Strode v. Hoagland

Epperson, C. This is an appeal from an order of the district court for Logan county setting aside a judicial sale in a proceeding foreclosing a real estate mortgage. The mortgage in controversy was given by Joseph S. Hoagland and wife, who have continuously owned the equity of redemption.. On the day preceding the sale the defendants filed objections to the appraisement for the the reasons that the action had abated, that the appraisers were not resident freeholders of the county, that the lands were appraised so far below their real value as to malee said appraisement fraudulent, that a copy of the appraisement had not been filed in the office of the clerk of the court prior to the advertisement, and that the appraisement, was not made upon actual view by the appraisers. At the sale the defendant’s daughter-in-law was the sole bidder. She bid $670, the-land having been appraised at $1,000. The executors of the estate of Martha E. Stuart, who had died since the suit was instituted, filed objections to the confirmation of the sale for many reasons; among them are the following: [543] That before tbe sale tbe attorney for tbe defendant bad filed with tbe clerk objections to tbe appraisement, which motion tbe executors confessed; that after tbe objections bad been filed by tbe defendants their attorney bid on said property in tbe name of bis wife, and that no greater bid was made for tbe reason that tbe objections were on file. The executors do not rely upon tbe other objections alleged in their motion, and it is unnecessary to refer to them here. Before tbe filing of these objections by the executors, tbe defendants had withdrawn their objections to tbe appraisement. Tbe only question to be considered is whether or not tbe conduct of tbe defendants and their daughter-in-law was unfair and prejudicial to tbe plaintiffs to such an extent as- would justify tbe district court, exercising sound legal discretion in setting aside tbe sale. That the appellant and tbe defendants were acting in unison there can be. no doubt. Tbe defendants employed their son as attorney in the action. Acting for them he filed objections to the sale, thereby preparing for further litigation and delay. On tbe day of sale, as attorney for bis Avife, he bid upon the property; and afterwards as attorney for tbe defendants, withdrew tbe objections previously filed. His wife then was tbe successful bidder, and for a sum defendants bad previously alleged was so far below the real value of tbe property as to amount to fraud. “It is ordinarily the duty of a court, AAdiere a judicial sale is made in conformity with its decree, to ratify such sale.” Passumpsic Savings Bank v. Maulick, 60 Neb. 469. But when one party indulges in unfair or fraudulent conduct to tbe prejudice of an adverse party, the trial court is vested with a discretion to set aside tbe sale. In the case of Roberts v. Robinson, 49 Neb. 717, it Avas held: “If there has been fraud or unfairness, irregularity, or disregard of tbe statute in making a judicial sale, tbe district court is invested with tbe discretion to set such sale aside.” The fraud or unfairness necessary to avoid a sale is not limited to tbe Avrongs of tbe officers conducting tbe sale, but whenever any person [544] does some act manifestly unfair and' prejudicial, which would become effective upon confirmation of the sale, the court should intervene to prevent the consummation of the wrong. The evidence in this case shows that one other person was disposed to bid at this sale, but having learned that objections were filed, and fearing protracted litigation, refrained from bidding. But even in the absence of evidence of this nature it is reasonable to presume that the filing of such objections will result in discouraging bidders, and a sale thus made may be set aside on the motion of the party aggrieved. The unfairness in this case is obvious. The defendants and those acting for and with them discredited the proceedings by filing objections to the appraisement, thereby threatening to litigate the rights of the purchaser. It is not even claimed that the objections were filed in good faith. The evidence of defendant’s attorney as .to his reasons for this conduct was that he filed their objections “with the object of raising all possible objections that might be raised in court before confirmation if facts should develop.” It was his business to know the facts and not to object unless justified.. Defendants depreciated the value of the land by their improper conduct, making it possible to purchase at the depreciation they caused, and their daughter-in-law cannot now claim to be a fair purchaser. Such conduct would vitiate a contract, and therefore fairly brings this case within the exeception to the rule announced in Nebraska L. & T. Co. v. Hamer, 40 Neb. 281, which provided: “Until a bid is accepted it is a mere proposal and may be withdrawn by the bidder. After acceptance it becomes a binding contract and cannot be withdrawn or changed except under such circumstances as would justify the rescission or reformation of other contracts.” But appellant argues, in effect, that plaintiffs were not prejudiced because they might have appeared at the sale and protected their rights by bidding a greater amount. The plaintiff’s were executors of the mortgagee’s estate. [545] They were justified in submitting to the defendants’ motion to set aside the appraisement because of its extremely low and fraudulent valuation. They waived no rights by their failure to bid. The record of the trial court shows no abuse of discretion, and we recommend that the judgment be affirmed. Ames and Oldham, CC., concur.. By the Court: For the reasons stated in the foregoing opinion, it is ordered that the judgment of the district court be Affirmed.