Opinion ID: 1721944
Heading Depth: 1
Heading Rank: 6

Heading: confirmation of sale

Text: Neb.Rev.Stat. § 25-1531 (Reissue 1995) sets forth the requirements for confirmation of a sale: If the court, upon the return of any writ of execution, or order of sale for the satisfaction of which any lands and tenements have been sold, shall, after having carefully examined the proceedings of the officer, be satisfied that the sale has in all respects been made in conformity to the provisions of this chapter and that the said property was sold for fair value, under the circumstances and conditions of the sale, or, that a subsequent sale would not realize a greater amount, the court shall direct the clerk to make an entry on the journal that the court is satisfied of the legality of such sale, and an order that the officer make the purchaser a deed of such lands and tenements.... If such sale pertains to mortgaged premises being sold under foreclosure proceedings and the amount of such sale is less than the amount of the decree rendered in such proceedings, the court may refuse to confirm such sale, if, in its opinion, such mortgaged premises have a fair and reasonable value equal to or greater than the amount of the decree. The court shall in any case condition the confirmation of such sale upon such terms or under such conditions as may be just and equitable. The Critels objected to the confirmation because the sale did not bring the actual value of the property. In support of their position, the Critels offered into evidence 1993 real estate tax statements which listed the taxable value of the property, and the tax statements were admitted without objection. The Court of Appeals affirmed the sale, finding that in light of the Nebraska Supreme Court's previous holdings, as well as the decisions of the majority of other jurisdictions, the assessed value of the Critels' land for tax purposes is not relevant to show the inadequacy of the sale's price. First Nat. Bank of York v. Critel, 95 NCA No. 51 at 36, case No. A-94-698, 1995 WL 762935 (not designated for permanent publication). The Court of Appeals stated: Even assuming, arguendo, that there is an inadequacy of price, this would not be, in and of itself, sufficient to warrant a resale unless it appeared that such a resale would probably produce a higher price. Id. Neb.Rev.Stat. § 77-201(1) (Cum.Supp. 1994) provides in part: [A]ll real property in this state, not expressly exempt therefrom, shall be subject to taxation and shall be valued at its actual value. Neb.Rev.Stat. § 77-112(1) (Cum.Supp.1994) provides in part: Actual value of real property for purposes of taxation shall mean the market value of real property in the ordinary course of trade. The term actual value has been held many times to mean exactly the same as market value or fair market value. Dowd v. Board of Equalization of Boone, 240 Neb. 437, 482 N.W.2d 583 (1992); Equitable Life Assurance Soc. of U.S. v. Lincoln Cty. Bd. of Equal., 229 Neb. 60, 425 N.W.2d 320 (1988). Although differing factors may cause the appraised value of property to be less than its actual value, some relationship exists between appraised and actual value such that the appraised value can properly be said to constitute relevant evidence of at least the minimum value of the land. See Louisiana Ry. & Navigation Co. v. Morere, 116 La. 997, 41 So. 236 (1906). Therefore, we cannot say that, having been admitted without objection, the assessed value of the real property for tax purposes was not relevant to the determination of whether the sale price of the land was fair and reasonable. At the confirmation hearing, no evidence was offered by First National showing that the property was sold for a fair value under the terms and conditions of the sale. The next issue is whether the Critels were required to show that a resale would produce a higher price. An order confirming a judicial sale under a decree foreclosing a mortgage on real estate will not be reversed on appeal for inadequacy of price, when there was no fraud or shocking discrepancy between the value and the sale price, and where there is no satisfactory evidence that a higher bid could be obtained in the event of another sale. See, Travelers Indemnity Co. v. Heim, 218 Neb. 326, 352 N.W.2d 921 (1984); Nebraska Federal Savings & Loan Assn. v. Patterson, 212 Neb. 29, 321 N.W.2d 71 (1982); Central Savings Bank v. First Cadco Corp., 186 Neb. 112, 181 N.W.2d 261 (1970). Thus, when there is no evidence that others are willing to pay more, a judicial sale will not be set aside on account of mere inadequacy of price, unless such inadequacy is so gross as to make it appear that it was the result of fraud or mistake, or to shock the conscience of the court. County of Dakota v. Mallett, 235 Neb. 82, 453 N.W.2d 594 (1990); Home Owners' Loan Corporation v. Smith, 135 Neb. 618, 283 N.W. 371 (1939); Conservative Savings & Loan Ass'n v. Mancuso, 134 Neb. 779, 279 N.W. 725 (1938). The foreclosure decree shows that there existed a first lien in favor of York County for 1990, 1991, and 1992 taxes, plus accrued interest, in the amount of $2,179.68. The remaining liens of the other parties to the foreclosure were found to be junior and inferior to the liens of York County and First National. At the sale, the purchaser bought the property subject only to the real estate taxes due York County. A comparison of the sale price of $4,000 to the assessed value of $29,809 establishes that the sale price was inadequate. First National offered no evidence to rebut this comparison, nor did First National object to the tax assessment offered as to the value of the real estate. Although there was no evidence that others were willing to pay more, there is a significant difference between the sale price of $4,000 and the $29,809 shown on the tax assessment. Where the evidence establishes that the sale price was inadequate, it is the duty of the court to deny confirmation of the judicial sale. See, County of Scotts Bluff v. Bristol, 159 Neb. 634, 68 N.W.2d 197 (1955); Ehlers v. Campbell, 147 Neb. 572, 23 N.W.2d 727 (1946). For this reason, the district court abused its discretion in confirming the sale.