In re Receivership of Great Western Beet Sugar Co.

• Decision Date: 15 July 1912
• Citation: 22 Idaho 328,125 P. 799
• Parties: In the Matter of the Receivership of GREAT WESTERN BEET SUGAR COMPANY. O. E. CANNON, Receiver, Respondent, v. HENRY HEWITT, Jr., a Lienholder, Appellant
• Court: Idaho Supreme Court

125 P. 799

22 Idaho 328

In the Matter of the Receivership of GREAT WESTERN BEET SUGAR COMPANY. O. E. CANNON, Receiver, Respondent, v. HENRY HEWITT, Jr., a Lienholder, Appellant

Supreme Court of Idaho

July 15, 1912

RECEIVER-IRREGULARITIES IN JUDICIAL SALE-DISCRETION OF THE COURT-RIGHTS OF WOULD-BE PURCHASER.

(Syllabus by the reporter.)

1. Where a public sale has been made by a receiver, in compliance with an order of the court, of property in his hands as such receiver, under notices requiring a cash payment on the day of the sale, and a bid is made within the terms of the sale, but the intending purchaser is unable to secure sufficient funds immediately with which to make such cash payment, it is a reasonable exercise of discretion on the part of the district judge to extend the time within which such payment shall be made where no injury is done to anyone by failure of the purchaser to pay at once the sum due on his bid.

2. A trial judge in equity proceedings, exercising authority over a sale of property in the hands of a receiver appointed by such court, has discretionary power to modify all orders affecting such sale, by subsequent orders.

3. At a public sale of property by a receiver, the mere failure of a successful bidder to immediately make the payment on his bid required by the terms of the sale, does not destroy the right of the receiver to demand or accept such payment later, where the rights of others are not injuriously affected by such delay.

4. In order to justify setting aside a judicial sale on behalf of one attacking it on the ground of alleged irregularities in the conduct of such sale, the person attacking such sale should allege and establish injury to himself resulting from the irregularities complained of.

5. One who has acquiesced in an irregularity in the conduct of a judicial sale at the time thereof, and does not show affirmatively that he has been injured thereby, should not afterward be heard to question its validity on the ground of such irregularity.

APPEAL from the District Court of the Fourth Judicial District for Elmore County. Hon. Edward A. Walters, Judge.

Action for confirmation of receiver's sale. Lienholder appeals from order of the trial court affirming such sale. Affirmed.

Judgment of the lower court affirmed, with costs to respondent.

J. B Eldridge and Chas. F. Reddoch, for Appellant.

The order of the court required a public sale, and no deviation from the terms of a decree is more obnoxious to objection than selling at private sale when the order directs a public sale. (South Baltimore Brick & Tile Co. v. Kirby, 89 Md. 52, 42 A. 913.)

The receiver had no authority or power in the matter other than to sell to the highest bidder who paid twenty-five per cent down on the day of sale. The attempt to make a sale to a man who paid down nothing is wholly void. (Ackerman v Ackerman, 50 Neb. 54, 69 N.W. 388; Zantzinger v. Pole, 1 Dall. (U.S.) 419, 1 L.Ed. 204; Porter v. Graves, 104 U.S. 171, 26 L.Ed. 691; Camden v. Mayhew, 129 U.S. 73, 9 S.Ct. 246, 32 L.Ed. 608; Walker v. McLoud, 204 U.S. 299, 27 S.Ct. 293, 51 L.Ed. 495.)

The pretended sale by the receiver was not a sale at public auction as directed by the order, but in fact was simply a private sale, and is therefore void. (Hutchinson v. Cassidy, 46 Mo. 431; Fambro v. Gantt, 12 Ala. 298; Neal v. Pattern, 40 Ga. 363.)

Judicial sales must be made in accordance with the terms of the decree ordering and directing the sale. (Morrison v. Lincoln Savings Bank, 1 Neb. (Unof.) 449, 96 N.W. 230; Nebraska Loan & Trust Co. v. Hamer, 40 Neb. 281, 85 N.W. 695; Patterson v. Patterson, 207 Pa. 252, 56 A. 442; Mason v. Hubner, 104 Md. 534, 65 A. 367; Musgrave v. Parrish (Ky.), 12 S.W. 709; Cofer v. Miller, 7 Bush (Ky.), 545; Bethel v. Bethel, 6 Bush (Ky.), 65, 99 Am. Dec. 655.)

The court had no authority after the sale to modify any of its terms, or extend to the purchaser any consideration whatever, other than to require that he comply with the terms of his bid. (Ohio L. Ins. Co. v. Goodin, 10 Ohio St. 557; Green v. State Bank, 9 Neb. 165, 2 N.W. 228; Benz v. Hines & Tarr, 3 Kan. 390, 89 Am. Dec. 594; Kinnear & Willis v. Lee & Reynolds, 28 Md. 488; Fitch & Co. v. Minshall, 15 Neb. 328, 18 N.W. 80.)

The record on its face shows collusion between the receiver and the purchaser, and should be set aside. (Dilley v. Jasper Lumber Co., 103 Tex. 22, 122 S.W. 255.)

Sullivan & Sullivan and R. Garland Draper, for Respondent.

The court can modify or change terms of sale or confirm unauthorized changes by receiver, and is vested with control of and wide discretion in judicial sales. (Fid. Ins. Trust & Safe Dep. Co. v. Roanoke Iron Co., 84 F. 752; Freeman, Void Jud. Sales, pp. 88, 89; Tobin v. Portland Mills, 42 Ore. 117, 68 P. 750; Rochat v. Gee, 137 Cal. 497, 70 P. 479; Pewabic Min. Co. v. Mason, 145 U.S. 349, 12 S.Ct. 887, 36 L.Ed. 732; Magann v. Segal, 92 F. 257, 34 C. C. A. 323; 24 Cyc. 26; Fowler v. Krutz, 54 Kan. 622, 38 P. 809.)

Even though there have been irregularities, if a court can give a good title and it is to the interest of the parties to confirm the sale, it will be confirmed, and the purchaser compelled to complete his purchase. (24 Cyc. 34; Swan v. Newman, 3 Head (Tenn.), 288.)

To justify the interference of the court, there must be fraud, mistake, or some accident by which the rights of the parties have been affected. (2 Beach's Mod. Eq. Prac., sec. 821, citing many cases.)

A judicial sale will not be set aside for irregularities or errors not prejudicial to the party complaining. (Miller v. Lanham, 35 Neb. 886, 53 N.W. 1010; 17 Am. & Eng. Ency. Law, 999; Meeker v. Evans, 25 Ill. 322; Bean v. Meguiar, 20 Ky. L. R. 885, 47 S.W. 771; McKnight v. Jacob, 5 Ky. L. R. 176; Wrightson v. Kline, 5 Ky. L. R. 57; Stryker v. Storm, 1 Abb. Pr., N. S. (N. Y.), 424.)

The person attacking the sale must be able to show injury resulting to him therefrom. (17 Am. & Eng. Ency. Law, 995, 996; Gilmer v. Nicholson, 21 La. Ann. 589; Stockton v. Downey, 6 La. Ann. 581; Brackman v. Allison, 1 Ky. L. R. 278; Godchaux v. Morris, 121 F. 485, 57 C. C. A. 434.)

One who has acquiesced in an irregularity in the conduct of the sale cannot afterward question its validity on the ground of such irregularity. (Sawyer v. Hentz, 74 Ark. 324, 85 S.W. 775; 24 Cyc. 38; Maquoketa v. Willey, 35 Iowa 323; In re Sheets Lbr. Co., 52 La. Ann. 1337, 27 So. 809; Hartshorne v. Reader, 3 Ohio Dec. 109; Atcheson v. Hutchison, 51 Tex. 223.)

DAVIS, District Judge. Stewart, C. J., concurs. Sullivan, J., sat at the hearing, but took no part in the decision.

OPINION

DAVIS, District Judge.

--On October 29, 1909, O. E. Cannon was appointed receiver of the assets of the Great Western Beet Sugar Company by the district court of the fourth judicial district, and on November 10, 1911, the judge of said court authorized such receiver to sell all the property of said company in order to pay its debts. The receiver thereupon fixed December 15, 1911, as the date of such sale, and gave due notice thereof, but on December 1, 1911, Henry H. Hewitt, Jr., the holder of a lien against said property and appellant herein, obtained a writ of prohibition from this court restraining said receiver and the judge of the district court from proceeding further under said order pending a hearing of said matter and decision relative thereto by this court, and said sale was thereupon postponed until December 28, 1911. Prior to said date this court quashed said writ and refused to further prohibit said sale. But at the request of R. G. Smith, an attorney for appellant herein, for time within which to investigate said matter and to endeavor to induce others to join him in a compromise settlement of the claims against said company, the date of said sale was deferred and was reset for January 5, 1912. No settlement being made by the interested parties, an auction sale of said property was held on said date, and a considerable number of people appeared, two of whom submitted bids in excess of the minimum amount of $ 56,546.79, fixed by the court as the lowest sum that could be accepted. L. G. Bradley, an agent of Hewitt, was present at said sale, but declined to bid on said property, and the bid of Harry Watkins for $ 56,547.79, being the highest bid offered, was accepted by the receiver, and the property was struck off to him. But when he was called upon on that day to pay the twenty-five per cent cash required to be paid at the time of the sale by the terms of the order issued by said court authorizing said sale, Watkins was unable to make the payment, and asked for a little time within which to secure the money. The receiver thereupon consulted the judge of the district court, who directed said receiver to allow Watkins a couple of days within which to pay the $ 14,136.95 then due.

Thereafter said L. G. Bradley resumed negotiations with the attorney for the receiver and others for a compromise settlement of the claims against said company, and in order to afford an opportunity for Watkins to raise said money, either through a compromise settlement with Hewitt and other claimants, or otherwise, the judge of the district court directed that payment thereof be not required by the receiver until further orders of the court. Hewitt and the others interested in the negotiations were still unable to agree upon a settlement, and Watkins procured the necessary money from James H. Brady and made the payment of twenty-five per cent of his bid of January 23, 1912, and was given a certificate of sale for said property. The receiver thereupon filed his return and prayed for an order confirming said sale, and a day was set for a hearing thereon. The appellant herein thereafter filed a motion to set aside...