Polk v. Afflick

Hart, J., (after stating the facts). The sole question raised by this appeal is whether or not the chancerv court erred in setting aside the sale by the receiver to E. M. Polk for certain property belonging to the insolvent corporation and accepting the increased offer by 'O. W. Afflick for said property. The record shows that E. M. Polk bid $3,250 for certain vacant lots in West Helena and $525 for the equity in a certain house and lot in West Helena. This property was struck off to him by the receiver, and'E. M. Polk complied with the terms of sale by depositing a certified check for $500 with the receiver and securing the deferred payments on said property. The 1,800 acres of rural land was offered for sale, and no one bid therefor. When the report of sale was presented to the court for confirmation, C, W. Afflick offered $5,000 for the property purchased by Polk and for the rm:al land: His bid was accepted by the court, and the sale to Polk was set aside. Under these facts the court erred in setting aside the sale to E. M. Polk. The value of the farm land, which was not sold at the receiver’s sale, is not shown; and there is nothing in the record from which to infer that the sum bid by Polk for the property struck off to him by the receiver was inadequate. Even if this be true, the mere fact that Afflick made an advance bid for the property would not be sufficient. The English practice treats the bidder at chancery sales in the light of one who has made an offer to be reported to the court, and, if a larger offer is made by another, the sale to the former is not confirmed. The practice of the English court of chancery in opening sales whenever an offer of a larger sum for the property is made has never been adopted in this State. Penn’s Adm’r v. Tolleson, 20 Ark. 652. There is a uniform current of decisions in this State settling that judicial sales will not be opened because bids for a greater amount are offered for the property when the report of sale is presented for confirmation. George v. Norwood, 77 Ark. 216; Brasch v. Mumey, 99 Ark. 324; Miller v. Henry, 105 Ark. 261; Wells v. Lenox, 108 Ark. 366; and Stevenson v. Gault, 131 Ark. 397. This principle is necessary to maintain the stability of judicial sales. In order to preserve the public confidence in the entire fairness of such sales, it has always been declared to be within the judicial discretion of chancery courts in this State to set aside such sales, where there is inadequacy of price coupled with fraud, or any other element which would amount to unfairness- and render it inequitable to confirm the sale. As we have' already seen, none of these reasons for setting aside the sale made by the receiver exists in the present case. But it is claimed that the right existed because' the order of sale contains the following: ‘ ‘ The court reserves the right to reject any and all bids offered at said sale. ’ ’ Ill the first place, if this clause be given the broad signification claimed by counsel for appellee, it would not have given the court the right, under the authorities cited, to have set aside the sale to Polk and accepted the bid at the time made by Afflick. At most, it could have only given the court the right to have rejected the bid of. Polk. Under the principles of law above -cited, this language could not have any greater signification than to authorize the receiver to have rejected bids made at the time of sale. The receiver was the arm of the court, and, after he accepted the highest bid made at the sale, such bidder became the purchaser, and, as such purchaser, acquired vested rights. He 'could be required to specifically perform his contract, and he acquired the corresponding right to appear and claim at the hands of the court his rights as a purchaser at the sale. It follows that the chancellor erred in setting aside the sale to E. M. Polk, and, for that error, the decree must be reversed, and the cause will be remanded for further proceedings in accordance with the principles of equity and not inconsistent with this opinion.