Saunders v. Stults

• Decision Date: 11 May 1920
• Docket Number: 33322
• Citation: 177 N.W. 516,189 Iowa 1090
• Parties: WILLIAM E. G. SAUNDERS et al., Appellees, v. A. S. STULTS et al., Appellees; WAHKONSA INVESTMENT COMPANY et al., Appellants
• Court: Iowa Supreme Court

177 N.W. 516

189 Iowa 1090

WILLIAM E. G. SAUNDERS et al., Appellees, v. A. S. STULTS et al., Appellees;

WAHKONSA INVESTMENT COMPANY et al., Appellants

No. 33322

Supreme Court of Iowa, Des Moines

May 11, 1920

REHEARING DENIED OCTOBER 23, 1920.

Appeal from Winnebago District Court.--M. F. EDWARDS, Judge.

APPEAL from the action of the district court in refusing to confirm a sale made by its receiver. Opinion states the facts.

Affirmed.

Kelleher Hanson & Mitchell, for appellants.

E. A. & W. H. Morling, Gordon & Osmundson, Senneff, Bliss, Witwer & Senneff, and Cosson & Clarke, for appellees.

GAYNOR J. WEAVER, C. J., LADD and STEVENS, JJ., concur.

OPINION

GAYNOR, J.

Prior to the happening of the matters involved in this controversy, the defendants Stults had contracted to purchase 790 acres of land. Finding themselves unable to finance the purchase, they induced the plaintiffs, Saunders and the two Sopers, to do so. A contract was entered into between these parties, by the terms of which the land was to be sold, and the sum realized divided between them, in proportion to the interests of each, as fixed in the contract. It appears that a sale could not be effected within the time limited by the contract, and a disagreement arose between them as to the price at which the land should be sold. Thereupon, these plaintiffs brought this action to terminate the joint adventure, and to have a receiver appointed. After a hearing, the court found for the plaintiffs, and appointed a receiver in the person of one James B. Anderson. Anderson qualified, and gave bond, and entered upon his duties as receiver. The decree was rendered in October, 1918, and directed this receiver to sell, convey, and convert into money all real estate and all personal property covered by the joint enterprise, and to do this as speedily as might be without sacrificing the property. As to the real estate, the receiver was directed to sell the same upon such terms "as are customary in the locality in relation to real estate when sold in like quantities at private or public sale." Thereafter, the receiver endeavored to interest buyers in the property, from time to time. The receiver fixed the price at $ 135, and undertook to secure a purchaser at that price. He made diligent effort to secure a purchaser. There is no complaint of this. On or about May 26, 1919, the Wahkonsa Investment Company and Furlong & Brennan, after inspecting the land, submitted a bid of $ 130. On May 31, 1919, the receiver accepted the bid of these parties, and entered into a formal written contract with them, in which he agreed to sell and convey to them the land aforesaid at the price of $ 130, and in the contract they bound themselves to buy at that price, and to pay $ 10,000 down. The terms upon which the Wahkonsa people were to purchase the property were as follows: To pay for said land the sum of $ 102,700, $ 10,000 in hand, and $ 30,000 in cash on March 1, 1920; to assume mortgages on the land, amounting to $ 35,475; and to give a second mortgage on the land of $ 27,225, the second mortgage to bear interest at the rate of 6 per cent per annum, payable annually from March 1, 1920. Shortly after this contract was made, the receiver prepared a report of this sale for submission to the court. The report, however, was not filed. Thereafter, and before any report was made to the court of the sale aforesaid, the First & Second Mortgage Corporation of Iowa presented a bid to the receiver of $ 145 per acre, with payments to be made on terms far more favorable to the parties interested than was provided in the Wahkonsa contract.

On the 21st day of July, 1919, the receiver filed a report, in which he advised the court of the sale of the land to the Wahkonsa people, and also advised the court of the offer made by the mortgage corporation, and requested such action by the court on his report as might be just and proper. The Wahkonsa people moved for a confirmation of the sale to them. Objections were filed to its confirmation on various grounds, among which were that the sale price was far less than the actual value of the land, and that the manner and times of payment were inequitable. After hearing was had upon this motion and the objections thereto, and after evidence was introduced, the court refused confirmation of the sale to the Wahkonsa people, and directed the receiver to accept the bid of the First & Second Mortgage Company on the terms set out in its offer, and directed the receiver to enter into a written contract with this party for the purchase and sale of the land. The Wahkonsa Investment Company and Furlong & Brennan appealed from this action of the court, claiming that the sale to them was a binding sale; that they acquired an interest in the land under the sale; that the court should have confirmed the sale; and that it erred in ordering the contract set aside, and in recognizing the sale to other parties on bids made after the sale to them, and also erred in directing the receiver to accept the bid of the First & Second Mortgage Corporation.

This is all that is necessary to present the only question that is here for our consideration.

The contention of appellant is:

(1) That a bidder to whom property has been knocked down at a judicial sale, acquires legal rights which are to be as much protected and enforced as are the rights of other purchasers, and that the court erred in not confirming the contract of sale made with appellants.

(2) That a successful bidder has a right to insist that his purchase be not set aside by the court, and that he has a right to a confirmation of the same; that there are no facts shown impeaching the sale, and no reason why the court should not have confirmed the same.

(3) That inadequacy of price which is not gross is not sufficient for refusing to confirm the sale; that the fact that more was offered for the land after the receiver had entered into the contract with these appellants, did not justify the court in setting aside that contract and refusing to confirm the same.

The appellants' contention overlooks material facts: that is, that the receiver was simply the officer or agent of the court; that this sale was not a completed sale; that it was not in the power of the receiver to make a completed sale which would bind the court to its confirmation; and that those who buy at a receiver's sale, such as we have in this case, take with knowledge of the fact that the contract of sale is not binding on the receiver until the same is presented to the court and approved by the court; that a sale such as we have here is a sale without the right of redemption.

In Terry v. Coles' Exr., 80 Va. 695, the Supreme Court of Virginia, quoting from Rorer on Judicial Sales, 30, 55, 56, said:

"Confirmation is the judicial sanction of the court. Until then, the bargain is incomplete. Until confirmed by the court, the sale confers no rights. Until then, it is a sale only in a popular, and not in a judicial or legal sense. The chancellor has a broad discretion in the approval or disapproval of such sale. The accepted bidder acquires, by the acceptance of his bid, no independent right, as is the case of a purchaser at a sale under execution, to have his purchase completed, but is merely a preferred proposer, until confirmation by the court of the sale, as...