King v. Platt — 37 N.Y. 155

Majority

p. 182

*King et al. v. Platt et al., executors.^[1]

Headnote

Judicial sale.

A judicial sale made on the day of the charter election, is not necessarily void; but if the plaintiff have be'en unnecessarily oppressive in his proceedings, it will he set aside.^[2]

Appeal from the general term of the Supreme Court, in the first district, where an order denying a motion to set aside a referee’s sale of certain real estate had been affirmed.

This was an action by Charles King, Edward J. King and Sylvester Brush against Nathan C. Platt, to compel the specific performance of an agreement to purchase certain real estate in the city of New York, made oil

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the 6th September 1860. The original defendant died, pending the suit, and his executors were substituted.

The defendant not having complied with the terms of the contract, for the alleged reason, that outstanding judgments, unsatisfied, existed as a lien upon the property, and not having answered the complaint, judgment was entered in favor of the plaintiffs on the 15th March 1862. By this judgment it was determined, that the balance of the unpaid purchase-money, with interest, was $78,412.60; and it directed the defendant to complete the purchase, within ten days, by paying the costs of suit, &c., and $22,160.60 *of the purchase-money due, and to execute and deliver his bond and a mortgage on the premises for $56,250, payable the 6tli October 1866, with semi-annual interest; and that, in default of so doing, the premises should be sold at public auction, and that the defendant should bo liable for any deficiency that might occur thereon. The defendant did not appeal from this judgment, nor comply with the terms thereof.

The premises were, accordingly, advertised for sale under the terms of the judgment, on the 18th November 1862, and the same were sold at public auction, on the 2d December, when the same was bought in by or on behalf of the plaintiffs, at a price which left a deficiency of about $10,000 against the defendant; and on the 22d December 1862, the premises were conveyed, by the referee who made the sale, to the plaintiffs, the report having been duly confirmed.

On the 12th February 1863, the defendant procured °an order requiring the plaintiffs to show cause why the sale should not be set aside and a resale ordered. The affidavits to sustain this order and the motion made thereon, disclosed the following causes or grounds of complaint:

1. That the sale was made on the day of a charter election in the city of New York.

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2. That the auctioneer named in the notice of sale did not personally officiate at its commencement.

■ 3. That the price bid was inadequate.

4. That the plaintiffs approached bidders at the sale, and deterred them from bidding and prevented competition.

The counter-allegations denied the 3d and 4th of these charges; and, on the hearing of the motion at special term, it was referred to a referee, “ to take proof whether any, and, if so, what, inducements, communications or representations were made or held out by the plaintiffs, or their agents, or in their behálf, or by the referee, to deter or prevent bidders at the sale.”

*On the 18th December 1863, on the coming in of the report of the referee, the motion was denied; and the order having been affirmed at general term, the executors appealed to this court. Other facts are stated in the opinion.

Martin and Emott, for the appellants.

Reynolds, for the respondents.

The sale of the defendant’s property was not void, because it took place on the day of the charter election in the city of Kew York. The statute provides that no court shall be opened, or transact any business, in any city or town, on the day of elections, for other than town or militia officers. (1 R. S., 5th ed., 148, §§ 4, 5.) A judicial sale, although conducted by one of the officers of the court, and under its direction, is not the business of a court', within the meaning of this statute. The object of the law referred to was, undoubtedly, to remove all obstacles which might necessarily interfere with the free exercise of the elective franchise. If the ordinary business of the courts were

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permitted, on election daj^s, the attendance of witnesses and jurors could be compelled by compulsory process, and, in that wayj they could be forcibly kept from the polls; it was to avoid such an evil, that the statute was passed. A judicial sale of valuable property, on an election day, presenting a tempting opportunity for gain, might induce sordid men to forego the privileges of electors, in order to promote their private interests; but their action would be voluntary, and freedom of action was all the law intended to secure.

The propriety of a forced judicial sale of a large and valuable property, on an election day, when public attention would necessarily to a great extent be turned to other objects, after a written notice from the person who was to be most affected by it, that he would consider it “unjust and oppressive,” was, at least, very questionable, and although not of itself, perhaps, sufficient to warrant the court in setting aside the sale, yet, in connection with the other facts disclosed *in this case, cannot fail to create in the mind an influence unfavorable to the plaintiffs.

The property which was the subject of this sale consisted of eight lots, situate on the corner of Fifth avenue and Fifty-ninth street, in New York city, at one of the entrances to the Central park. The order in which these lots should be sold, was considered by the defendant a matter of interest to him, and, consequently, on the day of sale, he made a written request that the corner lot, which was conceded to be the most valuable, should be sold first. This request was made with a view to cause the property to bring the largest price, and was, therefore, a proper and reasonable one. It was not, however, acceded to, and the lots were sold in a different order. I have examined the papers in this case with care, to see what reason was assigned, or could have existed, for this course, and I have been unable to find any that is satisfactory. The referee who

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sold the property states in his affidavit, that, “in the exercise of his discretion,” he caused the premises to be sold in parcels, and in the order adopted at the sale. That the referee acted in good faith, so far as his action is concerned, his well-known character for integrity leaves no room to doubt; but no reason for believing that the sale of the corner lot first, as requested, would have been detrimental to the sale, having been furnished-by the affidavits, or suggested on the argument, I cannot but think, that the referee’s discretion was exercised unwisely. That the defendant’s request was made in good faith, and founded on the belief that, if granted, it would have increased the amount which the whole property would have brought, cannot be doubted; and, in that opinion, he is sustained by six other persons, who are experienced in the sale of property of a like character in the city of New York.

The case, therefore, resolves itself into just this: That, while the sale of the corner lot first, could do nó harm, there was good reason to believe that it would result in a benefit. Under such circumstances, it is difficult to arrive at any other conclusion, than that the ^e^enc*an* was unfairly dealt with. *Whatever chance there was, however slight, that the order of sale he requested “should be adopted, would prove beneficial, he was entitled to it, and to deprive him of it was a constructive fraud.

I have not overlooked the affidavits on the part of the plaintiffs, expressing the opinion, that the propertjr would have brought no more than it did, if the corner lot had been sold first; yet I can see no good reason for not trying, at the 'least, a harmless experiment, to gratify a reasonable request of a failing and unfortunate debtor, which he thought would result to his advantage. I do not agree with the learned counsel for the motion, that the defendant had the right to determine the order of sale, and the authorities quoted

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do not sustain that position; but, in the absence of all directions by the court, the defendant has a right to be heard on the subject, his suggestions considered, and, if for the best, followed.

But, in the light of the other facts in this case, it is difficult to believe, that the refusal to accede to this request was the result of indifference or mere caprice. The plaintiffs bought the whole of the property at the sale. Their right to do so, of course, is not disputed. If it were fairly done, without any undue advantage, a court of equity would not interfere with the sale. But, besides matters already considered, there are facts disclosed in the papers which give rise to serious doubts as to the entire fairness of the plaintiffs’ conduct at the sale. From the whole evidence, it satisfactorily appears, that the plaintiffs manifested a desire, before the sale, to purchase the whole of the property, and resorted to the means necessary to accomplish their object. Raynor, who sustained intimate friendly and business relations with the plaintiffs, and who acknowledged that he would have the selling of the property, as broker, in case the plaintiffs should purchase it, said to a bidder, at the sale, that he could purchase the property, in one jiarcel, after the sale, upon better terms than he could get it then, by bidding. Raynor also testifies, that he made this communication, at the request of one of the plaintiffs. :::That this had a tendency to prevent competition at the sale, can hardly be denied, and, whether this effect was designed or not, it is equally fatal to the validity of the sale. There is other evidence tending to show that the sale was chilled by the course pursued by the plaintiffs; but it is unnecessary to pursue the subject further.

The sale having been made, against the defendant’s remonstrance, on a day most unfavorable to a large gathering, and the lots having been sold in an. order which induces a reasonable belief, that it was detri

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mental to the defendant’s interests, and under circumstances which give rise to apprehensions that free competition was interfered with, it ought not to stand. Whilst the law secures to the creditor his just demand, and sequestrates the property of the debtor to satisfy it, it still sedulously guards his interests in all the various steps taken leading to a sale of his property. The unfortunate debtor is not beneath its protection. It will not tolerate the slightest undue advantage over him, even by pursuing the strict forms of the law, or positive rules. (Story’s Eq. Jur., § 239.) Occupying the position of advantage, it behooved the plaintiffs to pursue their remedy with scrupulous care, lest they should inflict an injury on one who was comparatively powerless. A court of equity justly scrutinizes the conduct of a party, placed by the law in a position where he possesses the power to sacrifice the interests of another, in a manner which may defy detection, and stands ready to afford relief on very slight evidences of unfair dealing, whether it is made necessary by moral turpitude, or only by a mistaken estimate of others’ rights.

I feel quite convinced, that sufficient reasons exist for setting aside -this sale, and that justice will be subserved by doing so, for it cannot result in any loss to the plaintiffs. The rights of third parties do not intervene, and the plaintiffs have a lien for the taxes and assessments they have paid. (Kortright v. Cady, 23 Barb. 490 .)

resa^e probably result in satisfying the judgment, and all the outlays of the plaintiffs, and that is all they can reasonably ask. If the parties fail to agree upon the order in which the property shall be sold, either party can apply to the court for instructions to the referee. (Collier v. Whipple, 13 Wend. 229 .) The orders of the general and special terms should be reversed, the sale set aside, and a resale ordered.

Ordered accordingly.

Cases cited

Kortright v. Cady 23 Barb. 490 N.Y. Sup. Ct. 1857-02-12 p. 188