Opinion
Argued January 25
Decided January 31, 1871
N.B. Smith, for the appellants. Wm. J. Wallace, for the respondents on the same question.
Was the auction sale of the property under the mortgage void, as against public policy, under the facts of this case? I think not. No such defence was set up in the answer. The property sold was of the value of $6,000, as found by the referee. The amount to be paid therewith (the notes) was $6,000. The amount to be paid thereout by the intestate, to whom it had been assigned in the mortgage, was the same substantially. Whether the mortgagor was or not insolvent is not found in this case. If he was not insolvent, no question could arise as to this sale, as he consented to it precisely as it occurred.
If he was insolvent, no one could be injured by this sale, unless the court must presume that the property, but for this arrangement, would certainly, or at least probably, sell for more than its actual value; as by the arrangement, the debts of the parties amounting to about its value, were to be satisfied by the sale. There is no such legal presumption.
In my opinion this arrangement was for honest and just purposes, and violates no sound rule of public policy.
Waggoner, the intestate, was at that time an assignee and trustee for the same purpose for which he purchased this property, and the sole purpose for which this arrangement was made seems to have been to enable him more effectually to execute that trust. There was no agreement not to bid, none to purchase as low as possible, none in substance to repress or prevent competition. The bids might have been double what they were without any surplus and without affecting any interest.
No principle or authority warrants a court to pronounce such an arrangement fraudulent, as matter of law; and the finding of the referee negatives all fraudulent intent in fact. (See Story on Cont., § 548; 6 Watts Serg., 122; Phippin v. Stickney (3 Met., 387).
This does not in any degree impair the general doctrine as established in this State, and in this court, on the subject of combinations to prevent competition at public sales or lettings ( Woodworth v. Bennett, ante, p. 273, and Atchison v. Mallon, ante, p. 147, just decided by this court; Meech v. Bennett, Hill Den., 191), as it does not come within the rule. This being the only point presented for reversal, the judgment is affirmed with costs.
All concurring, judgment affirmed.