Jackson v. Smith, 130

• Decision Date: 24 January 1921
• Docket Number: No. 130,130
• Citation: 65 L.Ed. 418,41 S.Ct. 200,254 U.S. 586
• Parties: JACKSON v. SMITH et al
• Court: U.S. Supreme Court

254 U.S. 586

41 S.Ct. 200

65 L.Ed. 418

JACKSON

v SMITH et al.

No. 130.

Argued Dec. 17, 1920.

Decided Jan. 24, 1921.

Mr. W. W. Millan, of Washington, D. C., for petitioner.

Mr. Louis A. Dent, of Washington, D. C., for respondents.

Mr. Justice BRANDEISdelivered the opinion of the Court.

Smith and Wilson were sued in the Supreme Court of the District of Columbia by the receiver of the First Co-operative Building Association of Georgetown, D. C., for the amount of profits made by them and a former receiver of the association in the purchase at a foreclosure sale and subsequent resale of land mortgaged to secure a note owned by the association.The Supreme Court held them liable for the full amount of the profits, $743.68, with interest and costs.The Court of Appeals of the District reversed the decree and ordered that the bill be dismissed with costs.48 App. D. C. 565.A writ of certiorari was granted by this court.250 U. S. 655, 40 Sup. Ct. 10, 63 L. Ed. 1192.The question before us is whether the respondents are liable upon the following facts, and, if so, in what amount.

In 1908the Supreme Court of the District appointed William E. Ambrose, a member of its bar, receiver of the First Co-operative Building Association of Georgetown, D. C.Among the assets of the association so intrusted to the receiver was a note of Schwab for $2,700, secured by a mortgage deed of trust of land.The note being in default, Ambrose as receiver requested the trustee under the deed of trust to advertise the land for sale at public auction.The auction sale was held and a bid of $350 was made by Edwin L. Wilson, a member of the bar; but the trustee withdrew the property from sale because the bid was inadequate.Thereafter it was arranged between Wilson, Ambrose, and another lawyer, John Lewis Smith, who was counsel of the receiver, that the trustee should again advertise the property for sale; that Wilson should at the second sale use his own judgment whether to bid, and, if so, what amount; and that, if he should happen to bacome the purchaser, the three should be jointly liable for the purchase price and any expenses incident to the purchase and should be jointly interested in the property purchased.The second sale was duly advertised.Smith and Ambrose were present, but gave no instructions or directions in regard to the sale either to the trustee or to his auctioneer.Wilson also attended and in the exercise cise of his own judgment and without previous conference with either Smith or Ambrose bid $491 and became the purchaser of the property.There was no evidence of any improper influence at the sale to prevent competition or to close competitive bidding or to bring about the sale to Wilson in preference to any one else.On the contrary, it affirmatively appears that the sale was fairly conducted, that there was competitive bidding, and that the property was finally knocked down to the highest bidder.

Within a few days after the second sale Wilson and Smith found, through the aid of real estate agents, a purchaser named Kite who was willing to pay $1,400 for the land.In order to convey a good title it was necessary to clear the land of tax liens and an outstanding tax title.This required $550—that is, $59 more than Wilson had bid.He voluntarily raised his bid by that amount.The land was conveyed by the trustee to Wilson and by Wilson to Kite, the deeds being recorded simultaneously when Kite paid the $1,400.Of this amount $652.32 was used to discharge taxes, tax liens and expenses of sale.The balance, $473.68 was divided equally between Wilson, Smith and Ambrose individually.Wilson had paid out in making the purchase no money of his own or theirs.The estate of which Ambrose was receiver got nothing, as the amount required to discharge the tax liens exceeded the amount bid by Wilson.Much later the facts were brought to the attention of the Supreme Court of the District.Ambrose...