Source: https://supreme.justia.com/cases/federal/us/161/334/
Timestamp: 2019-04-23 04:38:31+00:00

Document:
While mere inadequacy of price has rarely been held sufficient in itself to justify setting aside a judicial sale of property, courts are not slow to seize upon other circumstances impeaching the fairness of the transaction as a cause for vacating it, especially if the inadequacy be so gross as to shock the conscience.
If the sale has been attended by any irregularity, as if several lots have been sold in bulk where they should have been sold separately, or sold in such manner that their full value could not be realized; if bidders have been kept away; if any undue advantage has been taken to the prejudice of the owner of the property, or he has been lulled into a false security; or, if the sale has been collusively or in any other manner conducted for the benefit of the purchaser, and the property has been sold at a greatly inadequate price, the sale may be set aside, and the owner permitted to redeem.
There are other facts in this case, stated in the opinion, in addition to the grossly inadequate price realized for the property that afford ample justification for the action of the court below in permitting the plaintiff to redeem upon equitable terms, and ordering a reconveyance of the property.
Quaere whether issue of an alias for the original amount of the judgment, after the return of a prior execution, satisfied to the amount of nearly one-half of such judgment, the sale of property thereunder to an amount more than sufficient to satisfy the amount actually due, and payment of the excess to plaintiff's attorneys will not invalidate the entire proceedings?
Whether the levy upon the interest of a co-tenant in a specific part, designated by metes and bounds, of a certain larger quantity of land is valid is not decided.
Before the time had expired to redeem from the execution sale, the plaintiff was told by the defendant that he would not be pushed, that the statutory time to redeem would not be insisted upon, and, believing it, acted and relied upon such assurance. Held that under such circumstances, the purchaser was estopped to insist upon the statutory period, notwithstanding the assurances were not in writing and were made without consideration, and that there was a concurrent jurisdiction of a court of equity, founded upon its general right to relieve from the consequences of fraud, accident or mistake, which might be exercised notwithstanding the statutory period for redemption has expired.
Territory of Utah by John M. Young against Frank B. Stephens and wife and Albert T. Schroeder and wife, as defendants, to set aside and cancel certain execution sales of real property in Salt Lake City as fraudulent and void, and for permission to redeem from such sales notwithstanding the expiration of the statutory time for redemption, and for a decree compelling the defendants to convey to the plaintiff the property mentioned, upon just and equitable terms.
feet, thence east 38 feet, thence south 98 1/3 feet, to the place of beginning, and also on a part of lot 12, block 8, five-acre plat A, Big Field survey.
Afterwards, on July 25, 1891, the marshal certified that he had sold the property described in the notice to John Clark, and, deducting his commissions and expenses of sale, paid the balance realized upon said sale, viz., $962.36, to the attorneys of Clark, Eldredge & Co., and further returned that there was still due and unpaid on said judgment the sum of $886.90. The John Clark mentioned in the return was a director and the principal stockholder of Clark, Eldredge & Co . Afterwards, on July 28th, an alias execution issued from the said court in such action for the full sum of $1,673.36, and $30.50 costs, by virtue of which the marshal levied upon a certain other parcel of the same lot described as beginning 64 1/2 feet west of the N.E. corner of said lot 2, running thence west 45 1/2 feet, thence south 20 rods, thence east 78 1/2 feet, thence north 90 3/4 feet, thence east 31 1/4 feet, thence north 41 1/4 feet, thence west 16 1/2 feet, thence north 148 1/2 feet, thence west 48 feet, thence north 49 1/2 feet, to the place of beginning, and on August 25th the marshal returned that he had sold these premises to the defendants Stephens & Schroeder for the sum of $828.70, and further certified that the judgment obtained by said corporation was still unsatisfied to the extent of $100.
On September 30th, said marshal made a further return to the last-mentioned writ in which he certified that he sold all of lot 12, block 8, five acre plat A, Big Field survey, situate in Salt Lake county, and also a certain parcel of land described as beginning 39 feet east and 81 feet north of the southwest corner of said lot 2, running thence north 209 feet, thence east 16 1/2 feet, thence south 209 feet, thence west 16 1/2 feet, to the place of beginning, to Stephens & Schroeder, for the sum of $136, and, deducting the costs and expenses of said last levy, amounting to $30, paid the balance, $106, to the attorneys of Clark, Eldredge & Co., and returned said writ fully satisfied.
this statement, a plat of which appeared in the record, constituted a single parcel of land, and should have been regarded and treated as such, and not as being divided into separate lots or parcels, and that the first parcel sold, being 15 1/2 by 28 feet, had no ingress or egress, and that the same as sold would necessarily be sacrificed on such sale on account of its location, but that at the time of the sale of this parcel, neither Stephens nor Schroeder had actual knowledge of any other realty owned by plaintiff.
Before the case was called for argument, the suit was settled so far as the defendants Stephens and his wife were concerned, leaving Schroeder and his wife sole defendants. The case coming on to be heard upon pleadings and proofs, the district court made a decree permitting the plaintiff, Young, to redeem the property upon paying to the defendants the sum of $723.25, less certain costs, but subject to one-half of a mortgage executed by the defendants, who were ordered to execute and deliver to plaintiff a deed of the property. From this decree an appeal was taken to the supreme court of the territory, which affirmed the decree of the district court, whereupon appellants prayed and were allowed an appeal to this Court.
in itself to justify setting aside a judicial sale of property, courts are not slow to seize upon other circumstances impeaching the fairness of the transaction as a cause for vacating it, especially if the inadequacy be so gross as to shock the conscience. If the sale has been attended by any irregularity, as if several lots have been sold in bulk where they should have been sold separately, or sold in such manner that their full value could not be realized; if bidders have been kept away; if any undue advantage has been taken to the prejudice of the owner of the property, or he has been lulled into a false security; or if the sale has been collusively or in any other manner conducted for the benefit of the purchaser, and the property has been sold at a greatly inadequate price, the sale may be set aside, and the owner permitted to redeem.
"Such is the history of a transaction which the appellant asks of this Court to sanction, and it seems pertinent here to inquire under what system of civil polity, under what code of law or ethics, a transaction like that disclosed by the record in this case can be excused, or even palliated."
"It is insisted that the proceedings were all conducted according to the forms of law. Very likely. Some of the most atrocious frauds are committed in that way. Indeed, the greater the fraud intended, the more particular the parties to it often are to proceed according to the strictest forms of law."
The Court commented most severely upon the conduct of the purchasers, and found no difficulty in setting aside the sale, although four members of the Court dissented upon the ground that the complainant had failed in her duty to redeem from the sale within the time limited by law.
opinion in Graffam v. Burgess, and the general proposition laid down, as above stated, that if, in addition to inadequacy of price, there be other circumstances throwing a shadow upon the fairness of the transaction, the judgment debtor will be allowed to redeem.
"Public policy and the analogies of law require that they should be considered per se as in the twilight between legal fraud and fairness, and should be deemed fraudulent, or in trust for the debtor, upon slight additional facts."
See also Hall v. Hallett, 1 Cox 134; Jones v. Martin, 26 Tex. 57; Byers v. Surget, 19 How. 303; Blight's Heirs v. Tobin, 7 T.B.Mon. 612.
"At the time of the last sale, to-wit, September 30, 1891, there was a balance due Clark, Eldredge & Co. of only $25.57, and their judgment had been satisfied except said sum, and to satisfy said balance property was sold as aforesaid, amounting in all to $136, $106 of which was paid by the United States marshal to said Stephens and Schroeder."
Upon no theory were the judgment creditors entitled to any more than the amount of their claim, and if, as may sometimes happen, the property be sold for more than the amount of the execution, the residue should be returned to the judgment debtor.
There is reason for saying that the issue of an alias execution for the original amount of the judgment, after the return of a prior execution, satisfied to the amount of nearly one-half of such judgment, the sale of property thereunder to an amount more than sufficient to satisfy the amount actually due, and the payment of the excess to the plaintiff's attorneys, invalidate the entire proceedings, the rule in some states being that a levy for an amount exceeding the amount of the judgment or the amount actually due upon the judgment, with interest and costs, is void. 2 Freeman on Executions § 381; Glidden v. Chase, 35 Me.190; Pickett v. Breckinridge, 22 Pick. 297; Peck v. Tiffany, 2 N.Y. 457; Hastings v. Johnson, 1 Nev. 614; Patterson v. Carneal, 3 A. K. Marsh. 618. But however this may be, there can be no doubt that this alias execution and the proceedings thereunder were irregular so far as Stephens & Schroeder were concerned, though perhaps not to the extent of invalidating the title of a bona fide purchaser. Stead's Executors v. Course, 4 Cranch 403; French v. Edwards, 13 Wall. 506; Groff v. Jones, 6 Wend. 522; Tiernan v. Wilson, 6 Johns.Ch. 411.
were made, and particularly be the successive sales of his interest in different parts of lot 2, block 70, held in common with his sister, Lydia Y. Merrill, and that a proper regard for his interests required that his entire right to the whole land thus held in common should have been sold at one time. This, however, raises a question as to which the authorities are not entirely in harmony, viz., whether the levy upon the interest of a cotenant in a specific part, designated by metes and bounds, of a certain larger quantity of land is valid. In view of the other manifest irregularities, we do not feel called upon to express an opinion upon this point.
"before any of said property was sold, said Stephens, who was the sole bidder at each of said sales, formed the intention that regardless of the value of the various pieces of property to be sold, and that were sold, he would leave a balance after each sale so that all of the plaintiff's property would be sold, and he so bid at the various sales as to accomplish, and did accomplish, said object and purpose."
As Stephens was appellant's partner in the practice of law, and in the prosecution of the claim of Clark, Eldredge & Co., and bought the property in for himself and partner, who now sets up title in himself by virtue of such purchase, it is clear that he is bound by Stephens' acts and representations. Certainly he cannot set up a title acquired by Stephens' assistance and at the same time repudiate his acts in connection with the acquisition of such title.
"Another pregnant proof of the design of the appellant to grasp and retain what no principle of liberality or equity could warrant is the fact, clearly established, of his refusal after the sale to accept from the appellee, for the redemption of his lands so glaringly sacrificed, a sum of money considerably exceeding in amount the judgment for costs, with all the expenses incidental to the carrying that judgment into effect. The appellant, by his irregular and unconscientious contrivances, achieved what he conceived to be an immense speculation, and he determined to avail himself of it regardless of its injustice and ruinous consequences to the appellee."
that he intended to redeem said lot from a tax sale that had been made thereof for the taxes of 1890, and did subsequently redeem the same, and informed Schroeder of the fact, and that Schroeder never at any time informed him that he had obtained a deed for the lot. The court further found that defendants purposely and intentionally failed to inform the plaintiff that they had a title to the said lot at the time the plaintiff was redeeming the same from the tax sales. The court further found that the said attorneys, in violation of their duty to obtain the highest possible price for the property while acting in behalf of their clients, became the bidders upon said property, and so acted as to obtain the same for the least possible sum, so as to satisfy the judgment, and at the same time to sell all the property belonging to said Young. If these facts be not sufficient to justify a rescission of these sales, it is difficult to imagine what would be so considered.
"a refusal by the purchaser to accept the money and permit the redemption to be made within the time agreed would be a fraud upon the defendant in execution, and authorize an application by him to a court of equity for relief. "
Probably if a motion had been made in the original case to set aside the sale upon the ground of mere irregularities, such motion would have to be made before the statutory period for redemption had passed; but in this class of cases, where fraudulent conduct is imputed to the parties conducting the sale, there is a concurrent jurisdiction of a court of equity, founded upon its general right to relieve from the consequences of fraud, accident, or mistake, which may be exercised notwithstanding the statutory period for redemption has expired. It is evident that where a sale has culminated in the execution and delivery of a deed to the purchaser, which is not void upon its face, or a mortgage has been put upon the property, as in this case, no remedy is complete which does not go to the cancellation of such deed and the complete reinvestment of the title in the plaintiff. It also appears from the findings that appellant has received rents from the property; that various sums had been expended for taxes and other purposes; that an accounting was necessary in adjusting the rights of the parties, which could not be effectually carried on in a court of law. There can be no doubt of the jurisdiction of a court of equity in such case notwithstanding the expiration of the statutory time of redemption. Graffam v. Burgess, 117 U. S. 180; Blight's Heirs v. Tobin, 7 T.B.Mon. 612; Day v. Graham, 1 Gilman 435; Morris v. Roby, 73 Ill. 462; Fergus v. Woolworth, 44 Ill. 374; Bullen v. Dawson, 139 Ill. 633; Jenkins v. Merriweather, 109 Ill. 647; State Bank v. Noland, 13 Ark. 299.
The appellants' brief deals largely with criticisms upon the findings and upon the admission of testimony, which we do not feel it necessary to discuss, as they do not involve the merits of the case, which rest upon the undisputed facts. It would be a reproach to a court of equity if it could not lay hold of such a transaction as this is shown to be and set aside a sale of property acquired under the forms of law and in defiance of natural justice.

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