Berlin v. Melhorn

Burks, J., delivered the opinion of the court. This is a contest between successive purchasers of the same land under decrees of court. Upon default by Melhorn, the first purchaser, the land was ordered to be resold, and at the offering Berlin was the best bidder. The commissioner conducting the sale made report of the fact to the court, and the court confirmed the report. Afterwards and during the term at which the order of confirmation was made, Melhorn offered an advance on [641] Berlin’s purchase; and thereupon the court, without assigning any reason, by its decree set aside the order of confirmation, and directed the land to be again exposed to sale at the price offered by Melhorn, as an upset bid. Berlin, on appeal allowed him, complains of this decree. We are of opinion that he has just grounds of complaint. We think it may be safely laid down, as a general rule, deducible from the authorities, that after a judicial sale has been absolutely confirmed by the court which ordered it, it will not be set aside except for fraud, mistake, surprise, or other cause for which equity would give like relief, if the sale had been made by the parties in interest, instead of by the court. But where the obj ection is "to the confirmation, the rule is more liberal. The principles applicable to such a case have been affirmed by several recent decisions of this court. In the opinion of the court by Judge Staples, in Brock v. Rice and others, 27 Gratt. 812, it is said that “ a decree of confirmation is a judgment of the court which determines the rights of the parties. Such a decree possesses the same force and effect of any other adjudication by a court of competent jurisdiction. But before confirmation the whole proceeding is in fieri, and under the control of the court. Until then, the accepted bidder is not regarded as a purchaser. His contract is incomplete, and he acquires by his bid no independent right to have it perfected. * * * * * * “ Whether the court will confirm the sale must, in a great measure, depend upon the circumstances of each particular case. IMS'difficult to lay down any rule applicable to all cases; nor is it possible to specify all the grounds which will justify the court in withholding its approval. * * * * “Tbe court, however, in acting upon a report of sale, does not exercise an arbitrary, but a sound legal discretion, in view of all the circumstances. It is to be exercised in the interest of fairness, prudence and with a just regard to the [642] rights of all concerned. See Taylor v. Cooper, 10 Leigh, 317; Daniel v. Leitch, 13 Gratt. 195, 211, 214; Blossom v. Railroad Company, 3 Wall. U. S. R. 205, 6, 7; Eorer on Judicial Sales, and cases at pages 30, 55, 56.” And in discussing these principles in their application to the opening of biddings before confirmation, Judge Anderson, speaking for the court in Roudabush v. Miller and others, 32 Gratt. 454, 465, said that “in a proper case, where it would be just to all the parties concerned, this court maybe understood as having sanctioned a practice in the circuit courts, in the exercise of a sound discretion, of setting aside a sale made by commissioners under a decree, and reopening the biddings upon the offer of an advance bid of a sufficient amount deposited or well secured; and to that extent the former English practice had been allowed in this State. But it has never been held imperative upon the courts to set aside the sale and reopen the bids. It is a question addressed to the sound discretion of the courts, subject to a review of the appellate tribunal, and the propriety of its exercise depends upon the circumstances of each case, and can only be rightfully exercised when it can be done with a due regard to the rights and interests of all concerned— the purchaser as well as others. An examination of the facts and circumstances of the present case will disclose the error in the decree. Melhorn, the new bidder, was a defaulting purchaser at a prior sale. In making the purchase he had submitted himself to the jurisdiction of the court in the cause as to all matters connected with the sale or relating to him in the character of purchaser. Clarkson v. Read and others, 15 Gratt. 288, 291. Upon default made, the-court took the usual course, according to our practice, of ordering a resale of the land. After the confirmation of the sale, he was in equity the owner of the land, subject to the lien retained for the purchase money, and the land was ordered to be resold as [643] his land. When, therefore, he made the advance bid he was offering to repurchase his own land at a less price than he had bound himself to give at the first sale. He did not object to the confirmation of the sale to Berlin on the ground of fraud, mistake, surprise, irregularity in the sale, ■or for any specified cause. He merely contented himself with offering an advance without even alleging that the price bid by Berlin was inadequate. He did not even except to the report of the sale, and suffered it to be confirmed without objection, nor did he make a bid until more than two weeks after the confirmation. We think that while it was in the power of the court at any time during the term to set aside the sale, this should not have been done, under the circumstances, except upon good cause shown, and that the mere (though secured) offer of a larger price by a defaulting purchaser was not good cause. The price at which Melhorn purchased at the first sale was evidently more than the land was worth. This is stated by the commissioner in his report and therefore he recommended a confirmation of the sale. It appears that the other lands of the decedent (Ammon) had been divided among his heirs, and it is shown by their written agreement that Melhorn (who married one of them) purchased the land in their interest, with the view probably, as suggested, to get time on the payment of the debts against the estate. The resale was advertised in the newspapers in conformity to the decree, and as no bidders appeared on the first day fixed for the sale, the advertisement was renewed from time to time with like result on five several occasions, and the land was finally sold after the sixth advertisement. Melhorn, as well as his sureties, who were also interested as heirs and co-purchasers, must have had knowledge of these repeated efforts to make sale. They resided in the county where the land lay and where it was advertised. Indeed, it is admitted by Melhorn’s counsel in his brief that Melhorn was present at each offering except [644] the last. And yet neither he nor they offered to huy. The longer the sale was deferred the more time they gained to meet the claims of the creditors. It was to their interest therefore and against the interest of the creditors to delay the sale. If it was competent for Melhorn to become a bidder for his own land directly to the court, it was equally as competent for him to bid at any of the numerous offerings that were made. As he was absolutely bound on the first purchase he could afford to bid a less sum on the resale, and if he became the purchaser a second time, he might on a second default again bid a higher sum than before, but still less than the original price, and so on from time to time upon repeated resales ordered, and thus postpone the ultimate realization of the purchase money indefinitely, unless previously collected by suits at law on his personal obligations. The report of the commissioner shows, as before stated, that the price obtained at the first sale was more than the land was worth, and there is nothing in the record to show that the sum bid by Berlin was not the full value of the land. The advance offered by Melhorn, for the reasons stated, is no evidence of the true value. There were no affidavits or depositions taken as to the value and no statement or even suggestion in the record that Berlin’s bid was inadequate. The land was assessed for taxation in 1879 at $3 per acre. Berlin’s bid was upwards of $4 per acre. The commissioner in his reports states that he had made repeated efforts to sell, that the sale to Berlin was the best he was able to make, and recommended its confirmation. His recommendation was at first adopted by the court without objection or exception from any quarter, and the order of confirmation should not have been disturbed. The last decree of the circuit court will therefore be reversed and the sale to Berlin will stand confirmed. Decree reversed.