In re Metallic Specialty Mfg. Co.

• Decision Date: 02 February 1912
• Docket Number: 4,189.
• Citation: 193 F. 300
• Parties: In re METALLIC SPECIALTY MFG. CO.
• Court: U.S. District Court — Eastern District of Pennsylvania

193 F. 300

In re METALLIC SPECIALTY MFG. CO.

No. 4,189.

United States District Court, E.D. Pennsylvania.

February 2, 1912

Conard & Middleton and Simpson & Brown, for trustee.

R Stuart Smith, for purchaser.

Henry N. Wessel, for prospective bidder.

J. B McPHERSON, District Judge.

The order complained of is as follows:

'And now, January 24, 1912, the testimony having been concluded the referee enters the following order: It appearing from the record that Theodore Dimmick has made a bid of $20,000 and has deposited $10,000 thereon, that his attorney has stated of record that he agreed to bid this price at either public or private sale, and it appearing that there are other bidders who are willing to bid besides Theodore Dimmick, and the majority in number and amount of creditors desiring a resale, confirmation of the sale to Roger S. Warner is declined, and a resale is ordered.'

Warner's bid, which was $17,000, was made and accepted at a public sale regular in all respects and free from fraud. The sale was judicial, and therefore could not become final until approval by the referee or the District Court. But it could be set aside only for cause, properly shown, and sufficient to move the conscience of the court. One such cause is gross inadequacy of price, but there is no contention that the bid in question was grossly inadequate. The sale was set aside on the ground that Warner's bid was lower than the value of the property, and this was inferred from the difference between the two sums. The referee states:

'The whole question before the court (is) whether an advance bid of $3,000, or 17 per cent. in excess of the price paid at public sale, is sufficient evidence of inadequacy of price at the public sale to justify my having ordered a resale.'

But it is well settled that mere inadequacy is not enough. Sturgiss v. Corbin, 141 F. 1, 72 C.C.A. 79, 15 Am.Bankr.Rep. 543; Ballentyne v. Smith, 205 U.S. 285, 27 Sup.Ct. 527, 51 L.Ed. 803. It must be admitted that no hard and fast line can be drawn between mere inadequacy and gross inadequacy; but there is a difference, although it is impossible to state it with precision. Every case must necessarily be judged upon its own facts.

It would have been better practice, I think, to defer the review of the referee's refusal until the resale had actually taken place. It may well be doubted whether (as a general rule) refusal to confirm is a final...