Conover v. Walling , 15 N.J. Eq. 173 ( 1852 )

The Ordinary.

At the last term of this court a motion was made, on behalf of the respondents, to dismiss this appeal, on the ground that the confirmation of the sale was a matter entirely in the discretion of the Orphans Court, and that an appeal would not lie from such an order of that court as was made in this case. I decided that the appeal was properly taken. I refer to the opinion then delivered as part of the history of the case.

The question now is, whether the order of the Orphans Court shall be affirmed.

I notice an informality in the proceedings of the Orphans Court, for the purpose of calling attention to it, that it may be avoided in future similar proceedings.

As the decrees and orders of the court below are matters of review in this court, any material matter or proceeding upon which such decrees and orders are founded should be so certified as to show the regularity and legality of the important steps taken in the progress of a case.

There is nothing upon the face of the proceedings sent here by the Orphans Court to show how the question arose before them, as to the mistake and misapprehension in conducting the sale, upon which they based their order now appealed from.

There is no dispute that the resale was asked for by or on behalf of the owners of the land, and was resisted by Peter S. Conover; but this does not appear on the records of the court. The matter should have been brought before the Orphans Court by petition, which would have made the whole case complete, and would have been a proper foundation for the subsequent action of the court.

The review of this order of the Orphans Court has embarrassed me very much. If the question presented was between Peter S. Conover and Mrs. Holmes, or Peter S. Conover and Daniel Ellis, and in which no one else had an interest, I should have no doubt as to the law or equity applicable to this controversy. Mrs. Holmes or Mr. Ellis is not entitled to the favorable consideration of the court. It was the contrivance between Mr. Ellis, as the agent of Mrs. Holmes, and Mr. Wolcott, the auctioneer, and which was adopted for the purpose and with the expectation that Mrs. Holmes would thereby be enabled to purchase the property at a less price than by taking her chance on a like footing with her competitors at the sale, that has occasioned all the difficulty.

Mr. Conover was an open and fair bidder at the sale. His conduct is not impeached. What he said or did is no way connected with the mistake and misapprehension complained of. The property was not struck off to him at an inadequate price. By his contract to take the property at the price at which it was struck off to him, he acquired rights which a court of justice ought to protect, as well as the rights and interests of the owners of this property. But it is not Mrs. Holmes or Mr. Ellis who seeks redress for an injury which has been done them, but the owners of the property ask the interference of the court in the protection of their rights. Thd commissioners and auctioneer are the agents for both the owners and the bidders, who are alike entitled to relief against an injury which has been done them by any mismanagement, fraud, or accident on the part of their agents, provided the wrong committed can be remedied without doing greater violence to the rights of an innocent party.

The mere fact that Mrs. Holmes now offers to bid a thousand dollars more on a resale of the property, is no justification for the court’s refusing to confirm the sale. The praqtice of the English courts in opening bids has not been adopted by our courts. Its tendency has been considered prejudicial to judicial sales.

But the Orphans Court did not proceed on this ground in refusing to confirm the sale. They state, in their order, that they refuse to confirm the sale because, owing to a misunderstanding between the said commissioners, the auctioneer, and Daniel II. Ellis, one of the bidders, as to whose bid it was, the land was struck off to Peter S. Conover for a sum much less than it otherwise would have brought, and that the said commissioners ought not, under the circumstances, to have permitted the land to be struck off to Conover.

Was there such a misunderstanding as prevented the property bringing a larger price than it would otherwise have brought ?

Did the commissioners do wrong in permitting the property to be struck off to Peter S. Conover ?

If both these questions can be answered in the affirmative, the Orphans Court did right in refusing to confirm the sale. For if the commissioners did wrong in permitting the property to be struck off to Conover, and thereby sacrificed the interest committed to their trust, the rights acquired by Conover were in violation of the rights of others, and are entitled to no superiority. By the use of the term wro-ng no moral guilt is imputed — no actual fraud — but such indiscretion and want of prudence as worked an injury, and ought to have been avoided.

That there was a misunderstanding between the auctioneer and Mr. Ellis, who was a bidder, is not disputed. Prior to the sale, Ellis saw the auctioneer, and told him he intended to bid for the property; that during the bidding he would put his thumb in the button-hole of his coat, and while it remained there the auctioneer should continue bidding for him, advancing each bid in the ratio or proportion of the immediate preceding competitor’s bid. To this the auctioneer assented. The first tract was set up. Ellis bid for it in the manner agreed upon. His bid was taken accordingly by the auctioneer, and the first tract was struck off to him for the sum of $18,375.

The second tract, the one in dispute, was then set up. Ellis stood a short distance from the auctioneer — immediately in front and in view of him — continuing the signal which had been proposed by Ellis, and which the auctioneer had agreed to take for his bidding. The auctioneer struck off the property to Peter S. Conover for $12,500. Ellis immediately claimed the bid.

There was no dispute as to Ellis having given the signal, and it is rather singular that the auctioneer should have made the mistake he did, and that after committing a mistake for which he was entirely to blame, should have persisted in declaring Mr. Conover the bidder.

Now how does the auctioneer account for the mistake ? ■He says he did not consider the arrangement between Mr. Ellis and himself as extending to the second tract. But the history of the arrangement shows he had no right to adopt any such conclusion. To say the least of it, his conduct as auctioneer, in reference to this matter, was most imprudent and indiscreet.

When the arrangement was made, Ellis asked the auctioneer if he knew which part of the property was to be sold first. The reply was, he did not — he had heard nothing about it — but he presumed they would sell the part with the buildings first. Mr. Ellis replied, he thought so too. This is all that was said in reference to a first or a second tract, ' or as to the manner in which the property would be sold. Ellis then told him that “ he wished to be a bidder, and a secret bidder.” This is the account given by Mr. Wolcott himself, when sworn as a witness before the Orphans Court. He concludes the account of the arrangement between them, after stating Ellis’ proposition as to the manner he would bid, in these words : “ I agreed to that, and told him I would attend to it. It was understood between us, as long as Mr. Ellis kept his thumb in that position, I was to consider him a bidder.”

Now, what right had Mr. Wolcott to conclude that this arrangement referred only to the first tract, and more especially when it was not known by either of them which tract was first to be sold. The mystery of this mistake is not lessened by the subsequent conduct of the auctioneer.

He says he stood in the same position when he cried off the second, as when he cried off the first tract; that Mr. Ellis stood nearly in the same position, moving in the crowd. He did not notice that Mr. Ellis had his thumb in the same position; he was where he could have seen his thumb in his lappel, if he had noticed; he did not look to see whether it was so or not; Mr. Ellis remained near the same place when he cried the second, as when he cried off the first tract; he could have seen him; he does not recollect that he saw Mr. Ellis’ thumb in that position during the second sale; he did not notice it when he was in the act of striking it off; if he had have noticed it he should not have taken it, because it was a heavy property, and he thought Ellis was fully satisfied with the purchase of the first farm, and if he had wanted to purchase the second, he (the auctioneer) thought Mr. Ellis would have told him at the interview.

It is unnecessary to comment on this conduct of the auctioneer to show that the responsibility for the mistake, and the trouble that it has produced, rests altogether with him. I have no doubt as to the upright intentions of Mr. Wolcott. But in this case he did not act the part of prudence.

That the consequence of this mistake was a reduced price of the property, is beyond a reasonable doubt. Mr. Ellis was the agent of Mrs. Holmes. She had authorized him, in writing, to bid for it $15,000. He declares it was his intention to have bid that sum, if necessary. Immediately after the sale, Mr. Conover refused to take a thousand dollars for his bargain. From these facts, we may reasonably conclude that, but for this mistake, the competition would have been such as very materially to have increased the price of the bid.

The question remains, as to the propriety of the commissioners in allowing the property to be struck off to Conover. If this mistake was brought to the knowledge of the commissioners, at a time when it was proper to correct it, and when it might have been corrected consistently with the rights of all parties in interest, and the commissioners refused to correct it, they did wrong, and the Orphans Court were right in not confirming the sale.

It is customary in New Jersey, at public sales, where a bid is claimed by two or more persons, and there is really good ground for dispute as to the claim of the bid, to put the property up again at the price and at the bid of such one of the competitors as the auctioneer may declare in his judgment entitled to it. This is the fair way of settling such disputes, and it is a right which the owner of the property claims, and which he will exercise, because it is to his advantage to do so.

If the commissioners did not in this case conduct the sale in the usual way, and the owners of the property have been injured by their proceedings, the commissioners were in error, and the court, having the power to correct that error, ought to do so, unless the commissioners can in some way justify themselves in pursuing the course they did.

It is insisted, on behalf of the appellant, that when Ellis claimed the bid, the commissioners offered to set the property up again; that Ellis refused, and declared he would leave it to the auctioneer; that Oonover acquiesced, and that the auctioneer decided in favor of Oonover.

If this is so, there is no ground of complaint against the commissioners. If Ellis declined having the property put up again, it amounted to a refusal on his part to bid any more for the property; and as he was the only competitor to Oonover, it was of no advantage to the owners to offer the property further, it might have operated to their detriment, for the effect of it would have been to relieve Oonover from his bid. In this view of the case, Ellis declined the usual mode of settling such difficulties, and the commissioners adopted the only course left them, and are not reprehensible for it.

But does tlio evidence warrant this conclusion ? Are the facts such as establish the premises from which it is drawn ?

Mr. Wolcott (the auctioneer) says, “ When it was struck off, I announced who was the highest bidder. I stated that the highest bidder was Peter S. Conover. When it was announced that Peter S. Conover was the highest bidder, Mr. Ellis claimed the bid. I replied to Mr. Ellis, that if he claimed the bid, it must be set up again, for I did not recognize a bid from him for that part of the property. Mr. Walling (one of the commissioners) spoke up, and said — yes, that was the way to settle the matter, for there were two claimants. Mr. Ellis replied that he would leave it to the decision of the auctioneer. Mr. Conover did not make any objection to that. The decision of the auctioneer was that Peter S. Conover was the highest bidder.”

There is nothing in this evidence of Mr. Wolcott to show that Mr. Ellis declined the proposition to have the property put up again, except it can be implied from his reply to the remarks of Mr. Wolcott and Mr. Walling, that he would leave it to the auctioneer.

Mr. Ellis, in his evidence, says he did not wish to make a fuss, and said, I will leave it to you, by which he meant the commissioners and the auctioneer ; that Mr. Walling then said, if there was any dispute it must be set up again; to which Mr. Ellis replied, very well, that is enough, and repeated it once or twice over. He further says, “ when he said that, I expected it would be put up again, and did not think anything else.

Mr. Walling’s testimony does not corroborate that of the auctioneer. He says, “ when the property was struck off to P. S. Conover, I recollect that Mr. Ellis claimed the bid. There was something then said about setting it up, and something said about leaving it to the auctioneer, but don’t think it was Mr. Ellis. I don’t recollect that Mr. Ellis said “very well.” I think that some one said, leave it to the auctioneer —and Mr. Ellis assented to it.

It does not appear that the other commissioners took any part in the matter, or that they were consulted or knew of the difficulty. They did not remedy the mista e as they ought to have done, and in the mode customary in conducting-such public sales.

One thing is certain, the difficulty was not settled by the commissioners, who were the proper persons, and who ought to have settled it. Taking Mr. Walling’s testimony to be correct, it is evident that the commissioners did not act in the matter for the interest of the owners of the property. All the commissioners, Mr. Walling and every one else, who had anything to say, seem to have treated the matter as one in which no person was interested but Mr. Conover and Mr. Ellis.

. That Mr. Ellis did not make any further complaint after it was determined Mr. Conover should have the bid, but permitted the conditions of sale to be signed without remonstrance, does not alter the case. Mrs. Holmes complained, and said there was something wrong. Mr. Hubbard said it was not right. Mr. Ellis’ conduct, subsequently, was such as might justly be considered as conclusive, as far as his own individual rights and interest were concerned, but ought not to prejudice the rights of others.

Without scrutinizing-the evidence further, I think the impression produced by it is very strong that this property did not bring as large a price as it would have done if the commissioners had, when this mistake was ascertained, put the property up again, and settled it in the usual and customary way.

It was argued, on behalf of the appellant, that the arrangement between the auctioneer and Mr. Ellis was illegal and improper, and ought not .to be favored or countenanced by the court. To this I assent. But the more improper and illegal was the conduct of the auctioneer, the more manifest is the wrong committed on the rights of the owners of the property, and the propriety of the court’s redressing the grievance.

Upon a careful review of the whole case, I am unwilling to say that the Orphans Court did wrong in making the decree they did. It must therefore be affirmed.

As to the costs, Mr. Conover must be put to no expense in prosecuting this appeal. He is an innocent party, and became involved in this controversy by the conduct of others, for which he is not responsible.

As the case is before me, I have no right to give directions as to any other costs, except of this appeal; but I have no doubt, as to other costs incurred by Mr. Conover, the Orphans Court will see the propriety and justice of their being paid out of the money raised from the further sale of the estate.