First Trust Co. of Lincoln v. Rathbone

• Decision Date: 19 February 1937
• Docket Number: 29876.
• Citation: 271 N.W. 428,132 Neb. 211
• Parties: FIRST TRUST CO. OF LINCOLN v. RATHBONE ET AL.
• Court: Nebraska Supreme Court

271 N.W. 428

132 Neb. 211

FIRST TRUST CO. OF LINCOLN v. RATHBONE ET AL.

No. 29876.

Supreme Court of Nebraska.

February 19, 1937

Syllabus by the Court.

1. Mere inadequacy of price will not preclude confirmation of a foreclosure sale unless it is such as to shock the conscience of the court or amount to evidence of fraud.

2. An order confirming a mortgage sale will not be set aside on appeal for inadequacy of price unless it is so gross as to show fraud, and unless the evidence shows that a resale would produce a better bid.

3. When it appears from the evidence that the amount of the mortgage lien on property under foreclosure exceeds its value, the moratory stay must be denied.

Appeal from District Court, Lancaster County; Shepherd, Judge.

Suit by the First Trust Company of Lincoln against Hazel V. Rathbone and Harvey Rathbone, impleaded with George Schwake and others. Judgment for plaintiff, and the first two named defendants appeal.

Affirmed.

Chambers & Holland and John H. Keriakedes, all of Lincoln for appellants.

T. F A. Williams, of Lincoln, for appellees.

Heard before GOSS. C. J., and EBERLY, DAY, PAINE, and CARTER, JJ., and ELDRED and CHASE, District Judges.

DAY Justice.

In this suit to foreclose a real estate mortgage, an order of sale was entered October 26, 1934, which fixed the mortgage lien at $17,351.40 and a tax lien in favor of another at $1,204.83. At a sale September 3, 1935, after a nine-months' stay, the plaintiff bid $13,950 for the property, subject to the tax lien. This is an appeal from the order confirming the sale and denying the defendants' application for a stay under the moratorium.

The appellants object to the confirmation of the sale for the reason that the bid was grossly inadequate. The rule is well established in this jurisdiction by numerous cases that mere inadequacy of price will not preclude confirmation of a foreclosure sale unless it is such as to shock the conscience of the court or amount to evidence of fraud. Lemere v. White, 122 Neb. 676, 241 N.W. 105; Keller v. Boehmer, 130 Neb. 763, 266 N.W. 577; Omaha Loan & Building Ass'n v. Clarke, 125 Neb. 497, 250 N.W. 748; Nelsen v. Doll, 124 Neb. 523, 247 N.W. 44.See, also, Suring State Bank v. Giese, 210 Wis. 489, 246 N.W. 556, 85 A.L.R. 1477.

A careful examination of the record does not reveal that the bid of the plaintiff was inadequate in this case. The evidence as to the value of the property at the time the court passed upon the motion to confirm the sale was in conflict. It consisted of the testimony of experts and interested parties. The witnesses for the plaintiff placed the value of the property between $10,000 and $12,000, while those for the defendants placed the value as high as $25,000. An analysis of the testimony shows that the difference of opinion was the result of the reasons given for arriving at the value. The reasons given by the witnesses for arriving at the value were the age and repair of the building, the rental value, and the location. These same features were considered by the witnesses for the defendant, but in addition they considered the possibility that at some future time the University of Nebraska might need the property and might pay much more than its present...