Smith v. Huntoon

Mr. Justice Baker

delivered the opinion of the Court:

We are of the opinion that the court erred in sustaining the demurrer to the bill of complainant. If the certificate of purchase had remained in the hands of the judgment creditor, Huntoon, no question could have arisen but what he would have been chargeable with notice of the irregularities in making the sale of complainant’s land alleged in the bill. It has been so repeatedly held, that where the judgment creditor becomes the purchaser he is chargeable with notice of all irregularities, that we do not deem it necessary to enter into a discussion of that question. Stewart v. Croes, 5 Gilm. 442; Morris v. Robey, 73 Ill. 462, and cases cited.

The bill alleges that the property sold was of the value of $1500 at the time of the sale, and that it was sold en masse for $71.65, without having been offered in smaller tracts. It is manifest' that the interest of the complainant in a much smaller division of this one hundred and sixty acres of land would have been ample to satisfy the special execution. In Steiuart v. Croes, supra, which was a like bill, the allegation was that the land was of the value of $1000 at the time of the filing of the bill, and the court said: “Had there been an allegation that the land was worth $1000 at the time of sale, instead of at the time of filing the bill, such allegation, in connection with the other statements in the bill, would have presented a clear case for the interposition of a court of equity, for it would never be allowable for an officer to sell, en masse, a tract of land worth $1000, to satisfy an execution for less than $30, when the tract was susceptible of division, and the sale of a small part would have satisfied the debt.” See, also, Day v. Graham, 1 Grilm. 435; Cowen v. Underwood, 16 Ill. 22; Ballance v. Loomis, 22 id. 82; Phelps v. Conover, 25 id. 312; Davis, Cory & Co. v. Chicago Dock Co. 129 id. 180, and cases there cited.

We held in Phelps v. Conover, supra, that while the plaintiff in execution has a right to insist upon a sale for the satisfaction of his debt, the debtor also has the right to demand that the sale shall be conducted according to law, and in such a manner as shall not needlessly sacrifice his property. A sale made, therefore, en masse, where the property is susceptible of division, and a smaller portion would, if offered, have satisfied the debt, is irregular. The creditor may insist that his debt shall be paid, but where a needless sacrifice is made of the debtor’s property, an unconscionable advantage is taken of the debtor, not warranted by law, “which circumstance,” as said in Morris v. Robey, supra, “with gross inadequacy of price, are at least impliedly recognized as grounds of equitable relief in a number of eases,” citing McMullen v. Gable, 47 Ill. 71, and Mixer v. Sibley, 53 id. 75.

Moreover, it is alleged that the affidavit for the attachnlent stated the residence of the defendant therein upon information, only, and that an untrue residence was given. It is required by the Attachment act that the affidavit for attachment shall state the residence of the defendant, “if known, and if not known, that upon diligent inquiry the affiant has not been able to ascertain the same.” By section 22 of the act, the clerk is required to send a copy of the notice by mail, addressed to the defendant at the place of residence stated in the affidavit. We do not propose, now, to determine the effect of this last mentioned irregularity. It must be manifest, whatever the effect, that the affidavit was not in compliance with the statute, and that no copy of the notice published by the clerk would have reached the defendant at the place designated in the affidavit, and that the purpose of the statute in requiring the mailing of notice was defeated. The statute seems to contemplate, that if the residence is not known, diligent inquiry should be made to ascertain the same; and if it be true, as alleged in the bill, that Huntoon could have ascertained the same upon inquiry, it was his duty to do so. By the course pursued, gross fraud might be perpetrated upon a defendant, and his property unjustly subjected to sale without notice to him.

It is alleged that Huntoon and Morrison and Whitlock knew that the land was of the value of $1500 at the time of the sale and of the transfer of the certificate of purchase. Without further noting the irregularities alleged in the bill, it must be said that those already mentioned, when taken in connection with the gross inadequacy of- price, make a case such as would require an answer, at least on the part of Huntoon, were he still the real party in interest. Although gross inadequacy of price, alone, will not be sufficient to avoid a sale under judicial process, yet it will, when combined with irregularity in making the sale, or even slight circumstances indicating unfairness or fraud, furnish sufficient ground-for equitable interposition. See Davis, Cory & Co. v. Chicago Dock Co. supra; Hamilton v. Quimby, 46 Ill. 90; Comstock v. Purple, 49 id. 158.

The point is relied upon, that Morrison and Whitlock are bona fide purchasers, and are to be protected as such, and that although the plaintiff in execution is chargeable with notice of irregularies in the proceedings, they are not so chargeable. 'It is said there is no allegation of notice to them of such irregularities. It is alleged that they had notice of the value of the land. It is not necessary for us here to determine the estate or interest which the holder of the certificate of purchase acquires by virtue of the sale and certificate. Whatever right Huntoon had, and no more, passed by the assignment to-Morrison and Whitlock. They occupy the position that he-occupied, and stand precisely where he stood. The rule that applies to strangers purchasing at judicial sales, or to a purchaser in good faith and for value from one who has acquired title under a judicial sale, can have no application to them. - The policy of the rule which protects strangers is to encourage bidding at judicial sales, and prevent the loss of money by strangers who bid upon the faith of the correctness of judicial proceedings, and where there is little opportunity to inquire into their regularity or irregularity. Morrison and Whitlock are mere volunteers, who paid the amount of the bid to the plaintiff in execution, and took an assignment of bis certificate. The rule which applies to the assignee of a certificate of purchase issued to a plaintiff in execution, is that which applies to the plaintiff in execution himself. A grantee is charged with notice of the deeds and documents through which he deraigns title. So, here, Morrison and Whitlock, when they purchased from Huntoon his inchoate right, must be presumed to have known the course of proceedings through which he proposed deriving title, and to have known what was shown by the public records in respect thereof. By looking at the return of the sheriff on the special execution mentioned, they would have seen that a one-fifth interest in one hundred and sixty acres of land, which it is alleged they knew was worth $1500, had been sold for $71.65, en masse, and without any portion of it having been offered in less quantity. By reference to the files in the case they would have observed a palpable non-compliance with the law, through which gross fraud might be perpetrated upon the defendant. They stand, as before said, in the shoes of Huntoon, and succeed to all his rights, but none other, and the certificate in their hands is charged with all the infirmities which existed against it while in the hands of Huntoon. Reynolds v. Harris, 14 Cal. 667; Turner et ux. v. Bank, 78 Ind. 19; Ayres v. Campbell et al. 9 Iowa, 213; Herman on Executions, 435.

The bill of appellant is inartificially drawn, and in many respects might well be amended, but we are of opinion it show's substantial grounds for equitable relief, and the decree dismissing the bill will be reversed and the cause remanded for further proceedings.

Decree reversed.