Robbins v. Guy

• Decision Date: 15 April 1968
• Docket Number: No. 5--4513,5--4513
• Citation: 426 S.W.2d 393,244 Ark. 590
• Parties: Lucy Lee ROBBINS, Appellant, v. Miles GUY and Ethel Ford Guy, Appellees.
• Court: Arkansas Supreme Court

Page 393

426 S.W.2d 393

244 Ark. 590

Lucy Lee ROBBINS, Appellant, v. Miles GUY and Ethel Ford Guy, Appellees.

No. 5--4513.

Supreme Court of Arkansas.

April 15, 1968.

Wilton E. Steed, Pine Bluff, for appellant.

Joe Holmes, Pine Bluff, for appellees.

WARD, Justice.

This appeal comes from a Chancery Court order setting aside the Commissioner's sale of land in a foreclosure suit.

Miles Guy and his wife (appellees) executed a note for $550 to Lucy Lee Robbins (appellant), and to secure payment they also executed a deed of trust on Lot 4 in Block 6 in Waters' Addition to the City of Pine Bluff. Upon default, appellant filed suit against appellees, securing a judgment for $537.14 (including costs) and also an order to sell the security. At the Commissioner's sale, appellant bought the property for the amount of the judgment. The trial court confirmed the sale, and ordered the property turned over to appellant who later sold it to a third party.

At the same term of the Chancery Court appellees filed a Motion to set aside the sale on the ground that the price paid by appellant was inadequate. After hearing testimony on behalf of both parties the court granted appellees' Motion, holding 'that the property herein sold for an inadequate price'. The court then canceled the sale to appellant and ordered a resale of the property by the Commissioner after giving proper notice, hence this appeal.

Appellant now seeks a reversal on the ground of insufficient evidence to sustain the action of the trial court in setting aside the sale, and we agree.

There is no contention by appellees that there was any irregularity, any mistake, or any fraudulent conduct in the entire proceedings. That being the state of the record before us, the trial court erred in setting the sale aside.

In Free v. Harris, 181 Ark. 644, 27 S.W.2d 510, the Court, on facts similar to those in this case, said:

'Mere inadequacy of consideration, however gross, unaccompanied by fraud, unfairness or other inequitable conduct in connection with the sale, is of itself insufficient to justify the court in setting the sale aside and refusing confirmation.'

'It is of the greatest importance to encourage bidding by giving to every bidder the benefit of bids made in good faith and without collusion or misconduct, and at least when the price offered is not unconscionably below the market value of the property.'

In Union & Planters' Bank & Trust Company v. Pope, 176 Ark. 1023, 5 S.W.2d 330, there appears this language:

'While this court has held that mere inadequacy of price will not justify a chancery court in refusing to approve a sale and deprive a purchaser of the benefits of his purchase, yet, if a purchaser has been guilty of any unfairness or has taken any undue advantage, the sale will be regarded as fraudulent, and the party injured will be permitted to set aside the sale.'

The above cited cases have never been overruled.

Our attention has been called to the case of Security Bank of Branson, Missouri v. Speer, 203 Ark. 562, 157 S.W.2d 775, where this Court held that during the same term, at which a judgment or order is rendered, it remains subject to the plenary control of the court, and may be vacated, set aside, modified or annulled. However, in the case of Summars v. Wilson, 205 Ark. 923, 171 S.W.2d 944 where the Speer case was cited, this Court either interpreted the Speer decision to hold or reversed it to hold that while the trial court had the power to set aside its judgments or orders (in term time) it could do so only by exercising sound discretion. There we said:

'Judicial sales are not to be treated lightly. The courts should not reject a sale and refuse a confirmation for captious reasons, but only in the exercise of sound discretion. The trial court is vested with sound judicial discretion in these matters; and the appellate court, in reviewing the action of a trial court to see if there has been an abuse of discretion, does not substitute its own decision for that of the trial court, but merely reviews the case to see whether the decision was within the latitude of decisions which a judge or court could make in a case like the one being reviewed. Just as the law's standard of conduct is the ordinary, reasonable, prudent man, so in reviewing the exercise of discretion, the test is whether the ordinary, reasonable, prudent judge, under all the facts and circumstances before him would have reached the conclusion that was reached.'

In any event, we now choose to follow the rule announced in the Summars case.

We cannot agree with appellees' contention that the low price paid for the property ($537.14) was unconscionable and therefore justified the court in setting the sale aside. This is on the basis that the property was worth $1,000, but the testimony does not justify that figure. It is true that appellees' attorney testified (over strenuous objections) that he believed the property was worth $1,000. Another witness, who was contacted by appellees to secure a loan and who examined the property, stated that he would advance $1,000 provided it would be used to pay off the judgment and the balance used to improve the house. Another witness, who ahd recently inspected the property, valued the property at not more than $575.

Appellees say the trial court should be affirmed because appellant failed to comply with Rule 9(d) of this Court. We do not find this to be the case. Appellant's brief contains an abstract of all material parts of the pleadings, the testimony and the decree. The Rule requires only such matters that 'are necessary to an understanding of all questions presented to this court for decision'. This requirement has been met by appellant.

It is our opinion that the trial court erred in setting aside the sale and in ordering a resale.

The decree of the trial court is therefore reversed.

GEORGE ROSE SMITH, J., concurs.

FOGLEMAN, J., dissents.

GEORGE ROSE SMITH, Justice (concurring).

I should like to discuss two cases, not mentioned by the majority, which seem to answer the argument made in the dissenting opinion.

In George v. Norwood, 77 Ark. 216, 91 S.W. 557 (1905), the property was sold at a public sale for $4,000. One of the parties objected to confirmation, on the ground that the price was grossly inadequate. The objector offered to bid $5,000 at a resale. The chancellor offered to permit the successful bidder to increase his bid to $5,000, but the bidder refused to do so. The chancellor then set the sale aside and accepted the party's higher bid of $5,000. We first observed that a judicial sale should not be set aside for mere inadequacy of price unless the inadequacy 'be so gross as to shock the conscience or raise a presumption of fraud or unfairness.' We then went on to point out that a court does not have an arbitrary right to refuse to confirm a judicial sale, saying:

'Courts have adopted as a wise public policy, the rule that confidence in the stability of judicial sales should be maintained, so that competitive bidding may be encouraged by the assurance that, in the absence of fraud or misconduct, the highest bidder will be accepted as the purchaser of the property offered for sale. And, while it is often said that the accepted bidder at such a sale acquires no independent rights until the sale be confirmed by the court, and that the court may exercise a discretion in either confirming or rejecting the sale, yet this discretion must be exercised according to fixed rules, and not arbitrarily, and the bidder has the right to insist upon its exercise in this manner only. He can insist that his purchase be not set aside by the court upon reasons which are condemned.'

In reversing the chancellor's decree we closed our opinion with these words:

'If the chancellor had, under the proof, approved this sale, our duty to affirm his decision would be plain; for it is undisputed that the sale was regularly made in accordance with the order of the court, and was free from any fraud or misconduct, and the evidence shows that the price bid was not inadequate.

'That being true, the purchaser had the right to insist upon a confirmation of the sale, and it is equally our duty to protect that right and to reverse a decision of the chancellor denying it. In other words, the decision refusing to confirm the sale under the proof presented by the record can not be said to be proper exercise of the discretion of the court, and must be reversed.

'The decree is therefore reversed, and the cause remanded, with directions to confirm the sale to appellant upon compliance by him with the terms of his bid.'

Thus the George case unmistakably holds that mere inadequacy of price (which is all that is shown in the case at bar) is not a sufficient basis for the chancellor's refusal to confirm a judicial sale and, further, that we will reverse such a decree and direct that the sale be confirmed.

The same principle was applied in Federal Land Bank of St. Louis v. Floyd, 187 Ark. 616, 61 S.W.2d 449 (1933), which I cite because there as here the highest bidder was the judgment creditor, who merely credited his bid upon the judgment, leaving a deficiency. Upon testimony that the property had brought only half its value the chancellor refused confirmation and ordered a resale. We held that the highest bidder had a vested right to confirmation, saying: 'Therefore, it seems that this court is committed to the doctrine that a purchaser at a commissioner's sale takes a vested interest by reason of the purchase, and confirmation follows as a matter of right (my italics), unless it be found that fraud entered into the transaction or else the price bid and offered was so grossly inadequate as to shock one's sense of justice.' Upon that reasoning we reversed the decree and remanded the cause with a direction that the sale be confirmed.

The foregoing cases rebut the novel suggestion that a chancellor may arbitrarily set aside a judicial sale, for no...