A bill in equity, by the owner of real estate sold at public
judicial sale will lie against a person who, at such sale, has made
untrue representations, which prevent other persons from bidding
and by which he has so, himself, got the property at an undervalue.
The original owner is not confined to seeking relief through the
summary modes such as motion to set aside the sale, which it was
within the power of the court from which the execution issued to
grant.
Slater v.
Maxwell, 6 Wall. 276, affirmed.
During the late rebellion, one Anderson, by a proceeding in what
was known as "the Provisional Court of Louisiana" -- a court
established by proclamation of the President in October, 1862, when
the insurrection which had prevailed in Louisiana, had temporarily
subverted and swept away the judicial authorities of the Union, and
which, by the terms of its constitution, was to last only until
"the restoration of the civil authority" -- brought some sort of
suit against one Cocks.
The suit proceeded to execution, and, on execution, the marshal
of the said Provisional Court exposed to public sale certain real
estate owned by Cocks in New Orleans and worth $15,000. Cocks was a
resident of Mississippi,
Page 74 U. S. 560
and knew nothing of the suit, execution, or exposure to sale. At
the sale, one Izard, his tenant, who was there, made a bid of
$1,500, giving out and letting it be understood that he was bidding
for account of Cocks and in his interest. Persons, who were at the
sale thus refrained from bidding from a wish not to compete, and,
competition being so prevented, the property was knocked down to
Izard at the sum bid by him.
Izard acknowledged these facts soon after the sale, and promised
to reconvey on receiving the money which he had advanced. He
afterwards refused to do this.
Cocks now filed a bill in the court below, setting forth the
above facts, that Izard had received in rents, in two years,
$2,500; and praying an account and reconveyance.
Izard demurred, and the court below, sustaining the demurrer,
dismissed the bill. Cocks appealed.
Page 74 U. S. 561
MR. JUSTICE DAVIS delivered the opinion of the Court.
It was decided by this Court, in
Slater v. Maxwell,*
that where a judicial sale is impeached for fraud, or unfair
practices, of officer or purchaser, to the prejudice of the owner,
a court of chancery is the proper tribunal to afford relief, and
this decision only reaffirmed a well established doctrine of equity
jurisprudence. The present case is within this rule, and the court
below manifestly erred in sustaining a demurrer to the bill.
The complainant puts his case for relief on two principal
grounds. The necessities of this case do not require us to examine
and decide the first point thus raised by him, for the second, if
the averments of the bill are true, affords ample ground to give
the complainant the desired relief.
The bill charges that Cocks, a citizen of the State of
Mississippi, was the owner of a valuable dwelling house and lots in
the City of New Orleans occupied by Izard as his tenant, which were
seized on judicial process and ordered to be sold. It does not
appear in what way the court acquired jurisdiction of the case, but
it is fair to presume it was through a proceeding by attachment, as
the complainant avers he was without the state and did not know of
either the judgment, execution, levy, or sale.
In this condition of things, the sale took place and Izard
bought the property for a sum of money hardly equal to its yearly
rental value. This he was enabled to accomplish by unfair practices
which operated to prevent persons who were in attendance at the
sale and desirous of purchasing from bidding.
These practices were of a character well calculated to deceive,
for it is easy to see that fair-minded men, knowing the owner of
the property to be absent, would be inclined
Page 74 U. S. 562
to put faith in the declarations of his tenant that if he
purchased, it was on account of his landlord, whose interests he
wished to protect, and would be disinclined to interfere with the
arrangement.
Can it then be doubted, if these things are true, that the
conduct of the defendant deprived the complainant of the advantage
which he would have received from a fair sale of his property at
which there would have been competition among persons both able and
willing to buy?
The law will not tolerate any influences likely to prevent
competition at a judicial sale, and it accords to every debtor the
chance for a fair sale and full price, and if he fails to get these
in consequence of the wrongful interference of another party who
has purchased his property at a price greatly disproportioned to
its value, equity will step in and afford redress either by setting
aside the proceedings under the sale or by holding the purchaser to
account.
The defendant in this case has behaved badly, and cannot be
allowed to enjoy the fruits of his unfair dealing. The complainant
had a right to expect, after reposing enough confidence in him to
rent him a dwelling house, that he would not, in his absence, turn
against him and use this very relation to his prejudice. It may be
that at the time of his purchase, the defendant intended to carry
out his promises, for after the sale he admitted his obligation to
do so, but his cupidity, in the end, got the better of him, as he
now asserts an adverse title in himself.
It is insisted that the complainant should have availed himself
of the summary mode by petition or motion to the court to have had
the sale set aside and resale ordered, but this objection cannot
prevail. It is needless to inquire whether he could have obtained
his object in this way, as by not pursuing it he did not forfeit
his right to sue in equity, and the defendant has surely no right
to complain, for he has now ample opportunity to make defense and
vindicate his integrity.
The decree of the Circuit Court of the United States
for
Page 74 U. S.
563
the District of Louisiana is reversed and the cause is
remanded to that court, with directions to proceed in conformity
with this opinion.
|74 Wall. 559ast|
*
73 U. S. 6
Wall. 276.
