Fletcher v. McGill
| Decision Date | 08 March 1887 |
| Citation | 110 Ind. 395,10 N.E. 651 |
| Parties | Fletcher and another v. McGill. |
| Court | Indiana Supreme Court |
OPINION TEXT STARTS HERE
Appeal from superior court, Marion county.
Howk, J., dissenting; Elliott, C. J., not sitting in the cause.
Rand & Winters and J. S. Tarkington, for appellants. McDonald & Butler and Cropsey & Cooper, for appellee.
This was a suit by McGill against Fletcher and Churchman to set aside a sale and conveyance of real estate made to the latter by the sheriff of Marion county, upon an execution against the property of the former. Upon request, the court found the facts specially, and stated conclusions of law thereon. As there are no other questions except such as relate to the propriety of the conclusions of law stated by the court, reference to the pleadings is immaterial.
The material facts found by the court were, in substance, as follows: On the eighth day of November, 1876, McGill was the owner in fee-simple of an undivided one-fifth part of certain tracts and parcels of real estate in the city of Indianapolis. On that date the Chamber of Commerce of Indianapolis recovered a judgment against him in the Marion superior court for $655.42. The judgment authorized a sale of property without relief from valuation or appraisement laws, and drew interest at the rate of 10 per cent. per annum. In December, 1879, the general counsel or attorney of the Chamber of Commerce, without other authority than such as may be implied from the relation which he sustained to the corporation, ordered an alias execution upon the above-mentioned judgment, which was executed accordingly, and placed in the hands of the sheriff of Marion county. The sheriff levied upon, and on the twenty-fourth day of January, 1880, after due advertisement, sold, McGill's interest in all of the property described in the complaint. Fletcher and Churchman became the purchasers at such sale. There was included in the levy and sale two lots-lots 1 and 2 of square 91-which were not owned by McGill. At the time of the sale, the latter owned no other property besides that in controversy subject to execution, except an interest in the capital stock of the Chamber of Commerce. The value of this interest is not found. Fletcher and Churchman received a sheriff's deed for the property purchased by them on January 31, 1881. Prior to the sale, the attorney who acted for the Chamber of Commerce in ordering the execution, and the subsequent proceedings thereunder, went to the appellants, and solicited them to bid on the property, previously advertised, at the sale which was to ensue. They authorized him, in their behalf, to bid $911.50 for McGill's interest in square 90; $2 for his interest in lots 6, 7, 14, 15, 30, and 31; and $2 for his supposed interest in lots 1 and 2 in square 91. After the rents and profits and the fee-simple of the several tracts had been, so far as appears, regularly offered, the fee-simple of the land was offered in the order as above described, and bids were made by the attorney of the execution plaintiff in pursuance of the direction theretofore given by Fletcher and Churchman. The property was struck off to the latter at the bids so made.
At the time of the sale the fair cash value of the property owned by McGill, and sold, was as follows:
+------------------------------------------------------------+
¦Of the undivided one-fifth of square 90, ¦$5,000¦
+-----------------------------------------------------+------¦
¦Annual rental, ¦30 ¦
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¦Fair cash value of the undivided one-fifth of lot 6, ¦175 ¦
+-----------------------------------------------------+------¦
¦Fair cash value of the undivided one-fifth of lot 7, ¦175 ¦
+-----------------------------------------------------+------¦
¦Fair cash value of the undivided one-fifth of lot 14,¦480 ¦
+-----------------------------------------------------+------¦
¦Annual rental of undivided one-fifth of lot 14, ¦40 ¦
+-----------------------------------------------------+------¦
¦Fair cash value of the undivided one-fifth of lot 15,¦480 ¦
+-----------------------------------------------------+------¦
¦Annual rental undivided one-fifth of lot 15, ¦40 ¦
+-----------------------------------------------------+------¦
¦Fair cash value of the undivided one-fifth of lot 30,¦200 ¦
+-----------------------------------------------------+------¦
¦Fair cash value of the undivided one-fifth of lot 31,¦500 ¦
+-----------------------------------------------------+------¦
¦Annual rental undivided one-fifth of lot 31, ¦40 ¦
+-----------------------------------------------------+------¦
¦The total value of the whole being, ¦$7,160¦
+------------------------------------------------------------+
McGill had no actual notice of the sale until March, 1881, after the year for redemption had expired, and after the sheriff's deed had been executed. Upon learning of the sale he offered to redeem, and requested Fletcher and Churchman to inform him how much was due them. They refused, saying that they had bought the property on speculation. This suit was instituted September 27, 1881.
In respect to a feature of the case upon which an alleged estoppel against the appellee is predicated, the following facts were found: On November 4, 1874, McGill subscribed for 10 shares of the capital stock of the Chamber of Commerce. At the same time, and in consideration of such subscription, he executed his note to the corporation for $1,000. Subsequently he paid upon the note $500, and the balance due thereon was the amount for which the judgment above mentioned in favor of the Chamber of Commerce was taken. The Chamber of Commerce withheld the certificate of stock for which subscription had been made as a security for the payment of the sum subscribed. After the sale of the land, and after the offer to redeem, McGill, on April 14, 1881, made a written transfer of his stock to James M. Cropsey, to whom, at the appellee's request, the Chamber of Commerce issued a certificate for the stock. This certificate has not been returned, nor tendered back.
Upon the facts found the court stated, as its final conclusion, that the appellee was entitled to have the sheriff's sale and deed set aside, without prejudice to the right of Fletcher and Churchman to be subrogated to the rights of the Chamber of Commerce, and with the right to enforce the lien of the judgment against McGill's interest in the land sold.
The appellants contend that the conclusions of law stated by the court are not supported by the facts found, (1) because they argue that neither fraud nor irregularity in making the sale had been found, and hence the court was not authorized to set aside the sale for mere inadequacy of price, if the price was inadequate; (2) because the appellee, with knowledge of the sale, assigned and directed the delivery of the certificate of his stock, which had been withheld by the Chamber of Commerce as security, to James M. Cropsey. In this way, it is argued, he elected to affirm the sale, and is therefore estopped to assail its validity. On the other hand, it is earnestly contended that the sale was for a price so grossly inadequate in itself as to give rise to a presumption of fraud, and that coupled with the inadequacy of price is the fact that there was included in the levy, advertisement, and sale two lots which were not owned by the appellee, and the further fact that the circumstances attending the sale, and the arrangements of the bids, together with the relation which the attorney for the Chamber of Commerce occupied in respect to the purchasers at the sheriff's sale, were such as to cast doubt upon the fairness of the sale.
That the price for which the property was sold was grossly inadequate admits of no discussion. Separate parcels of property, the cash value of which is found to aggregate over $7,000, have all been swept away to pay a debt of little more than $900. It is somewhat difficult to conceive how, at a fair open sale, in a populous city, the sacrifice of so much property should have been necessary in order to pay so small a debt. It is difficult, too, to determine how it could have been thought necessary or proper that everything which the debtor owned, and was supposed to own, should have been exposed to sale, and actually sold, when a single separate parcel of the property was abundant to pay the debt five times over. Moreover, that all of the debtor's property subject to execution should have been swept away at such disastrous prices without actual notice to him, until after the year for redemption had expired, adds to the general disfavor in which the transaction stands in a court of conscience. While it is true a purchaser at a sheriff's sale is only held to take notice that the forms of law have been observed in making the sale, when an injury so overwhelming is to result, such purchaser, when the sale is seasonably questioned, nevertheless must himself exclude all traces of design on his part, or of which he was cognizant, to produce the ruinous consequences which have followed to another, who remained in actual ignorance until after the time for redemption had expired. The use of the mere forms of law to acquire the property of another, with the knowledge that the owner is unsuspecting of injury from want of actual notice, is itself a legal fraud. Sometimes the grossest frauds are perpetrated according to the strictest forms of law. Now, while it appears from the facts found in this case that the owner of the property had no knowledge of the sale until after the year for redemption expired, it does not appear whether or not the purchasers were aware of his ignorance of what had occurred, nor does it affirmatively appear that they did anything to conceal the facts from him. In such a case the language of Chancellor Desaussure, in ...
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