Case ID: tenn_37/html/0406-01.html
Source: Caselaw Access Project
Author: {"author": "Totten, Special J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Andrew Houston et al. vs. Robert R. Aycock.
    1. Chanoery Sale. Confirmation. Rights of purchaser. Opening the biddings. A purchaser at a Chancery sale, is to be regarded, after the confirmation of said sale, as owner of the estate according to his purchase, and his title will not be disturbed by opening the bid-dings, except in case of fraud, accident, mistake, or the existence of some trust relation between the parties. The mere tender of an advance bid, however large, is not of itself, sufficient ground to authorize an opening of the biddings after confirmation.
    2. Cases Cited. Mann vs. M’Donald, 10 Humph., 279; Henderson vs. Lowry, 5 Yerg., 243; Childress vs. Hurt, 2 Swan, 492; Morton et al. vs. Sloan, 11 Humph., 281; Owen vs. Owen, 5 Humph., 352; Donaldson vs. Young et al., 7 Humph., 266; M’Minn vs. Phipps, 3 Sneed, 200.
    EROM HENRY.
    This case is from the Chancery Court at Paris. The complainants were non-residents and three of them were minors. They were tenants in common with the defendant of a lot in the town of Paris. On the 6th of June, 1856, the defendant filed a petition in the Chancery Court at Paris, for a sale of said lot for partition. The complainants were made parties defendant to said petition, by publication, and a guardian ad litem, was appointed for the minors. An order of reference was made directing the clerk and master to report as to the title of the lot, value of rents and improvements, and upon the coming in of his report, an interlocutory order was made for the sale of said lot for division, which was sold by the clerk and master on the 6th of April, 1857. The lot was sold on a credit of twelve months, and bought by the defendant, at the price of $500 00. The clerk, and master reported thereof at the July Term, 1857, and there being no exception, the same was confirmed. Of these proceedings .the complainants had no actual notice. The lot, as . it seems, was worth about one thousand dollars. This bill was filed by the complainants, setting forth these facts, and tendering one thousand dollars for the lot, and praying that the bid-dings be opened that the lot might be sold for a price approximating its value. The defendant demurred to the bill, which at the January Term, 1858, was sustained by Chancellor Williams. The complainants appealed.
    ROGERS & SomeRS, for the complainants.
    The question is whether the biddings should be opened under the circumstances of' this case.
    
      While it is true as a general rule that the biddings will not be opened after confirmation, for .increase of price alone, still we think this case does and ought to constitute an exception to the general rule. It was decided in the case of Donaldson vs. Young (Joker, 7 Humph., 366, that an application to open the biddings in the case of the sale of an estate for division, rests on different grounds from a forced sale at the instance of creditors. Such application would often be successful in the former case, where it would not be in the latter. In the one case the sale is made by the Court for the accommodation of the parties, and is under the control, to a great extent, of the parties. The aid of the Court is invoked to enable the parties to divide their own property for their own benefit, and no one of them should be permitted to gain an undue advantage over the others. They stand in a sort of fiduciary, relation to each other. In the other case, the sale is the result of a litigation between the parties, and is forced, there being no community of interest between ' them.' The. case of Mann, Adm’r, vs. McDonald and others, 10 Humph., 275, is nearly identical with the case under consideration. In that case, land was sold for distribution, and was bought by one of the tenants in common, for a price greatly below its value. The report of sale was confirmed. At the same term at which the confirmation took place, one of the other owners applied to have the sale set aside, and biddings re-opened, upon the ground that the land was sold for much less than its value, and offering an advance of fifty per cent, upon the price for which .it had been sold. The Chan cellor set the sale aside, and opened the biddings, and tLe land was again sold, at the price agreed to be advanced. The first purchaser appealed, and the decree of the Chancellor, opening the biddings was affirmed. It is true that the first purchaser was guardian ad litem for some of the owners who were minors, and that is the only material difference between that case and this. Rut the Chancellor in that -case, rested his decision upon the other grounds presented, independent of and without looking to the fact of the purchaser’s being 'guardian, and this Court said they were not prepared to hold that he erred in the exercise of his discretion. In the case of Maurice vs. The Bishop of Durham, cited in said case, in 10 Humph., Lord Eldon qualifies the general rule that the bidding ought not to be opened after confirmation, by saying that such is the case, unless some particular principle arises out of the character of the purchaser, as connected with the ownership of the estate. This case, we insist, falls within the operation of such qualification; here the purchaser was one of the joint owners of the property sold. It was sold without the actual knowledge of the other owners, and was bought by the joint owner, who alone instituted the proceedings, under which it was sold, at less than half its value. Besides, three of the other owners are minors. How, if the connection of the purchaser with- the ownership of the estate will in any case authorize the opening of the biddings, this case is certainly one in which it should have that effect.
    Again, we insist that this case falls within the act-of 1787, chapter 22, section 1, and proviso 4, which provides that any person, not being served with process, and against whom a decree has been rendered, having been, made a party by publication, may within three years from its rendition, appear in Court, and petition to be heard with respect 'to the matter of such decree, and that such proceedings may be had as if no former decree or proceedings had been in the same cause. This statute, of course, applies to this case; and these petitioners, by virtue thereof, have a right to have the case heard anew, as though no former proceedings had ever taken place. This statute applies to all cases where non-residents can be made parties defendant by publication, and the character of the decree can make no difference as to its application. Now this application on the part of these non-residents to have said sale set aside and the biddings opened, is the only one they could make that could be of any advantage to them. That Aycock, the purchaser, and one of the tenants in common, had a right to have the lot sold for division, is conceded. It could be divided in no other way. But we insist he had no right to purchase it at only or less than half its value; and unless the former proceedings are set aside altogether, or the sale set aside and the biddings opened, they are totally remediless, and must submit to so great a sacrifice of their interests. Looking to the relation in which the purchaser stood to the petitioners, and the gross inadequacy of the price bid by him, his purchase, it is insisted, was a fraud upon their rights, and ought to be set aside.
    Andebw McOampbell, for the defendant.
    After a sale by the master, and that confirmed, the biddings cannot be opened on tbe offer of a bigber price alone; unless some circumstances of fraud, mistake, or accident bas occurred in tbe sale, or some trust relation exists between tbe parties. See tbe case .of Henderson vs. Lowry, 5 Terger’s Reports, 240, and tbe authorities there referred to.
    This is an application upon petition to set aside a final decree at a term subsequent, and- to divest tbe title that was by said decree vested in tbe purchaser, solely upon tbe ground that a person who is a non-resident proposes in said petition, to increase bis bid. If this could' be done at any time,- it must be upon tbe report of tbe clerk and master, and before final decree. Even this is done at this day reluctantly by tbe Courts. There should be in every case where a sale is set aside, special circumstances rendering it inequitable to confirm tbe sale. 3 Sneed, 196, McMinn’s Legatees vs. J. Phipps, Adm’r.
    
    If even there should be any sufficient grounds to set aside this, as fraud, mistake, &c., it could not be done by petition, but would have to be done by a bill filed for tbe purpose of rescinding tbe contract. Idem., 202.
   Totten, Special J.,

delivered tbe opinion of tbe Court.

Tbe petitioners and defendant were tenants in common of lot Ho. 1, containing one-quarter of an acre in tbe town of Paris; tbe interest of defendant being three-fourths thereof. Under a decree in Chancery at Paris, directing a sale of said lot for division, the same was sold by the master, on the 6th April, 1857, to the defendant, at $500 00, on a credit of twelve months, he being the highest bidder. This sale was reported to the Court, and at July Term, 1857, the sale was confirmed.

The petitioners instituted 'the present proceeding, September 23, 1857, and pray “that said sale be set aside and that the biddings be opened.” They allege that the price given for the lot is not more than half its value, and said Andrew Houston, one of the petitioners, offers to advance the bid to one thousand dollars. They state that they are non-residents, and some of them minors; that they had no actual' notice of said suit until after the sale was confirmed; the mode of proceeding being by publication under the order of • the Court. The defendant’s demurrer to said petition was allowed, and the petition dismissed; thereon the petitioners appealed to this Court.

We may observe that a purchaser at a Chancery sale acquires no title to the estate until report and confirmation of the sale. He is not liable in the interim to any loss or injury that may happen to the estate; and may on proper grounds refuse to execute the purchase.

Therefore, before confirmation, the biddings may be opened on an offer to advance the price, in a sum deemed adequate, supported by other reasons in favor of the application. As in Childress vs. Hurt, 2 Swan, R., 492, the advance of price was thirty per centum on nine thousand five hundred dollars, and also, there was ground to believe that the purchaser held the estate for the use of the debtor, to the prejudice of creditors. So in Morton, Smith & Co. vs. Sloan, 11 Humph. R., 278, the advance of price and slight mistake in the number of acres, were the grounds relied on by the Court in ordering that the biddings be opened.

The English rule is, that before confirmation of the sale, mere advance of price is sufficient to open the biddings. Sugden on Vend., 66. But our cases, on grounds of well considered policy require .something more. Vide Owen vs. Owen, 5 Humph.. R., 352; Donaldson vs. Young & Coker, 7 Humph. R., 266; Morton, Smith & Co. vs. Sloan, 11 Humph. R., 281; McMinn vs. Phipps, 3 Sneed R., 200.

But after confirmation of the sale, the purchaser has become the owner of the estate, is subject to any loss or injury it may sustain, and is bound to execute the terms of his contract. And, therefore, after confirmation, no advance of price, however large, will have the effect to open the biddings; it can only be regarded as auxiliary to other grounds of much greater weight.

Thus, in Watson vs. Birch, 2 Ves. jr., 54, it is-said, that in “Grower’s case it was decided that increase of price alone is not sufficient; but if fraud appears, that suspends the operation of the general rule.” So in White vs. Wilson, 14 Ves., 151, Lord Eldon, referring also to Grower’s case,. states the. rule to be, “ that after confirmation of the- report, unless there is some misconduct upon- the part of the individual who has the benefit of that confirmation, the - Court will not open the biddings upon negligence, surprise, or circumstances of that kind; and that it is much better for the suitors that it should be distinctly understood, that a report confirmed cannot be shaken, unless upon such circumstances as were contained in that case; the party who confirmed the report being the steward of the family, and knowing more of the circumstances of the estate than he communicated. That was a case of surprise, generated by his own conduct, which Lord Thurlow thought gave a right to open the biddings in that instance. But if the purchaser’s conduct is fair, there never would be an end of opening biddings after confirmation of the report.”

It will be seen that in Gower’s case, which so fully illustrates the subject, the biddings were opened on the ground of fraud in the purchaser.

So in Fergus vs. Gore, 1 Sch. & Lef., 350, Lord Redesdale held, that after confirmation, the biddings could not be opened, except on the ground of fraud in the purchaser.

In Henderson vs. Lowry, 5 Yerg. R., 243, Catron, C. J., says, “After a sale by a master, and that confirmed, the biddings cannot be opened on the offer of a higher price alone, unless some circumstance of fraud, mistake, or accident has occurred in the sale, or some trust relation exists between the partiesand Green, J., fully concurs.

In Mann vs. McDonald, 10 Humph. R., 279, the purchaser, for an adequate price, was guardian ad litem, for certain minors interested in the estate, and the sale was set aside on account of the “trust relation,” in conformity to the doctrine stated in Henderson vs. Lowry.

We conclude that the purchaser, after confirmation, is to be regarded as owner of the estate according to his purchase; and his title will not be disturbed, by opening the .biddings, except in' case of fraud, accident, mistake, or the existence of a relation in trust.

Now, in the present case, none of the grounds stated can have any application. No improper act is imputed to the purchaser. The lot being offered at public auction by the master, he had a perfect right to compete with others; and being the highest bidder, became the purchaser.

The notice of the suit by publication, was such as the law permits and considers valid, and was all that could be legally given in the case. The offer to advance the price was in itself no ground for opening the bid-dings, and could only be regarded as auxiliary, but not necessary, to one of the principal grounds before stated.

The minority of some of the petitioners cannot alter the case. That is no ground to set aside the sale, or open the biddings. If there be any ground to annul the decree, or the sale made in pursuance thereof, the minors have a day in Court after they come of age to show the error; but if there be no error, it will bind them. Mills vs. Dennis, 3 J. C. R., 367.

The decree of the Chancellor will be affirmed.