In re Mott

• Decision Date: 17 January 1881
• Citation: 6 F. 685
• Parties: In re MOTT, Bankrupt.
• Court: U.S. District Court — Southern District of New York

6 F. 685

In re MOTT, Bankrupt.

United States District Court, S.D. New York.

January 17, 1881

Wm Fullerton and Geo. F. Betts, for petitioners.

Douglas Campbell and E. W. Paige, for respondent.

CHOATE D.J.

This is a petition to set aside and annul a sale of the interest of the assignee in bankruptcy of Jordan Mott in certain real estate made by the assignee at public auction on the eleventh day of September, 1868. A grantee of a grantee of the purchaser at the sale, having been served with notice, has appeared, and now moves that the petition be dismissed on the ground that it states no case for setting aside the sale. This motion is in the nature of a demurrer to the petition. The motion was heard, however, upon the petition and upon all the proceedings of record in the case.

Jordan Mott was adjudicated a bankrupt under the bankrupt law of 1841. He died, as appears by the petition, in 1874, leaving a will under which the petitioners claim as his devisees. In his life-time, and subsequent to his bankruptcy, he is alleged to have entered into possession and to have been seized in fee of certain lands-- part of the lands included in the sale sought to be set aside-- which were set off to him in partition; and the petitioners, as his devisees, claim to have succeeded to his title. This is the interest by virtue of which they claim to set aside the sale, their rights and interests as devisees of Jordan Mott being adversely affected by the title made under his assignee in bankruptcy. It is not suggested, at this stage of the case that the petitioners have not such an interest as authorizes them to maintain the petition if it states a case for setting aside the sale.

The order of the court under which the assignee acted in making this sale was entitled In the Matter of Jordan Mott Bankrupt, and also In the Matter of Jacob H. Mott, Bankrupt, both of which proceedings were pending in this court under the bankrupt law of 1841. The order, which was dated thirteenth of June, 1868, directs the official assignee 'to sell the assets hereinafter referred to in each of said matters at public auction, and for cash, by advertising the same one time, 14 days prior to the day of sale, in the newspaper called the Times, published in the city of New York, describing the same as follows: 'All the right, title, interest, etc., of each and either of said bankrupts in and to any and all real estate in any manner described in a certain will of John Hopper, etc., which is more particularly described as follows:' Then follows a particular description of several parcels of land in the city of New York.

It appears by the petition that the interest of the assignee in both matters was put up and sold together, and that one James M. Smith, Jr., became the purchaser at the auction sale for the sum of $1,750, which he paid to the assignee, whereupon the assignee delivered to him separate deeds as assignee of Jordan Mott, and as assignee of Jacob H. Mott, which deeds of his interest as assignee of Jordan Mott express, as the consideration thereof for the several parcels of land, the sums of $725, $50, and $50, respectively.

It is not alleged in the petition that Smith was guilty of any fraud or deceit, or that he was not a bona fide purchaser, for value, of such interest as was conveyed to him by the assignee; and, although improper motives in respect to the disposition of the proceeds are charged against the assignee, it is not alleged that Smith, the purchaser, was privy to them in any way. Nor is it alleged that the price bid and paid by Smith was less than the interest of the assignee was then worth, or that any other parties were willing, or could have been found, to give any greater sum. It does appear by the petition, on the contrary, and is expressly alleged, that Jordan Mott actually owned the real estate in fee at the time of his death, and was in possession thereof, from which it must be inferred that the interest of the assignee, whatever it may have been, was a mere colorable interest; that that which was sold and bought was merely a right to bring a lawsuit to recover the lands under a title adverse to that under which Jordan Mott held and claimed them. This necessarily disposes of the claim on the part of the petitioners that this sale should be set aside as improvidently made and as injuriously affecting the interests of the bankrupt's estate. Unless there was an inadequacy of price, no such relief could be given on that ground, even if, after this great lapse of time, the petition on that ground would be entertained. I think, also, upon this petition, the purchaser, Smith, and his grantees, are entitled to avail themselves of all the benefits that may be claimed by a bona fide purchaser upon a judicial sale, no bad faith or collusion on his part being averred by the parties seeking to set aside the sale, and the fact appearing that he actually paid the price bid, which is not alleged to have been inadequate. The allegation that Jordan Mott's interest in the lands was worth $500,000 is not and cannot, consistently with other averments of the petition, be construed as an allegation that the interest of the assignee was of greater value than the price paid.

It is claimed, however, that on the facts alleged in the petition the order of the court under which the sale was made was void on several grounds, and also that the sale was not made in conformity with the order, if that was valid.

The first objection to the order is that the court in the order of sale did not appoint the time of sale. The ninth section of the bankrupt act provided that all sales should be 'at such times and in such manner as should be ordered and appointed by the court in bankruptcy. ' It is argued that congress intended that the court should fix the day and hour at which the sale should take place. Such has not been the practical construction put upon the statute by the court, and in the many orders of sale made under that law none are referred to in which the day and hour of the sale were fixed by the court. The making of an order directing the assignee to sell, is ordering the time of sale within the meaning of the statute. The order amounts to a direction that the sale should be made at once, with reasonable diligence, and this is a practical and sufficient compliance with the statute. The further objection--that the assignee, by adjourning the sale from the time first fixed, appointed the time of the sale, instead of the court, as required by the statute-- is answered by the same suggestions. It is suggested, indeed, in the argument, that there is no sufficient evidence that the sale was regularly adjourned to the eleventh of September when it was actually made. It does, however, appear that such an adjournment was advertised in the newspaper as having been made by the...