Opinion
Decided January 22d 1937.
Complainants purchased the premises in question at sheriff's sale for $100. Defendants object to confirmation on the ground that the bid is inadequate and grossly unconscionable, and they set forth prevailing economic conditions, lack of competitive bidding and financial inability to protect themselves at the sale. The final decree for principal, interest and taxes paid by complainants is $50,500. The sale had heretofore been postponed on application of defendants for almost four months, upon payment of half a year's taxes and interest, defendants representing that negotiations for sale of the land were pending. In opinion of defendant who purchased the premises, they now have a value of $90,000. Held, the matter will be referred to a master to ascertain and report the fair value of the mortgaged premises unless complainants credit $30,000 on the bond. Affirmed.
On appeal of James R. Deering.
On appeal from an order of the court of chancery advised by Vice-Chancellor Stein, who filed the following opinion:
"Complainants purchased the premises in question at sheriff's sale for the sum of $100. Defendants object to confirmation of sale upon the ground that the bid of $100 is inadequate and grossly unconscionable, and they set forth the distressed economic conditions presently prevailing, and the consequent lack of competitive bidding and also the financial inability on the part of the defendants to protect themselves at the sale.
"It is said in the objections filed to the confirmation of sale that the fair value of the mortgaged premises is `considerably in excess of the final decree.'
"The complainants by a verified petition pray the court (a) to dismiss the objections, and (b) that if the objections be not dismissed that a receiver be appointed pending order for resale of the premises and confirmation of sale, or that the defendants be directed to pay a reasonable rent, to be ascertained upon notice and hearing before the court.
"The final decree for principal, interest and taxes paid by complainants is approximately $50,500. The sale of the mortgaged premises was heretofore postponed on the application of the defendants by an order dated February 4th, 1936, to June 1st, 1936, upon payment at that time by defendants of the sum of $2,176.14, representing taxes for the first half of 1936 and six months interest, it being then represented to the court by the mortgagors that negotiations with a possible purchaser for the sale of the premises were pending. Such negotiations failed.
"In the affidavit of the defendant James P. Deering filed separately and apart from said objections it appears that he made effort for a considerable time past to dispose of the premises without success. The premises were purchased by him in 1926 for $80,000, and alterations subsequently made at a cost of approximately $107,000. Other items for redecorating and equipment mentioned cannot be considered in this matter.
"In defendant's opinion the premises are worth at the present time $90,000, and William H. Hintelmann, an expert, whose affidavit is attached to that of defendant, corroborates defendant. Mr. Hintelmann's opinion is not based upon sales of comparable property similarly located, for he says that there has `been very little market for premises of this nature this spring.' No reference is made by him to any sale of comparable property similarly located. His opinion may, therefore, be said to be predicated upon nothing more substantial than an honest desire to arrive at what he believes to be the fair value.
"It appears that the mortgage originally was $40,000, and with arrearages of interest and taxes has mounted to a final decree in the sum of $50,500, plus costs and sheriff's fees. The complainant has paid approximately $7,000, in tax arrears as I recall the statements of counsel on the argument, so that the bid is $100, plus the taxes paid.
"The matter will be referred to a master of this court to ascertain and report the fair value of the mortgaged premises unless complainants will credit upon the bond the sum of $30,000."
Mr. James R. Deering, pro se, for the appellant.
Mr. Samuel Kaufman, for the respondents.
The order appealed from will be affirmed, for the reasons expressed in the opinion delivered by Vice-Chancellor Stein in the court of chancery.
For affirmance — TRENCHARD, PARKER, CASE, BODINE, PERSKIE, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, COLE, JJ. 11.
For reversal — THE CHIEF-JUSTICE, HEHER, JJ. 2.