Case ID: va_43/html/0348-01.html
Source: Caselaw Access Project
Author: {"author": "BARD WIN, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Tiffany v. Kent & als.
    July Term, 1845,
    Lewisburg.
    (Absent Brooke, J.)
    1. Insolvent Debtors — Sale of Equity of Redemption— Validity. — Asale by a sheriff of an equity of redemption in lands surrendered by a debtor in execution, upon his taking the benefit of the act for the relief of insolvent debtors, is legal.
    2. Same — Same—Debtor Entitled to Credit — Liability of Purchaser — Quaere.—At a sale by the sheriff of an equity of redemption surrendered by a debtor in execution, the whole amount of the debt secured by the deed of trust on the land, is stated to be due, when in fact the debtor is entitled to a credit thereon. Quiere. If the purchaser is not bound to pay the whole amount stated to be due; and if' the creditor in the execution is not entitled to have the amount of the credit to which the debtor is entitled, applied to the satisfaction of his execution.
    3. Same — Same—Same—Suit Setting up Claim — Parties. — In a suit by the insolvent debtor setting up ! such a claim, the creditor in the execution is a necessary party.
    4. Same — Same—Purchaser—Title.—A purchaser at a sheriff’s sale of an equity of redemption surrendered by a debtor in execution, having paid off the incumbrance upon the property, may have it sold by the trustee in the deed, in order to perfect his title.
    5. Injunctions — Resolution — Grounds. — What not a sufficient ground for continuing a motion to dissolve an injunction.
    In July 1842, James Tiffany obtained from the Judge of the Superior Court of Raw and Chancery for the county of Pulaski, an injunction to restrain the sale of certain lots in the town of Newbern, and a tract of twenty-four acres of land adjoining the town. The bill stated, that the complainant being indebted to John D. Howe, in the sum of 896 dollars, he, with his wife, on the 29th of June 1833, executed a deed by which he conveyed said lots and land to a certain Reason Vermillion, in trust to secure said debt. That Howe transferred the debt, and the benefit of the trust, to Robert C. Ingram; and that by an agreement between Ingram and David Kent, Kent became the owner of said trust deed. That complainant paid to Ingram the sum of 280 dollars, which Kent admitted to be a proper credit *on said deed. The bill then proceeded to state other claims which Tiffany had against Kent; and alleged, that if he could have a credit for these claims, he could discharge the debt secured by the deed of trust. The bill farther stated, that in 1836 or ’37, the complainant having taken the oath of insolvency, his interest in the lots and land aforesaid was sold, subject to the deed of trust; and that Kent became the purchaser thereof, for the sum of 205 dollars. That complainant understood that Kent purchased the property for the benefit of complainant ; and hopes to be able to prove that such was the understanding at the time of the purchase. That complainant had often tried to get a settlement with Kent, but without success; Kent postponing it on various pretences. And that without having made a settlement, he has directed the trustee, without giving complainant any credit, to advertise and sell the said lots and land; and the trustee has accordingly advertised the same to be sold on the 1st day of the next August court for Pulaski county. The bill then makes Kent, Vermillion, Howe, and Ingram, parties; and prays for an injunction to restrain the sale of the lots and land in the bill mentioned; and that an account ma} be taken to ascertain the balance, if any, due on the deed of trust; and for general relief.
    Kent answered the bill promptly. He denies that he purchased the property for the benefit of the complainant: or that there was any such understanding at the time of the sale. He admits that at the time of the sale of complainant’s equity of redemption in the property, Ingram, to whom the trust deed then belonged, owed complainant 280 dollars; and that sum was credited on complainant’s bond to Howe on the 21st of March 1838. He says, that having paid to Ingram the amount due upon the trust deed, he was desirous to get a complete title to the property; and the trustee being unwilling to release to him the legal title, he directed a sale of the ^'property by the trustee, for the purpose of completing the title.
    The defendant farther denied that he was indebted to the comolainant on any of the claims set up in his bill; but if he was so indebted, such indebtedness existed before the complainant took the oath of insolvency; and the claims should have been surrendered to the sheriff.
    The evidence filed in the cause, did not prove a purchase for Tiffanj'; but it did go to prove, that at the sale by the sheriff, the property was stated to be under an in-cumbrance of about 1000 dollars, or a little above that sum.
    On the 30th of May 1843, at a special term of the Court, the cause came on, upon a motion by the defendant to dissolve the injunction, and on a motion of the complainant to continue the cause until the next term: and on the motion for a continuance, the complainant filed an affidavit made by himself, in which he said that he believed he could prove substantially all the allegations of his bill; but that he had not taken all his testimony, because there had been a conversation between Kent and himself since the previous fall term of the Court, which induced him to believe that a settlement could be accomplished between them; and which made him more careless about taking testimony. That he had given Kent notice that he would take depositions in the case at the March court previous; and that the witnesses attended, but that he could not procure a justice of the peace, or any other person authorized so to do, to take the depositions; and that shortly after-wards,., Kent left the State, and did not return until about the May court. That after his return, complainant gave him notice that complainant would take depositions on the Saturday previous to the Court; at which time, he took sundry depositions; but he failed to take the deposition of Edward Hammet, because he did not attend according to his promise. That he can prove by Hammet, *one of the claims set up in his bill; and that he would have endeavoured to take his deposition the first day of the Court, but that he understood no litigated business would be attended to at this Court; and that he could prove by other witnesses, whom he names, other claims set up by him in his bill; and also the declaration of Kent, that his object in purchasing the property was not to acquire the property himself, but for the benefit of complainant; all of which testimony he would have taken in time but for the reasons before stated.
    The Court overruled the motion for a continuance, and dissolved the injunction; and from this decree Tiffany obtained an appeal to this Court.
    B. R. Johnston, and Cooke, for the appellant.
    Kent having purchased the equity of redemption in the property, if his purchase was valid, he was entitled, upon the payment of the trust deed, to have the title conveyed to him; and a sale by the trustee was improper.
    The question here, is, was the sale by the sheriff valid? The Court is referred to the argument of the counsel for the appellees in the case of Cosby v. Rambert, 1 Rob. R. 235, on the general question of the propriety of the sale of an equity of redemption by the sheriff. • But whatever may be the correct doctrine on the general question, we insist that when there is such a cloud upon the title as to prevent a fair sale, the sheriff has no right to sell, but should apply to a Court of Equity to have the cloud removed.
    In this case, the sheriff advertised a sale subject to an incumbrance of 1050 dollars, taking no notice of a credit of 280 dollars, to which the debtor in the trust was entitled : and he thus sold so as to subject the creditors and debtor to at least this loss.
    The mistake as to the amount of the trust debt was not discovered until after the bill was filed, and could not, therefore, be stated therein; but we may have relief *as to this mistake, it not being inconsistent with the statements of the bill; and we may add statements by evidence, not inconsistent with the bill.
    If the sheriff had authority to make the sale, he sold under a mistake, and the property being still in the hands of the purchaser, the Court may set aside the sale.
    If the creditors should have been before the Court, the injunction should not have been dissolved; but the complainant should have been required to amend his bill, and make them parties.
    The Court should have continued the cause. On a motion to dissolve an injunction, the Court will give more weight to evidence than upon a final hearing. Tiffany swears he can prove the contract that he should be permitted to redeem; and he does prove the agreement after the sale; and though this would not be sufficient on final hearing, it is sufficient to forbid the action of the Court on the motion to dissolve the injunction.
    Eulton, for the appellee.
    The grounds on which the appellant' asks relief in his bill, are, first, that Kent purchased for Tiffany’s benefit; and second, that he was entitled to credits ‘ which Kent had not given. There is nothing said in the bill about the invalidity of the sale; but the plaintiff claims that the purchase was made for his benefit.
    Upon the grounds of relief stated in the bill, the plaintiff, has failed; and now he seeks to set aside the sale as illegal, though there is no allegation of fraud in the sale, in the bill, and no issue made up upon it.
    The duty of the sheriff in relation to the property surrendered by an insolvent debtor,is prescribed by the statute. He is directed to sell all the property delivered in the schedule, and make return thereof in sixty days. The 34th section of the act vests the estate in the sheriff “for such interest as he may lawfully depart withal.” These words are taken from the English bankrupt *act; under which it has been determined that a contingent interest is assignable bj the commissioners. Higden v. Williamson, 3 P. Wms. 132; Shirley v. Eong, 6 Rand. 736. These cases shew that the assignees may sell such interests; and here the sheriff has the same power under the statute.
    But the whole interest having passed to the sheriff, and he having sold to Kent, Tiffany has no title, legal or equitable, on-which he can come into equity. And surely it, at least, is a necessary part of his case, that he shall shew he has satisfied all the executions on which he swore out of jail, before he can have any interest in the property.
    As to the advertisement of the sale of the property by the trustee, it was the easiest mode of getting the legal title.
   BARD WIN, J.,

delivered the opinion of the Court.

It appears to the Court, that the appellant has neither alleged in his bill nor proved any fraud in the sheriff’s sale of the equity of redemption in the proceedings mentioned; nor has he by his .bill impeached the same on any other ground: and that he has failed to prove the allegation that the purchase by the appellee Kent at said sale, was for his, the appellant’s, benefit. But it appears-that at said sale the property was put up by the sheriff, subject to the full amount of the incumbrance created by the deed of trust, without any declaration to said Kent and others present, of the credit against the same to which the appellant was entitled, upon his dealings with Ingram, the then owner of said incumbrance; which credit was afterwards ascertained to be 280 dollars. And if the appellant is entitled to any relief against said Kent in this suit, it must be upon the ground that he or his schedule creditors have an equitable claim against said Kent for the amount of said credit. But in order to obtain such relief, it will be necessary for the appellant to amend his bill, and make his schedule creditors ^parties in the cause: and a claim of the appellant to relief on that ground, ought not, so far as now appears from the record, to furnish any obstacle to the said Kent’s perfecting his title to the property by a sale under said trust deed. The Court is therefore of opinion, that the injunction which had been granted to the appellant was properly dissolved by said decree ; and that there is no error therein. Wherefore it is .decreed and ordered, that said decree of said Circuit Court be affirmed; and that the appellant do pay to the appellee Kent his costs by him expended in the defence of this appeal. _ And the cause is remanded to the said Circuit Court, in order that the same may be there proceeded in to a final hearing- thereof.