Opinion
10-12-1875
HESS & al. v. RADER & wife & als.
Fultz, for the appellants. Sheffey & Bumgardner, for the appellees.
I. W is appointed a commissioner to sell land at public auction, but he is not to act under the decree until he gives bond, & c., faithfully to perform this and any future decrees made in the cause. He does not execute the bond, but he sells the land at private sale to H, which he reports to the court. The court confirms the sale, and directs him to collect the money and invest it; and H pays him the whole purchase money; only a part of which he invests, and dies insolvent. HELD:
1. The sale having been made by a commissioner under a decree of the court, and that sale having been confirmed by the court, it is a judicial sale.
2. Whether made at public or private sale, it only becomes a sale at all, when confirmed by the court; that constitutes such sale a judicial sale.
3. W not having given the bond as required, had no authority to receive the purchase money; and H is responsible to the party who is entitled to the proceeds, for so much as has not been properly invested by W, and cannot be made out of W's estate.
4. The statute, Code of 1873, ch. 174, § 1, is imperative, that a bond shall be given, and it is the duty of a purchaser at a judicial sale to see that the bond has been given before he pays his money to the commissioner, or he does it at his own risk.
In a cause pending in the Circuit court of Augusta county, in which the committee of Sarah Kratzer, a person of unsound mind, and Elizabeth Kratzer, were plaintiffs, and the said Sarah Kratzer, by her guardian ad litem was defendant, a decree was made on the 18th of June 1859, by which E. T. H. Warren was appointed a special commissioner to sell a tract of land, in one-half of which Sarah Kratzer had a life estate, and Elizabeth Kratzer was entitled to one-half at once, and to the whole on the death of the said Sarah. And the decree provided, that the said special commissioner was not to act under said decree until he executes and files with the clerk of the court, bond, with security to be approved by said clerk, payable to the Commonwealth of Virginia, in the penalty of $7,000, and conditioned faithfully to perform the requirements of this and any future order of this court in this cause. Warren does not appear to have executed the bond required by this decree; but after two failures to sell the land at public auction, he made a private sale of it to Andrew Hess and Martin Miller for $3,000, payable at different periods up to March 1861. This contract was reported to the court; and on the 14th of June 1860 the court approved and confirmed the contract; and decreed that Warren should take from the purchasers their bonds, and collect the same as they fell due, and pay the costs of suit and sale, and the remainder loan out on good personal security, subject to the future order of the court; and report to the court at the next term.
All the purchase money of the land was paid by Hess and Miller to Warren, as soon as it was due, and he seems to have invested a part of it on personal security. He, however, having gone into the army early in the late war, and having been killed, made no report to the court; and no further steps were taken in the case until November 1864; when Hess and Miller filed their petition in the cause, stating the payment of the purchase money, and asking that a conveyance of the land might be made to them; and accordingly the court made a decree appointing a special commissioner to convey the land to them; which was done.
In June 1866 Elizabeth Kratzer filed her petition in the cause, in which she states the fact that Warren did not execute the bond required of him by the court, and that he did not leave sufficient estate to discharge his liability for the purchase money received by him; and she asks that the purchasers of the land, Hess and Miller, or the estate of Warren, may be compelled to make up any deficiency, after applying the sums to be received from the borrowers from Warren of a part of the purchase money.
This petitioner afterwards married Adam Rader, and they filed an amended and supplemental bill in the cause, in which they set up the same claim upon the estate of Warren and the purchasers of the land. This bill was answered by Hess and Miller; and accounts were directed and taken, from which it appeared that after applying the moneys lent out by Warren, and so much of his estate as was applicable to this claim, there remained due to the plaintiffs for the land the sum of $2,331.07, with interest on $1,762.14, from the 1st of October 1873, subject to a credit on the interest of $34.50.
The cause came on to be heard on the 11th of April 1874, when the court annulled the deed that had been made to Hess and Miller, and decreed that they should pay to Rader, as receiver of the court, the said sum of $2,331.07, with interest on $1,762.14. And unless said payment was made in sixty days, commissioners named should proceed to sell the land on terms stated in the decree. From this decree Hess and Miller applied to a judge of this court for an appeal; which was allowed.
Fultz, for the appellants.
Sheffey & Bumgardner, for the appellees.
OPINION
CHRISTIAN, J.
The court is of opinion, that the sale made to Hess and Miller was a judicial sale, being made under a decree of the Circuit court of Augusta, entered in June 1859. It is true it was not made at public auction, but it was made by a party who had been appointed commissioner of the court; was reported to said court and confirmed as a sale made by the court. It was none the less a judicial sale because made privately, and not at public auction. In either event it only becomes a sale at all, when confirmed by the court. It is the confirmation by the court, and not the biddings or propositions to buy that constitutes such sale a judicial sale.
The court is further of opinion, that the payment of the purchase money to Warren, by Hess and Miller, was without authority, and that such payment does not discharge them from obligation to pay to the appellees such part of the purchase money as has been lost in consequence of the insolvency of Warren.
Hess and Miller, being purchasers at a judicial sale, were bound to take notice of the decrees and other material proceedings, under authority of which the land was sold, and must be presumed to know the law which governs such sales. Now the decree directing a sale, and appointing a commissioner for that purpose, upon its face expressly provides, that " the said commissioner shall not act under this decree until he executes and files with the clerk of the court bond with security, to be approved by said clerk, payable to the commonwealth of Virginia in the penalty of $7,000, and conditioned faithfully to perform the requirements of this and every future order of the court in this cause." The very decree under which the appellants purchased, informed them that the party with whom they were dealing was not authorized to act until he had given the bond required. It was easy for them to have made the enquiry if the bond had been given; and it was their own culpable neglect in not making such enquiry: and if loss has occurred to them, it was in consequence of their own want of diligence and negligence in not seeing to it, that the party with whom they were dealing was clothed with proper authority.
But beside the express directions of the decree, the statute law, which every party acting under it must be presumed to know, informed these appellants that " no special commissioner appointed by a court shall receive money under a decree or order until he gives bond before the said court or its clerk." Before they paid any part of the purchase money they should have enquired if the bond required by law had been given. Otherwise they might be paying to one who had no authority to receive it. They might as well have paid it to a stranger. Both the decree under which they purchased, and the law governing such decrees, declared that the giving a bond was a condition precedent to any authority of the commissioner in the premises.
Much was said in the argument, about the hardship of requiring parties to pay their money twice in the same transaction, when it had been once paid to a commissioner of the court. It may be answered to this--1st, the hardship arises out of the negligence of the parties; and 2d, they have not paid it to a commissioner of the court authorized to receive it, because the very authority to receive the money is the execution of the bond required by law.
The provision of the statute referred to, Code 1873, ch. 174, § 1, is one most useful and salutary. It was intended as a shield of protection to all parties, whose property had to be disposed of, and proceeds administered by the court of chancery. These parties are most frequently persons under disability, such as infants, insane, and others not sui juris. The legislature in its wisdom has determined not to leave the matter to the chance of a court's requiring a bond for the faithful performance of the duties of its commissioner, or to the chance of the appointment of an insolvent commissioner; but has declared as the law of every case, that " no special commissioner appointed by any court shall receive money under a decree or order until he gives bond before said court or its clerk."
No case of individual hardship should influence the courts in weakening in any degree the force of this wise and salutary law; but it ought to be constantly maintained and enforced, as one which affords wholesome and safe protection to all parties, whose property is sold under proceedings of a court of chancery. The court is therefore of opinion that there is no error in the decree of the said Circuit court, and that the same should be affirmed.
DECREE AFFIRMED.