Ballentyne v. William Smith
| Citation | 205 U.S. 285,27 S.Ct. 527,51 L.Ed. 803 |
| Decision Date | 08 April 1907 |
| Docket Number | No. 216,216 |
| Parties | C. G. BALLENTYNE and Honolulu Rapid Transit & Land Company, Appts., v. WILLIAM O. SMITH, Trustee; The Pacific Heights Electric Railway Company, Limited, and C. S. Desky |
| Court | United States Supreme Court |
This is an appeal from a judgment of the supreme court of the territory of Hawaii (17 Haw. 96), affirming an order of the third judge of the first circuit court in the territory of Hawaii, which refused to confirm a sale of property made by a commissioner under order of court in a foreclosure suit brought by William O. Smith, as trustee, against the Pacific Heights Electric Railway Company, Limited, a Hawaiian corporation, and directed that the property be again offered for sale. The suit was brought to foreclose a trust deed of $50,000 executed by the railway company to Smith, as trustee, on April 1, 1902, and purporting to convey an electric railway 2 1/2 miles in length and running up to Pacific Heights, with its equipment of every kind, and also all land and other property conveyed to it by deed from one Charles S. Desky, dated January 25, 1902.
The sale was made on February 4, 1905, for the sum of $1,100. It was in bulk of the entire property covered by the mortgage, except a cable and condenser, which were of comparatively little value, and which, for reasons not at all affecting the merits of this controversy, were not sold with the balance of the property. The commissioner who made the sale reported that the amount realized was disproportionate to the value of the property sold, and recommended that it should not be confirmed, but that such further order should be made as to the court should seem meet in the premises. On the hearing of a motion to confirm the sale, and objections thereto, the trial court found that the evidence was overwhelming that the actual value of the property was at least seven times the amount at which the property was struck off, that being the highest and best bid therefor.
Messrs. David L. Withington and William R. Castle for appellants.
[Argument of Counsel from pages 286-288 intentionally omitted] Messrs. Francis M. Hatch, William O. Smith, A. Lewis, Jr., and L. J. Warren for appellees.
Statement by Mr. Justice Brewer:
The question presented is whether a court of equity may, prior to any order of confirmation, set aside a foreclosure sale of mortgaged property upon the single ground of inadequacy in price; and further, whether, if it has that power, the inadequacy here shown is so gross as to justify such action. It does not appear that there was any fraudulent conduct on the part of the purchaser or any combination to restrict bidding. The sale was duly advertised. It was, so far as disclosed, open and public, and the bid reported was the highest. Nothing in time or place or lack of attendance of buyers is shown. Many of the considerations, therefore, which have influenced courts of equity to set aside judicial sales are not to be found in the present case. Indeed, the only substantial objection is that the amount of the bid is largely below the value of the property. Something may be said on each side of the question; on the one, that a court of equity owes a duty to the creditors seeking its assistance in subjecting property to the payment of debts, to see that the property brings something like its true value in order that, to the extent of that value, the debts secured upon the property may be paid; that it owes them something more than to merely take care that the forms of law are complied with, and that the purchaser is guilty of no fraudulent act; on the other, that it is the right of one bidding in good faith at an open and public sale to have the property for which he bids struck off to him if he be the highest and best bidder; that if he be free from wrong he should not be deprived of the benefit of his bid simply because others do not bid, or because parties interested have done nothing to secure the attendance of...
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