Shapiro v. Goldman

148 N.E. 217, 253 Mass. 60, 1925 Mass. LEXIS 1196
Massachusetts Supreme Judicial Court·Decided June 1, 1925·Published·Cited by 7 cases

Opinion

Sanderson, J.

The plaintiff Shapiro is seeking to recover $600 of Charles Goldman, receiver in bankruptcy of the estate of Y. & M. Grocery & Provision Company, Inc., in an action for money had and received. The money was paid as a deposit when property of the estate was sold to him by the receiver at public auction for $2,500. Later on the same day the same property was put up for sale by the receiver and again sold to Shapiro, this time for $4,050. The receiver again put the property up for sale the next day and it was sold at public auction for $4,250 to another bidder who, by agreement with the auctioneer, was given until the following day to pay the amount of the required deposit, and thereupon Shapiro, who had taken no part in the third sale, demanded the return of the $600 deposited. This demand was refused. The purchaser at the third sale failed to make any payment on the property and it was again advertised and finally sold for $2,600, which the parties agreed was as good a price as the auctioneer could get. The action of Goldman is brought as trustee of the same estate to recover of Shapiro as damages the difference between the price bid by him at the second sale and $2,600, the price for which the property finally was sold, together with expenses connected with the last sale, and he alleges that he has applied the $600 to the loss and expenses. When the action of Shapiro was begun, Goldman was still receiver; [62] but when the action of Goldman was brought, he had become trustee.

The questions raised relate to rulings made and refusals to role as requested. It appears that the trial judge, upon the evidence, was not satisfied that the sale on which the actions proceed was ever confirmed by the referee in bankruptcy nor that Shapiro ever submitted to the jurisdiction of the bankruptcy court; and the judge ruled that Shapiro was released from any obligation under the sale and was entitled to a return of his deposit, and found for the plaintiff Shapiro in the sum of $720.30 in one case, and for the defendant Shapiro in the other. He also declined to give the rulings requested by Goldman.

The ruling that Shapiro was released from his obligations and entitled to a return of the deposit must be assumed to be a ruling upon the admitted facts and the findings made by the judge. It was not a ruling upon the whole evidence as in Clarke v. Massachusetts Title Ins. Co. 214 Mass. 31. Goldman contends that the judge should have ruled (1) that the State court had no jurisdiction because the $600 deposited was in the custody of the bankruptcy court which had exclusive jurisdiction; (2) that the receiver could not be sued in the State court because he was acting in the scope of his duties as receiver wholly in relation to a bankruptcy matter; (3) that neither the auctioneer nor the receiver could release a purchaser at an auction sale; (4) that a bidder to whom property has been sold cannot refuse to go on without consent of the bankruptcy court; and (5) that as matter of law Shapiro is not entitled to the return of his deposit and is hable to Goldman, trustee, for loss sustained in making the fourth and final sale of the property; and that the findings and rulings of the trial judge were wrong.

It was agreed that the sale for $2,500 to Shapiro on which $600 was deposited was made subject to confirmation by the bankruptcy court. The purchaser at such sale has a right to confirmation from the time when the property is struck off to him if the court finds no reason for disaffirming the sale. Graffam v. Burgess, 117 U. S. 180. G. L. c. 106, § 23 (2). Until the sale has been confirmed the person to [63] whom the property is struck off cannot be required by the court to complete his contract to buy. Stout v. Philippi Manuf. & Mercantile Co. 41 W. Va. 339. Mason v. Wolkowich, 150 Fed. Rep. 699. When the receiver put the property up for sale the third time, all purchasers at former sales were thereby released. Price v. Price, 1 L. J. Ch. (O. S.) 184. Head v. Moore, 96 Tenn. 358. The receiver had abandoned the second sale and cannot now set up its validity after he has sold the same property at auction to another buyer. Cowper v. Weaver’s Admr. 119 Ky. 401. The sale to the third buyer was a binding contract between the parties subject to confirmation, notwithstanding the fact that time was given him to pay the required deposit. That buyer might have been sued for the deposit. Thompson v. Kelly, 101 Mass. 291, 299. Shapiro did all that was required of him in connection with the sales to him. By demanding the return of his deposit after the property was again sold, he was not refusing without right to go on with the sale. Camden v. Mayhew, 129 U. S. 73. Stout v. Philippi Manuf. & Mercantile Co., supra. Campe v. Saucier, 68 Miss. 278. Even in the case of an unjustifiable refusal on the part of the buyer to complete his contract he cannot be held hable in damages unless the resale is by order of court on the purchaser’s account. Camden v. Mayhew, supra. In the case to be determined there was never a confirmation of the sale to Shapiro and no order of court that it be sold on his account when it was put up for sale the third time. Shapiro might have insisted on such rights as he had as a purchaser, but after the third sale he could waive those rights and recover his money.

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Shapiro v. Goldman, 148 N.E. 217, 253 Mass. 60, 1925 Mass. LEXIS 1196 (Mass. 1925).

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