United States v. Weir

HENLEY, Chief Judge.

This protracted case is now before the Court on the motion of defendant, James Weir, hereinafter at times called movant, to set aside an execution sale conducted by the Marshal whereby Weir’s interest in approximately 1,000 acres of land in Chicot County, Arkansas, was sold to L. J. Warren of Lake Providence, Louisiana, for a price of $60,000. The assignees of Warren, hereinafter called respondents, resist Weir’s motion and have filed a petition of their own seeking confirmation of the sale, issuance of a Marshal’s deed to the premises, the issuance of a writ of assistance to put them in possession of the land, and an injunction restraining Weir from interfering with their possession. Respondents also seek any other relief to which they may have shown themselves to be entitled.

The matter has been heard in open court, and has been submitted on the record in the case, oral testimony, and written briefs. This memorandum incorporates the Court’s findings of fact and conclusions of law with respect to the issues presented.

The lands in question were acquired by movant in 1955, and prior to the sale which took place in April 1962 were owned by movant, subject to a mortgage in favor of The Connecticut Mutual Life Insurance Company. In 1959 movant had a rice allotment of ten acres. He deliberately overplanted this allotment very substantially, and the Government commenced this suit against him to recover penalties as provided by the Agricultural Adjustment Act of 1938, as amended and supplemented, hereinafter at times called the Act.¹

Movant resisted the claim of the Government and in connection with his defense he was represented by a firm of attorneys from Dallas, Texas, and by local counsel- It was contended by Weir that the ?Act was unconstitutional, that the Act imposed no personal liability for penalties on farmers who produced commodities in violation of the Act, that the rice produced by him in 1959 was intended to be sold as seed rice and was not covered by the Act, that he did not plant as much rice as the Government contended, and that he had been discriminated against by the local officials administering the rice program in Chicot County.

The case having come to issue the Government filed a motion for summary judgment which the Court granted on February 12, 1962. Judgment in favor of the Government was entered in the sum of $16,972.09 plus six percent interest from March 23, 1960. The judgment itself bore interest at six percent from date of rendition. Movant appealed and the judgment was affirmed. Weir v. United States, 8 Cir., 310 F.2d 149.

Although movant was advised repeatedly that he could stay execution of the judgment pending the appeal by posting a supersedeas bond, he refused to supersede and obtained no stay.

On February 28, 1962, on application of the United States Attorney the Clerk issued a writ of execution commanding the Marshal to make of the goods and chattels, lands and tenements of Weir within this District the sum of $16,972.-09 principal, plus accrued interest in the sum of $1,965.92 and costs amounting to $59.80.

On March 5, 1962, the Marshal, acting through one of his deputies, Bob E. Powell, served the writ on Weir at his home in Dermott, Arkansas, and after making an unsuccessful effort to levy on personal property made his levy on Weir’s farm. The sale was held on the afternoon of April 17, 1962, and the successful bidder was Captan Jack Wyly, an attorney of Lake Providence, who, along with Carneal Warfield of Lake Village, Arkansas, was representing Weir at the time. By prearrangement Wyly was bidding for Warren, and it was understood that Warren was acquiring the property for movant’s benefit. It seems to have been movant’s intention at the time to redeem or to bring about a redemption of the land within the one year period allowed for redemption by Ark.Stats.1947, § 30-440. However, it appears from the testimony taken in connection with the instant motion that Weir did not expect to pay or cause to be paid in redemption more than about $23,000; he seems never to have contemplated having to pay $60,000 plus interest on that sum.

On September 28, 1962, Warren assigned his certificate of purchase to respondents in consideration of their payment to the Marshal of the bid price of $60,000 plus interest. The amount paid to the Marshal by respondents was $61,639.34. That sum, of course, was more than sufficient to discharge the judgment rendered in this particular case, but at the time of the payment there were pending in the Pine Bluff Division of this District three other suits brought by the Government against Weir to collect additional penalties under the Act. In view of the pendency of those eases, the Marshal, at the request or direction of the United States Attorney, after paying off the judgment in this case impounded the balance of the funds in his hands, and as the other suits against Weir went to judgment those judgments were satisfied out of the impounded funds.

Movant’s period of redemption expired on April 17, 1963. He failed to redeem, and on April 19 filed the instant motion. When the motion was filed, the Marshal had not issued a deed to respondents and the issuance of a deed was held in abeyance pending disposition of the motion.

Movant contends first, and principally, that he was not permitted to select personal property to be sold in satisfaction ■of the execution, as provided by Ark. Stats.1947, § 30-401, and that the lands were not subdivided into tracts for purposes of sale, as provided by Ark.Stats. 1947, §§ 30-421 and 30-422. He also contends that the lands sold for a grossly inadequate price, and the Court is willing to assume, although the matter is by no means clear, that he contends that the Marshal made an excessive levy.

Before discussing the controlling facts the Court considers it desirable to quote the Arkansas statutes just mentioned, and to comment upon them.

Section 30-401, derived from the Revised Statutes of Arkansas, ch. 60, § 28, is as follows:

“Selection of property to be sold— Levy. — The person against whom any execution may be issued may select what property, real or personal, shall be sold to satisfy the same; and if he give to the officer a list of the property so selected, sufficient to satisfy such execution, the officer shall levy upon such property and no other, if it be sufficient in his opinion to satisfy such execution, and if not, then upon such additional property as shall be sufficient.”

Sections 30-421 and 30-422, derived from Act 37 of 1868, presuppose that real property is to be sold in satisfaction of an execution. Those sections are as follows:

“30-421. Division of real estate into tracts. — In all sales of real estate, under execution, when the tract or tracts to be sold contain more than forty [40] acres, the same shall be divided, as the owner or owners may direct, into lots containing not more than forty [40] nor less than twenty [20] acres, and the officer whose duty it may be to sell said property, shall begin at one corner of said real estate, to be designated in the notice published by him advertising said sale, and proceed to sell in such tracts of not more than forty [40] nor less than twenty [20] acres each, of contiguous territory, unless ^* the whole of said tract or tracts be disposed of, unless the execution shall be sooner satisfied.

“30-422. Corner where sale of tracts commenced.- — In all cases where the corner at which the sale is to commence has not been designated in accordance with section one [§ 30-421] of this act, the officer whose duty it may be to sell said tract or tracts of land, shall commence at the northeast corner as required in section two [2] of this act.”

It is apparent that section 30-401 does not impose upon the officer serving a writ of execution a mandatory duty to levy upon personal property in preference to real estate or to refrain from seizing real estate as long as there is available personalty. That section merely gives to the judgment debtor the right or privilege of selecting in the first instance the property, whether real or personal, which he desires to have sold in satisfaction of the judgment. Wade v. Deniston, 180 Ark. 326, 21 S.W.2d 424. The statute was designed for the benefit of judgment debtors, and where a judgment debtor takes no action to avail himself of that benefit, he waives it. Trapnall v. Richardson, Waterman & Co., 13 Ark. 546, 549; see also 21 Am.Jur., Executions, § 376, 33 C.J.S. Executions § 95b.

Nor is section 30-421 a self-executing statute. It does not come into operation unless and until the owner directs the subdivision of his property for the purpose of sale, and if the owner gives no such direction, and if the property is sold in solido without objection to the mode of sale the right conferred by the statute is lost. In Reynolds v. Tenant, 51 Ark. 84, 9 S.W. 857, it was said (pp. 87-88 of 51 Ark., p. 858 of 9 S.W.) :

“The sale of the land was made in a body. This, it is contended, is in violation of the statute * * *. This requirement has been held by this court to be directory, and at the option of the owner, and may be waived. In this case the owner was present at the sale, and did not ask that the land be divided up according to the statute, or object to the sale. The requirement of the statute was for his benefit. He did not ask the sheriff to comply with it. He had a right to waive it, and did so by his failure to demand it. It does not appear that the land failed to bring a fair price. Feild v. Dortch, 34 Ark. 399; Youngblood v. Cunningham, 38 Ark. 571.”

Returning now to the facts, the evidence discloses that on March 5, 1962, Deputy Marshal Powell went to the home of movant in Dermott and served the writ of execution upon him. In connection with the service Powell at least attempted to explain to Mr. Weir his right to pay the judgment, or to post a supersedeas bond, or to select specific property for sale.² Powell testified that he did in fact explain those rights to Weir, and that Weir said that he would not pay the judgment, that he would not post a bond, and that the Marshal’s office was-not going to seize anything. Weir’s version of the conversation at his home ini Dermott varies somewhat from that of' Powell. Weir denies that Powell pointed out to him the available alternatives, just mentioned. According to Weir, Powell started to say something which, he had been directed to tell Weir by the-United States Attorney, but Weir refused to hear what Powell was about, to say and either ordered him or requested him to leave the house.

Whether one accepts Powell’s version or Weir’s as to what was said a-t the-house, it is undisputed that later on the-same day Powell went to the Weir farm; for the purpose of levying on personal property. He discovered the locked barn and the grain bins which have been mentioned; he also saw a single piece-of equipment, which Weir testified was a bulldozer, and which Powell thought was, in poor condition. Powell could not see what was in the barn, and he could not tell what, if anything, was in the bins; or the condition of their contents. Faced with this situation Powell went to a telephone and called Weir with the request that he open the barn and the; bins so that Powell could make his levy. This Weir vehemently refused to do and’ warned Powell not to seize any property..

While it does not appear from the evidence that Weir expressly threatened Powell, the evidence does disclose, and Weir does not deny, that his attitude was-menacing. When Weir refused to come to the farm as requested by Powell, the latter telephoned James W. Gallman, an Assistant United States Attorney at Little Rock, and after conferring with Gall-man made his levy on the land.

The sale of the property was duly advertised for April 17, 1962. Shortly before the sale Weir filed an application to enjoin it. The application, obviously prepared by an attorney, attacked the levy on various grounds, but no point was made that Weir had not been permitted to make a selection of property •or that the land was advertised for sale in a block.

In its order denying the application, ■entered on April 16, the Court pointed out that it did not appear that Weir had availed himself “of the rights of •selection provided by Ark.Stats. 30-401, '30-421, 30-422.” A copy of that order was mailed to Weir, and it appears that he received it on the morning of April 17. The sale was held during the afternoon.

On the morning of April 17 Deputy Marshal Powell was accompanied to Lake Village, the county seat of Chicot County, by the United States Attorney and the Regional Attorney for the Department of Agriculture. Mr. Weir was present, along with Mr. Wyly, Mr. War-field, Mr. Warren, Mr. Charles A. Smith, and Mr. W. R. Smith. Messrs. Wyly, Warfield, and Warren have been identified already. The Messrs. Smith are farmers and close friends of Weir.

The United States Attorney and the Regional Attorney were both desirous of .avoiding a sale of Weir’s farm and they ■entered into extended negotiations' with Weir’s friends and advisers in an effort to settle the case. In addition, the United States Attorney specifically told Weir that he could file a supersedeas bond, and there were friends of Weir present who would have signed the bond as sureties •and who would have been satisfactory •as such.³ Weir discussed the matter with Wyly, and Wyly advised him to let the sale go on, and stated that “It will liurt them more than it will us. Let the bell ring.” Movant took Wyly’s advice ■and refused to execute the bond.

By the time this decision was reached about 100 people, mostly friendly to Weir, had gathered around the courthouse to witness the sale. As the Marshal was about to call for bids, Charles A. Smith, who has been mentioned proceeded to make an inflammatory speech to the effect that Weir had been mistreated, that he had been denied due process of law, that his wife had an interest in the property, that the sale would be illegal, and that the purchaser would not acquire good title.

The Government had on hand as a bidder one Birchfield, an employee of the Chicot County ASC Committee. While it is not entirely clear, it seems inferable that Birchfield bid the amount of the Government’s judgment, plus interest and costs, and his bid was raised somewhat by Wyly. At this point a Mr. McBride, who seems to have had no connection with the Government or with Weir, other than as an acquaintance, entered the bidding, and he and Wyly began to bid against each other. When Wyly made his final bid, Charles A. Smith' shook his head at McBride as a signal to him to stop bidding, and McBride made no further bids.

As stated, the crowd at the sale was generally friendly to Weir, and Mr. Smith admitted in his testimony that there was a general understanding that the land was to be bid in for Weir’s ultimate benefit, and that the price would be kept down. With regard to the speech which he made before the bidding commenced Smith testified that he spoke of his own volition and not at Weir’s instigation, and this may be true. However, the Court notes that Weir and his attorneys were present and did not disavow Smith’s remarks.

Following the sale but before the purchase money was paid to the Marshal, Mr. Wyly worked out an arrangement with the United States Attorney whereby the rice which had brought about the suit would be sold and the Government’s judgment, that is to say the penalties of the Act plus interest and costs, would be paid out of the proceeds with the surplus being turned over to Weir. Had this agreement been carried out, it seems clear that Mr. Warren would have released his rights under his certificate of purchase, and that would have been the end of the matter, at least as far as this particular case was concerned. Weir, however, refused to carry out the agreement and discharged Mr. Wyly as his attorney. Mr. Weir testified that he refused to carry out the agreement because the Government insisted that it be named as a joint payee with Weir in any checks that might be given in payment for the rice. Weir stated that other farmers were not treated in that manner, and that he refused to go along with such a procedure. Actually, Weir was simply unwilling to pay the Government the amount of its judgment.

When the facts above outlined are considered in the light of the principles which have been mentioned, the Court is convinced that Mr. Weir has waived the benefits of Ark.Stats. §§ 30-401, 30-421, and 30-422, and that he is estopped by his conduct from complaining of the conduct of the sale, any inadequacy of the price obtained for the land, and any ex-cessiveness in the Marshal’s levy.

Mr. Weir not only failed to designate any property for sale or to request that his land be subdivided for sale purposes. He knowingly and intentionally refused to make any selection of property and forbade the Marshal to make any seizure of any personal property. He refused either to pay the judgment or to supersede it, and he and his friends conspired to keep the bidding down, with friend Smith going so far as to make the speech which has been described. From its consideration of the entire record the Court is convinced that for reasons about which the Court need not speculate, but which seemed good and sufficient to Weir at the time, he wanted his entire farm sold, if there was going to be a sale at all, and he-wanted it sold at the lowest price possible. Because of McBride’s participation the bidding may have gotten out of hand,, and the ultimate impounding of the entire purchase price paid to the Marshal may have been unanticipated by Weir, but those matters are immaterial to the validity of the sale.

With further regard to the alleged inadequacy of price and with regard to the alleged excessiveness of the levy, the Court is not persuaded that the levy was excessive or that the price received was actually inadequate. It must be remembered in this connection that the land was subject to a first mortgage. While the record does not disclose the exact amount of the debt secured by the mortgage as of the time of the sale, the original amount of the debt was $60,000, payable at the rate of $3,000 per year beginning January 1, 1959, and the debt bore interest on unpaid principal at the rate of five percent per annum. Further, Mr. Weir was a married man, and under Arkansas law an execution sale does not cut off a wife’s right of dower. That right, while inchoate during the husband’s lifetime, is a lien on the land, and a purchaser at an execution sale takes subject to it. The dower right becomes vested upon the death of the husband, and the wife has seven years after his death to secure an allotment of her dower. See Humphreys v. McKnight, 202 Ark. 715,152 S.W.2d 567; Roetzel v. Beal, 196 Ark. 5, 116 S.W.2d 591.

Taking into consideration the mortgage, Mrs. Weir’s dower interest, the small rice allotment of the Weir farm, and possibly the farm’s small allotments of acreage for the planting of other controlled crops,⁴ the Court simply is unable to say that the Marshal made an exces-•sive levy cr that a bid of $60,000 for Weir’s interest in the land, subject to the mortgage and subject to the dower interest, which might well make the title unmerchantable, was grossly or even substantially inadequate.

But even if it be assumed that the price was inadequate, it is well settled in Arkansas that mere inadequacy of price, no matter how gross, is not alone sufficient to vitiate an execution sale. Carden v. Lane, 48 Ark. 216, 2 S.W. 709; Pindall v. Trevor, 30 Ark. 249; Newton’s Heirs v. State Bank, 22 Ark. 19; Brittin v. Handy, 20 Ark. 381; Hardy v. Heard, 15 Ark. 184. Nor will inadequacy of price, standing alone, justify a court of ■equity in refusing to confirm a judicial sale. Hinton v. Elliott, 187 Ark. 907, 63 S.W.2d 633; Wells v. Lenox, 108 Ark. 366,159 S.W. 1099.

While movant contends that an alleged suppression of bidding, presumably by Charles A. Smith, is a factor in the ease which should be added to the alleged inadequacy of price so as to vitiate the sale, it is clear that once the bidding passed the amount of the Government’s judgment, including interest and costs, it was in movant’s interest for the bidding to be kept low. Moreover, if Smith in fact “suppressed” the bidding either by his speech or by his indication to McBride that he should cease bidding, this “suppression” was for the benefit of Weir, or for what Smith thought was for Weir’s benefit, and, although Weir may not have instigated or expressly authorized the conduct of Smith, he certainly did not disapprove of it.

At the commencement of the hearing movant filed in open court a supplement to his original motion. In that pleading he sought to advance one contention which he had advanced when the case was before the Court on the merits, and which is not now open. He also advanced two constitutional contentions which the Court finds to be so insubstantial as to require neither statement nor discussion.

It is argued by respondents that since the motion under consideration was not filed until after movant’s period of redemption had expired, the sale cannot be set aside except for defects which would have rendered it void absolutely, and that the defects upon which movant relies would at most have made the sale voidable. Cf. Bird v. Kitchens, 215 Ark. 609, 221 S.W.2d 795. However, since the Court is convinced that none of movant’s contentions has merit, it becomes unnecessary for the Court to pass upon respondents’ contention just mentioned or on their contention that they are bona fide purchasers for value and without notice and are entitled to protection as such.

Movant’s motion will be denied, and respondents will be granted affirmative relief on their own petition. An appropriate order is being filed contemporaneously with this opinion.

The Court is not willing to bring this memorandum to a close without making certain general observations about the case. Throughout the entire proceedings Mr. Weir has sought to create the impression that he has been persecuted by the Government. Such is simply not the case, at least as far as the Marshal’s office and the United States Attorney’s office are concerned. Mr. Weir’s present predicament is due to his deliberate violation of the Agricultural Adjustment Act in 1959, and to his deliberate refusal either to supersede or to pay the judgment rendered in this case. Mr. Weir, of course, had and has every right to be opposed to the Government’s farm program. Many people are. And he had the right to carry his opposition to the extent of litigation, as he did; but, he should have foreseen that he might lose the case and should have been prepared for the consequences. He could not avoid losing the case, but he could have avoided losing his farm. It is unfortunate that he has lost both.

1 . 7 U.S.C.A. §§ 1281 et seg., particularly §§ 1351-1356.

* In the Act of 1868 “unless” is “until”.

2 . There is no question that Weir had sufficient unencumbered personal property to satisfy the judgment. That property consisted principally of the rice -which was the subject of the lawsuit in the first place, farming equipment, and motor vehicles. Most of the farming implements and equipment were located in a locked barn on the Weir farm, and the-rice was stored in locked bins also located on the farm.

3 . Since the farm even subject to the insurance company’s mortgage was unquestionably worth more than the Government’s judgment, the requiring of sureties on the supersedeas bond was more or less of a formality. Actually, Weir’s own signature on the bond would have been adequate security at least at that time.

4 . Laying to one side Mr. Weir’s claims of unfair treatment at tile hands of the Chi-cot County ASC Committee, which claims have no support in the record in this case, Weir’s basic acreage difficulties stem from tlie fact that his farm has little, if any, “crop history.” Weir testified that when he bought the property, it was largely uncleared, and that he has cleared it up and put it in shape for cultivation.