Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-10-01
THE DELINQUENT RAILROADS.
Decision Of Chancellor East.
Order of Sale of the Knoxville and
kentucky Railroad Revived.

ing, Chancellor East delivered the following
| opinion respecting the sale of the Knoxville
and Kentucky Railroad, the effect of which
is to revive the order of sale under the orig
inal conditions imposed by the Commits
sioners -.
A decree was entered heretofore in this
cause ordering the sale of various railroads,
| if before the day of sale each of these rail-
road companies did not take its road at a
| specified sum. The sum specified to be
paid by the Knoxville and Kentucky Rail-
road was 1897, 800. The debt which this
company owed the State was more than two
million eight hundred thousand dollars.
! This company having failed to take its road
at the specified sum, it, with others, was ad-
| yertised to be sold at public auction, in the
! city of Knoxville, on the 10th day of Sep
! TENDER, 1871. The advertisement was
made, and the sale took place under the
| supervision of the commissioners appointed
| by the Legislature, and adopted by the
court. These commissioners have made a
report to the court, and in the case of the
road in question, say, that the same was
not sold, and ask that the order of sale be
revised and renewed. ThereupOn the petit
! TONERS, W. b. Johnston, A. L. Maxwell
and L. A. Scott, partners under the firm
name and style of w. 3. Johnston & Co.,
| file their petition, and state $50 far as it is
| material to notice the allegations of the
same) that they were present at the sale,
that the same was put up for sale to the
highest bidder. and was struck off, to them
by the auctioneer, for the sum Of 10000,
that being the highest, last and best bid
and they offered to comply, by paying the
money in part and executing
bonds, according TO the decree, for the bal
ance. That the commissioners did before the
sale was opened, announce that unless the
bid reached the minimum price fixed by the
court upon each road that they reserved the
right to refuse to sell such bid. Petition
also states the bid made did not reach the
minimum and that afterwards the COM
missionerS refused to recognize the sole,
and notified petitioners TO that effect, that
the commissioners had no right to refuse
their bid, or to fix any other terms than
those mentioned in the decree; that the
minimum fixed in the decree was a sum
specified at which the stockholders or COM
pany should take the road by given time
and if these refused, then the same was to
be offered at public sale to the highest bid
der without regard to the minimum. This
is the true construction and meaning of the
decree, and the only question presented is
whether this was a SALE the petition having
| been demured to it is to be taken as true,
so far as il is not contTadicted by the record
in the cause. One point presented in argyll
ment is this: that the commissioner acted
in this matter not as officers of the State
but as commissioners of the court and as
such, were amenable to the court and the
latter has the power to control their actions.
Another point presented by the solicitors
of the State is that whether the commission
ers acted as officers of the State or of the
court and whether they had the power or
right to make the terms they did,
whether rightfully or wrongly, they did
make the reservation as to the minimum
before the sale commenced, and before the
hid was offered, and petitioners knew the
fact beforehand and therefore made the
bid, subject to the terms, and consequently
cannot be heard to complain, as there was
no sale 1t is insisted by the demUTing
party that after the property had been ad-
vertised, and before the day of sale, the SUI
preme Court Of the State had granted Wr1ts
of error and SupeTsedeas in another one OF
these delinquent railroads, the sale OF which
had been decreed in this same cause, and
that this fact would or might III the estima-
ton Of persons who otherwise would have
attended the sale, and become bidders, have
thrown a cloud upon the title, and therefore
il became the duty of the Commissioners to
withdraw the property, or to put 1t up upon
some cautionary term. The petitioners rest
their case mainly upon the incapacity of the
ConmiSsiOnerstOm inject other terms and con-
ditions into the sale than those mentioned
in the decree that the court is the party
= 4 .innnrGs that a
bid made is merely bid to the court, which
the Commissioners were empowered 20 re-
ceive and report, and that the question Of a
sale or no sale is not their question, but one
of "a judicial character, not submitted to them.
1t is well settled proposition of law that
the Orner of property may offer it for pub
lie sale at auction, upon any terms he may
indicate. That he has the right TO reserve
to himself one or more bids, has been re-
Gently held, in the case of WarlOw VS.. Har-
rison; Am. Law Reg, pa; and | suppose
no case can be found in which the ''owner"
was not allowed to give notice before the
sale commenced, that he would not take
less than 4 specified sum, for this is cquiva-
lent to reserving one bid to himself That
he may do so, after having given public no
tce to that effect, | take it, is clear, for this
is, in result, but the reservation of right
to make bid; and if all the bystanders and
bidders are warned before the biddingS are
opened, that the owner has minimum
less than which he viii not take, this mini
mum in effect becomes his bid, whether he
actually bids or not while the sale is going
on, no one can claim that he has been dealt
with fraudulently or in any degree in bad
faith. 1t is not an uncommon praC-
ticc for the courts to put upon
property sold a minimum price, and
with this, let the auction proceed.
If the Commissioners had been the owners
of this property take it that they could
have annexed any condition they chose,
to the terms of this sale-proyided they had
given notice thereof to the biddcrS-betore
the sale commenced, or the rights Of any
one had vested, either completely or I'M
choately.
Now this brings into consideration the
power of Commissioner or Clerk and
Master, in executing DEGREES Of sale: what
power have they, if any?
That the court has the right upon report
made, in the exercise of a legal discretion,
and of course, upon good cause shown, to
set the sale aside, or to open it, before con-
frmatiOn, is unquestiOnable, and OF daily
practice. The auctioneer is the agent of
the seller, until bid is made, and then he
becomes the agent of both the seller and
the bidder. The bidder may well presume,
if the owner is not known to him, that the
auctioneer, has full power of sale, and the
right of property, as well as powerto fix the
terms The owner may himself declare the
terms Of sale, in the presence OF the bidders,
or he may empower the auctioneer to do
so. Should the owner declare the terms, his
! agent, the auctioneer, cannot vary them,
| against his win, nor could bidder who had
! heard them, claim the property by any
| agreement between him and the auction
| eer subsequently made, or by any act Of the
! auctiOneer Intentionally or unintentionally,
! in contravention of the declared terms.
| If the owner of property, about to be sold
at auction, should before the sale com
menced- annou0ce that the property
would not be sold unless it brought GER
! tain sum, and then direct the sale to pro-
coed, with that understanding, the fact that
A was tilTlast, highest and best bidder. for
sum less than the amount specified, added
! to the fact that the auctioneer knocked down
I the property at the bid, and declared it sold
/ to it, would not make it sale. Ordinarily.
tie fact that the auctioneer does declare