Richards v. Holmes

THIS was an appeal from the circuit court of the United States for the District of Columbia, holden in and for the county of Washington.

The case is stated in the opinion of the court.

It was argued by Mr. Bibb, for the appellants, and by Mr. Fendall and Mr. Tracy, for the appellees. There was also a brief filed by Mr. Bradley, as counsel for Southworth, Litchfield, and Beach.

Mr. Bibb made the following points:--

1. That the note was dated on the 1st of May, 1846, and payable in two years. The trustee had no right to sell until the 1st of May, 1848, whereas he sold on the 21st of October, 1847.

2. The allegation set up that Holmes had verbally agreed with Harper to pay the interest semi-annually, &c., cannot be permitted to vary the deed or enlarge the powers of the trustee. Nor could the consent of Holmes impair the rights of Richards, Bassett, and Aborn. They had a right to redeem the property when the note became due, the property being worth more than the lien upon it.

3. The notice of sale was not properly given.

4. The auctioneer was seller and bidder for Harper.

The trustee could not purchase the estate himself; he could not buy as the agent of another; he could not employ the auctioneer to bid for the estate on behalf of Harper. Ex parte Bennett, 10 Ves. 393; Coles v. Trecothick, 9 Ves. 248; Ex parte James, 8 Ves. 345, 348, 350; Ex parte Lacey, 6 Ves. 625; Lister v. Lister, 6 Ves. 631, 632; Twining v. Morris, 2 Brown Ch. Ca. 326; The York Buildings Co. v. McKenzie, 3 Brow. Par. Ca., Appen.; Davoue v. Fanning, 2 Johns. Ch. Rep. 254, 257, 268, 269, 270.

According to established principles, such a sale as this cannot stand in a court of equity.

The counsel for the appellees, after justifying the sale in other respects, thus noticed one of the points of alleged defectiveness:--

The trustee did not bid at all; Harper's bid was regular. His rights as a creditor, whose only security for his whole fortune was the property advertised for sale, stood on ground as strong, at least, as that of the owner of it. And, though it is not lawful for an owner to employ an agent 'to take advantage of the eagerness of bidders, to screw up the price,' yet, as a 'defensive precaution,' 'a bidder may be privately appointed by the owner, to prevent the estate from being sold at an under-value.' 1 Sugden on Vendors, (9th ed.) 26, 27; Fonbl. Eq. Bk, 1, ch. 4, § 4, n. X; 1 Mad. Ch. Pr. (4th Am. ed.) 324, 325; Smith v. Clarke, 12 Ves. 477; Steele v. Ellmaker, 11 Serg. & R. 86; Jenkins v. Hogg, 2 Const. Rep. (S.C..) 821; Wolfe v. Luyster, 1 Hall, N. Y. R. 146; Phippen v. Stickney, 3 Metc. 384. Harper made only one bid, and that for 'defensive precaution.' The bid was made through the auctioneer, who was the agent of both parties. Smith's Mercantile Law, 301, and the cases there cited; Conelly v. Parsons, 3 Ves. 625, n.

It is denied that the property was sold at 'a very inadequate price,' or that the amount at which it is said to have been assessed on the books of the corporation of Washington (of which there is no evidence) is a true test of its value. But even if the price were 'very inadequate,' the inadequacy would be no ground for annulling this sale. 1 Fonbl. Eq. 128; 1 U.S. Digest, 344, pl. 33, and the cases there cited. It will be contended that the sale was in all respects regular; and that, if it were not so, yet the complainants cannot avail themselves of the imputed irregularities.

Mr. Justice CURTIS delivered the opinion of the court.