Opinion
11-15-1877
LONG & al. v. WELLER'S ex'or & als.
O'Ferrall, for the appellants. William B. Compton and B. G. Patterson, for the appellees.
1. An objection to the title of land by a purchaser at a judicial sale, must be made before the sale is confirmed by the court. Ordinarily an objection after confirmation comes too late.
2. The title to an easement on the land to which it is appurtenant is necessarily connected with the title to the land, and an objection referring to such easement must be governed by the same rules.
3. An objection by such a purchaser, after the sale has been confirmed, that owing to his misinformation as to the boundaries of the land, he does not get certain water privileges which he would have had if he had been correctly imformed as to the said boundaries, can only be sustained on the ground of fraud or mistake; and if mistake is relied on, it must be the mistake of both parties.
4. An objection of the kind should be made to the court as soon as it is discovered by the purchaser.
5. Where a judicial sale of land is made upon a credit, and the title retained as a security, upon a rule against the purchaser to show cause why the land should not be resold for his failure to pay the purchase money before making a decree for the sale, the court should ascertain how much of the purchase money is due, and should in the decree give him a day in which to pay it; and if not paid in that time, the commissioner to sell.
6. Whether the whole or only a part of the land should be sold, or whether as a whole or in parcels, must be referred to the discretion of the court, and his act will not be disturbed unless plainly erroneous.
This case was heard at Staunton, but decided at Richmond. It was a creditor's bill filed in April, 1871, in the county court of Rockingham, by Samuel R. Allebaugh, executor of John Weller, deceased, to subject the property of William W. Carpenter to the payment of his debts. Of this property there was a tract of six hundred acres of land, with a mill upon it. After an account of debts had been taken, at the June term, 1872, there was a decree appointing commissioners to sell the land at public sale, upon the terms of enough in hand to pay the expenses of sale and the costs of the suit, and the residue in four equal annual payments, bond with approved security to be given by the purchaser, and the title retained.
The commissioners reported a sale of two parcels of the land; but this sale was set aside. At the October term, it appearing that a part of the land had been sold, it was ordered that a survey be made of the different parcels of the said lands, as well as of that portion yet to be sold, when sold, and a report of the surveys made to the court at a future term, showing the number of acres, roods, & c., in each parcel, and to whom sold.
The commissioners reported six parcels of land sold, describing the sixth parcel as " the mill and buildings, with about ten acres of land, more or less, metes and bounds pointed out on day of sale." There having been an advance bid made for this property, the court set aside the sale and directed the commissioners to re-advertise the mill property for sale again, and when it was put up it was to be started at the price offered in the additional bid.
The commissioners made another report, in which they set out a number of sales of parcels of land to different parties. They say the mill property and about thirteen acres of land was sold to Mary J. Barley, A. R. Whissen and Peter Long, at the sum of $2,932.63. At the January term, 1873, these sales were confirmed, and it was ordered that Samuel Shacklett, the general receiver, do withdraw the bonds filed in the papers in this case, and collect them as they fall due, and hold the proceeds subject to the future order of the court.
The cause having been transferred by operation of law to the circuit court, at the October term, 1876, a rule was directed to issue against Peter Long, Mary J. Barley, & c., to show cause why the said mill property and land should not be resold for the purchase money. To this rule Long and Mary J. Barley appeared and filed their answer. They say that the property is only valuable as a mill property, and that its value in that particular was the only inducement to purchase it; that no plat of the property was exhibited on the day of sale, or at any other time previous thereto, so far as they knew; that they purchased under the full belief and understanding, gathered from the representations made on the day of sale, and from the fact that a road to the mill had long been used, that said road was a part of the property; that the line of the road ran on the south side of Smith's creek, and that the full and complete control of the water-power of Smith's creek, from the extreme upper end of said tract to a point nearly opposite the mill, was sold with the property; in all which they fear they have been mistaken. And they set out the importance of the road, the line and the water-power to the property. They say they have paid of their purchase money the hand payment of about $150, and the first deferred payment of $700, and that they have erected improvements to the amount at least of $1,500. And they insist they shall not be required to pay any more until the title to all the privileges, rights, easements, as well as to the land itself, may be perfected, or if not perfected, that they have an abatement from the purchase price, for the damage to the said property sustained by them in failing to receive all they purchased.
The case came on to be heard upon the rule on the 24th of November, 1876, when the court held that the answer was not sufficient cause shown, and decreed that a commissioner named do proceed, after advertising the time, terms and place of sale for four weeks, to resell the said mill property and land thereto attached, on the premises, on the terms of $1,500, and all costs of suit and sale, including the costs at law, to be paid in hand on the day of sale, and the balance in two equal payments of nine and eighteen months, with interest from the day of sale, the purchaser giving bond, & c., and a lien retained on the land. From this decree Peter Long and Mary J. Barley obtained an appeal. But before the appeal was perfected, viz: on the 26th of January, 1877, the court modified the decree and directed that unless Peter Long, & c., or some one for them, do pay to A. B. Irick, receiver, all the purchase money now due upon their purchase of the property, and all costs at law and in this proceeding, within thirty days from this date, that then the said commissioner shall proceed, & c., as set forth in the decree of November 24th, 1876.
O'Ferrall, for the appellants.
William B. Compton and B. G. Patterson, for the appellees.
BURKS, J.
The appellants were purchasers at a judicial sale of a small parcel of land with valuable mill buildings upon it. The decree, under which they purchased, retained the title to the property as security for the payment of the purchase money. The sale was reported and confirmed without objection or exception. The purchasers paid a portion of the purchase money, and being in default for the residue, a rule was made against them to show cause against a resale of the property to satisfy the unpaid balance of the purchase money. They filed their answer to the rule, objecting to the resale on several grounds, and asking for an abatement of the purchase money unpaid. The circuit court deemed the answer insufficient, and by decree ordered the resale. We are to determine whether there is any error in this decree, from which an appeal has been allowed to the purchasers by one of the judges of this court.
In Virginia, the maxim caveat emptor strictly applies to all judicial sales. The court undertakes to sell only the title, such as it is, of the parties to the suit, and it is the duty of the purchaser to ascertain for himself whether the title of these parties may not be impeached or superseded by some other and paramount title; and if he have just grounds of objection for want or defect of title, he should present them to the court before the confirmation of the report of sale. Ordinarily, objection after confirmation comes too late. Young's adm'r & Bowyer v. McClung & als., 9 Gratt. 336, 358; Threlkeld's v. Campbell, 2 Gratt. 198; Daniel & als. v. Leitch, 13 Gratt. 195, 212, 213; Watson v. Hoy & als., (not yet reported), Virginia Law Journal, August, 1877, p. 473, et seq., 28 Gratt. 698.
These authorities would seem to be a sufficient answer to the pretension set up by the appellants in their answer to the rule for resale, to the effect that at the time they purchased the land and mill property, they believed that the right to the use of the entire road mentioned in the answer was annexed or appurtenant as an easement to the property purchased by them, and that since the purchase they have discovered that a claim has been asserted by a third party, which is probably right, and will deprive them of the use of the road, and thus seriously impair the value of the property purchased by them.
This is nothing but an objection for defect of title. The title to the easement is necessarily connected with the title to the land to which it is appurtenant; and whatever the purchasers believed, they must be taken to know that they could acquire by their purchase only the title that the court sold, which was the title, whatever it might be, of the parties to the suit. They purchased at their own risk, and cannot be heard to object for want or defect of title, at least after confirmation of the sale.
What is about to be said in regard to representations alleged to have been made on the day of sale as to the water-power and privileges, will apply also to the representations said to have been made in regard to the road.
The purchasers, in their answer to the rule, further object, that, under their contract, they were entitled to certain valuable water privileges, which they failed to get. This objection is based upon an alleged misunderstanding of the boundaries of the land purchased, and goes rather to the identity of the subject sold than to the title. If they are entitled to any relief on that account, it must be on the ground of fraud or mistake discovered after confirmation of the sale. In such case, the confirmation of the sale would not be an insuperable barrier to relief in the absence of laches, acquiescence, waiver, or other circumstance rendering relief inequitable.
I do not understand the answer as charging or imputing fraud to any one. The respondents do not pretend that the representations made on the day of sale, upon which they relied, as they say, to their prejudice, proceeded from the commissioner who made the sale, or from any party in interest, or indeed from any person having authority to make them. They could not, therefore, have been defrauded by them. I rather take it, that the defence, in the main, was intended to be based on the ground of mistake. Mutual mistake of material facts by the parties acting, or the mistake of such facts by one of the parties induced by the fraud or culpable negligence of the other, is certainly ground for equitable relief. 1 Story's Eq. Juris. § 151. The decision in Watson v. Hoy & others, supra, was founded on the doctrine of mutual mistake. But the mistake of one of the parties occasioned by his own culpable negligence does not entitle him to relief as against the other, who is free from negligence. 1 Story's Eq. Juris. § 146.
If there were any mistake in this case, it was not mutual. It was a mistake, if mistake at all, of the purchasers attributable solely to their own negligence. If they chose to rely upon the representations of strangers to the cause, and were thereby misled to their prejudice, they " must lie down under their folly." It was a judicial sale, and the records of the court and the papers in the cause were the only reliable sources of information as to the property to be sold, the title, boundaries, & c. To these the purchasers should have looked. If they had so looked, they could not and would not have been misled. The land which was offered for sale had been once before offered under a decree in the same suit. It had been surveyed and a plat of the survey was on file with the papers in the cause. It is admitted by the respondents in their answer, that there was such a survey, and that it showed the boundaries. They admit that it was filed, but they say they do not know when it was made or filed; that they did not know of its existence until recently. If the survey was filed before the sale, as it no doubt was, ignorance of the fact is no excuse. It was their duty to make inquiry, and inquiry duly pursued would have led to knowledge. It will not do for them to shut their eyes and then say they did not see. Wherever inquiry is a duty, the party bound to make it is affected with knowledge of all which he would have discovered had he performed the duty. Means of knowledge with the duty of using them are, in equity, equivalent to knowledge itself. Strong, J., in Cordon v. Hood, 17 Wall. U. S. R., 1, 8. See also Burwell's adm'r v. Fauber & als., 21 Gratt. 446, 463, 464.
It is moreover to be observed in this case, that the answer to the rule is wholly affirmative in its character, and is not therefore evidence of the facts it avers. No evidence in support of it was produced, none offered to be produced; and non constat, that any ever would or could be produced. No affidavit was filed stating that requisite proof would be furnished, if opportunity were afforded to procure it, and it does not appear that any application was made to the court to give such opportunity.
It is further to be observed that the purchasers not only paid the cash instalment of the purchase money without objection, but also the first deferred instalment, which became due twelve months from the day of sale. It is not stated when this deferred instalment was paid, but it is not to be supposed that it was paid before maturity. And yet it is stated in the answer that the respondents did not discover the facts on which they rely for defence until after the payment last referred to was made. It is singular that the alleged discovery was not sooner made, and also worthy of notice that after the discovery no attempt was made by them to obtain relief until they were called upon to answer the rule for resale after nearly two years' default. They might and should have filed their petition in the cause, as soon as they made the discovery, setting out the matters stated in their answer. The inference to be drawn from their delay is not favorable to the equity of their claim.
For the reasons stated I am of opinion that the circuit court did not err in holding that the answer of the appellants to the rule did not show sufficient cause against the resale. But I think the decree was erroneous in ordering a sale without giving the purchasers a day to redeem.
It is the invariable rule to give such day in suits by mortgagee against the mortgagor to foreclose a mortgage, (Clark v. Reyburn, 8 Wall. U. S. R. 322, 323, 324), and also in suits by vendor against vendee to enforce his lien for purchase money, whether such lien be express or implied. Kyles v. Tait's adm'r, 6 Gratt. 44; Yancey v. Mauck & als., 15 Gratt. 300; Adams' Equity, side p. 128. See also the valuable appendix prepared by William Green, Esq., to Wythe's Reports (Minor's Ed.) 404, et seq., and especially p. 420, note 80.
In a suit by vendor against vendee, whether the lien is treated by analogy as a security in the nature of a mortgage, and the suit assimilated to a bill for foreclosure by judicial sale, or the suit be considered, as Judge Allen seemed to think it should be in a case, at least, where the title is retained, (Yancey v. Mauck & als., supra, ) as a suit for the specific execution of a contract to which the lien is incident, the rule is the same.
Does the rule apply to proceedings in a pending suit for resale of property theretofore sold under decree in the same suit with retention of lien, or of the title with the lien incident, as security for the payment of the purchase money? I confess I can see no reason why it should not so apply in full force.
In judicial sales the court in some sense is regarded as the vendor, making sale by a commissioner as its agent, and the contract is treated as a contract substantially between the purchaser on one side and the court as vendor on the other. Where the title is retained, the proceeding for resale, whether by bill or in the more summary way, by rule, is a proceeding substantially by the court, as vendor, to enforce the collection of the purchase money by enforcing the lien incident to the title retained as a security, and must be governed by the same rules and principles which control proceedings of a like nature in a like case by any other vendor. See authorities cited by Judge Daniel in Clarkson v. Read & als., 15 Gratt. 288, 295, and among the rest, the case of Harding v. Harding, 18 Eng. Ch. R. 514, in which Lord Cottenham said, " that there was no reason why a person purchasing under a decree of the court should not be held to his contract as much as a person purchasing in the ordinary way; that the court might enforce the vendor's lien against the estate, and that an order to hold the purchaser to his contract and to resell the estate in the meantime, was in strict analogy to the course the court takes against the purchaser in the ordinary way. "
This error in the decree, in not giving the appellants a day to redeem, was corrected, it seems, by the circuit court, after the appeal from the decree was allowed and before the same took effect, by the giving of the bond required. As this correction was not to the prejudice of the appellants, but otherwise, they have no cause to complain of it.
As the decree appealed from did not give a day to redeem, of course no amount was fixed to be paid by way of redemption, and this is assigned as additional ground of error; and it is contended that, although the amendatory decree gives a day for redemption, yet it does not ascertain with sufficient certainty the amount to be paid. This amount is described in the amendatory decree as " all the purchase money now due upon their (the appellants') purchase of said property, and all costs at law and in this proceeding."
The receiver had made no report showing how much of the purchase money had been paid, and what balance remained unpaid. It would have been more regular to have required such report before the rule was made, or at least before the resale was ordered; but the appellants, in their answer to the rule, state that they had paid " the hand payment of about $150, and the first deferred payment of about $700, making in all about $850." It appears by the record that the land was sold for cash sufficient to pay the costs of suit and expenses of sale, and for the residue of the purchase money on a credit of one, two, three and four years, equal instalments, secured by the bonds of the purchasers, with title retained as further security. The gross amount of the purchase money was $2,932.63. The answer to the rule shows about the amounts paid. It is not material what were the precise amounts, as they were in full discharge of the cash payment and of the first deferred instalment, thus leaving wholly unpaid the three bonds last falling due with the interest accrued thereon. These bonds, of course, would show accurately the amount of the unpaid balance of purchase money due at the date of the decree and of the resale. They were, under an order of the court, in the hands of the receiver, to whom the appellants were directed to make payment. The decree, therefore, in describing the amount of purchase money to be paid, as " all the purchase money now due upon their (the appellants') purchase of said property," fixes the amount with requisite certainty. And so of the " costs at law and in this proceeding." They were evidenced by the record, and when taxed by the clerk, as the law requires, the amount would be certain. And id certum est quod certum reddi potest.
It is further assigned as error, that the decree complained of orders a sale of the whole of the property, instead of ordering, as it is contended should have been done, a sale of so much only as might be necessary to discharge the unpaid balance of purchase money.
In ordering a sale of property to satisfy a charge upon it, if partition be practicable and would not be injurious, and a sale of a part will produce means sufficient to satisfy the charge upon the whole, certainly such part only should be sold. But whether it be necessary to sell the whole subject, or a part only, and if a part, whether the cutting off that part will not materially impair the value of what remains, and of the whole, then whether it would be more advantageous to sell it altogether or in in parcels, and if in parcels, what number there should be, how they should be laid off and in what order sold, are questions (and there are numerous others of a like character) which must of necessity be left for determination to the sound discretion of the chancellor who orders the sale. This court will supervise the exercise of this discretion by the chancellor, but will, in no case, reverse his action in the matter, unless plainly erroneous.
There is nothing in the record which shows that the circuit court committed any error in ordering a sale of the entire property. Indeed, the contrary rather appears. The property consists of a parcel of land containing thirteen acres, with the buildings upon it. It was sold entire to the appellants. Three-fourths of the purchase money, with accrued interest, remain unpaid. Prima facie, it will take the whole property to discharge this unpaid balance. It is very improbable that the proceeds of the sale of the land detached from the mill seat and buildings on it would pay this balance. Nor has it been made to appear that it would be advantageous or judicious to sell in parcels. On the contrary, the appellants, in their answer to the rule, assert that the chief value of the property is in the mill seat and buildings, and that the land attached and sold with it, together with certain privileges, is " necessary for the operation of the mill. "
At all events, as the cause must be remanded, if in the further proceedings to be had in the circuit court, it be made to appear that it is necessary to sell only a part of the property, or that it would be more advantageous to sell the property in parcels than in one body, the circuit court can frame its decrees and orders accordingly.
Upon the whole matter, I am of opinion to affirm the decree of the circuit court as amended, and to remand the cause for further proceedings in order to final decree.
The other judges concurred in the opinion of Burks, J.
The decree was as follows:
This cause, which is pending in this court at its place of session at Staunton, having been fully argued, but not determined, at said place of session, this day came here the parties by their counsel, and the court having maturely considered the transcript of the record of the decree aforesaid and the arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the said circuit court committed an error in not ascertaining and fixing by said decree the amount of the purchase money owing by the appellants and remaining unpaid for the land therein ordered to be resold, and a further error in the said decree in not giving to the appellants a reasonable time for the payment of said purchase money before the sale ordered by said decree should be made, and that the said errors are the only errors in said decree; but as it appears from a certified copy of an order of the said circuit court, filed in this cause, that after the appeal aforesaid was allowed, but before it took effect, the said decree was amended by the said circuit court and the said errors were thereby corrected, the court is further of opinion that the said decree, as thus amended, should be affirmed. It is therefore decreed and ordered that the said decree, as amended as aforesaid, be affirmed, and that the appellants pay to the appellees their costs by them expended in their defence of the appeal aforesaid here; and this cause is remanded to the said circuit court for further proceedings to be had therein, in order to a final decree, in conformity to the opinion and principles herein expressed and declared; which is ordered to be certified to the said circuit court of Rockingham county.
DECREE AFFIRMED.