Ruby v. Bowlus

Hammond, J., delivered the opinion of the Court. Walter H. Ruby, the owner of a farm in Carroll County, appeals in proper person from the overruling of exceptions, filed by his trustee in bankruptcy, to the ratification of a sale of the farm under mortgage foreclosure. In July, 1957, the appellee Bowlus, the attorney named in the mortgage, instituted the foreclosure proceedings and advertised the sale for Saturday, August 3. On Friday, August 2, Ruby filed a voluntary petition in bankruptcy in The ¹¹⁹ United States District Court for the District of Maryland.

On the day of the sale, Bowlus read to those present a statement that recited the contents of a telegram to him from the lawyer who had filed the petition for Ruby, stating that the sale should be cancelled because of the bankruptcy, and concluding that “If you buy this property at this sale, the sale might have to be ratified by the United States District Court in Baltimore.” Thereupon, the auctioneer cried the sale and the farm was sold for $23,000. With the approval of the bankruptcy court, the trustee duly filed exceptions to the ratification of sale on numerous grounds, those that are relied on in this Court being: (a) that the advertisement was insufficient because it did not state that the property was a dairy farm; (b) that the sale was inadequately advertised; (c) that the price was grossly inadequate; (d) that the institution of the bankruptcy proceedings “had much to do with the low price” because of “commotion at the sale”; (e) “that the sale was held on the Sabbath of the mortgagors handicapping them from endeavoring to interest buyers therein for that particular day in accordance with their beliefs”; (f) that a stainless steel milk tank sold with the farm was not a fixture covered by the mortgage, and should not have been sold. The trustee declined to appeal from the order of the lower court overruling the exceptions, and the bankrupt, who had participated in the proceedings below by his counsel, noted an appeal in proper person. The appellee seems to concede his right to do this.

It has been held that if a trustee in bankruptcy declines or fails to prosecute or defend a suit by or against a bankrupt, the bankrupt may do so. Paradise v. Vogtlandische Maschinen-Fabrik (3rd Cir., 1938), 99 F. 2d 53 ; Meyer v. Fleming, 327 U. S. 161, 165-167, 90 L. Fd. 595, 598-599; and cases cited in the notes. Other decisions establish the right of a bankrupt to appeal if the trustee will not or does not. Carroll v. Hannon (Pa.), 136 A. 212, 213 ; Kagey v. Fox West Coast Theatres Corp. (Kan.), 31 P. 2d 67 .

It has been held by this Court that one who has a real interest in the controversy, although technically he was not a party below, may appeal. Hall v. Jack, 32 Md. 253 . Com ¹²⁰ pare Weinberg v. Fanning, 208 Md. 567 . We shall treat the appeal as properly before us.

At the threshold we note that it is not contended here, as it was below, that after the filing of the bankruptcy proceeding the Circuit Court for Carroll County lacked the power to continue the foreclosure proceedings. In re Hurlock (D. C. Md., 1928), 23 F. 2d 500 , 501, flatly states that the state court was not ousted of jurisdiction by the mere institution of the proceedings in bankruptcy. The contention that the sale was defective because the farm was not advertised and sold as a dairy farm is without merit. The property was advertised as a 100-acre farm improved with an eight-room dwelling house (with bath, hot air heat, oil burner), a bank barn 40' x 50', a new loafing barn 36' x 100', and a 4-stall milking parlor.

The record discloses that the loafing barn was unfinished, without a roof and with one side gone, and that the milking parlor “was not completed.” There is nothing to show that any milk had ever been shipped from the farm, and it is clear that not only was it not in use as a dairy farm at the time of sale but that, in fact, it had not been farmed at all for over a year. The argument that the sale was inadequately advertised finds no support in the evidence. The sale was advertised in the Westminster Democratic Advocate once a week for four weeks, in the Hanover Sun, which has a large circulation in Carroll County, once a week for three weeks, in the Sykes-ville Herald once a week for three weeks, and in the Frederick Post once prior to the day of sale. In addition