Court Opinion

ID: 8012033
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:59:19.853756+00
Date Added: 2024-06-11T16:36:07.871096
License: Public Domain

Barclay, J.
(dissenting). — Upon the leading proposition in the case a majority of the court in banc have adopted the unanimous opinion delivered in the first division. But they discard some of the minor rulings announced in that opinion, and conclude to affirm the circuit judgment. This change in the result does not seem to me entirely satisfactory.
1. My view still is that the cause should go back for a rehearing. The reasons for that view were given in the divisional opinion, and others will he added.
The opinion of the first division was as follows (omitting the passage approved in the learned opinion of Judge Burgess) :
“2. The defendants next insist that, as the trial court had control over its process, it might set aside the execution sale on equitable grounds satisfactory to that court.
“It is true, as pointed out in Ray v. Stobbs (1859) 28 Mo. 35 and recently repeated in Bryant v. Russell (1895) 127 Mo. 422 (30 S. W. Rep. 107), that a court on motion has jurisdiction to regulate and control the use of its own writs, so as to see that no injustice is done hy them.
“But the exercise of its judgment upon such motions is not beyond all review.
“The reasons assigned in such motions must he considered in determining the conclusiveness of action thereon hy the trial court.
“The lien judgment in the case at bar was rendered hy a justice of the peace. But when the transcript *460thereof was filed in the circuit court, it came under the control of the latter court for purposes relating to its execution. R. S. 1889, sec. 6287.
“That control includes the power, on proper occasion, to set aside sales on execution to satisfy such judgments.
“The grounds of the motion in the pending cause were four. Two of them related to the proceedings in the federal court. The comments .already made dispose of them, so far as we are concerned.
“The first of the two remaining grounds was that the sale was for ah inadequate sum; that the defendants, bringing the motion, had no actual notice or knowledge of the judgment, execution, levy, or sale, until long after the sale; and that the sheriff had a custom (which he failed in this instance to observe) to notify interested parties or their attorneys of the demand of such an execution, and to thus give opportunity to pay the same.
“The circuit judge, upon an instruction, given at the close of the evidence on the motion, declared that mere inadequacy of consideration in the sale was not sufficient ground to set it aside. So it is probable that his order sustaining the motion was not based on that objection.
“The circuit judge also excluded questions of defendants directed to the point as to the sheriff’s custom to notify defendants in execution.
“As defendants are not in position to complain of that ruling, we need not go into it on plaintiffs’ appeal.
“Want of actual knowledge by, or notice to, defendants of the proceedings to. enforce the lien would not alone form a just or substantial ground to vacate the process on a judgment for its enforcement, where the proceedings were valid against collateral attack, *461those defendants having been duly brought before the court by constructive service as allowed by law.
“3. The remaining ground of the motion is that the ‘sale was inequitable, unjust, and contrary to good conscience,’ for the reason that defendants, long after the judgment was rendered, and ‘before the issuance of said execution, were led to believe and did believe by statements made by said C. B. McAfee to the attorneys of said defendants,that there were no other lien judgments at said time against said property on behalf of any clients of his, and that the sum of five thousand dollars, which was then paid to said C. B. McAfee, on settlement of a large number of lien judgments held by his clients, then and there settled all his lien claims and those of his clients, which at said time were reduced to judgment; that these defendants and their said attorneys were thrown off their guard by said statements of said C. B. McAfee, and by reason of the same, did not investigate as to whether there were any such other judgments, and did not watch for said sale, and said property was sold without their knowledge for the grossly inadequate sum of two hundred and fifty dollars.’
“We have examined the evidence carefully on this point, and find that it does not establish the facts above alleged. We are unable to discover any proof of any statements by Mr. McAfee which should reasonably have been interpreted by adverse counsel as charged in. the passage from their motion above quoted.
“4. Some minor objections to the execution sale are made, as, for instance, that there were certain supposed irregularities in the lien judgment, or proceedings. But on examination we find none of those objections tenable or requiring special comment.
“5. On the case as it was submitted to the learned trial judge, we hold that he was in error in set*462ting aside the sale. For that reason we shall reverse his order. As he sustained the motion, the moving defendants had no occasion to except to the rulings (against them and favorable to plaintiffs) excluding proof of a custom of the sheriff to notify parties interested, before enforcing executions, and declaring by instruction that mere inadequacy of price was not a sufficient ground to set aside the sale. .
“In view of these rulings, to which these defendants had no need to except (because of the final ruling in their favor), we are unwilling to substitute a conclusive ruling to the contrary, on the record as it now stands.
“While the court’s declaration (as to inadequacy of price) is correct 'as a general proposition when applied to sheriff’s sales which have become final, it is not more than a half-truth as applied to the review of such a sale upon motion made before the sale has become a finality under the process on which it took place.
“It has been expressly held in this state that it may sometimes be the duty of an officer, in charge of process, to postpone such a sale, on his own motion, in case a gross and unnecessary sacrifice of property is threatened. Conway v. Nolte (1847) 11 Mo. 74; State ex rel. v. Moore (1880) 72 Mo. 285.
“And in cases where the officer would- be warranted in postponing the sale, the court itself, if the sale occurred, might set it aside upon prompt and timely application to that end, if the property has been-in fact sacrificed by a grossly inadequate sale, in circumstances which call for such relief against the abuse of the court’s process.
“In the present case the property sold for $250. It was certainly not worth more than forty or fifty thousand dollars. It was admitted that it cost about *463the latter sum; and there is proof that it was worth at least $15,000. It bore an incumbrance to secure $49,000.
“There are special facts, however, which indicate that the purchaser at the execution sale represented a large body of lien claimants whose demands reached the amount of about $11,000 and-the sale (under section 6727, R. S., 1889, as well as by their own mutual agreement) would inure to the benefit of all of them in proportion to their demands. So that, in effect, in view of the insolvency of the Building Company, the principal debtor, the price may be considered as substantially equivalent to the last named sum, which we do not think sufficiently out of proportion to the value of the property to warrant a court in vacating the sale, on the sole ground of inadequacy in the price.
“But here the evidence which the court excluded, as to the custom of the sheriff to notify defendants in execution, might have laid a basis for the court’s remedial discretionary action, when coupled with great inadequacy in the proposed price.
“Where inadequacy of price (such as would not alone warrant interference with such a sale) is accompanied with any circumstance of surprise, mistake, or even excusable neglect, the court, whose process is involved, may, in the exercise of a sound discretion, relieve against a sacrifice of the property, where such course appears to be dictated by the demands of justice in the particular case. Cole Co. v. Madden (1887) 91 Mo. 585. This may be done on timely motion, without resort to an independent suit in equity.
“We hence reverse the decision upon the motion to set aside the judgment, and remand the cause with directions to rehear that motion in conformity to the principles announced in this opinion. Beace, C. J., and Maceaelane and Robinson, JJ., concur.”
*4646. To the reasons given in the above quoted part of the divisional opinion, it may be well to a'dd a few further observations, in view of some positions taken in the opinion of my learned associate, Judge Bukgess. His opinion holds that the setting aside of the execution sale was a proper use of the discretionary power, of the circuit judge.
It is plain from the record in this court that the circuit judge did not intend lo exercise his discretion upon the facts, because he was convinced (as his rulings show) that the pendency of the receivership prevented a valid sale. All the court here differ with him on that point, yet a majority favor affirming the order to set aside the execution sale, nevertheless.
The proposition is undoubtedly true that a circuit ruling should always be sustained where it is right, though wrong reasons may have prompted it. But where a reviewing-authority undertakes to say that a decision in the trial court is correct on discretionary grounds, when that decision was evidently based on other, and untenable, grounds, the reviewing court should at least be very sure that ample foundation for a favorable exercise of the discretionary power (which was never exerted) exists in the facts, and it should also be very sure that the conclusion announced accords with the demands of the situation which confronted the trial judge in the particular case.
The application of discretionary authority, to set aside execution sales, by the court out of which the process has issued is governed by equitable considerations, though the form of relief may be legal. On motions directed to that end the court (though the form of action is not changed) applies rules of common fairness and justice according to the very right of the case, and on such terms as may be just.
Here, the parties moving to set aside the sale are *465not the primary debtors. They are persons claiming rights in the property under a mortgage; and they profess to have been surprised at the sale and to have been willing to pay the claim without a sale. These facts are emphasized in the learned opinion of the court in banc.
It appears that the moving defendants concede that the plaintiffs’ mechanics’ lien judgment “is a prior lien” (to use the language of their admission in the record), and that the lien judgment has become final as to all concerned. The gravamen of defendants’ complaint now is that they were misled by Mr. McAfee when they were trying to pay off all claims reduced to judgments.
Should any court, on such a showing; set aside an execution sale, in the exercise of discretion, without putting some sort of terms upon the parties moving for such relief? Ought not the latter, in such circumstances, to be required to do that equity which their admissions concede? Ought they not to pay, tender, or, at least, secure, the plaintiffs’ judgment which the moving parties have no ground to contest (and do not contest), before an order for resale is made?
The trial judge merely set aside the sale, without more. Even the costs of the first sale were not required to be paid by the moving parties. Plaintiffs are thus put to the hazard of paying costs of the resale, and of the possibility of losing their present full security for payment. At all events plaintiffs must lose considerable time now in obtaining payment of their demand, though the latter is practically undisputed.
It seems to me that a court, proceeding to deal with the situation described by this record, should at least require security for plaintiffs’ judgment before setting aside the former sale in the circumstances here *466shown, especially where the chief ground of the objection to the former sale is that these parties were trying beforehand to pay the plaintiffs’ demand.
But no terms were imposed of any sort, for the manifest reason that the learned trial judge thought the sale should be vacated as an interference with the federal receivership. Had he reached, or considered, the general equities of the motion, he would, no doubt, have fully recognized the soundness of these suggestions as to the propriety of imposing reasonable terms on the moving defendants as a condition to setting aside the sale. The imposition of fair terms in such circumstances is approved as well by precedents as by the obvious demands of justice. Sawin v. Bank (1853) 2 R. I. 382; Winterson v. Hitchings (1895) 34 N. Y. Sup. 183.
At the hearing of this motion, Mr. McAfee, who purchased the land on behalf of the lien claimants, was a witness. In the course of his examination he said: “If these gentlemen will pay my clients to-day, I will deed them this property. * * * I had the sale made because I wanted to bring these men up to the mark in some way. * * * If these gentlemen will just pay off these claims, they will own the opera house.”
But these gentlemen were then contesting his purchase chiefly on the legal ground that the receivership was an obstacle to its consummation; and so they gave no heed to this polite invitation to pay. off the mechanics liens.
7. The pendency of the receivership and the well known power of the federal authority account in a great measure for the small price the property brought. But those factors in that result were not chargeable to the mechanics and material men, or their attorneys, who seem only to have sought payment for the labor and improvements upon the property. *467Whoever bought in such circumstances bought a certain lawsuit, with its probable terminus in the supreme court of the United States. What wonder then that no one bid at the sale but the lien claimants, or their attorney to protect their interest!!
The condition of the property and of its title had quite as much to do with the small price realized as any of the facts that have been mentioned as warranting interference of the court on discretionary grounds.
8. It has been intimated that the advertisement was misleading because the sheriff says he did not know he was selling the opera house. The description as used by him in his published notice of sale closely resembled the one adopted in the learned district judge’s order appointing the receiver. No one acquainted with the property could have been misled. The federal receiver was manager of the advertising department of the paper in which appeared the advertisement of sale. It is not likely in such circumstances that any fraud or secret sale was contemplated or perpetrated by the parties seeking to have the sale brought on, or by the sheriff.
9. The court, on a direct ruling, excluded evidence of the sheriff’s custom to notify parties defendant in executions of his demand, before proceeding to a sale. Later on, one of the witnesses testified to- such a custom. That fact was volunteered by the witness as part of an answer to this question:
. “Have you looked in the office of the attorneys for the judgment creditors, since that, for it” (namely, the lost execution)?
Though the evidence of the custom thus came in, and was not stricken out, it is clear from the court’s definite ruling on the point, at an earlier stage of the hearing, that the learned judge regarded the fact as irrelevant, and gave no weight to it.
*468It does not seem necessary to discuss its value to support a conclusive judgment in this court on a question properly referable to the discretion of the trial judge.
10. All things considered, it seems to me that the order setting aside the sale, without any sort of terms imposed on the moving parties, should not be affirmed; but that the cause should be remanded to the end that the motion may be reheard on its merits on the circuit, and such conclusion be then reached as the facts disclosed may appear to warrant, in view of the ruling of the’' supreme court that the federal receivership is of itself no impediment to the sale.