Court Opinion

ID: 6637488
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:42:19.574286+00
Date Added: 2024-06-11T15:59:06.227129
License: Public Domain

Brown, J.
The question presented by the pleadings is whether the complainants are entitled to a decree for specific performance upon their view of the case, or whether the defendant is entitled to the purchase money agreed to be paid at the sale, regardless of the homestead right claimed by the bankrupt. It is a well settled principle of law that in judicial sales there is no warranty, and the rule caveat emptor is applied with full force. This was settled by the supreme court of the United States in the case of Monte Allegre, 9 Wheat. 616, and is the general doctrine in most, if not all, the states. Borer on Judicial Sales, §§ 458 and 459. I see no reason why this rule does not apply to sales made by an assignee in bankruptcy. In such case the assignee making the salé is the mere agent of the court, having no power to bind any one but himself. This he may undoubtedly do in *263case of fraud, or upon a conveyance with a warranty, and in such eases only. Mockbee v. Gardner, 2 Harris & Gill, 176.
I should find great difficulty in this case in holding that the assignee had bound himself personally by anything contained in this advertisement. He purports by this to sell “the right of redemption” of the bankrupt in the land in question, hut he does not assume to guarantee that the property is not subject to other liens. While it maybe true that, if the bankrupt himself had put forth this advertisement and sold the land, he would he estopped to set up a claim of homestead, the assignee stands in a somewhat different relation to the property. By the express provisions of the bankrupt act the homestead did not pass to the assignee, and he had no right or authority to sell it unless by the consent and joinder of the bankrupt and Ids wife, which was not given in this case.
But there is another ground upon which I think the complainants are entitled to a qualified relief. The- terms of the advertisement were somewhat ambiguous, and I have no doubt that they were misled into supposing that they had acquired a title to the property free and clear of all encumbrances except that of the execution. It is true, that neither the bill nor the cross-bill set forth, in terms, that there was a misunderstanding as to the conditions of the sale, but taking them together it is quite apparant that there was. In such cases a court of equity has a judicial discretion to set aside the sale. Rorer on Judicial Sales, § 421; Laight v. Pell, 1 Edwards’ Ch. 577; Le Fevre v. Laraway, 22 Barb. 167; Veeder v. Fonda, 3 Paige, 94-97.
In Anderson v. Foulke, 2 Harris & Gill, 346, 357, it is said that in Maryland, as well as in England, “if there should be made to appear, either before or after the sale had been ratified, any injurious mistake, misrepresentation or fraud, the order of ratification will be rescinded, and the property again sent into the market and resold.” This power has been frequently exercised in cases where the land was stated to be greater in quantity than it turned out upon actual survey; or where it was sold for a greatly inadequate price; or where *264the auctioneer, intentionally or otherwise, misled the bidders as to the time when the sale would take place; or when, under any other circumstances, proposed bidders, without any negligence of their own, are prevented from attending the sale.” I see no reason why this course may not be properly pursued in the case. While the assignee did not intentionally mislead the purchaser, the notice of sale would naturally lead a person to suppose that the property was to be sold subject to a certain lien and to that lien only, and the complainants in this case were in all probability misled by it.
It seems to me that substantial justice will be done by granting the complainants a decree setting aside the sale, and subrogating them to the rights of Hardin, the purchaser under the execution sale. The proper course will then be for Hardesty and wife to petition the bankrupt court for their exemption. This question being determined, the assignee will kuow exactly what he is to sell, and the purchaser what he proposes to buy. I express no opinion in this case as to whether, in fact, Hardesty and wife are entitled to the homestead claimed by them.
A decree will be entered in accordance with this opinion.