Maxwell v. Burns

• Decision Date: 24 September 1900
• Parties: MAXWELL v. BURNS et al.
• Court: Tennessee Supreme Court

59 S.W. 1067

MAXWELL v. BURNS et al.

Court of Chancery Appeals of Tennessee.

September 24, 1900.

Appeal from chancery court, Knox county; George W. Henderson, Special Chancellor.

Petition by J. L. Maxwell, Jr., administrator of L. K. Burns, deceased, against Almenda Burns and others. Petitioner was denied relief, and he appeals. Sale rescinded, and decree ordered entered accordingly.

Jourolmon, Welcker & Hudson, for appellant. Sansom, Welcker & Parker, for appellees.

BARTON, J.

The question before us in this case arises under the petition filed by the complainant, administrator of the estate of L. K. Burns, deceased, to reopen and set aside a sale made by the clerk and master, under a decree of the court in this case, of certain personal property to one J. P. Parrill. The transcript was made up by agreement, and presents only the facts necessary to the particular contention before us. We gather from the record, however, that the original case was under a bill filed to wind up the estate of L. K. Burns, deceased. On April 28, 1899, a decree was entered in the case adjudicating a number of matters, and, among other things, directing the sale of certain personal property. Upon this point the decree was as follows: "And it appearing to the court from the master's report aforesaid that there are in the hands of the master of this court, belonging to the estate of L. K. Burns, deceased, and not yet disposed of, certain shares of stock in the Knoxville Brick Co. and in the Lenoir City Co., and that certain interests of said Burns and leases upon oil lands in Wayne county, Kentucky, belonging to said estate, and also notes and accounts on various individuals in Knoxville, Tennessee, the names, dates, and amounts of which are set out in the master's report, have not yet been disposed of by Maxwell, administrator, or the master of this court, it is therefore, upon motion of complainant's solicitor, ordered by the court that the master, after ten days' advertising in some newspaper published in Knoxville, Tennessee, offer for sale and sell to the highest and best bidder at public outcry, in front of the court-house door at Knoxville, Tennessee, for cash in hand, all of said personal property and any other personal property of said Burns not heretofore disposed of; and the master will report his action in the premises, as soon as practicable, to this court." The master acted under this decree, and on May 15th filed his report, in which he says that: "Pursuant to the decree, and after giving the notice required by the decree, he proceeded on Monday, May 15, 1899, in front of the court house in Knoxville, Tennessee, to sell at public auction to the highest bidder, and in bar of the equity of redemption, the following personal property, to wit: (1) Twenty shares of the capital stock of the Knoxville Brick Co., which was bid off by J. H. Parrill for the sum of 25 cents. (2) One-half interest in two and one-half shares of stock in Lenoir City Co., bid off by same party for 25 cents. (3) A certain leasehold interest upon oil lands in Wayne county, Kentucky, set forth in the pleadings and exhibits, were bid off by the same party for 25 cents. (4) A lot of old accounts, amounting to something over $1,000. bid off by same party for 25 cents. The total thus bid, being one dollar, was paid to the undersigned. All of which is respectfully submitted. This 15th of May, 1899, J. F. Chumbley, C. & M., by Lewis Tillman, Dep. C. & M." On May 20, 1899, the petition under which this contest arises was filed by J. L. Maxwell, administrator. In it he alleges the entry of the decree above noted, and that the face value of the capital stock of the Knoxville Brick Company mentioned was $2,000; that the sale was ordered after 10 days' advertising; that on May 15th the master offered for sale the personal property, and sets out the sale as shown by the clerk and master above noted. It is further averred that only three publications were made of the sale, and he avers that there was not 10 days' advertising, as directed by the decree, and that neither the public nor the creditors of the Burns estate had the proper notice and opportunity to be present and bid at the sale; that the price obtained was nothing in law; that the 20 shares of the Knoxville Brick Company stock were worth $200, and that by order of the court the funds of the Burns estate in this court to the extent of $1,600.50 had been paid out to redeem for the benefit of the estate the stock in question, which had been held by a creditor as collateral; that the application of this money had been made by order of the court some two years before, when it was believed that the stock was worth $2,000. It is further averred that the other property embraced in the sale was worth more than 100 times the amount bid therefor by Parrill. It is further shown that E. C. Lucky, a solicitor of the court, representing a large number of creditors, had offered a bid, and had tendered into court the sum of $150, for the stock in the brick company alone; and it is averred that the sale was made on an inadequate notice, without proper opportunity for the creditors and public to know of the same; that the price bid was so grossly inadequate as to shock the conscience of the court, and that the same should be set aside. The petition was accompanied by an affidavit of C. R. Lucky tendering $150 for the stock of the brick company, and averring that he had fully intended to attend the sale and bid upon the property sold, but had understood the sale was to be made on the 25th, and asking that the sale be set aside. J. H. Parrill demurred to the petition. On the demurrer being overruled, she answered the same, and in the answer said that she was not personally informed as to the facts alleged in the petition, but understood that due advertisement had been made, and that the sale had been made in accordance with the directions of the decree; that the property had been bid in for her by her agent and attorney, V. A. Huffaker, who had in his possession certain funds of hers, which he was authorized to use for speculation on her account; and that he, on her account, had in good faith bought the property in question and she claimed that she was entitled to it, and the court had no power to set the sale aside. It may be stated, however, that it further appears from this record that, while this defense was made in the name of Miss Parrill, it was in fact made on behalf of Harry Galbraith, or of the firm of Galbraith & Maloney, of which H. H. Galbraith was a member. The facts in regard to Mr. Galbraith's connection with the matter, as they appear in his testimony, are that when he was informed of the sale he became anxious to become the owner of the personal property sold, and, deeming it to be of much greater value than that for which it had been sold, he made various inquiries as to his right to have the biddings reopened, and the sale again made; that for this purpose he approached Mr. Welcker, who represented some of the creditors, consulted with his father, who was employed in the clerk and master's office, and other counsel, but was informed that the sale was final, and that it could not be reopened; but, being exceedingly anxious to become the owner of the property, he procured Mr. W. L. Welcker to prepare a petition to have the biddings reopened for the purpose of using this petition either to induce Mr. Huffaker, acting for Miss Parrill, to sell him the property, or to consent without litigation to the reopening of the biddings. To use his own language, he "desired to use the paper on Mr. Huffaker as a bluff." Mr. Welcker testifies that Mr. Galbraith came to him, and stated that J. H. Parrill had become the purchaser of the property sold for a grossly inadequate consideration, and asked him (Welcker) to file a petition for the administrator on behalf of the creditors to open the biddings on the sale, and said that he would advance the same as shown in the petition. A petition was prepared, which is made an exhibit to Mr. Welcker's deposition, and shows an offer on the part of Harry Galbraith of $25 for the property. This petition recites that the sale was for merely a nominal bid of one dollar. In his deposition, Harry Galbraith testifies: That when he learned of the sale he became anxious to own the property, got Mr. Welcker to prepare the petition, but told Mr. Welcker that, if he could induce Huffaker to sell the property to him under an arrangement suitable to himself, he would purchase it in that way; and he testifies that he did purchase the property from Mr. Huffaker, as agent for Miss Parrill, for the sum of $10.50, and that thereafter he had no interest in having the bids reopened; that he acted in perfect good faith, as he wanted to become the owner of the property. He says he took the petition to Mr. Huffaker as a bluff, but says the petition did not bluff Huffaker, who told him the sale was final, and that thereupon he bought all the property except a few personal accounts for $10.50. It is shown that this defense is made on behalf of Galbraith or Galbraith & Maloney. As to the advertisement, it appears that it was not inserted for 10 consecutive days in any newspaper, but only three times, but that the first insertion was more than 10 days before the sale. Mr. W. A. Galbraith testifies that for more than 20 years he was deputy clerk and master of the chancery court of Knox county; that he wrote the advertisement in question, and procured the same to be inserted in the paper, and that it was inserted on 3 different days, — the first insertion being with the issue of May 3, 1899; that the decree called for 10 days' advertisement; and that the course pursued in advertising this sale was the same as had been pursued in advertising like sales of personal property under like decrees during the period of his knowledge of the business of the clerk and master's office. He said that the custom had...