Benton v. Shreeve

• Decision Date: 24 May 1853
• Citation: 4 Ind. 66
• Parties: Benton v. Shreeve and Others
• Court: Indiana Supreme Court

4 Ind. 66

Benton v. Shreeve and Others

Supreme Court of Indiana

May 24, 1853

ERROR to the Wayne Circuit Court.

The decree is reversed--the parties, plaintiff and defendants, to pay their own costs. Cause remanded.

C. H Test, for the plaintiff.

J Perry, for the defendants.

OPINION

Stuart J.

This was a bill in chancery by the heirs, &c., of Caleb Shreeve, deceased, against Benton and others. Benton answered. The other defendants made default. The cause was set down for hearing on the bill, answer of Benton, depositions, &c., and there was a decree in favor of the complainants. Benton prosecutes this writ of error.

It appears that on the 27th of May, 1837, lot No. 60, in Richmond, owned by one Forsha, was mortgaged to Joseph Derickson, to secure the payment of 200 dollars, and interest at 10 per cent. On the 24th of May, 1838, Forsha sold and conveyed the lot to Olds. In November following Olds mortgaged the lot to one Green, to secure the payment of 200 dollars. And in December, 1838, Olds executed a second mortgage on the same lot to Shreeve, to secure another 200 dollars, with 10 per cent, interest. Derickson assigned his mortgage to Sarah Derickson, and Keefer became the remote assignee of Green's mortgage.

Both these latter mortgages were afterwards foreclosed. The Derickson decree was against Forsha and Olds, as defendants; the Keefer decree against Olds alone. Shreeve, the junior incumbrancer, was not made a party to either.

Executions were issued on the several decrees, and placed in the hands of the sheriff about the same time, though there is some confusion of dates. On the 30th of January, 1841, the lot was sold on the Derickson decree to Caleb Shreeve for 560 dollars. Shreeve paid 232 dollars and 60 cents on the Derickson execution, and failed to complete the further payment embraced in his bid. No deed was ever made or tendered by the sheriff, nor any further steps taken by him to compel Shreeve to pay. The sheriff returned the execution indorsed according to the facts. The Derickson decree was entered satisfied of record, with an express reference to the return of the sheriff as to the mode of payment.

On the same day, January 30, 1841, the sheriff sold the same lot on the Keefer decree to Benton, for 25 dollars. Deed by the sheriff to Benton accordingly.

Shortly after, Caleb Shreeve died, leaving the complainants below his heirs, &c. Olds is also dead, leaving the defendants of that name his heirs, &c. Keefer, the assignee of the Green mortgage, was a party defendant. Thus all the parties having an interest in the subject matter were before the court.

The answer of Benton puts nothing in issue material to the decision of this cause.

The bill contains four alternative prayers. One is for the specific performance of the sheriff's sale on the Derickson decree. That such a sale may be enforced in equity, is not without authority; but in this state it has been doubted. 8 Blackf. 105. Even if such sale could be enforced, the heirs of Shreeve are not in a position to seek it successfully. Neither by their ancestor nor by them was the purchase completed. To entitle a purchaser to such relief, he must have paid the money, or offered to pay it. He must follow up the tender by bringing the money into Court. Nor will specific performance be decreed where there has been unreasonable delay on the part of the purchaser. 4 Scam. 202.--4 J. C. R. 559.--4 Rand. 478.

Another of the alternative prayers was, that the Shreeve heirs be subrogated to the rights and remedies of Sarah Derickson. That was, in substance, the decree; and it is correct, as far as it goes. Shreeve had paid off that decree with the obvious purpose of protecting his own junior mortgage. He was not a party to the foreclosure, and, perhaps, he was still entitled to redeem. But it is sufficient that he had an interest to protect, and it is but fair to presume, what the whole transaction tends to show, that he acted with reference to the protection of that interest. He was, therefore, entitled to be subrogated. 2 Story 480.--7 Paige 248.--Leading E. C. 86-7.--Peet v. Beers, at the present term. ^[1] The case of Eddy v. Traver, et al., is a strong illustration of the leaning of the American courts in favor of the doctrine of subrogation. 6 Paige 521. ^[2]

Another of the alternative prayers of the bill is directed against the validity of Benton's purchase. Benton had no lien on the lot, no rights to protect. Nor is he a purchaser without notice; for he had constructive notice of the several mortgages. He had also constructive notice of all the facts returned by the sheriff as to the sale on the Derickson decree, and the payment of part of the purchase-money by Shreeve. Indeed, his answer, connected with other circumstances, goes far to establish actual knowledge. At the time Benton purchased for 25 dollars, most of the witnesses concur that the lot was worth 500 to 600 dollars; at the time of taking the depositions, 1,300 dollars; and that the rents and profits enjoyed by Benton were more than equal to the improvements he had made.

It thus appears that the price paid was about a twenty-fourth part of the value of the lot at the date of the purchase. On this ground, counsel contend that the sale to Benton was fraudulent and void, and rely on 1 Blackf. 410.--6 J. C. R. 411. But, on close examination, it will be seen that neither of these cases is in point. The ground on which those sales were set aside was, that the sheriff put up and sold at one time a large quantity of land, susceptible of division, and which should have been offered in suitable parcels. The amount due on the execution, and the price the land sold for, are thrown in by the Court in giving the history of the case, merely as supplemental. Here there is no pretence that the property could have been advantageously divided, but only that the price was inadequate.

As to what is inadequacy of price, the books are not agreed. Some authorities place the standard at one point, others at another. And in general, courts pay great regard to the circumstances and the equities involved in each case. Under the civil law, contracts for the sale of land were rescinded if the price was below half the value. 1 Story Eq. sec. 244, et infra. So it was in France, before the revolution. Kent, chancellor, in 2 J. C. R. 1. Perhaps a stranger, speaking of our appraisement laws, would refer them to the same class. At an early day, our statute placed the standard at one-half; later, at two-thirds, &c. True, at the date of the Keefer mortgage, there was no appraisement law in force. Yet, in the consideration of doubtful cases, under judicial sales, the repeatedly expressed opinion of the legislature, as to what the standard should be in such sales, is not without its uses to our own courts in aiding them to come to correct conclusions as to adequacy or inadequacy of price.

In relation to different contracts, courts recognize different standards. Thus Chancery will often refuse to enforce specific performance of a contract, which, if executed, it would also refuse to set aside, leaving the parties to their legal remedies. 2 Story's Eq. 5.--11 Peters 229. --3 Cow. R. 445.--Sax. 320--2 Blackf. 431. In Seymour v. Delancy, Kent, Chancellor, refused specific performance, adding, that the inadequacy of price was so great (one-half) as to give to the contract the character of hardship, unreasonableness and inequality. 6 J. C. R. 222.

In regard to the rescission of contracts on account of price, there is a general concurrence of authority in this rule, that mere inadequacy of price is not sufficient ground to set aside a sale, unless the inadequacy be so gross as to be of itself evidence of fraud. Osgood v. Franklin, 2 J. C. R. 1--affirmed by the Court of Errors on appeal. 14 J. R. 527. Thus, also, land estimated by the witnesses at from 3,000 dollars to 3,500 dollars, was sold for 2,900 dollars; held, that the inadequacy was not so gross as to indicate fraud. 1 Hoff. C. R. 37. So where land valued at 1,800 dollars, was sold at sheriff's sale for 400 dollars, it was held by this Court that the consideration could not be considered grossly inadequate. 2 Ind. 442. On the other hand, where a trustee sold and conveyed the trust lands worth 500 dollars, for 50 dollars, (one-tenth the value) the sale was set aside as fraudulent.

In view of these authorities, it is easy to conclude that the price paid by Benton was grossly inadequate.

But the authorities indicate a further distinction between private and public sales.

The rule that a sale will be set aside for gross inadequacy of price applies only to private sales, and not to sales at public auction. 1 Freem. 441. So in Livingston v. Byrne, the Court of Errors held unanimously that inadequacy of price was not sufficient to invalidate a judicial sale, unless there be additional circumstances to justify it. And that decision is placed on the authority of Lord Elden, in White v. Damon, 7 Ves. Jr. 34. See, also, accordingly, 3 Hay.--1 Spears's Ch. 351.--2 Green's Ch. 460.

The rule to be deduced from these authorities, as applicable to this case, is, that gross inadequacy of price is not sufficient, of itself, to set aside a judicial sale like that to Benton; but that such inadequacy may be a controlling element, in connection with...