Buckeye Development Corporation v. Brown & Shilling, Inc.

McWilliams, J., delivered the opinion of the Court. This appeal arises out of a quarrel between Brown & Shilling, Inc., an appellee (Brown), and The Buckeye Development Corporation, appellant (Buckeye). A story (long and wearisome) goes with it but, fortunately for us and those obliged to read this opinion, to dispose of it we need to deal with but a single chapter. ²²⁷ Brown is trying to collect from Buckeye $9,518.60 for plumbing installed in a supermarket built by Buckeye and leased to Acme Markets, Inc. Buckeye claims Brown owes it in excess-of $30,000. In the course of its campaign to lay hands on its-money Brown obtained a judgment (by default) against Buckeye.

In December 1964 Brown caused a writ of fieri facias to-be issued and the sheriff, obedient to his instructions, levied' upon Buckeye’s equity in the supermarket. The public was advised by an advertisement which appeared in the Jeffersonian-(published in Baltimore County) on 5, 12, 19 and 26 February 1965 that the sheriff would sell Buckeye’s equity at 12 o’clock, noon on 1 March 1965 at the court house door to the highest bidder for cash. At the stroke of twelve, the auctioneer employed by the sheriff read the advertisement and asked for bids. There were about* a dozen people in attendance but only two bidders.

The bidding began at $1,000 and soon escaladed to $15,000. Stewart* A. McLean thereupon bid $15,250. McLean, president of The-McLean Land Company, Incorporated, and the brother of counsel for Brown (R. Taylor McLean, Esq.), was acting, in this, instance, for Homewood Holding Corporation. He had been directed by its president, Robert G. Merrick (his brother’s wife’s uncle), to bid up to $15,250.

McLean (S.A.) had in his pocket a certified check for that amount when he made the bid. As soon as the bidding advanced beyond $15,250 he left the scene. The highest bidder, at $16,000, was Nachman Gerber. He is the president and (with his wife) the sole stockholder of Buckeye.

Earlier in the day Gerber had gone to the sheriff’s office to see about having the sale called off. He was told this would be done if he paid the amount of the judgment ($9,518.60) and the expenses. This he was not able to do because, he said, his “money was tied up.” Because the auctioneer had been told of the incident, he repeated twice during the bidding that cash or a certified check would be required of the successful bidder. Gerber said he “didn’t have the money on * * * [him] but * * * [he] could get it.” The sheriff and Mr. McLean (R.T.) declared this to be unsatisfactory.

Gerber then spoke to Joseph L. Soley, a bystander. What Gerber said to Soley was not disclosed but Soley was heard to say that “he couldn’t do it because ²²⁸ he couldn’t make enough on his money.” Gerber’s attorney (Samuel S. Eisenberg, Esq.) then indicated he would offer his check for the $16,000. The sheriff refused to consider Mr. Eisenberg’s check because he had “seen many lawyer’s checks bounce also.” The sheriff, the auctioneer and Mr. McLean (R.T.) having decided to reoffer the property, the bidding began again. This time the property was “knocked down” to Soley (the byj stander at the first sale) for $15,750.

Soley had neither cash nor certified check but he said his bankbook was in his office (a building trailer) about lj^ miles from the court house. They all (auctioneer, sheriff, Mr. McLean (R.T.) and Soley) trooped off to Soley’s trailer where he exhibited a passbook showing funds on deposit in a savings and loan association. The sheriff testified “it was plenty to cover the purchase price.” It was then about 1:00 P.M. After the exposition of the passbook Soley telephoned his attorney and his partner. What they said to him the record does not make explicit but it is easy to surmise they were not happy about his purchase.

After these conversations Soley announced that he would not go through with the sale unless he “got a guaranteed title.” The sheriff said he didn’t “say flatly no that he wouldn’t” but all considered it to be the equivalent of a flat no. With the situation “still what you might say up in the air” they all (except Soley) left. They didn’t go back to the court house to reoffer the property because it was then around 2:45 P.M. and, as the sheriff said, “By then [there] wouldn’t have been anyone there.” Nothing further was done on 1 March in respect of plans to resell the property. By midday on 2 March Mr. McLean (R.T.) had procured his brother to accept an assignment (without consideration) from Soley of all his right, title and interest in the property.

This was executed by Soley individually and as president of The Hamilton Building Company. McLean (S.A.) paid the sheriff $15,750. On 3 March the auctioneeer reported to the sheriff that, on 1 March, he had sold the property to The Hamilton Building Company “by Joseph L. Soley, President” for $15,750, subject to a first mortgage of $334,000 (approx.), a second mortgage ²²⁹ of $35,000, and Acme’s lease. He reported further that “Mr. Soley” has since assigned his interest to McLean Land Company.

There is also in the record a document, under the masthead of the auctioneer, entitled “Contract of Sale”, which states that The Hamilton Building Company “acknowledge [s] purchasing the property [for $15,750] and agrees to comply with the terms” in the advertisement of sale. Soley signed this [on 2 March] as president. At the bottom of the page, over the signature of the sheriff, are the words, “I hereby acknowledge receipt of $15,750 in full payment on [sic] the above described property as stated in terms of sale.” The deed from the sheriff to The McLean Land Company was executed on 10 March. It wTas recorded among the Land Records of the county on 24 March.

It recites a sale to The Hamilton Building Company and the receipt from it of $15,750. On 4 March the sheriff mailed to Mr. McLean (R.T.) a check for $9,742.26 which represented the amount of the judgment, interest, costs and a deposit of $100. The forwarding letter lists $78 in advertising costs, $415 for the auctioneer and $284 levy costs, concerning which we shall have more to say later on. Buckeye contends there are irregularities in the conduct of the sale for which it should be set aside.

We agree. Other contentions are listed but our decision makes it unnecessary to consider them. The sale of an interest in land under a writ of fieri facias at common law was impossible because of the inhibitions inherent in feudal tenure. An exception was provided, in Maryland and certain other colonies, by the Statute of 5 Geo.

II, c. 7, which allowed the sheriff to deliver the debtor’s land to the creditor under the writ of elegit. The present power of sheriffs to sell land under writs of fieri facias is derived from Chap. 160, § 1 of the Acts of 1810, now Code, Art. 83, § 1 (and virtually unchanged). Hartogensis, Maryland Statutory Modification of the Common Law of Real Property, 1 Md. L. Rev. 238 , 244 (1937). The distinctions between sheriff’s sales and other judicial sales are too well known to require elaborate comment here.

While the only reason for a sale by the sheriff under the writ ²³⁰ ■of fieri facias is to accomplish a satisfaction of the judgment, the sale should be so conducted as to promote competition and to secure the best price. Judge Raine (the trial judge) felt “the sheriff is entrusted with a certain amount of discretion” in conducting execution sales and it must be conceded that this is generally true. Nevertheless, whatever may be the limits of that “certain amount of discretion” it must be fairly and impartially exercised for the benefit of all concerned. Ordinarily the sheriff may follow the reasonable directions of the judgment ■creditor but he should be at all times aware that he is not merely the servant of the creditor and that the debtor may have interests which he has a duty to protect.

Indeed, in some circumstances, the bidders at the sale may be drawn within the purlieus of his duty to be fair and impartial. Home Owners Loan Corp. v. Braxtan, 220 Ind. 587 , 44 N. E. 2d 989 (1942); City of St. Louis v. Peck, 319 S. W. 2d 678 (Mo. App. 1959) ; 33 C.J.S., Executions, § 201 (1942) ; 21 Am. Jur., Executions, § 176 (1939).

There are some areas in which there is little room for the exercise of discretion. When the published terms of sale provide, as in the case at bar, for a sale