Horsey v. Hough ex rel. Hough

Stewart, J., delivered the opinion of the Court. The sale vacated by the pro forma order of the Circuit Court-for Caroline County, purposes to have-been made, in pursuance of the provisions of the 64th Article of the Code. From the view we take, it is not necessary to consider all the exceptions that have been interposed to the ratification of the sale. The tenth, eleventh and twelfth exceptions, with the testimony applicable thereto, are sufficient to show the character of the sale. [137] The tenth and eleventh refer to the circumstances that transpired at the time of the sale, and the twelfth, to the inadequacy of the price, at which the property sold; according to the uniform decisions of the Court, no sale will be set aside, in all other respects unexceptionable, for inadequacy of price; unless the sum reported by the trustee is so grossly inadequate as to indicate a want of reasonable judgment and discretion in the trustee. Glenn &c. vs Clapp 11 G. & J., 9. We think the inadequacy of the price of the property, in this case comes within the range of the above rule, and must be regarded, in connection with the other facts in the case, as a sufficient reason for affirming the order, vacating the sale. ' The proof shows that Samuel H. Horsey, the mortgagee, made the sale in question, and reported himself as the purchaser, in virtue of the mortgage from Kugler and wife, bearing date the 20th April, 1869. In appears, that Kugler and wife, by deed of 7th November, 1870, for the consideration of $14,850, therein expressed, and the payment of this _mortgage debt of $2000 to Horsey, conveyed the property to Mrs. Hough. It further appears, that the property was subject to the payment of a judgment held by the State. The Counsel for Horsey stated on the day of sale, that this lien existed, but the amount was not known. In the advertisement of sale, there is no reference to this judgment. The mortgagee reports the fact of this lien existing, and that he believes a considerable balance remains due. Hough states there is about $1400 due on the judgment, and there is no testimony to the contrary. Schuyler values the property, lot No. 1, at $4000 ; states it was improved by the use of lime — lies at Gloldsborough station on the Maryland and Delaware Railroad — has on it a large peach orchard — some 1500 trees in full bearing. [138] Lot No. 2, he. values at $1000 to $1200 — has'a number jc peach trees on it and medium buildings. Lot No. 3,-from' $3000 to $4000 — the buildings are better than ordinary— large dwelling house and steam saw-mill on it in good order. Dr. Hardcastle thinks the property, No. 1, cheap at $4000 on the day of sale, now worth $5000 — lot No. 2, worth $3500 — lot No. 3, $4000. Thos. Jones estimates it at from $10,000 to $11,000. George W. Kugler, at $12,800. From these estimates, take the minimum of Schuyler, $8000, and deducting the balance of the judgment lien $1400, and they furnish on the lowest value of the property $6600. There was no testimony to the contrary. Horsey, the mortgagee, reports himself as the purchaser of all- this property, sold in three distinct parcels, to wit: the “Wyatt Farm” 145 acres, for $500 — the “Sylvester Farm” 97 acres, for $400 — the dwelling-house, with the saw-mill and premises, 6 acres, for $700 ; for the sum of $1600 in the aggregate. He also reports that the same property had been previously struck off to Robert Schuyler, at the respective prices of $900, $550 and $925, making a total of $2375 ; but that he refused to comply with the terms of sale, as advertised. He does not report specially the facts, and circumstances transpiring, under which the property had been bid off by Schuyler, but in his testimony, he states with more particularity, what occurred — in substance, that Schuyler offered to pay $1200 in cash, and said that he would pay the.balance on the ratification of the sale ; and to the receipt of the money he objected, as not in conformity with the terms of sale. Schuyler states, he offered Horsey $1200, and the balance as soon as the sale was ratified, with any security he [139] might ask for its payment — that Horsey would not take the money, alleging no reason. The auctioneer Irvin, testifies that the property was struck off to Schuyler, as the highest bidder, who tendered, what he stated to be $1200, and said that the balance would be paid on the ratification of the sale. The testimony of Richardson and Fieroe, is of the same tenor. From the proof, it appears, that Schuyler, acting for the benefit of the mortgagor’s assignee, bid off the property at $2375, exceeding Horsey’s subsequent bid $775, and offered to pay in cash $1200, and there was ample evidence, that this sum was tendered by him, and not accepted ; and no question was made as to his disability to pay the balance. The $1200 in cash offered by Schuyler, was only $100 less than the entire amount, at which Horsey afterwards bid off the property. In determining upon the approval or rejection of the sale, in such cases, the true question to be considered,' is not so much, whether there has been a literal or technical, as a fair and reasonable compliance with the terms of sale ; and a bona fide disposition of the property. Without intending to charge the mortgagee, in this case with the wilful violation of his trust; the circumstances disclosed "by the proof, show reasonable ground for the inference, that he misapprehended the nature of his duty, as trustee, which required an advantageous sale of the property, for the benefit of all the parties interested. His conduct was inconsistent with the obligations of a trustee, properly understood. The mortgagee was acting, not alone for himself, but as a fiduciary, and for the benefit of all parties interested in his proceedings. His duties were analogous to those of a trustee under a decree; and the Oourt must determine upon the propriety [140] of the sale reported by him, as in the case of an ordinary trustee. (Decided 5th June, 1873.) There is this difference, however, between the trustee and the mortgagee, which should never be forgotten by the latter, that he has a personal interest in the proceeding, and that the mortgagor has, notwithstanding, reposed full trust and confidence in his strict impartiality, and that there must be ample reciprocity on his part by a fair and just discharge of his duty. No Court can countenance a breach of faith, or failure of duty under such circumstances — on the contrary, in the review of his proceedings, when brought in question, the Court must see that his conduct measures up to this standard of fiduciary duty; and will exercise greater care and strictness in deciding upon the merits of the sale made by him; more especially in a case where the mortgagee has reported himself as the purchaser, at a great depreciation. Hubbard vs. Jarrell, 28 Md., 661. Order affirmed, and came remanded.