Barclay v. Pittsburg Home Building Co. ( 1914 )

Opinion by

Tkexleb, J.,

The statement of the question involved is as follows: A receiver of an insolvent corporation having presented to a court of equity a petition for leave to sell real estate at private sale free and clear of liens, and the sale having been confirmed and the deed delivered to the purchaser, should the court, on the petition of lien creditors, set aside the sale and order a resale, for the reason that no notice was given to certain known creditors by the receiver of its intention to present such petition as provided by the Act of May 11, 1911, P. L. 261?

The act reads as follows: “That from and after the passage of this act, the courts of common pleas of the several counties of this commonwealth in all cases where, under existing laws, the court has power to order the sale of real estate of any corporation in the hands of a receiver duly appointed, for the payment of debts and for other purposes, the said court may decree and approve a private sale, if in the opinion of the court, under all the circumstances a better price can be obtained at private than at public sale, as where the interest shall be undivided, or for any other sufficient, cause.

“Section 2. At least ten days’ notice of the intention to present such petition to the court shall be given by the petitioner to all known creditors and other parties in 'interest, previous to the presentation of the same to the court.”

About five months after the deed was given, a petition to set aside the sale was presented by lien creditors who had no notice of the application to sell at private sale. The property in the meanwhile had’ been improved and had changed hands several times.

The testimony in the case shows that the price obtained at private sale was more than was offered at public sale and that the price was adequate. It is claimed that an offer to bid $1,100 more than the price received was presented at the argument in the court below, but there is nothing on the record to show this. It was presented, if presented at all, to the court seven months after the final decree, and the advance over the price bid did not equal the sum expended by innocent purchasers in improvements. Instead of being proof of inadequacy of price, it confirmed the conclusion of the court that the price bid for the property, when the sale was had, was adequate. That more could be obtained on a resale by reason of improvements made to the property by innocent purchasers would hardly appeal to the conscience of a court of equity.

The power of the court to make the sale is not questioned. A receiver’s sale is, in effect, a sale by execution process: Mould v. Mould, 28 Pa. Superior Ct. 318; Green v. Ineson, 43 Pa. Superior Ct. 447.

As regards the rights acquired by a purchaser of property at a receiver’s sale under an order of court “it is sufficient for him to see that there is a suit in equity in which the court appointed a receiver of the property, that such receiver was authorized by the court to sell; that a sale was made under such authority, that the sale was confirmed by the court and that the deed accurately recites the property thus sold. If the title of the property was vested in the receiver by the court, it would in that case pass to the purchaser. He is not bound to inquire whether any errors intervened in the action of the court, or irregularities were committed by the receiver in the sale, any more than a purchaser under execution upon a judgment is bound to look into the errors and irregularities of a court on the trial of the case, or of the officer in enforcing its process.

“If the receiver in the one case, or the sheriff in the other omit to perform his whole duty, by which the parties are injured, or commit any fraud upon the court and the rights of third parties have so far intervened as to prevent the court from setting the proceedings aside, the injured parties must seek their remedy personally against those officers, or on their official bonds.” Such is the law as stated in High on Receiver’s (4th ed.), p. 782, citing Koontz v. Northern Bank, 16 Wallace, 196, opinion by Field, J.

Although we have no Pennsylvania cases referring to the effect of the giving of a deed by a receiver under order of court, upon irregularities in regard to the sale, we have a number in which the subject is considered in relation to sheriff’s de'eds. Mere irregularities in a sheriff’s sale are cured by the acknowledgment: Crowell v. Meconkey, 5 Pa. 168; Shields v. Miltenberger, 14 Pa. 76; Spragg v. Shriver, 25 Pa. 282; Media T. & T. Co. v. Kelly, 185 Pa. 131.

As was said in Stroble v. Smith, 8 Watts, 281, it is not said in any part of the statute that the omission of a thing requested shall avoid the deed. It may be a reason to reject the acknowledgment; but it would be attended with an alarming degree of insecurity, were the title open to subsequent objection; and, to avoid a mischief so startling, it is necessary to consider the provisions of the section as directory. In the above case the failure consisted in not complying with sec. 97 of the Act of June 16, 1836, P. L. 760, directing and requiring that no acknowledgment of any sheriff’s deed should be allowed, unless notice should be first given as provided by said act.

After a sheriff’s sale has been confirmed, the purchase money paid, the deed acknowledged, recorded and' delivered to the purchaser, and possession of the premises taken by him the court has no power upon a rule to show cause, to set aside the sale and compel the purchaser to deliver up the deed to be canceled. The delivery of said deed by the sheriff after it has been properly acknowledged, the sale confirmed, and purchase money paid, vests the title in the purchaser. It is a good title until it is proved that it was procured by fraud upon defendant in the execution. This must be done either by an action of ejectment or a bill in equity: Evans v. Maury, 112 Pa. 300; Media T. & T. Co. v. Kelly, 185 Pa. 131; Cooper v. Wilson, 96 Pa. 409; Lengert v. Chaninel, 208 Pa. 229; Collins v. Phillips, 236 Pa. 386. In Evans v. Maury, 112 Pa. 300, Paxson, J., at page 314 says: “But it is a very great stretch of power, far greater than any chancellor ever exercises, to dispose of such grave questions in a summary manner. We cannot concede the power to any single judge of wresting a man’s title from him. . . . We grant the power of the Common Pleas to supervise its process, be it by execution or otherwise, and lay its hand heavily upon any fraud which may occur at any stage of the proceedings. This is true so long as the proceedings are withiii its grasp. But after they are completed and ended, there must be a time come when the power of the court to interfere summarily for the correction of supposed evils shall cease. When shall that time be? If not with the delivery of the deed, how shall we fix the time?”

Lengert v. Chaninel cited above holds to the doctrine of Evans v. Maury, even after the judgment upon which the sale had taken place was reversed.

In Media T. & T. Co. v. Kelly, 185 Pa. 131, the rule was applied even where the price was grossly inadequate and the advertisement did not comply with the law.

As was said in Abrams v. Sav. and Trust Co., by Henderson, J., ante, p. 354, in relation to a sale in the orphans’ court, “there was no evidence of the fraud in procuring of the sale, the court has found that the consideration was adequate and that improvements have been made by the purchaser exceeding in value the price of the land. The authority to order a private sale cannot be questioned and as the sale was confirmed by a decree of the orphans’ court and made on the application of the guardian of the estate of the minor appointed by that court it is inequitable that an innocent purchaser acting on her faith in the integrity of the decree of the\court should be subjected to the loss of her land by a contradictory decree of the same court.”

Whilst the facts presented in the above case differ from those before us, we consider the reasoning applies.

We are all of the opinion that the court below committed no error in refusing to set aside the receiver’s sale.

Decree affirmed.