Gordon v. Matthews

Miller, J., delivered tbe opinion of tbe Court. It appears from the record in this case, that Henry J. MeNamee applied for the benefit of the insolvent laws in May, 1859; that Daniel 'Wineow was appointed trustee for the benefit of his creditors, and the appellants became sureties on the trustee’s bond; that the property consisting chiefly of real estate, was sold by the trustee under order of the Court, in October, 1859, for @3,894.00, the terms of sale being one-third cash, one-third in six and one-third in twelve months, the credit payments to be secured by the bonds of the purchaser with sureties to be approved by the trustee, and that the insolvent himself became the purchaser. In his report the trustee stated the purchaser had complied with the terms of sale and it was finally ratified in January, 1860. At the instance of creditors two audits were stated at different periods, distributing the cash and first credit payments, including interest upon the latter down to the time it was due, to the claims of the creditors according to priority paying some in full, others in part and leaving unpaid a large number of junior claims.

These audits wére finally ratified in February and November, 1860, and most of tbe creditors to whom distribution was thus 'made brought suits on the trustee’s bond for the several sums so audited to them, and recovered judgments which were paid by Mr. Gordon, one of the sureties. A third audit was also stated distributing the last credit payment, still leaving a large amount of claims unpaid; but before this audit was ratified the Court on petition of the appellants filed in January, 1861, stating the purchaser had paid no part of the purchase money, except §710, and that Wmeow was insolvent, passed an order, with Wineow’s consent, removing him and appointing Mr. Gordon, trustee, in his place. The new trustee received from Wineow §500 out of the §710, of purchase money paid him, and then under orders ²⁴⁴ of the Court re-sold the property in March, 1863, for $4,163 cash, a sum less by a small amount than that ascertained by a ratified account to be due from the first purchaser on account of his purchase. To the final audit distributing the ■funds in Mr. Gordon’s hands, exceptions were filed by the appellants and from the order ratifying it they have appealed.

We do not agree with the Special Judge who passed the order appealed from in his interpretation of the effect of the orders of Judge Weisel directing a re-sale. The order' of February, 1861, directed all the real estate to be re-sold for the payment of the purchase money due by McNamee, and that such sale should be at his risk. That of November, 1862, directs the sale made by Wineow to be “set aside,” except as to lots E and F, but also directs the trustee to resell for the payment of the purchase money due by McNamee and that said sale shall be at his risk. Again in the order of February, 1863, the sales of lots E and F are annulled and set aside, but the trustee is directed to re-sell them at the risk of McNamee for the payment of the purchase money due thereon by him.

That it was not the intention of the Judge, who passed these orders, to absolutely vacate and annul the sales made by Wineow, so as to release the purchaser from liability, is apparent not only from his opinion of June, 1864, accompanying' the order affirming the re-sale of the two lots in which he treats them simply as orders of re-sale at the purchaser’s risk, but also from his order of June, 1863, ratifying the account showing the amount due by McNamee, as purchaser, in which it is said he will thereafter be allowed a credit for the net amount of the proceeds of sale made or to be made by the new trustee under the several orders of re-sale heretofore passed. Notwithstanding the inadvertent use, of the terms “ set aside ” and “ annul ” in two of these orders, we are of opinion their true meaning was simply that of orders of re-sale at the purchaser’s risk, and that they cannot have the effect to vacate and annul all that ²⁴⁵ bad been done in the ease, so as to require the second sale to be treated as a sale de novo. Nor is there any reason for so construing them. It might have been very important to the creditors that the purchaser should have been held to his contract, for though he was an insolvent applicant, yet he had been discharged under his application and for this subsequent contract of