Hurt Bldg., Inc. v. Atlanta Trust Co.

• Court: Georgia Supreme Court
• Writing for the Court: BELL, Justice.
• Citation: Hurt Bldg., Inc. v. Atlanta Trust Co., 181 Ga. 274, 182 S.E. 187 (Ga. 1935)
• Decision Date: 16 October 1935
• Docket Number: 10882.
• Parties: HURT BLDG., Inc., v. ATLANTA TRUST CO. et al.

182 S.E. 187

181 Ga. 274

HURT BLDG., Inc., v. ATLANTA TRUST CO. et al.

No. 10882.

Supreme Court of Georgia

October 16, 1935

Syllabus by the Court.

1. A judgment of a court of competent jurisdiction is conclusive between the same parties and their privies as to all matters put in issue, or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until such judgment shall be reversed or set aside.

2. An order confirming a judicial sale is a final and conclusive judgment to the same extent as any other adjudication by a court of competent jurisdiction.

3. While a motion to set aside a judgment is addressed to the sound discretion of the judge, it should not, although made during the term at which the judgment was rendered, be granted unless some meritorious reason be given therefor.

4. After a judicial sale has once been confirmed, the court has no discretion to rescind it except upon some special ground such as fraud, accident, or mistake, which has worked an injustice, and which was unknown to the complaining party at the time of confirmation.

5. Under the rulings stated above, the motion to set aside a decree confirming a receivers' sale did not state a cause of action, and was properly overruled.

Error from Superior Court, Fulton County; Edgar E. Pomeroy, Judge.

Proceeding by the Atlanta Trust Company, trustee, wherein a judgment was rendered confirming a receivers' sale and a motion was made by Hurt Building, Incorporated, to set aside the judgment. To review a judgment refusing the motion to set aside the judgment confirming the receivers' sale, movant brings error.

Affirmed.

Spence & Spence and Geo. & John L. Westmoreland, all of Atlanta, for plaintiff in error.

Harold Hirsch & Marion Smith, Alston, Alston, Foster & Moise Crenshaw & Hansell, Herbert J. Haas, G. B. Tidwell, Jones, Powers & Williams, J. Walter Mason, and Craighead & Craighead, Dwyer & Dwyer, all of Atlanta, and Root, Clarke, Buckner & Ballantine, of New York City, for defendants in error.

BELL Justice.

The judgment to be reviewed in this case is the refusal of the court to set aside a judgment confirming a receivers' sale. After careful consideration of the voluminous record and of the several questions discussed in the briefs, we have reached the conclusion that the case is controlled by a very few plain and familiar principles, and that under them the judgment must be affirmed, regardless of any opinion which might be entertained by this court as to other questions argued. In this view, there is much in the record which may be treated as immaterial and omitted from this statement.

The Atlanta Trust Company, as the trustee under a security deed conveying property situated in Atlanta which may be described in brief as the Hurt Building, filed a petition in the superior court of Fulton county to foreclose the deed as an equitable mortgage; the deed having been made to secure an issue of bonds of which there was past due and unpaid an amount in excess of $3,000,000 at the time the suit was filed. To this action certain pleas were filed, and proceedings were also instituted in the federal court. Holders of all but a relatively small portion of the bonds confided their respective interests to two committees, called the bondholders' committees. Pending the suits these committees entered into a contract with D. Frank Mennis, one purpose of which, among others, was to end all resistance to the foreclosure of the security or trust deed, and to bring about an early sale of the property by receivers theretofore appointed by the superior court. Mennis agreed to procure the dismissal of all adversary proceedings, and to cause to be conveyed to the receivers certain property rights appurtenant to the Hurt Building in order that the same might be sold in connection therewith. The contract anticipated that at the instance of Mennis a new corporation would be created, to succeed automatically, upon its organization, to all the rights granted to Mennis under the contract. The proposed corporation was referred to by the parties as "the purchaser corporation," a designation appropriate to the thought that it might bid and become the purchaser at the receivers' sale. The committees promised that upon the dismissal of the antagonistic proceedings and the execution of the acts to be performed by Mennis, they would in the following manner assist the new corporation in its effort to acquire the property: They would bid for the property as much as $2,100,000, and if they became the successful bidders they would then resell the property to the "Purchaser Corporation"; such resale to be partly for cash and partly on terms. If the bidding should pass $2,100,000, the Purchaser Corporation would carry on the bidding to whatever price it desired, and in case it should become the successful bidder, the committees would "cause their nominee to accept the assignment of such successful bid and to acquire title to properties as aforesaid, and thereafter cause title to said properties to be sold to the Purchaser Corporation at and for a purchase price equal to the amount of the successful bid of the Purchaser Corporation at the foreclosure sale, such price to be payable" $600,000 in bonds and the balance in cash. The $600,000 of bonds would be secured by mortgage on the property involved in the suit and other property specified. The contract between the committees and Mennis as just described was approved by the superior court. Hurt Building, Inc., the plaintiff in error, is the "purchaser corporation" contemplated by the contract.

Mennis procured dismissal of all proceedings, wherever filed, in opposition to the foreclosure of the security deed, including dismissal of a writ of error pending in the Supreme Court of Georgia and having as its purpose the reversal of a decree of foreclosure theretofore entered in the superior court of Fulton county, to wit, on March 22, 1934. Mennis also caused to be transferred to the receivers the property rights appurtenant to the Hurt Building and otherwise executed the affirmative covenants undertaken by him in his contract with the two committees. The way being thus apparently clear for such action, the superior court on January 28, 1935, passed an order directing the receivers to sell the property known as the Hurt Building to the highest bidder for cash on March 5, 1935, after prescribed advertisement. The order required a deposit of $25,000 from each person desiring to qualify as a bidder and contained the following additional provisions: "The court may reject any or all bids. If a purchaser whose bid is confirmed by this court does not complete payment of the purchase price in 90 days after such confirmation or within such additional time as may be granted by this court, then the deposit made by such bidder shall be forfeited as damages for his failure to complete. Such sale shall be subject to confirmation by this court and the receivers shall report to this court at 10 A. M. on March 6, 1935, the highest and best bid or bids received by them for confirmation or rejection by this court at that time or at such later time as the court may adjourn the hearing. If the receivers are in doubt as to which bid is the highest and best bid the receivers shall report to the court all such bids as they deem advisable to report. At the hearing by the court on the question of confirmation of the sale the court may receive a further bid or bids from any person who qualified at the sale or then qualifies as a bidder." The receivers exposed the property for sale on March 5, 1935, as directed. Hurt Building, Inc., after duly qualifying, submitted a bid of $2,280,000, which was the largest amount offered, and the receivers declared the property sold to this company, subject to confirmation by the court. On March 6, the court convened for the purpose of considering confirmation. It seems that the receivers had prepared a report showing that the highest bid had been submitted by Hurt Building, Inc., but before the presentation of such report an attorney representing holders of second mortgage bonds stated to the presiding judge that he had on the previous day obtained from the Federal District Court an order restraining the further progress of the sale; whereupon the judge of the superior court entered the following order: "On this the 6th day of March, 1935, there came on before the court the hearing with respect to the report of the receivers as to the sale conducted on the previous day under order of the court, this hearing being provided for by this court in its order of January 28, 1935, and being for the purposes specified in said order. After discussion, all parties at interest, including all qualified bidders under the receivers report this day filed, being present before the court and consenting thereto; it is now ordered that the hearing set for this day by order of January 28, 1935, is hereby set for 10 o'clock a. m. Tuesday, March 19, 1935, and that all the terms and provisions of the order of January 28, 1935, relative to the hearing provided therefor as of today, shall in every respect apply to the hearing to be held on March 19, 1935, or any adjournment thereof, including the provision that further bids may be made by any person who qualified at the sale, or then qualifies as a bidder. This the 6th day of March, 1935."

On March 19, still before action upon the report of the receivers in regard to the sale as conducted on March 5, the committees who had executed the contract with Mennis made known to the court certain facts pertaining to the new proceedings in the federal court, showing that the injunctive order issued by such court had been dissolved and the proceedings dismissed,...