Smith v. Roberts

Supreme Court of Georgia
Smith v. Roberts, 106 Ga. 409 (Ga. 1899)
32 S.E. 375; 1899 Ga. LEXIS 693
Little

Smith v. Roberts

Opinion of the Court

Little, J.

There are several assignments of error made to the ruling of the court refusing to dismiss the petition. From the view which we take of the case, it is only necessary to refer to two questions presented by the motion to dismiss. It is a general proposition, well recognized in equity pleading and practice, that one who submits a bid for property offered for sale by a receiver under order of the court, brings himself within the jurisdiction of the “court for the purpose of .having the sale completed; and to this end the court may by rule or attachment compel the bidder to perform his part of the contract, and either pay the amount of his bid and take the property, or make good the difference between his bid and the amount realized at a subsequent sale of the same property. But the plaintiff in error avers that he was a resident of the county of Oglethorpe and was not at the time the petition was filed, nor now, a resident of Lowndes county where the proceedings were pending, and that the superior court of Oglethorpe county alone has jurisdiction of him for the trial of the matters alleged against him in the petition, and that the constitution of this State, in par. 6, sec. 16 of art. 6, fixes the venue of such a suit against him in the coupty of Oglethorpe where he resides. We do not find it necessary, however, to discuss- or decide the question of jurisdiction raised in this case, because on its merits, as shown by the petition, the case must be adjudged against the defendants in error. Assuming that the superior court of Lowndes county had acquired jurisdiction of plaintiff in error, for the purpose of compelling him to pay the difference between the amount of his bid and that which the property brought at a resale, it only becomes material to pass on the question raised in the fifth ground of the motion to dismiss. That is, it does not appear from the petition or the record in the case that the property sold on the first Tuesday in April, 1897, was the same and the whole of the property bid for by the plaintiff in error. In express terms, the written bid alleged to have been made by Smith was for the purchase of “the sawmill, planing-mill, engines, boilers, locomotives, tramroads, railroad-iron, and all fixtures, furniture, and utensils and appurtenances, and all other property of any kind, character, and description, owned by the *416Mineóla Lumber Company on the 13th day of December, 1895.” This bid specifically included not only all the property which the company owned at that time, but to which they had an equitable title, where the legal title was in some other person to secure a debt dr there was a lien for purchase-money. And the bid was made with the understanding, as expressed in the writing, that the court was to provide for the payment or discharge of the debts for which the title was so held, by proper order. Evidently the purchaser did not propose to buy any single interest of the Mineóla Company, nor any particular item of property. A fair construction of his bid manifests that his purpose was to purchase the entire property as an outfit or plant — not only those items which the company held absolutely, but other particular and necessary pieces of property where the legal title was in the original vendor or a lien existed for the payment of some particular sum. This, in effect,' was his. bid, and with these terms and conditions it was accepted by the court.

It is contended that when this bid was submitted and accepted by the court, a valid sale was completed, under the terms, of which the receiver was entitled to have the purchase-money, on tender of the property according to the terms of the bid. Assuming the bid to have been made, such a conclusion must follow. The compilers of the American and English Encyclopaedia of Law, in vol. 12, p. 234, have, from authorities cited in notes 1 and 2, condensed the rules which are applicable to the question under consideration, in the following language; “Where the sale is made under a decree in chancery, the power of the court to enforce the contract of purchase is broader than in case of an ordinary execution sale. In addition to an action at law to recover the amount bid, or the deficiency upon a resale, the court of chancery may, upon motion, or proper application, (1) set aside the sale, release the purchaser, and decree a resale; or (2) ratify the sale and decree a specific performance of the contract, enforcing its order by attachment and commitment of the person of the purchaser for contempt; or (3) order a resale, holding the purchaser liable for any deficiency, and for the costs of the resale.” See also, Jones on Mortgages, *417§1642; 2 Dan. Ch. PI. & Pr. 1281, 1282. In the case at bar the proceeding was instituted under the third of these rules, that is, ordering the property resold with the express purpose to hold Smith liable for the deficiency and the costs of the second sale. In order to do so, it is essential that the same property and all of it should be resold; otherwise it would be impossible to ascertain the deficiency, so as to fix the amount for which the bidder at the first sale is to be held responsible. It must be noted that no element of uncertainty can be allowed to enter in establishing this liability. The first purchaser is liable for a fixed, definite amount, to be ascertained by subtracting, from the purchase-price which he contracted to pay, the amount realized at the second sale of the same property, or he is liable for nothing. The difference measures the liability. Without stopping to ascertain the rules which govern the manner of the second sale, in relation to the liability of the first purchaser, further than to say that the mode, manner, and terms are left to [the sound [discretion of the chancellor in the accomplishment of the purpose to obtain the best price at the second sale for the protection of the original purchaser, we refer to certain established principles which must be considered in determining, in a proceeding of this character, the liability which attaches to the first purchaser who is able, but refuses, to comply with the terms of his purchase. The summary process exercised by courts of equity, to compel a purchaser to complete his bid, is cumulative of the remedy to recover the amount in an action at law, not exclusive. Townshend v. Simon, 38 N. J. L. 239; Shinn v. Roberts, 43 Am. Dec. 636; Municipality v. Hennan, 14 La. An. 559; 17 La. An. 52. The resale must be made upon the same terms, as near as may be, in order to render the first purchaser liable for the difference. Shinn v. Roberts, supra; Riggs v. Pursell, 74 N. Y. 370. If the terms of the sale differed materially, it is proper to restrain plaintiffs from collecting the difference. Our statute law, Civil Code, §5466, in dealing with liability of the purchaser at a sale of real or personal property, when made 'by an executor, administrator, etc., or by a sheriff under legal process, declares, that the trustee or officer making the sale may either proceed *418against the purchaser for the full amount of the purchase-money or resell'the property and proceed against the first purchaser for the deficiency; and in construing this provision of the law, this court has made repeated rulings on the question as to what defenses may be urged by such purchaser in a suit to recover the deficiency.

The applicability of the principles ruled may be questioned when sought to be followed in a court of equity. It may be answered, however, that equity is ancillary, not antagonistic to the law; that it follows the law where the rule of law is applicable, and the analogy of the law where no rule is directly applicable. Civil Code, § 3928. We are not now dealing with the powers of a court of equity to enforce its orders, nor attempting to limit the practice incident to such courts to enforce its decrees or adjudications by rule or attachment; but the principles which govern the liability of a purchaser of property, for a deficiency in price on a resale, must be the same whether it arises in a suit at law under a sale made under legal process issued by a court of competent jurisdiction, or the sale be had under an order of the same court, by a receiver, in the exercise of its chancery powers, and the proceeding is in the nature of a petition for attachment. The incidents are different, but the rules of law which afford a defense, when resting on similar facts, must be the same in both jurisdictions. In the case of Hendrick v. Davis, 27 Ga. 171, which was a suit to recover the difference between the amount originally bid and that which the property brought at a resale by the sheriff, the court ruled: “For Hendrick to be liable, the same property must have been resold, and resold as the property of the identical defendants as whose property it had been bid off by him.” In the case of Saunders v. Bell, 56 Ga. 442, which was an administrator’s sale, it was ruled that a nonsuit was proper where the resale was delayed twelve months. See also Cureton v. Wright, 73 Ga. 8. As we have seen, the bid of Smith was made for the property as a whole, and in a certain condition relatively to its situation as it existed at a particular time, December 13, 1895. In order to hold Smith liable for the difference between his bid and the amount realized at a resale, it is a. condition precedent *419that a resale of the property for which he bid and as he bid— that is to say, as to extinguishment of liens on the property— should be made. Confessedly, this was not done. The rails upon which there existed a lien were taken up and turned over to a bank which held the lien. One of the locomotives was similarly disposed of; and so was the iron safe. It is true the petition alleges that he is entitled to a credit for the prices at which these items of property sold, less the amount necessary to extinguish the liens on them; but he bid for this property in a certain condition, free of all liens, and as parts of a whole plant, and made his bid on the condition that he should have the property divested of liens; and, in order to hold him good for the difference, the same property must have been sold with the same conditions as to title. While the receiver might have pursued one of the other remedies which the law gives him,— for instance, he might have, without a resale, tendered the property to Smith according to his bid and demanded the purchase-money, and, on his refusal to comply, instituted an action to recover the amount bid, — yet, when he, or the intervenors proceeding in his name, selects another remedy which the law allows — that of holding the purchaser for the difference between the bid and the amount realized at a resale, — it is essential, before recovery, either in law or in equity, that a resale of the property as originally purchased must be alleged and proved. This not having been done, as shown by the petition, the proceeding should have been dismissed; and the judgment overruling the motion to dismiss is

Reversed.

All the Justices concurring.

Reference

Full Case Name
SMITH v. ROBERTS, receiver
Cited By
1 case
Status
Published