Hebb v. Mason

Boyd, C. J., delivered the opinion of the Court. This is an appeal from a decree of the Circuit Court for Washington County dismissing exceptions filed by the appellants to a sale made by the appellees, who are assignees of a mortgage made by Samuel E. Hebb, Mary C. Hebb and Sarah E. Hebb to James Snyder, and ratifying the sale made to George H. Poffenberger. If some of the allegations in the exceptions had been proven to be true, a court of equity would undoubtedly have been called upon to set aside the sale. They allege that the mortgagors are aged and infirm, being respectively about 76, 85 and 86 years of age, and that George H. Poffenberger, the purchaser named in the report, resided near them, well knowing their ages and infirmities, and designing to take advantage of them and profit by their ages and feebleness and pretending great friendship for them, inveigled thorn into signing a pretended lease, in the spring of 1921, for a term of five years, which they allege was fraudulently obtained, is illegal and void; that in procuring said lease the said Poffenberger was actuated by the belief that long before the expiration thereof, the deaths of one or all of said mortgagors or financial reverses sustained by them would force the sale of their farm and that in such event the fact that the farm was subject to such a long lease would greatly interfere with the sale of the same and its fair market value, and with great profit to himself; that he for several years past has designed to secure said farm unfairly, and has declared his intention to secure it; that he fraudulently procured a judgment against them ³⁴⁷ for two thousand dollars, given without consideration, and has brought suit against them for $1,627.40 additional, which is still pending; that in the autumn of 1921 some of their relatives made an investigation of their transactions with said Poffenberger and asked for an accounting, but be did not account and shortly thereafter" brought the suit referred to above, his attorneys of record being tbe assignees of the mortgage.

Then after a long statement about an effort to have the mortgage assigned to Scott M. Wolfinger, who w'as attorney for William E. Hebb, and an offer made by him, that part of the exceptions concludes by alleging “that the said sale was made to the prejudice of the said mortgagors, against the rights of the said William E. Hebb, who was able and willing to pay more for said farm than the amount at which it is reported sold to the said George H. Poffenberger, and that said sale was unfairly made to the said George H. Poffenberger, pursuant to a design and purpose on the part of the said George H. Poffenberger and the said assignees that the said Poffenberger, and he only, should become the purchaser of said farm, to the great loss and prejudice of the rights of these exceptants.” In other exceptions, it is alleged that the sale was not fairly made, and was accomplished by intrigue and connivance on the part of Poffenberger; that the rights and interests of the mortgagors ought to he protected, and that William E. Hebb tenders and offers a larger sum than offered by any other purchaser and is able and willing to comply with the terms of sale; that the reported purchase price of $5,250 is not the largest sum which the assignees were offered; that no bona fide offer at public sale has ever been made; as required by law, and the provisions of the mortgage, and for these and other good and sufficient reasons to he shown at the hearing they pray that the. sale may he vacated and rescinded and be not ratified. The mortgage is for the sum of $1,100.00 and is on a farm of something over two hundred acres — the advertisement ³⁴⁸ ■stated 205 acres more or less — and Mr. Samuel Hebb, one of the mortgagors,- testified that there were two- hundred and ten acres. The farm was offered at publie auction on the 18th of April, 1922, by the appellees, but it was withdrawn, as the highest bid was $4,500.00, which was made by William E. Hebb, one of the exceptants and a nephew of the mortgagors. Before the property was offered for sale, Mr. Wolfinger, as attorney for William E. Hebb, had offered to pay off the mortgage if the assignees would assign it, but they said they would accept the amount due and release the mortgage, but would not assign it.

Before the property was sold to Mr. Poffenherger, Mr. Mason, one of the assignees, asked Mr. Wolfinger to make a bid for the property, but he replied by saying that he was authorized by William E. Hebb to buy the farm .and that he would give $100.00 more for it than the highest bid made by any other person. Mr. Mason told him he could not tell him the amount of the bids by other parties, as it would not be fair to them. Of course that could not have fairly been done, as trustees or parties occupying in effect such a position would not be permitted by the court, if known to it, to adopt such measures. If that were permitted, purchasers at private sales could not be obtained if aware of such practice, and it would be unfair to those in good faith bidding, if trustees used them to run up1 the price, while there was an outstanding agreement to sell the property to another at $100 or any other sum larger than was offered by those not in the secret.

On April 12, 1922, which was after the property had been advertised and before the day fixed for the sale, the mortgagors executed an agreement which referred to the advertisement and authorized William E. Hebb to purchase the property for them. They agreed to transfer all their right, title and interest in and to the equity cause, all their estate therein, and all their right, title and interest in and to the proceeds of the sale of the property and to execute all other instruments, whether by way of mortgage, deed, or otherwise, as William ³⁴⁹ E. Hebb might require, in order to protect himself from loss on account of the purchase. They also agreed to execute a mortgage on their property in Sharpsburg, where they resided, and which was conveyed to them by James Snyder, if he should require or request the execution of it. Although William E. Hebb did not sign the paper, it recited that he covenanted and agreed that if he purchased the farm it would be made for and on account of the mortgagors, and that he would account to them, for the proceeds of sale, and all securities, assignments or transfers made to him pursuant to the agreement, and that he would, upon the request of the mortgagors, their heirs or legal representatives, and upon indemnification of all moneys by him expended, paid, or debts contracted or incurred, convey the farm to> them or anyone designated by them.

Mr. Mason testified that he was not aware of the agreement until it was produced during the taking of the testimony in this case. If William E. Hebb had the money to buy the property as he said he was prepared to do, we do not understand why he did not make a bid as the assignees requested, or why Mr. Wolfinger, as his attorney, did not make a bid of the value of the property if it was worth more than what Mr. Hebb bid at the public sale. Mr. Hebb testified that he was ready to bidup' to $8,000.00, if necessary, although he did not say that the property was worth that amount. With the exception of the commissions, it would apparently have made no difference whether he bid $5,000 or $8,000, as under that agreement, he was buying it for the mortgagors, and they would have been entitled to the excess over what was due by them.

The only debts spoken of in the case are the mortgage of $1,100.00, the judgment of $2,000.00, and the suit for $1,621.40. If the property was worth anything like $8,000' William E. Ilehb had a large margin between what he bid at the public auction and the value of the property. If, as he says, he was able and willing to take the property, it is unfortunate that he did not make a more substantial bid than ³⁵⁰ $4,500 and thus save for the mortgagors all they had in it, over and ah-ove such indebtedness as may -be shown to exist. There is no- evidence to show that the “sale was unfairly made to the said George H. Poffenberger, pursuant to- a design and purpose on the part of the said George H. Poffenberger and the said assignees that the said Poffenberger, and he only, should become the purchaser of said farm,” etc. That was not attempted to be proven in the case, as no one can fairly claim that what appears in the record does tend to prove it.

If it was true, a court of equity should not hesitate to- set the sale aside. The mortgage was not given to Poffenberger, but to Snyder, for payment or part payment of the property in Sharpsburg purchased by the mortgagors of Tames Snyder. It was dated November 29, 1916,. and as far as shown by the record, Poffenberger had nothing to do with that purchase. As- he had a judgment for $2,000' against the mortgagors, if he is really the present owner of the mortgage, as the appellants allege and is probably true, he had the right to- refuse to- assign the mortgage, as it is prior to his judgment.

The mortgagors could have paid it off, and could have given William E. Hebb a new mortgage to secure him, if he advanced them the money with which to p-ay off the Snyder mortgage. That would have been subject to the $2,000' judgment, but if that is fraudulent and without consideration, as the exceptions state, steps could then have been taken to- have it set aside. If the above could not have been done because of the incompetency of the mortgagors, or either of them, a committee could have been appointed and, if necessary, authority could have been obtained from the court to enable him to give a new mortgage. There was certainly no valid reason for permitting a sale under this mortgage, if William E. Hebb- was ready to do what the agreement of April 12, 1922, authorized, if the parties were competent to make that agreement, and if not, steps could have been taken as suggested above, for their protection.

Why the assignees should be subjected to the charges made in the ex ³⁵¹ ceptions against them is not shown, when according to the •exceptants William E. Hebb was not only willing, bnt able to protect the mortgagors, as he claims is his object, and to secure himself either by a new mortgage given by the mortgagors, or by such of them as could act and a committee to he appointed by the court, if necessary and proper. The remedy was so simple that it is difficult to understand why it was not pursued. There are some insinuations in the record outside of that, hut no proof. If Pfiffenberger had taken advantage of those old people by fraudulently procuring a lease for five years, obtaining 'a judgment for $2000, or in other ways, it is unfortunate and peculiar that more than appears in this record was not produced as evidence.

Two competent attorneys appeared for the appellants. Mr. Wolfinger testified that ho was employed in the fall of 1921 to investigate the affairs between the mortgagors and Poffenberger, but with the exception of two witnesses' who testified that Poffenberger told them he expected in a short time to have the farm, or something of that kind, nothing was offered. The testimony fell far short of the 'charges in the exceptions, and what there was did not involve the assignees in any way. 'Courts cannot assume that reputable members of the bar would be guilty of such things as are charged in these exceptions, and unless the parties making them can support the charges by evidence, they should not be made, and if there was any such evidence it should have been produced. The exception alleging that an offer of a larger sum than any other purchaser had made is answered by what we have already said in reference to the $100; the statement that the purchase price of $5,250.00 is not the largest sum which the assignees have been offered has no foundation whatever in the record, unless it refers to the $100.

The mortgagors not only