Lessee of Gantly v. Ewing

THIS case came up on a certificate of division from the Circuit Court of the United States for the district of Indiana.

The facts were stated by an agreement in the nature of a special verdict, and were as follows:

'On the twenty-fifth day of December, eighteen hundred and thirty-eitht, one Jacob Linzee was indebted to Daniel W. Gantly, of the city of New York, in the sum of nine hundred and nine dollars and eighty-two cents; and, to secure the payment of the same, Linzee then executed to Gantly a mortgage on town lot numbered one hundred and seventy-nine, in Peru, Indiana, of which Linzee was seised in fee. At the time of the execution of the mortgage, Linzee was in possession of the mortgaged premises, and they were worth from one thousand do fourteen hundred dollars. Linzee made default in the payment, and Gantly, on the eighth day of September, eighteen hundred and forty, obtained a decree in the state court to foreclose the mortgage; and unless the money should be paid in sixty days, an execution was directed to be issued for the sale of the premises.

'In January, eighteen hundred and forty-one, an execution was issued, and on the thirteenth of February following, before the sale of the property, the appraisement law passed, and was published the twenty-third day of February, eighteen hundred and forty-one; one the first of March, eighteen hundred and forty-one, the sheriff, having given due notice, sold the premises at public auction, to the defendants, for seventy-six dollars, and executed a deed to them for the same; which deed was offered in evidence to support the title of the defendants. The property was not valued, nor were the rents and profits offered for sale by the sheriff. And the court were asked to instruct the jury that, as the rents and profits had not been offered, nor the land valued, under the statutes of Indiana, the sheriff's deed was inoperative and void. And on this question the opinions of the judges were opposed; and on motion of plaintiff's counsel, the point is certified to the Supreme Court, under the act of Congress.'

Cooper and White, for plaintiffs in error.

Hoban, for defendants in error.

The argument on behalf of the plaintiff in error was as follows:

The acts of the state of Indiana, which have relation to the question, are certified in the record.

Now as Linzee made default in the payment of the money the mortgage was given to secure, Gantly foreclosed the mortgage in the state court, under the provisions of the Revised Laws of Indiana, of 1831, pp. 244 and 245, and issued his execution, as required by that statute, requiring 'mortgaged premises to be sold as other lands are sold on execution.' All the proceedings, up to the time of issuing the execution, were strictly in accordance with the provisions of the statute above mentioned. And as the defendants claim as purchasers under the execution, they waive all objections to the previous proceedings. Cowp., 46.

But I contend that the sheriff's deed to the defendants is inoperative and void, for the following reasons:

1. Because the sheriff sold the fee-simple of the land, without having first offered the seven years' rents and profits of the same.

2. Because he did not have the land appraised before the sale of the same.

By the Revised Law of 1831, p. 235, sect. 3, it is enacted, 'That real and personal estate, taken in execution, shall sell for the best price the same will bring at public auction and outcry; except that the fee-simple of real estate shall not be sold to satisfy any execution or executions, until the rents and profits, for the term of seven years, of such real estate, shall first be offered for sale at public auction and outcry.'

Which appears to be a good and salutary law, enacted to prevent the sacrifice of the fee-simple of real property, to the cupidity of a heartless set of speculators, who hang round sheriff's sales, for the sole purpose of speculating off the misfortunes of their fellow-creatures. In England the fee-simple of land cannot be sold under execution, but the judgment-creditor can only take possession of the rents and profits, by a writ of levari facias, or take his extent under an elegit, but both of which remedies he could not resort to. A similar law, I believe, still prevails in Virginia. In New York, when the fee-simple has been sold under execution, the owner of the land is allowed a year from the time of the sale to redeem the land. In Ohio, lands are required to be appraised before they can be sold under execution. And I never have learned that either the constitutionality, or the policy, or the propriety of either of the laws of New York or Ohio, have ever been questioned.

Then, to give a fair construction to the statute of this state last recited, it must inevitably appear that the offering of the rents and profits was made a condition precedent by the statute to the sale of the fee-simple of the land in controversy, and that a sale, without such previous requisition having been first complied with, is null and void.

Sheriffs in this state receive the whole of their power and authority from the statute laws of the state. They have no common law powers nor implied powers, and it would be dangerous to trust them with either. But, on the contrary, it has been said by the Supreme Court of this state that it may be safely presumed, by a bona fide purchaser at sheriff's sale, that the sheriff had done his duty in obeying the directions of the statute as respects the inquest, the advertisement and sale, &c. 1 Blackf. (Ind.), 210.

But in the present case the defendants could not be bona fide purchasers; the very idea is repelled by the gross inadequacy of the price they bid and gave for the same. We cannot presume that the defendants supposed the rents and profits had first been offered, when the proof is positive that they had not been offered. Presumption can never outweigh positive proof.

The improper conduct of the sheriff in selling property may be inquired into, in an action of ejectment on his title, and the owner of the land would have a right to prove on the trial that it was known to the purchasers that the rents and profits had not been offered for sale by the sheriff. 4 Blackf. (Ind.), 228.

In the present case, as the property was sold for a price grossly inadequate, and the sheriff never offered the rents and profits, as is proved on the trial, every presumption is against the defendants.

I now come to the second point, that the property had not been appraised before the sale was made.

It appears from the testimony certified of record, that the execution under which the property in question was sold, was issued in January, A. D. 1841; that on the 13th of February, and before the sale, the legislature passed the appraisement law; and that the same was published on the 23d of February, A. D. 1841, being five days before the sale of the property in question, by the sheriff, to the defendants; which law was in force, and was, by the 14th section of the same, to take effect from and after its passage. Vide Law of 1841, p. 130-132.

In the case of Tredway v. Gapin, 1 Blackf. (Ind.), 299, 'it was said by the Supreme Court, that from the time a statute is published in print, by authority, at any place within the state, it takes effect in every part of it, unless the act itself otherwise directs.'

This statute being in force at and before the time of sale of the property in question, by the sheriff to the defendants, the defendants have no title to the premises, unless they show that it had been strictly complied with; the 6th section of which statute is as follows: 'That hereafter no real property shall be sold on execution for less than for one-half its cash value at the time of such sale.' And the 7th section of the same law points out the form of the appraisement and return at the cash value at the time of the appraisement; which statute is not only directory to the sheriff, but it in positive and direct terms prohibits any sale of land under execution, unless the statute has first been complied with.

In the case of Tweedy v. Pickett, 1 Day (Conn.), 109, it was decided by the Supreme Court of Connecticut, that, 'in order to make out a title to land by the levy of an execution, it must be shown the appraisers were indifferent freeholders, and that they were sworn according to law.' And in the case of Mitchell v. Kirtland, 7 Conn., 229, the law is laid down to the effect following:

'The acquisition of title by execution being a proceeding in invitum, the requisites of which are prescribed by positive law, in derogation of the common law, a strict compliance with these requisites is indispensable to a transfer of the title.' Vide also, the case of the United States v. Slade, 2 Mason, 70.

And by the statute of Indiana, approved January 6th, 1821, (Laws of 1820, 1821, p. 4,) it is enacted 'that no real property shall be sold for less than one half of its real value, by virtue of any execution which may hereafter issue on a judgment which has heretofore been rendered, or which may hereafter be rendered,' &c.

Shortly afterwards the Supreme Court of Indiana were called on to give a proper construction to the last mentioned statute, and it decided that a bid and sale of land offered at sheriff's sale under execution under that statute, where the purchaser did not bid half the apraised value of the land, and a sheriff's deed under such a bid and sale, were void, and conveyed no title to the purchaser. See Harrison et al. v. Doe, on the demise of Rapp, 2 Blackf. (Ind.), 1; which case, I think, clearly settles the construction of the recent appraisement law, and is in accordance with the cases cited in Connecticut, and the case in Mason's Reports. And they all go to establish the position taken, that, inasmuch as the land was not appraised before the sale, the sheriff's deed to the defendants is inoperative and void.

If the title to the defendants be good under this deed, they (the defendants) get the property for less than a tenth part of the value, and Gantly will have to lose nine-tenths of the money Linzee has so long and justly owed him; which, I think, clearly shows the sale by the sheriff to the defendants to be fraudulent and void.

In the third resolution in Fermor's case, 3 Co., 78, the court said that 'the common law doth so abhor fraud and covin, that all acts, as well judicial as others, and which of themselves are just and lawful, yet being mixed with deceit, are in judgment of law wrong and unlawful.'

The question whether a deed be fraudulent and void as to creditors, may be examined and decided in an action of ejectment. 2 Black., 230.

It would be unnecessary to produce further authority in support of the second objection to the deed of the sheriff in this case.

It has, however, been contended by the counsel for the defendants, that the appraisement law of our state, of 1841, is unconstitutional, and, therefore, that the lessor of the plaintiff has no right to complain of its violation; and the case of Bronson v. Kinzie et al., 1 How., 311, is by them referred to to support their position. But I am wholly at a loss to find out the least spark of resemblance between the cases. If Gantly (the lessor) had bought the property in question for a nominal price, without the same having first been appraised, and Linzee commenced a suit against him to recover the property, it might have raised a different question to that now before your honors. But, in the present case, the defendants bought the land at sheriff's sale in violation of the appraisement law, after the same was in force. The appraisement law, at the time of the purchase, was the law of the land, entered into and became a part of the contract between the defendants and the sheriff, and if it was unconstitutional, it would make the argument so much the stronger for setting aside the sale.

A law may be constitutional in its application to some cases, and void as to others. 8 Pet., 94. The law might have been unconstitutional between Gantly and Linzee, and constitutional between the defendants and the sheriff.

Hoban, for defendants in error, after stating the case, proceeded as follows:

From the above statement, which is taken word for word from that of the plaintiff in error, it appears that the title of the defendants in error to the premises in dispute is admitted, unless the sheriff's deed is inoperative, and the deed is assailed upon these grounds: first, because the sheriff sold the fee-simple of the land without first having offered the seven years' rents and profits of the same-and this is supposed to be required by the act of the legislature of Indiana of 1831, sections 3 and 18. It must be premised that this law is prior in date to that of the mortgage, which was in 1838. It will appear from the law itself that it applies only to executions on judgments at law; section 18 applies to decrees in equity, which provides that sales under them are to take place at public vendue to the highest bidder, as on execution on judgments at law. In the nature of things a law of this kind could not apply to a chancery decree, which orders a specific thing to be done in a manner by the law itself expressly declared to be, as the court may determine 'in the premises between the parties, as may be right and just.' I do not deem it necessary on this point to do more than to refer the honorable court particularly to section 18 of the law, where the sale of the land and the making of an unencumbered deed to the purchaser are spoken of, but no mention of a valuation of the land, or restriction of the court, first to order the sale of the rents and profits for seven years, before decrees of the unconditional sale of the premises.

The second objection is, that the land was not appraised pursuant to the act of the legislature of Indiana of February 13, 1841, which requires, as it appears, that land shall not be sold on execution, except after being appraised, and then only after more than half the value is bid.

The first answer to this is, that the law applies to sales on executions, which, in Bronson v. Kinzie, 1 How., 311, is admitted not to apply to sales under mortgage foreclosures.

But if the law be admitted, and be particularly framed, to apply to a case of this kind-still it is clearly unconstitutional. The law of Indiana is of 1841; the date of the mortgage 1838. I shall refer your honors only to Bronson v. Kinzie, 1 How., 311, where the leading cases are referred on this subject; Green v. Biddle, Sturges v. Crowningshield, Ogden v. Saunders; these cases, as laboriously and ably argued as any on record, decide this general principle, that a state law which materially varies the well ascertained remedy upon a contract, is as to contracts in existence at the time of its passage, in the sense of the amendment of the Constitution, a law impairing the obligation of a contract, and which in consequence no state has a right to pass. Bronson v. Kinzie, 1 How., 311, applies this principle specifically to a case of the very character now under consideration, and decides that a law extending the time of credit under a mortgage foreclosure, and prohibiting the sale of the mortgage premises, unless after valuation, and unless they produce a certain sum or value, as such an invasion of the ascertained remedy, at the date of the contract or mortgage, (and rendered in legal contemplation a part of the compact between the parties,) as to come within the prohibition intended by the Constitution. This law prohibits the sale of the premises until it may be made to produce one-half its value by assessment, which may never be.

Mr. Justice CATRON delivered the opinion of the court.