Shipley v. Shamwell

41 App. D.C. 267, 1914 U.S. App. LEXIS 2173

Opinion

Mr. Justice Bobb

delivered the opinion of the Court:

Many States have, by express statutory enactment, fixed a period within which a judgment debtor may redeem property sold at execution sale. Other States also permit creditors to redeem. In some jurisdictions the statutes require that property sold on execution sale shall bring a designated proportion of its appraised value. Several jurisdictions require a return to be made by the officer conducting the sale, and the'sale must be confirmed by the court, before the rights of the' execution debtor are certainly devested. Deputron v. Young, 134 U. S. 241, 258, 33 L. ed. 923, 931, 10 Sup. Ct. Rep. 539. In this District, unfortunately, there is no statute allowing redemption, nor is the court required to confirm an execution sale. The failure of the legislature to provide any remedy for a situation where gross injustice is liable to result requires the court carefully to scrutinize its powers, to the end that justice may result.

There is a difference between an attempt by a court to revise one of its judgments, after the expiration of the term in which that judgment was entered, and the assertion by the court of power to set aside an execution sale. Especially is this true where, as here, the sale had not been confirmed by judicial order. As the sale may be made long after the term at which the judgment is entered, so may the court inquire into that sale, without reference to the particular term during which it has been made. The general rule undoubtedly is that, a proceeding to set aside such a sale being equitable in its nature, all that is required is that it shall be instituted promptly, before the rights of innocent third parties have intervened. Thus in Starr v. United States, 8 App. D. C. 552, three months after an execution sale it was discovered that the interest of the judgment debtor in the property levied on was not subject'to levy. Motion was' made to set aside the sale, although, the return' of the marshal set forth that various judgments had been satisfied .in full. The court said: “Now, where the facts are plain and simple and uncontroverted, and the relief sought can be had by the order of the court upon motion, it is not apparent why a party should be driven to the trouble and expense and delay of a suit of equity, when equity cannot develop anything more than is manifest in the record upon the motion. In most cases of this kind the power to grant relief is concurrent in the courts of common law and the courts of equity.” It appearing that the rights of third parties were not affected, the court set aside the sale, notwithstanding that a deed had been executed by the marshal. Hart v. Hines, 10 App. D. C. 366, involved a motion to vacate an execution sale. The amount realized for- the property at the sale was $145, while its real value was from $1,0Q0 to $1,200. The judgment debtor there had “for years manifested no purpose to satisfy the just demand against him.” The only irregularity noticed by the court, other than the inadequacy of price, was the fact that three parcels were sold in bulk. The court obsei-ved that “in a matter so largely appealing to the equitable discretion of the trial court, and under such circumstances as those here apparent, it should he made very clear to an appellate tribunal that the order appealed from is erroneous, to induce a reversal of such order. * * * That there was gross inadequacy of price in this case, sufficient to shock the conscience, is too plain to need any argument to show it.” The court, after noting the second circumstance deserving of consideration, namely, the failure to offer the lots separately, affirmed the order. In that case a deed had been executed, as in this. Discussing that feature of the case,'the court said: “But it is not in the power of a purchaser at an execution sale, by hastening to take his deed from the sheriff or marshal to defeat the right which we have seen to be inherent in the court, to control its process, especially when that purchaser is the plaintiff in the judgment, as he virtually is in the- present case. * * * It is only required of him (the judgment debtor) that he should act promptly, before any rights of innocent parties have intervened.” In Anniston Pipe Works v. Williams, 106 Ala. 324, 333, 54 Am. St. Rep. 51, 18 So. 111, the court said: “As to the time within which a motion to set, aside a sale of land under execution must be made, we have repeatedly held that no inflexible rule has been or can be announced. There should always be promptness in making such a motion, the reasonableness of which is to be determined by the particular circumstances of each case.” See also 17 Gyc. 1281.

In the present case it is undeniable that the appellee moved promptly, and it is equally clear that the lights of third parties have not intervened; for, upon the record before us, we must assume that the execution creditor was the real purchaser at the sale. Indeed, appellee’s motion was filed immediately after the sale had been brought to the court’s notice by appellant’s petition for possession. We rule, therefore, that the motion ■was seasonably made, and that the court was possessed of jurisdiction to entertain it.

It is true that mere inadequacy of price has seldom been considered sufficient to justify the setting aside of an execution sale. The Supreme Court of the United States, however, has uever gone so far as to say that, under no circumstances, would such a reason warrant a court in exercising its discretion in favor of a judgment debtor. An intimation to the contrary is found in Graffam v. Burgess, 117 U. S. 180, 192, 29 L. ed. 839, 843, 6 Sup. Ct. Rep. 686: “From, the cases here cited we may draw the general conclusion that, if the inadequacy of price is so gross as to shock the conscience, or if, in addition to gross inadequacy, the purchaser has been guilty of any unfairness, or has taken any undue advantage, or if the owner of the property, or party interested in it, has been for any other reason misled or surprised, then the sale will be regarded as fraudulent and void, or the party injured will be permitted to redeem the property sold. Great inadequacy requires only slight circumstances of unfairness in the conduct of the party benefited by the sale to raise the presumption of fraud.” In Hart v. Hines, 10 App. D. C. 376, the court observed that, while Graffam v. Burgess was a proceeding in equity, its doctrine is entirely applicable “where the court acts in the exercise of i.ts equitable discretion and its control over its own process, which it should never permit to be used unnecessarily and wantonly to the injury of anyone.” In Phillips v. Wilson, 164 Pa. 350, 30 Atl. 264, there was involved an order setting aside an execution sale, and it was ruled that a court does not abuse its judicial discretion in setting aside such a sale, where the application to vacate the sale is accompanied by an offer to bid more, qnd it also appears that counsel- for a mortgage creditor had neglected to bid, under a mistaken impression that the mortgage would not be discharged. In Davis v. McCann, 143 Mo. 172, 44 S. W. 795, where an execution sale had been set aside, the court said: “Inadequacy of price alone will not justify the setting aside of a sheriff’s sale of real estate under execution, unless the price is so inadequate as to shock the moral sense and outrage the conscience. Then courts will interfere to promote the ends of justice.” And in Collins v. Smith, 75 Wis. 392, 44 N. W. 510, the court ruled that the discretion to set aside a sale on the ground of' inadequacy of price “should be exercised or withheld as justice to both parties may require, after due consideration of all the circumstances of the case.”

That there was gross inadequacy of price in the present case cannot be gainsaid. In Hart v. Hines, 10 App. D. C. 377, as previously noted, where the discrepancy between the price realized and the value of the property was not so great as here, the court ruled that the inadequacy of price was sufficient to shock the conscience. If, under any circumstances, therefore, a court would be justified in setting aside a sale merely because of inadequacy of price, we think it might be done in this case. After all, the real object of such a sale is to permit the execution creditor to make his judgment. It is not and never-was intended that, through the instrumentality of such a sale, avarice should be encouraged and rewarded. We have seen that the supreme court of Pennsylvania refused to interfere with the exercise of discretion by the trial court in setting aside such a sale where counsel for a mortgage creditor, under a mistaken impression as to the law, had failed to bid, and as a result the price realized was grossly inadequate. Here, the execution debtor failed to satisfy the judgment because he had been so advised by counsel. In the ciraunstances of this case, we think the court below was entitled to give some weight to this fact. But there is another circumstance, apparent on the face of the record, which the court was entitled to consider. Sec. 1085 of the Code [31 Stat. at L. 1359, chap. 854] requires that such property, when levied upon, “shall be appraised by two sworn appraisers, and sold at public auction for cash.” In the appraisal here, as previously noted, the value of the property is fixed at $300, notwithstanding that its assessed value was $1,240, and that, according to affidavits which have not been met, its real value is at least $1,450. Inasmuch as this property was improved real estate, it is perfectly apparent, we think, that these appraisers misapprehended their duty, and appraised the lot minus its improvements. In the tax assessment list the value of the land is placed at $340, and the improvements $900. Two of appellee’s affiants fixed the value of the land at $250, and the third at $300, so that there is no escape from the conclusion that the appraisal was made under a misapprehension. This error is important because, of course, the purpose of sec. 1085 is to furnish some real basis upon which the marshal is to proceed, as he undoubtedly owes some duty to both the execution creditor and the execution debtor. Davis v. McCann, 143 Mo. 172, 178, 44 S. W. 795. In view of his responsibility to both parties in interest, it was his duty to state to prospective purchasers at the time of the sale the amount of the sworn appraisal. It well might have made a difference in the amount bid, had that appraisal been based upon all instead of a part of the property.

As ruled by this court in Hart v. Hines, supra, it is not in the power of a purchaser at an execution sale, by hastening his deed, to defeat the right of the court over its own process. And in Deputron v. Young, 134 U. S. 258, 33 L. ed. 931, 10 Sup. Ct. Rep. 539, the court ruled that when an order confirming a sale was vacated before there was any change in the relation of the parties, “the sheriff’s deed fell with it.”

Taking into consideration all the circumstances, we -think the court was fully justified in exercising its discretion to set aside the sale. The order is therefore affirmed, with costs.

Affirmed.