouse door. In other words, there is a discrepancy between the decree and the advertisement. Was that such a discrepancy as was material? In an advertisement it very often happens that a word is spelled wrong or a figure is upside down or -something of that sort. It is almost impossible in human affairs to get everything straight all the time. Was this such a variation as would be material and should affect the sale itself ? The object of the sale is to get bidders. It is not simply to enable the complainant, the mortgagee, or whoever it may be, to obtain a property, and in this case the evidence shows that the mortgagee has no wish for the property, that he wishes to realize bis debt. Tbe object is not to get tbe property to tbe mortgagee at a low price. It is to secure a public sale, and public notice is necessary in order to bave tbe public present. That is tbe object of tbe advertisement, and if tbe advertisement is not properly carried out tbe sale is not a good one. Tbe decree may be good, but tbe proceedings after tbe decree would not'be good. Here was an advertisement wbicb invited tbe public to come to tbe courthouse door. Tbe decree said they must come up into tbe court room. Was this a material variation ? Tbe evidence shows that in point of fact tbe same people who were downstairs at tbe courthouse door came upstairs into tbe court room, and, stated conversely, tbe evidence seems to be that tbe same people who were up in tbe court room were those who were downstairs in front of tbe building. It might seem, therefore, that no barm could bave been done. Tbe place of tbe sale called for by tbe decree and that called for by tbe advertisement were in tbe same public building.

Tbe point is not without difficulty, but it seems to me that I will .have to bold that this variation is material. I do this with some hesitancy, but still, to err on tbe safe side, if there is any error at all, I will bave to bold that tbe sale is void because tbe advertisement did not conform to tbe decree. I regret it very much for a number of reasons. This is tbe first mortgage foreclosure in this court, as far as I recollect; and it was to be hoped that it would be carried out expeditiously, conforming to tbe principles of tbe local law as to an expeditious sale. But it seems that a mistake has occurred, and it is simply a question of whether it is material or not. I think it is material. While tbe preceding grounds as to undervaluation would not be conclusive, I think there has been an error committed in tbe advertisement. That tbe public, in other words, were not given notice of where tbe sale was to be, and bow far that may have affected them I have no way of telling. Some people might not have wished to go to tbe courthouse door who would have come to tbe court room. I have no way of judging one way or tbe other. It is simply tbe ordinary case that where an error occurs tbe court has to presume injury. I think I will have to bold that there was an error in this case, and set aside tbe sale, and order a resale in whatever may be tbe shortest time possible.

It is so ordered.