Dean v. Clapp, 43590.

• Decision Date: 19 June 1936
• Docket Number: No. 43590.,43590.
• Citation: 268 N.W. 56,221 Iowa 1270
• Parties: DEAN v. CLAPP et al.
• Court: Iowa Supreme Court

221 Iowa 1270

268 N.W. 56

DEAN

v.CLAPP et al.

No. 43590.

Supreme Court of Iowa.

June 19, 1936.

Appeal from District Court, Mills County; John P. Tinley, Judge.

Appellant appeals from an order denying objections to the approval of sale and approving sale of certain assets by the receiver.

Appeal dismissed.

Cook & Cook, of Glenwood, for appellant.

C. T. Genung, of Glenwood, and D. E. Whitfield, of Malvern, for appellees.

HAMILTON, Justice.

A brief summary of the facts out of which this controversy arose will enable us to better understand the legal question involved. Among the assets which came into the hands of M. E. Clapp, receiver of the Mills County National Bank of Glenwood, Glenwood, Iowa, was a note in the principal sum of $2,151.48, bearing date of May 10, 1932, and signed by John W. Johnson (now deceased) and Verna R. Johnson, which note was secured by a second mortgage upon 200 acres of real estate in Mills county, Iowa, which was junior to a first mortgage of approximately $21,000. The estate of John W. Johnson was insolvent and consisted of only the real estate covered by said first and second mortgages, and a small amount of exempt personal property. There were other judgments junior to the first and second mortgages of approximately $10,000. The firm of Genung & Genung were attorneys for Mr. & Mrs. Johnson and continued to represent Mrs. Johnson after Mr. Johnson's death. The matter of a compromise settlement of the Johnson item of indebtedness was agreed upon between the receiver and the attorneys for Mrs. Johnson, whereby this second mortgage note was to be settled for the sum of $500 and an assignment thereof made to N. S. Genung for Mrs. Johnson. This settlement was submitted to the comptroller and was approved by him. The sum of $100 was paid down and the balance was to be paid when the note and mortgage were duly assigned and delivered. Before the matter was finally approved in open court, the receiver requested that the matter be heard at a public hearing upon notice. Accordingly, the court set the matter down for hearing and ordered notice given by publication in a newspaper, the order reciting “that notice of said hearing be given to all creditors of the Mills County National Bank of Glenwood, Iowa, and to all persons interested therein.” The day before the hearing, one, L. C. Dean, appellant herein, filed what is denominated “objections to application to sell asset No. 223, John W. and Verna R. Johnson.” He sets up in these objections that the offer of $500 was inadequate, and that he as objector had offered more for the purchase of said note and mortgage than the $500 offer. It developed at the hearing that his offer was $600. It appears that he had attempted to purchase the farm from Mrs. Johnson. Being unsuccessful in this, he purchased of the Metropolitan Life Insurance Company the first mortgage, paying therefor $19,000. He said he thought he would try to settle these mortgages and judgments and buy the farm if he could make a deal. Mr. Dean is a banker living in Glenwood. He was not a creditor and was in no way interested in the trust of the Mills County National Bank. There was no issue raised on his objections by way of resistance or motion to strike. No evidence was introduced, except by appellant. The attorneys for Mrs. Johnson appeared and cross-examined the witnesses. The receiver appeared by his attorney, D. E. Whitfield, and at the conclusion of the hearing the court denied said objections and approved the offer of N. S. Genung and ordered and adjudged that the receiver be empowered and authorized to execute and deliver an assignment of said promissory note and mortgage to said N. S. Genung on payment of the sum of $500 in cash. The notice of appeal recites that the appeal is from “the order approving the application” to sell said asset.

N. S. Genung has filed a motion to dismiss this appeal, upon the grounds that L. C. Dean has no interest in the result of said appeal and is not such an interested party in said matter as to be affected by the determination thereof, that he has no direct, immediate, or pecuniary interest in the subject-matter of the litigation and the order appealed from does not affect a substantial right of his, and that he has no such interest in the subject-matter in which said order appealed from was made as to be aggrieved or prejudiced thereby.

The question with which we are confronted is, May an entire stranger to a cause of action or proceeding appeal from an order approving sale of an item of personal property belonging to the trust, his only relation to the matter being that he desires to purchase and is willing and ready and able to pay and offers to pay more? Was he a party to the proceeding before the court, or does he have an interest in the subject-matter of the litigation such as to authorize him to appeal from the order of the court approving the sale? We think the matter has never been squarely before this court. At least our attention has not been called to any case involving the identical question. In the case of Van Der Burg v. Bailey, 207 Iowa, 797, 223 N.W. 515, 516, we said:

“The right of appeal is not an inherent or constitutional right. The Legislature may give or take it away at its pleasure. In other words, the permission to appeal is a gratuity, and the Legislature has the right to say upon what terms and conditions it will grant this right.”

Appellant frankly states in his testimony: “I am not a creditor or interested in any way in the trust of the Mills County National Bank.” Therefore, his only interest in this litigation was that of a mere speculator, who, without associating with himself any one of the creditors or other parties interested in said trust, as an entire stranger to the proceeding, files an application resisting the approval of the sale of the item of property in question. His interests were no more than those of any other person who might be interested in the purchase of such item. He had no standing in a representative capacity by which he was seeking to protect the interests of creditors of the trust. He cites no statutory authority, and indeed there is none, granting to him any such right. The real controversy here centers about the widow, who has a very vital interest in this matter, who is seeking to save her farm by compromise settlement of this debt, and the appellant, who is seeking to obtain a favorable position as the owner and holder of the first mortgage by which he might deprive her of the only hope she could possibly have of retaining the farm, the meager equity in which, with a few household goods, constitutes her entire earthly possessions. With this situation before us, we are called upon to view the cold legal proposition and ascertain whether or not appellant's right to maintain and prosecute this appeal is “nominated in the bond.” Appellant has furnished us with no authority from this or any other jurisdiction to sustain his right to appeal. We have therefore been compelled to make our own independentinvestigation, and we have not succeeded in finding a single precedent directly in point.

The nearest approach to the question is found in cases where the property has been struck off or sold to the successful bidder, and, on objections to the approval of the sale, or where the matter has proceeded to the point where the sale has been approved and the court on application or objection has set aside his order and ordered a resale. In such cases it has been held in a few jurisdictions-and our own court has recognized the same principle in a few cases-that such a bidder becomes a party of record to the proceeding and would therefore have the same right as any other interested party to maintain an appeal from such an order. This is based upon the reasoning that when the bid is once accepted, and especially after the sale has been once approved by the court, it becomes a binding contract, enforceable against the bidder. Penn Mutual Life Ins. Co. v. Creighton Theatre Bldg. Co., 51 Neb. 659, 71 N.W. 279. We have held that until the bid is accepted and approved it remains nothing more than an offer. The bidder has parted with nothing. He has subjected himself to no liability, nor has he in any way been injured or aggrieved and can in no sense be held to be a party of record to the proceeding. As said in Harney v. Crowley, 184 Iowa, 1101, 169 N.W. 370, 371:

“The plaintiff as bidder at the referee's sale had no legal standing to demand an approval. His bid was an offer and nothing more, and bound no party in interest until it had obtained the approval of the court.”

[1] Appellant argues that because the notice prescribed by the court contained the statement, “and to all persons interested therein,” that the court had in mind bidders or prospective purchasers, and because the notice was thus addressed, that anyone and every one who might be interested as a prospective bidder was thereby made a party to the proceeding. “Persons interested therein,” as used in the court's order and in the notice, while in a broad general sense might be construed to...