Mergenthaler Linotype Co. v. McClure

• Decision Date: 24 April 1929
• Docket Number: (No. 1040-5294.)
• Citation: 16 S.W.2d 280
• Parties: MERGENTHALER LINOTYPE CO. v. McCLURE et al.
• Court: Texas Supreme Court

16 S.W.2d 280

MERGENTHALER LINOTYPE CO. v. McCLURE et al.

(No. 1040-5294.)

Commission of Appeals of Texas, Section B.

April 24, 1929.

Error to Court of Civil Appeals of Eleventh Supreme Judicial District.

Action by the Mergenthaler Linotype Company against S. W. McClure and others. Judgment for plaintiff in part and for defendant in part was reversed, and cause remanded by the Court of Civil Appeals [9 S.W.(2d) 198], and plaintiff brings error. Affirmed.

J. F. Lindsey, of Anson, and George Sergeant, of Dallas, for plaintiff in error.

Thomas, Pope & Shapard, A. J. Smith, Smith & Smith, and Brooks & Robinson, all of Anson, and Odell & Owens, of Throckmorton, for defendants in error.

LEDDY, J.

This appeal involves the validity of a sale of personal property by a receiver.

The order of the court directing the receiver to sell, after setting forth the necessity for the sale, contained this recital: "It is, therefore, the order, judgment and decree of the court, this day made, that the aforesaid Receiver, Gilbert C. Smith, be and he is hereby directed and ordered to sell the above described property at public sale to the highest bidder for cash at the court house door at Anson, Jones County, Texas, on the 29th day of January, 1927, after first having given ten full days notice of the time, place and terms of said sale by posting three written notices of said sale and the date and day thereof by posting notices, one at the court house in Anson, Jones County, Texas, and one in the city of Stamford, in Jones County, Texas, and one in the City of Hamlin in Jones County, Texas, and that the said Receiver, Gilbert C. Smith, be authorized and directed to make a bill of sale to the purchaser or purchasers of said property at said sale and that the said Gilbert C. Smith, Receiver, pay the entire proceeds of said sale to the treasury of this court by paying same to Spurgeon Reeves, Clerk of the District Court in and for Jones County, Texas, there to remain to await the further order of this court and the establishment of claims and liens against the above described property and any funds that may be derived therefrom."

At the time this order was made, the court had not determined the priorities of various liens asserted against the property ordered to be sold. The order directing the sale also provided for the establishment of claims against the property on the 4th day of February, 1927; the following provision with reference thereto being incorporated in said order: "And it is the further order and decree of the court that the above cause be set down for a hearing for the purpose of the establishment of claims of parties against said property against said receiver and said funds on the 4th day of February, 1927, at the hearing when this order was entered these present, parties involved in the suit, were as follows: Gilbert C. Smith, Receiver, in person and by attorneys, Garner Printing Company, in person and by attorneys, S. W. McClure by his answer filed in this behalf, Buford Kennedy, in person and by attorneys."

After the sale had taken place, plaintiff in error filed a motion to vacate and set aside the sale on the grounds that said property, which consisted of a Mergenthaler typesetting machine and other personal property composing a small newspaper plant, had sold for an inadequate price, and that the receiver had, in violation of the order of the court, failed and refused to sell the same to the highest bidder, in that a representative of plaintiff in error had bid $1,000 at the receiver's sale for the typesetting machine alone, which bid was wrongfully ignored by the receiver and the entire property sold to E. G. Negy on his bid of $425.

The record does not show that any evidence was offered to sustain the matters set forth in said motion at the time the same was heard by the court. About one year later, when the case was finally tried on the merits, plaintiff in error offered testimony showing that at the receiver's sale its representative had made a conditional bid of $1,000; the condition being that this amount be credited on the indebtedness sued on by plaintiff in error.

Plaintiff in error contends that, inasmuch as it held a first lien against the typesetting machine, which constituted a part of the property ordered to be sold, it was entitled to have its bid of $1,000 credited upon its indebtedness, and that its bid under the circumstances was equivalent to a cash bid.

In making a sale of property, a receiver exercises a naked power according to the mandate of the court, the terms of which he must follow. Article 2297, R. S. 1925; I. & G. N. Ry. Co. v. Wentworth, 8 Tex. Civ. App. 5, 27 S. W. 680; Hackensack Water Co. v. DeKay, 36 N. J. Eq. 548; Slaughter v. Strother, 99 Ga. 633, 27 S. E. 764; Leathers v. Kelling, 12 Ky....