Herndon v. Gibson , 20 L.R.A. 545 ( 1893 )

The opinion of the court was delivered by

Mr. Justice Pope.

The plaintiff obtained a judgment . foreclosing a mortgage, executed by the defendant, Mrs. Gibson, to secure a sum of money borrowed by her from the endowment fund of Adger College, on a tract of land of some 250 acres, in Oconee County, in this State. The debt in judgment was $770.01, and eo§ts, $51.05. At the sale of the mortgaged premises by the master for Oconee County, the defendant, Mrs. Gibson, publicly announced that it was her intention to bid at such sale; that she was a widow, dependent upon such premises for a support, and requested that no one would bid against her. Such action on her part prevented two persons, who attended such sale to bid for the same, from bidding, one of whom was willing to give $300 therefor. Mrs. Gibson, the defendant, bid $100. There was no other bidder. The same was knocked down to her as the highest bidder. Immediately thereafter she induced the defendant, Mrs. Biemann, to advance the $100, which was paid to the master, with the request that title should be made to Mrs. Biemann, who had agreed with Mrs. Gibson to hold the title to secure the loan of the $100.

Thereafter, and very soon, the plaintiff, as receiver of the Adger College, obtained leave of the court to bring an action to set aside such sale, upon the ground that the conduct of Mrs. Gibson, the defendant in the foreclosure action, had chilled the sale and prevented a fair competition, alleging that the property was worth about $1,000. He not only alleged the foregoing facts, but suggested that the defendant, Mrs. Biemann, had participated in the conduct of Mrs. Gibson. The matter came on to be heard by Judge Fraser on the pleadings and affidavits. It should be stated that Mrs. Biemann denied any and all knowledge of the matters herein referred to, and that Mrs. Gibson exonerated her from any participation therein. The other defendant, Holleman, is master for Oconee County, and is included as a party to prevent a deed to the premises being executed by him to Mrs. Biemann. The decree of the Circuit Judge dismissed the complaint, thereby denying the prayer of the plaintiff for any relief. In his decree, he finds the property worth $1,000; that Mrs. Gibson did use the language attributed to her at the sale, but held that she told the truth when she stated that she was a widow, dependent upon these lands for a support, and did not wish any one to bid against her, and so requested; that, therefore, she was guilty of no fraud, as she concealed nothing, nor did she. misrepresent anything. From this decree, the plaintiff has appealed, upon four grounds. The decree and grounds of appeal should appear in the report of the case.

1 We cannot agree with the Circuit Judge. Under the laws of this State, fraud in the concealment or misrepresentation of facts is not the only fact which will vitiate a public sale. Anything by a party in interest that chills the sale— prevents free competition amongst the bidders — will, on complaint, cause such a sale to be set aside. Carson v. Law, 2 Rich. Eq., 296, is an apt illustration of this principle of our laws. In this last mentioned case, when the. bidder offered $1,000 for a lot of nine negro slaves, announcing, when he did so, that it was his purpose to send them as a gift to the wife and children of the defendant in execution; his bid was the only bid; he paid the purchase money, and sent the slaves to the wife and children of the defendant in execution. He, therefore, told the truth; he concealed nothing; he misrepresented nothing; his conduct was generous; yet the court of last resort in this State set the sale aside. That it is a principle engrafted upon our laws that at public sales fair competition must exist, is too long and firmly settled by our decisions to need comment. Hamilton v. Hamilton, 2 Rich. Eq., 355; Martin & Walker v. Erans, Ibid, 368; Dudley v. Odom, 5 S. C., 131; Barrett v. Bath Paper Company, 13 Id., 128. It follows, therefore, that the Circuit Judge was in error.

It is the judgment of this court, that the judgment of the Circuit Court be reversed, and the cause be remanded to the Circuit Court to enforce, by its decree, the principles herein, with directions, however, that the defendants, Mrs. C. H. Biemann and Joseph W. Holleman, master, shall not be liable for any costs.