Federal Deposit Ins. Corp. v. Ivey-Matherly Const. Co.

• Decision Date: 18 November 1977
• Docket Number: Nos. 1,3,2,No. 54234,IVEY-MATHERLY,54234,s. 1
• Citation: Federal Deposit Ins. Corp. v. Ivey-Matherly Const. Co., 241 S.E.2d 264, 144 Ga.App. 313 (Ga. App. 1977)
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION et al. v.CONSTRUCTION COMPANY et al
• Court: Georgia Court of Appeals

Page 264

241 S.E.2d 264

144 Ga.App. 313

FEDERAL DEPOSIT INSURANCE CORPORATION et al. v.IVEY-MATHERLY CONSTRUCTION COMPANY et al.

No. 54234.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Nov. 18, 1977.

Rehearing Denied Dec. 9, 1977.

Cofer, Beauchamp & Hawes, James H. Rollins, Atlanta, for appellants.

Alex McLennan, Noel H. Benedict, Atlanta, for appellees.

QUILLIAN, Presiding Judge.

This appeal involves the trial judge's refusal to confirm a foreclosure sale under Code Ann. §§ 67-1503 through 67-1506(Ga.L.1935p. 381).The appellant makes the following enumerations of error: (1)the trial court erred in denying appellants' application for confirmation where there was no evidence of gross inadequacy of the foreclosure price and no evidence of fraud, mistake, misapprehension, surprise or other circumstances which would have contributed to any inadequacy of price, (2)the trial court erred in denying appellants' motion to modify the judgment to authorize a resale of the property where the evidence shows that, if appellants failed to sell the property at its fair market value, such failure was unintentional and contrary to appellants' purpose in having the property appraised prior to the foreclosure sale.

The property in question sold for $682,000.An expert witness for the appellant testified that amount was its true market value, while the appellee's expert witness found the property to be worth $830,000.The trial judge determined the sole question to be whether the property brought its true market value as required by Code Ann. § 67-1504.He found: "While the expert witnesses were in substantial accord as to the true market value of the improved portion of the subject property, the evidence was in sharp conflict as to the true market value of the remaining unimproved portion of the subject property.The Court, after giving careful consideration to the evidence, finds that the evidence produced by defendants is more creditable and reasonable than the evidence produced on behalf of plaintiffs.The Court finds that the entire tract of subject property on July 6, 1976, had a true market value substantially in excess of $682,000."Held:

1.Code§ 67-1504 provides: "The court shall require evidence to show the true market value of the property sold under such powers, and shall not confirm the sale unless he is satisfied the property so sold brought its true market value on such foreclosure sale."Our courts have applied this clearly enunciated principle in a host of cases.Norwood, etc., Co. v. First Fed. S. & L. Assn., 99 Ga.App. 692, 696(5), 109 S.E.2d 844;Davie v. Sheffield, 123 Ga.App. 228, 180 S.E.2d 263;Thompson v. Maslia, 127 Ga.App. 758, 764, 195 S.E.2d 238;Scroggins v. Harper, 138 Ga.App. 783(1), 227 S.E.2d 513;Jonesboro, etc., Assn. v. Donnelly, 141 Ga.App. 780(4), 234 S.E.2d 349;Hinson v. First Nat. Bank, 221 Ga. 408, 144 S.E.2d 765.

Nevertheless, in Wachovia Mortgage Co. v. Moore, 138 Ga.App. 101, 225 S.E.2d 460, the majority of this court reversed the trial judge's confirmation of a sale and applied the rule set out by Giordano v. Stubbs, 228 Ga. 75, 79(3), 184 S.E.2d 165, 168: "Inadequacy of price paid upon the sale of property under power will not of itself and standing alone be sufficient reason for setting aside the sale.It is only when the price realized is grossly inadequate and the sale is accompanied by either fraud, mistake, misapprehension, surprise or other circumstances which might authorize a finding that such circumstances contributed to bringing about the inadequacy of price that such a sale may be set aside by a court of equity."Giordano was an equity case involving the setting aside of a foreclosure sale, not the confirmation (or failure to confirm) of a foreclosure under Code Ann. § 67-1503.The distinction between a confirmation proceeding and an equitable action is emphasized in Keever v. General Electric Credit Corp. of Ga., 141 Ga.App. 864, 865, 234 S.E.2d 696.Thus, we fail to see why Giordano could be cited in Wachovia as support for the proposition therein advanced.

The statute requires that the trial judge make a determination as to whether the sale brought the property's true market value (Code Ann. § 67-1504;Ga.L.1935, p. 381), not whether the price was grossly inadequate.SeeScroggins v. Harper, 138 Ga.App. 783, 227 S.E.2d 513, supra;Hamilton Mortgage Corp. v. Bowles, 142 Ga.App. 882, 883(3), 237 S.E.2d 198.

In construing this statute, specifically Code Ann. § 67-1505(Ga.L.1935, p. 381), this court has held that mere inadequacy of price is sufficient reason for denying confirmation and ordering a resale of the property.Davie v. Sheffield, 123 Ga.App. 228, 180 S.E.2d 263;Adams v. Gwinnett Commercial Bank, 140 Ga.App. 233, 234, 230 S.E.2d 324, 326.In the Adams case, where the trial judge found the plaintiff failed to prove by a preponderance of the evidence that the property brought its fair market value on the date of sale, Chief Judge Bell speaking for the majority of this Court stated: "Where there is a 'failure to sell for its true market value, the court may order a resale.' "Implicit in the Court's holding is the proposition that this self same failure to sell for its true market value likewise justifies the trial court's declining to confirm the sale (although under Giordano v. Stubbs, 228 Ga. 75, 184 S.E.2d 165, supra, andGunter v. Tucker Federal Savings & Loan Assn., 237 Ga. 806, 229 S.E.2d 662, it would not alone sustain a subsequent equitable action to set aside the sale).

While an appellate court will affirm a trial court's determination made under Code§ 67-1504 where there is no evidentiary basis of a violation of those maxims outlined in Giordano, supra, or that the plaintiff"chilled" the sale (seeDarby v. Federal Deposit Ins. Corp., 141 Ga.App. 78, 232 S.E.2d 615;Clairmont Development Co. v. Trust Co. Bank, 141 Ga.App. 180, 233 S.E.2d 37), it does not follow that the absence of such facts will require a reversal.

Wachovia Mortgage Co. v. Moore, 138 Ga.App. 101, 225 S.E.2d 460, supra, holding to the effect that there must be a showing of gross inadequacy of price, accompanied by fraud, mistake, etc., to justify a refusal to confirm is in error and is overruled.

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