Case ID: sc-eq_4/html/0114-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Columbia.
    
    Heard by Chancellor Desaussure.
    éASEsaar.
    John Keith Administrator of Young, vs. W. and B. Purvis.
    A creditor enforcing his judgment at law, and selling land of his debtor, agrees with the agent of the debtor, who was acting under precise instructions, that if the agent would not bid up the land at the sale, he, the creditor, would buy it in, and give the debtor time to come in and pay the debt and redeem the land. The creditor represented this arrangement to third persons, who attended at the sale, prepared to purchase the property at its value, and prevented their bidding. He then bought in the land at one third of its value ; and a short time after sold the land, — gave credit »n the judgmen 1 lor she amount he had bid in the land, and pressed the debtor for tlie balance of the debt. The debtor is entitled to relief; and the creditor was decreed to pay the value which third persons were ready to have-paid.
    An agent acting' under precise instructions, iis not at liberty to depart from them. If he does, it is subject to the negation of his principal.
    This was a bill filed to have relief in a case, under the following circumstances:
    Mr. Young, in bis lifetime, purchased a tract of land and the buildings thereon, situated near Columbia, for :!,700i. sterling, and gave bond for the same. Mr. Young died, and Mr. Keith administered on his estate. Some payments wore made, but a largo balance remained due. The defendants who held the bond, obtained judgment thereon, and urged the payment by execution. Mr. Keith wrote to his agent in Columbia, requesting some indulgence and time to raise the money.; and if he could no! obtain it, then to bid in the land at the sale, and to pay the ten per cent, required by law, for which he would place funds at his disposal.
    The indulgence was refused, and the land was put up to sale under the execution.. The agent of Mr. Keith was informed, that the payment of the 10 per cent, would not he sufficient to protect his bidding in the land to another sale day, but that the creditor could put up the land fim Ride ini mdiately again, an¿,so on, toties quotics, till tiie whole debt was paid. This induced him to agree not to bid the land in as ho had been directed; but to permit the creditors (the defendants) to become the purchasers, on their assurance that they would give Mr. Keith some time to come in and redeem the land, by paying off the debt: and they accordingly became the purchasers at S 1,000. It was proved that several persons attended the sale with a view to purchase the property ; and one of them swore he went prepared to bid as high as g 3,000 for the property, and to purchase it at that price. But he and others, who amended the sale with a view to purchase, were prevented by one of the defen - dant’á declaring that an agreement was made with the agent of Mr. Keith, by which they were allowed to buy-in the property; and that they were to give time to Mr. Keith to redeem the land.
    The defendants not long after their purchase, sold the land to a third person for a valuable consideration, and gave credit to Young's estate for g 1,000, tli,e amount of the sum for which they had bid in the land; and demanded the payment of the balance of the debt.
    The hill was filed by Mr. Keith to obtain relief!
    After hearing the evidence, and the arguments of counsel, chancellor Dtsanssure delivered the following decree:
    I have considered this case and the testimony adduced, with great attention ; and I have no doubts where the justice of the case lies.
    It appears, from the pleadings and the evidence, that the defendant having a judgment at law agaiust the complainant, ordered a sale of the property in question adjacent to Columbia. At the sale several gentlemen of property and character attended wiLh a view to purchase. One of them states, that he was determined to hid as high as g 2,000 ; and another that he was directed by a friend to bid as high as g’SjOOO. ; Both .were competent judges, and swore that it was their settled purpose to go to those several amounts. One/of tho| defendants, however, by representations made tofthescijiersons, discouraged, and most unquestionably .prevented their bidding at all Tim property was then bid off by one of the defendants at g 1,000.
    
      JUNE, 1810
    
      Upon this plain statement there can be no doubt that the defendants deprived the complainants of the be-kqUi which would have arisen from a fair sale, at which there would have been a competition among purchasers, able and willing to buy. And justice pronounces that the creditor acting such a part, is bound to make good the difference, which arises most palpably from his interference.
    But, it is alleged in excuse of the defendants, that they did not intend a fraud, but meant merely to get a command of the property, and then to indulge the complainant for a reasonable time, to come in and redeem the property by paying the debt; and that in fact, the agent of the complainant had come into this arrangement with them.
    Let us .examine these excuses : It is said no fraud was intended. The presumption is very much against the defendants; and though their character ought to, and does in my mind, protect them from the imputation of a deliberate frasid, yet I must observe their conduct produced as mischievous effects to the complainants, as if it had been founded in deep design and fraud. They prevented persons from bidding, who were willing to bid fl 3,000; and they bid the property in themselves at Í-5 3,000,* and then, after a short time, shut the door to the complainant, and prevented his getting more credit on the judgment than the gj,000, at which they bought the property. Surely this was unwarrantable ; and tlvough not founded iu fraud, the injured complainant is entitled to redress.
    The next excuse is of no greater value. The defendants may really have intended, and I am quite willing to believe did intend, no more by discouraging and preventing other bidders, and buying in the property Ihem-sclves.very low, than to get such a command of the property, as would operate upon the complainant to come, forward and redeem the property, by paying off the debt. ¡But docs this object warrant a creditor to take away from a debió;1 the chance oí’ a fair sale and a full price, which., generally speaking, may be expected, ami which, in tbis case it is proved, wealthy men were willing and stood prepared to give for the property ? Certainly not. Ills intention and object may have been what it would, but the means taken were improper, and did produce a dircct 'mischief ami loss to the debtor, which this court is bound to remedy.
    But it is said, that the agent of Mr. Keith, the administrator of Young, consented to the arrangement, and that this agreement took away all ground of .complaint from the principal.
    Let ns look into the facts, and then judge of this excuse. Mr. Keith had written to his agent to endeavor to obtain from the creditors a postponement of the sale, in, the hope of being able to raise money to meet the demand before the next sale day $ lmt if lie could not, then to hid at the fíale, and buy in the property.
    The agent could not obtain the postponement, but one of the-Messrs. Purvis', the defendants- told him that he would bid in the laud, and give Mr. Keith a reason»able time to redeem by paying the debt. Mr. John Taylor, who stood ready to give £>2,000, but thought it worth much move, (for See thought the land alone worth £5 3,000 and the buildings worth $ 3,000) acting a friendly part, advised the agent to come into this arrangement, thinking the time given important, and the agent pressed by circumstances, it seems, did yield to the proposition, and the land was set up for sale, and bid in by Mr. Pur-vis for S1,000, without any bidding on the part of the agent, or of the gentlemen who intended to have purchased; they being prevented by tlie representations of defendants, and the sudden arrangement made at the moment of the sale. Two questions wore made upon this statement of facts:
    Lust, — Had the agent any right to enter into such agreement ?
    Second, — If he liad, what was the eileet of it?
   Í am dearly of opinion, that he had no sight to do so. He was not a general agent. He acted under pre-else instructions, to obtain a postponement or to bid in the property, oven if obliged to pay ton per cent, on the sales. He could not obtain a postponement and lie did not bid at the sale, but entered into an arrangement not |0 jJU|. †() pcrni,t the defendant to buy in the land, audio let in his principal to redeem it in a reasonable time.. And the use which defendant made of this arrangement, was to discourage and prevent third persons from bidding. Though the agent meant well; he departed from his instructions, and his act was not obligatory on his principal. If indeed, his principal had afterwards sanctioned it, it would have been valid. But ho did not sanction it; for in a letter which defendants have thenv selves introduced as evidence, he expresses his astonishment at it.

The agreement not being binding on Mr. Keith, leaves the ease upon the first naked ground, that the judgment creditors discouraged and prevented other competent persons from bidding, as they swear they intended", by which means they got an opportunity to bid in for 5$ 1,000, a property which was worth from S,000 to 0,500 dollars j and which these very persons had sold to Mr. Young for 1,7001. sterling

It was urged that the agent of Mr. Keith, could not have obeyed his instructions, for he was not furnished with funds to pay the ten per cent, if Iig had bid in the land, and could not raise them j and therefore, be acted for the best. It would be sufficient to answer, that wherever an agent acts contrary to his orders, though with the best intentions, hee' acts subject to the affirmation or negation of his principal. And the person who i -ansacts with him, and who knows the instructions, as these defendants did, (for it is lit proof that the letter of Mr. Keith, was produced and read to Mr. Purvis) does it also subject to the will of the principal. But, in fact, it has not bcc-n proved that the ten per cent, had been demanded by the advertisement of sale: and though the agent is said to have declared that he bad not money to pay the ten per cent, and could not raise it, Mr. Keith states in his letter, which defendant made evidence alsq, that he had placed funds at the command of bis agent. But admit he had no funds, the unauthorized arrangement made, winch was announced to the people at the sale, prevented them from bidding aud deprived Ms principal of the benefit of a fair sale, and left him af the mercy of a rigid creditor: and the judgment creditors having drawn the agent into these terms, with a foil knowledge that it was contrary to the instructions, must bear all the ill consequences.

Second.' — .But if it should be conceded that the agreement was binding on Mr. Keith, another question arises, what was the effect of it, and how has it been complied. With ?

The agreement in a few' wordsjwas, that if Mr. Keith's agent would not bid at the sales, and if other persons attending with a view to purchase, did not bid, Mr. Purvis would buy in the property, and would let in Mr. Keith to redeem by paying the money. One of the witnesses swore, the money was to be paid by the middle of May — the defendants in their answer say in a reasonable time.

It is contended for the present defendants, that Mr. Keith had by this agreement a short time to come in and avail himself of the benefits of it, and that upon his not doing so, Mr. Purvis had a right to consider it at an end ; to keep the land a,t the sum of $ 1,000 for which ho hid it in, and to proceed to enforce his judgment for the balance of the debt.

For the complainant, Mr. Keith, it is insisted, that the defendant Purvis by consenting to give a reasonable-time to redeem, had changed the transaction altogether, and had converted the business into a mortgage; and Mr. Keith could come i,n and redeem at any time until the Purvis’s foreclosed the equity of redemption.

The decided cases have been examined, and I am strongly inclined to think that this case comes properly in that class which determines that the debtor basan indefinite time to redeem,. The agreement contained in it ab origine, the principle of redemption,. indeed, it war-5 the only stipulation entered into for Mr. Keith ; and J do think the creditor was not at liberty, at so short a time, after the sale, to consider the agreement and the permission to redeem, at an end, and to keep the land at so low a price, and to press the debtor for the balance.

.What is a mortgage ? it is a conveyance of property, with a condition that such conveyance shall be void, if the debtor pays certain sums of money by a given day; to which the law attaches another principle, to wit, that the debtor may come in and redeem the property, within any reasonable time after the day of payment stipulated ,* which time is extended to twenty years, unless the creditor previously forecloses the equity of redemption by legal process 5 whereupon the court gives a day to the creditor, to come in and redeem the property by paying the debt, ‘What was the agreement here ? That if the debtor would not bid in the property, and if third persons would not bid, but allow the creditor to bid olí the property at li is own price, he would give time to redeem. To this agreement the law attaches all the rights of a mortgage 5 and Mr. Keith had a right to come in and redeem, not to a limited day, but within what the courts should deem a reasonable time.

Mr. Purvis not having dono this, but having, as he says in his answer, sold the land, he has cut off Mr. Keith from his stipulated benefit, and he must hear all the consequences.

v Against this, it is insisted, however, that the agreement was merely parol, and was not binding on Mr. Pur-vis ; and that the statute of frauds need not be pleaded.

I am inclined to think that the answer of the defendant, admitting the agreement and the part execution of it, would take the case out of the statute of frauds. Bat admit that it is a parol agreement and void, can it be believed that the complainant is not to have redress ? Can it be tolerated, that a creditor shall, at a sale of bis debtor’s property, lull him to sleep, and keep off other purchasers, by an agreement, under which he buys in the land for a small sum, much below the value, and then that he should declare that the agreement was void under the statute of .frauds, and that the other party should be allowed to have no benefit from the agreement, whilst he reaped all its fruits ? Surely not. Courts of justice would be blind indeed, if they could permit such a state of things. If the agreement was void, then Mr. Purvis must surrender up his advantages under it, and he liable to make good the loss sustained by the adverse party from his conduct.

It is said, indeed, he has made nothing by this great bargain. This may be so, hut his improvidence in selling the land, and the balance of the debt, merely for the amount of the debt, does not weaken the complainant's title to redress.

It is alleged, that the complainant asking equity should do equity, and should have paid or offered to pay the balance of the debt, and thus redeem the land. It is a complete answer to say, that the speedy sale of the lands by defendant, took away the power of complainant to redeem and to have the land.

The only difficulty which remains, is, as to the nature of the relief to be given. If the defendant had not sold the land, as he has-stated in his answer, I should be inclined to think that the proper relief would be, to let in the complainant to redeem on paying the debt; unless, indeed, there had been a great alteration in the value of the property. .

But, as he has sold the land, I am unwilling to disturb the rights of third persons. I will endeavor to give relief in another way.

It is, therefore, ordered and decreed, that the defendants do give credit as of the day the sale took place, for the sum of g> 3,000, [being the amount which Mr. Howell was prepared to give for the land,] on the judgment which they held against Mr. Keith, as admüús trator of Mr. Young; — and that if this be impossible-from Tin actual sale and assignment of tbe judgment» that the defendants do pay to tbe complainant the sum of $2,000, with interest from the day of sale, being the' difference between the § 1,000, at which tbe land was bid in, (and which lias been already credited) and the $ 3,000 which Mr. Howell was ready to gire. And that defendants do pay the costs of this suit.

Blamling for complainant. Nott and Egan for defendant.

There was no appeal from this decree. 
      
       2 Cornyns, 635; 1 Tern. 138, Exton vs. Graves; 2 Ycm. 84, Man* 1<i,ve vs. Ball; 1 Tern. 263, Barrel w. Sabine.