Wurm v. John J. Reilly, Inc.

• Decision Date: 19 July 1960
• Citation: 86 A.L.R.2d 286,163 A.2d 13,102 N.H. 558
• Parties: , 86 A.L.R.2d 286 Warren N. P. WURM et al. v. JOHN J. REILLY, INC., et al.
• Court: New Hampshire Supreme Court

Page 13

163 A.2d 13

102 N.H. 558, 86 A.L.R.2d 286

Warren N. P. WURM et al. v. JOHN J. REILLY, INC., et al.

Supreme Court of New Hampshire.

Argued June 21, 1960.

Decided July 19, 1960.

Wiggin, Nourie, Sundeen, Nassikas & Pingree, John N. Nassikas, Manchester, for plaintiffs.

Green, Green, Romprey & Sullivan, Manchester, for John J. Reilly, Inc., Thomas F. O'Brien, sheriff, and Ovila J. Pichette, deputy sheriff.

Devine, Millimet & McDonough and Norman H. Stahl, Manchester, for Lyons Iron Works, Inc., Thomas F. O'Brien and Ovila J. Pichette.

Fisher, Parsons & Moran, Harold D. Moran, Dover, for defendants Fred C. Assad and 32 Merrimack St., Inc.

James M. Winston, Manchester, receiver and trustee in bankruptcy, pro se.

DUNCAN, Justice.

The sale which these plaintiffs seek to have set aside and decreed invalid was held on the premises in question on April 6, 1959, by public auction, pursuant to executions in favor of the creditors John J. Reilly, Inc. and Lyons Iron Works, Inc. issued in actions brought to enforce mechanic's liens upon the premises. The notice of the sale stated that all the right, title, and interest of the defendant hotel corporation and all its 'Right in Equity and Right to Redeem said Right in Equity' would be sold 'subject to all prior valid liens of record * * *.' The notice further stated: 'Terms cash at time of sale. Sheriff's deed to be given within 30 days of sale.'

At the sale, it was announced that a prior mortgage secured indebtedness amounting to $59,000, that a prior lien for taxes due the city of Manchester secured taxes totalling $14,613.73 plus interest and that a prior lien for federal taxes secured payment of $12,328.49 with interest. However the referee in bankruptcy, there present, announced that as filed before him the claim of the Federal Government approximated $5,000.

The record of the bidding showed an opening bid by the defendant Assad for $20,000. Thereafter bids by Assad and four other bidders, including the plaintiff Blank were received. The property was sold to the defendant Assad upon his bid of $140,000, which followed a bid by the plaintiff Blank for $139,000.

Following a conference of attorneys for the execution creditors, the deputy sheriff, and the successful bidder, the latter delivered to the deputy sheriff his personal check for $25,000 and a check of Joseph Michael Realty Corporation for $115,000. On April 7, 1959, the deputy sheriff carried the check for $25,000 to the First National Bank of Rochester, where he received a cashier's check in substitution therefor. The bank check was then deposited to the sheriff's account.

The check for $115,000 was held by the sheriff until his deed of the premises dated April 6, 1959, was delivered and recorded on April 20, 1959, when the larger check was also deposited to the sheriff's account. There was evidence that the account of Joseph Michael Realty Corporation showed a balance of $3,940.82 on April 20, 1959, a deposit of over $119,000 on April 22, 1959, and a charge against the account for $115,000 on the same date.

The plaintiffs attack the execution sale upon several grounds: first, because the requirement of cash at time of sale operated to discourage bidders; second, because the sale was not for cash; and finally upon the ground that the defendant Lyons Iron Works, Inc. has failed to preserve its mechanic's lien by proper attachment.

While it is possible that sales for cash, particularly where substantial sums are involved, tend to discourage bidders (Aldrich v. Wilcox, 10 R.I. 405, 408; 3 Jones on Mortgages (8th ed.) 538), by the weight of authority judicial sales are required to be for cash unless the interested parties agree otherwise. We are aware of no authority in this jurisdiction for departure from the general rule. The statute specifies that the debtor's right to redeem 'may be taken on execution, and * * * sold at auction' (RSA 529:19), but is silent as to the terms of such a sale. However, in the early case of Chase v. Monroe, 30 N.H. 427, 432, 433, a sheriff was held liable for the sale price of attached goods which he sold upon credit to a purchaser who was unable to pay the price when due. After pointing out that there was no agreement by the creditors to a sale upon credit the court said: 'Property sold upon writs of attachment is to be disposed of in the same manner as upon execution; to wit, at auction; to the highest bidder; and, of course, for cash * * * If [the sheriff] sells on credit, it is at his own risk.' See also, Jackson v. Smith, 52 N.H. 9, 12.

In the absence of evidence of any agreement upon terms other than cash, the sale in the case before us is not open to attack upon the ground that the notice improperly discouraged bidding by imposing cash terms. 3 Jones on Mortgages, supra, s. 2079. 2 Freeman on Executions, s. 293a; 33 C.J.S. Executions § 217, p. 463.

The plaintiffs argue that an execution sale is required to be for cash, and that since uncertified checks were accepted by the sheriff, the advertized terms of the sale were violated as well and that the sale should be set aside for that reason. It is suggested that acceptance of the checks was evidence of unfairness or bad faith on the part of the sheriff, who acted as trustee for the parties (Jackson v. Smith, 52 N.H. 9, supra); and that the sale must therefore be held void in accordance with principles set out in Very v. Russell, 65 N.H. 646, 23 A. 522, Wheeler v. Slocinski, 82 N.H. 211, 131 A. 598.

That the acceptance of checks constituted such unfairness as to vitiate the sale was not a compelled conclusion. There was evidence that the bidder offered to pay cash, but that the sheriff elected to take checks after investigation disclosed the probability that they would be honored, and the execution creditors offered no objection. In accepting the checks the sheriff rendered himself liable for their equivalent (Chase v. Monroe, 30 N.H. 427, supra; Robinson v. Brennan, 90 N.Y. 208, 213), but the decisive factor here is that no...