Oram v. Rothermel , 1881 Pa. LEXIS 156 ( 1881 )

Mr. Justice Paxson

delivered the opinion of the Court

The first assignment of error is sustained. The issue trying was whether the title of the defendants below, acquired by means of a sheriff’s sale, was fraudulent and void as to the defendant in the execution, and his creditors, by reason of certain 'acts and declarations of the defendants, at the time of the sale. The property in dispute, and for which this ejectment was brought in the court below, was a leasehold known as the “Benjamin Franklin Colliery,” situated in Northumberland county. The offer was to show, by the record of a judgment in Schuylkill county, what the defendants’ real and personal property in that county sold for, and what took place at the sale. We are unable to see how the title to the leasehold in Northumberland county can be affected by what occurred at a subsequent sale of the defendant’s property in Schuylkill county. If the sheriff’s sale in Northumberland was conducted according to law, and the defendants resorted to no trick or device .to depreciate the property and prevent competition, they-acquired a good title, and it cannot be affected by what took place subsequently in Schuylkill.

The second and third assignments raise but one question, and may be considered together. The court below rejected-the defendant, Thomas Baumgardner, as a witness, for the reason that he was incompetent under the act of 1869. He was not rejected upon the ground that the assignor of the thing or contract in action was dead, but because the action was by administrators. At the time the witness was offered, the case stood thus: Charles P. Helfenstein leased the premises in dispute to Richard B. Douty. The interest of Douty was first sold by the sheriff to the defendants, one of whom was the witness offered. The interest of Douty was sold by the sheriff a second time, and purchased by Joseph K. Maurer, who brought this ejectment. Afterwards Maurer died, and his administrators were substituted as plaintiffs. John B. Douty, one of the defendants, died a few days after the service of the writ upon him. More than five years after his death, the plaintiffs’ counsel issued a scire facias to bring his executors upon the record as defendants. The executors paid no attention to the writ, never appeared, were never ruled to plead, and no judgment by default was entered against them.

The learned judge was clearly right in holding the witness was not incompetent, because the assignor of the thing or contract in action was dead, and it is unnecessary to add anything to what he has said upon this head. The other branch of the case is not so clear. It may be assumed, however, that the placing of the executors of John B. Douty, upon the record as defendants, does not affect the competency of the witness. The executors were unnecessary parties, and had no business upon the record. When John B. Douty died, his interest in the lease passed to his surviving partner. The executors had nothing to do with it except to see that the surviving partner accounted for its value. The plaintiffs could not, by having improper parties placed upon the record, deprive the defendants of the right to be examined as witnesses,-if otherwise entitled thereto.

Since the commencement of this action Maurer has likewise died, and his administrators are npon the record as plaintiffs. The cases show it is not material whether they are there as original or substituted plaintiffs, provided they are proper parties. It was contended they were not necessary parties; that the administrators could have recovered in ejectment had they omitted setting forth their representative character; that the letters of administration were but a link in the chain of evidence to make out-their title; that they were under no duty to spread it upon the record, and that its absence could not be taken advantage of, by either plea or demurrer. It may be conceded the plea of ne ungues administrator would not be a proper plea, and that the action might have been sustained without the administrators declaring in their representative character, yet such admission would not carry with it the principle for which the defendants contend. The administrators were proper parties. The lease was a chattel real and goes to the administrators. The latter were entitled to bring ejectment in their representative character. Being properly upon the record, we think the case comes within the Act of 1869, and that the court below was right in excluding the witness.

The vice of the plaintiffs’ second and third points (see 4th and 5th assignments), is that they wholly ignore the question of actual fraud, and by affirming them, the learned judge laid it down as an inflexible rule of law that the purchase of a judgment by another judgment creditor at a judicial sale, with an understanding or agreement that the former should not bid, rendered a sale to the latter absolutely void, without regard to the fact whether a fraud was contemplated or committed. This instruction was too broad. It withdrew from the jury the question whether an actual fraud was committed. All the authorities, require that this question shall be submitted to the jury : Dean v. Connelly, 6 Barr 238; McMichael v. McDermott, 5 Harris 353. Even if a fraud were intended, yet if none was' committed, neither the defendant nor his creditors have just ground of complaint. Abbey v. Dewey, 1 Casey 413, merely decides that if the purchaser resorts to a trick or any fraudulent device to obtain the property below its value, and thereby purchases it for less than it would have sold for at a fair sale, the sale to him is void. It is true there are cases which hold that such sale would be void even if the property sold for its full value : Stainies v. Shore, 4 Harris 203. But they are manifestly instances in which there was proof that some one was prevented from bidding who would have paid more than the full value. The defendant in an execution has the right that his property shall bring all that the fancy or the caprice of bidders will give. If a purchaser will give twice its value, the defendant is entitled to his bid, and, in such case, it is no answer to say the property brought its full value. But such instances are exceptional, and are not to be presumed. As a general rule, where property has brought its full value, there is no room for the presumption of fraud in the sale. . And even a combination between creditors does not necessarily indicate fraud. Creditors whose ihoney is iii peril have rights as well as debtors. It was said in Smull v. Jones, 1 W. & S. 128 : “ Lien creditors, as well as others, may purchase jointly at sheriff’s sale, if all be open and fair. A combination of interests for that purpose is not neeessárily corrupt. It is the end to be accomplished which makes such a combination lawful or otherwise; if it be to depress the price of the property by artifice, the purchase will be void ; if it be to raise the means of payment by contribution, or to divide the property for the accommodation of purchasers, it will be valid.” Slingluff v. Eckel, 12 Harris 472, merely decided that when one judgment creditor agreed to pay the claim of another judgment creditor, if the latter would not bid, the contract was a fraud against the defendant if he had not acceded to it; and even if he had, the other creditors might be affected by it. The court very properly declined to enforce such a contract, upon grounds of policy. This presents a very different question from the one we are considering. The issue here is whether the defendants had been injured by an actual fraud.

There may be instances which will readily suggest themselves, where by agreement but a single creditor should bid for all. Such an arrangement might even be in the interest of the defendant himself. The crucial test of all such arrangements is whether it is fair and without intent to depress the property and get it at an under value. This question must in all cases be referred to the jury, and it was error in the court below to rule it as a question of law irrespective of the element of fraud in fact.

The answer of the learned judge to the plaintiff’s fourth point (sixth assignment) is open to the same criticism. The jury were told that if either of the defendants, at the time of the sale, induced Joseph 3L Maurer to believe that they were bidding in the colliery for Richard ; or that they promised to pay his claim against the defendants, and that if by either of said means Maurer was induced not to bid, it was a trick and contrivance, and avoided the sale to the defendants as against the plaintiffs. Here the question of fraudulent intent is again omitted. The jury were substantially instructed that the mere fact that either of the defendants stated that they were buying the property for Richard was a fraud, no matter whether the statement were true or false. I am not aware of any authority that will sustain this ruling. Sharp v. Long, 4 Casey 433, is authority against it.

The seventh, eighth, ninth and tenth assignments all raise substantially the same question, viz.: that the court erred in leaving to the jury to find that the representations made by the defendants, at the sheriff’s sale, in regard to their purchasing the colliery for Richard, were false and fraudulent, without any evidence in the cause of such falsehood or fraud sufficient to justify a verdict to that effect.

The only evidence was that of Richard B. Douty himself. He said : “ I went up and saw my brother John B. Douty, and I told him, says 1, ‘ John, I have been sent here by a party who is able, to ask if you will take dollar for dollar, with interest to date, for your claims against me, and leave the colliery come back to me.’ Says he, ‘ Who would be fool enough to do that ? ’ Says I, ‘ Never mind, the man is able to make his word good.’ And he talked there about how he had been kept out of his money by this arrangement, that he had calculated to build an opera house and one thing and another like that, now he couldn’t get his money. Says I, ‘John, you have a chance to get your money.’ He said he wouldn’t do it. Then I says to him, ‘ N ow,’ *ays I, ‘ John, 1 don’t know what more any honest man would •want than dollar for dollar, with interest to date,’ says I, ‘ strangers, let alone being brothers.’ That wouldn’t do ; he would not take it. I came down to Weaver’s hotel. I met Mr. Baumgardner in the office or just coming in the office of the hotel there. Says I, ‘ Mr. Baumgardner, will you take dollar for dollar for your claims against me, dollar for dollar, with interest to date?’ Ho, he wouldn’t, he wouldn’t have anything to do with it.” Mr. Fageley was examined and said that he told Richard to make this offer, and promised the necessary funds. Yet it is apparent from the testimony he had no idea of the amount of money that would be required ; he thought some $18,000. to $20,000, whereas the indebtedness for cash advanced and indorsements to Baumgardner, Wm. H. and. John B. Douty would seem to be not less than $60,000.

If this offer was regarded by Douty and Baumgardner as a serious one, which is hardly probable, it yet amounts to nothing. It was not an offer the parties were bound to accept, even though they intended to carry out in the strictest good faith their declarations in Richard’s favor made at the sheriff’s sale. They had a clear right- to hold the colliery until repaid from the profits all their cash advances and liabilities for indorsements. The colliery was sold March éth 1873; the conversation Richard speaks of was about the middle of May succeeding. In the meantime it is not alleged that any considerable amount of profits had been realized. But expensive and extended repairs had been made. The offer did not include these repairs, nor the indorsements of Wm. H. Douty. It might well therefore be refused, and yet be no violation of the implied trust in Richard’s favor. There was no denial of his right to claim the colliery after the purchasers had fully realized their claim. It is a trust enforcablein equity. But this attempt to wrest the colliery from the defendants eight months after they acquired title, before they had even a chance to reimburse themselves, upon such flimsy testimony as that detailed by Richard B. Douty, is not entitled to succeed. We are of opinion that upon this branch of the case the court should have given the jury a binding instruction. There was not sufficient evidence of the bad faith- of the defendants to have submitted to the jury.

The learned judge evidently misunderstood the object- of the plaintiffs’ first point. The point was: “ That the plaintiffs have not shown any title in them to enable them to maintain this action, and the verdict should be for the defendants.” New judges would understand that under this point was concealed the fact that the plaintiffs by an oversight had omitted to offer in evidence their letters of administration. This was purely a technical matter; the answer of the judge disclosed that he did not understand the point to refer to it. If a specific instruction was desired upon the effect of the omission referred to, the judge should have been asked for it when he answered the point. This would only have been just to the court below. The plaintiffs’ title was defective in the absence of the letters of administration: But were this the only error we would not reverse.

Judgment reversed, and a venire facias de novo awarded.