Reynolds v. Nye

1 Free. Ch. 462

• Court: Mississippi Chancery Courts
• Decided: July 1, 1844
• Status: Published

Opinion

The Chancellor.

This case was submitted, at the late sitting, upon motion to dissolve the injunction upon bill, answer and exhibits. The bill states, that on the 12th of May,. 1840, the complainant became the purchaser of lots No. 9 and 147, iü the city of Yazoo, at a'sale made by virtue of a deed of trust from one James R. Creecy to Charles E. Mount. That there was an old judgment in favor of Jordan <fc Smith against the said Creecy and the defendant Nye, upon which there was but a small balance due, and upon which said Nye fraudulently, and for the purpose of purchasing in said lots for a mere trifle, caused an execution to be issued and levied thereon, and at the sale became himself the purchaser for five dollars each. That the lots were worth at the time of the sale eight thousand dollars. That Nye, although one of the defendants in the judgment, took out the execution himself, and assumed the control thereof, without the assent of the plaintiffs thereto. That Nye has instituted an action of ejectment upon the title thus obtained, against which the bill prays for a perpetual injunction and a rescission of the sale, or such other relief as may be consistent therewith.

The defendant denies that he was guilty of any fraud, and says it is true that he sued out the execution as charged by the complainant, but that he was a mere surety to Creecy, the other defendant therein; and that his purpose, in part, was to indemnify himself against that liability. That it is also true that he purchased the lots at five dollars each, he being the only bidder. He accounts for this sacrifice of the lots by stating that the title was in a confused and embarrassed condition.

It is apparent from this statement of facts, that the motion to dissolve involves an examination of the principal merits of the case.' The first thing that suggested itself to my mind, upon looking into the case, was a doubt, whether the complainant’s relation to the property in question was such as entitled him to question the validity of the sale under which the defendant claims. A little reflection, however, and some examination of authorities, has removed all doubt on that score. The complainant derived title, under Creecy, before a sale under the judgment against him was made to the defendant; equity will therefore consider him, in respect to these lots, as standing in the place of Creecy, and entitled to all his remedies. Dust v. Conrod, 5 Munford 411.

I think it at least clear upon the facts of the case as they now stand, that the complainant would, on final hearing, be allowed to set aside the sale upon paying the .defendant the amount of his bid, and satisfying the remainder of the judgment under which the sale was made. This was the view of chancellor Kent under a case not very unlike the present. Howell v. Baker, 4 John. Ch. Rep. 117. It appears that the judgment was originally for eight hundred and seven dollars forty one cents, but at the time of the sale the execution stood credited with seven hundred and ninety-five dollars and seventy-five cents, thus leaving a very small balance due. The very fact that two lots estimated at from five to eight thousand dollars were levied on for so small a sum, was a gross abuse of power on the part of the sheriff, and was of itself sufficient to throw doubt and suspicion upon the transaction, and to deter those who were present at the sale from bidding. It is not to be supposed, at a fair sale of property worth eight thousand dollars, that it would only bring ten dollars, unless the minds of the by-standers had been in some way misled in respect to either the title, value or condition of the property. This was truly an inequality “so strong and manifest as to shock the conscience and confound the judgment of any man of common sense.”

It is true that inadequacy of price creates a mere presumption of fraud, and that that presumption does not, from that circumstance alone, attach to judicial or other sales made at auction; but it may, connected with other facts, be evidence of fraud even in such sales. The defendant states that he was desirous of purchasing the lots that he might have some indemnity in his hands against liabilities he had incurred for the principal defendant in the judgment. If he expected to purchase the property at a fair price, it is'difficult to see how it was to be made the subject of indemnity to him. He admits that the lots were levied on at his instance and by his direction. That levy was excessive .and oppressive, and as it was made at the instance of the defendant, who' purchased under it, I think that circumstance, connected with the gross inadequacy of the sum paid, render the validity of the sale extremely questionable, unless it is protected by having been made under an execution. I perceive no reason founded in considerations of public . policy which should prevent a court of equity from setting aside a sale made under execution where it is tainted with fraud or infected with other vices which render it inequitable that it should stand. It is of the utmost importance that such sales should be conducted with perfect fairness and with a view equally to the rights of the debtor and creditor.

In the case of Knightly v. Birch, 3 Camp. Rep. 520, it is said, where a sheriff finds that property which he exposes to sale is about to be sacrificed, he should return that it was not sold for the want of bidders, and wait for a venditioni exponas. The rule thus laid down is sustained by the plainest principles of justice. The duties of a sheriff do not require him to make a sacrifice of the debtor. Every consideration of justice requires that he should exercise a sound discretion, and deal with equal partiality between the debtor and creditor. It is true, that mere irregularities or misconduct in the sheriff would not, in general, affect the validity of the sale, unless the purchaser was advised of them, and in some way participated therein.

In this case, Nye himself directed the excessive levies under an execution which he had sued out, from a judgment to which he was himself a party defendant. This circumstance was of itself sufficient to throw a suspicion of unfairness over the whole transaction. It is essential to a pure administration of the law, that the time and mode of enforcing the collection of a judgment should be left exclusively to the discretion of him to whom it of right belongs. It is indispensable to the protection of the rights of the plaintiff in such case, that the course of the execution should be under his own control. Any other practice might lead to the greatest fraud upon the judgment creditor. It is true, the defendant says he had the sanction of the plaintiff’s attorney; but it may be doubted whether even an attorney has the power to place the judgment of his client under the control and at the mercy of the defendant in that judgment. But it is unnecessary that I should make any decision upon this point.

I am of opinion that all the circumstances of the case taken together, if unexplained, show such unfairness as should induce the court,-upon final hearing, to set aside the sale, upon the complainant paying the balance of the judgment under which it was obtained.

Letrthe motion to dissolve be overruled.