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Attorney(S)

Mr. J. W. Albertson, for petitioners. Mr. W. A. Moore, contra.

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Decision Summary — Supreme Court of North Carolina (January Term, 1880)

Factual and Procedural Background

On the death of Henrietta Winslow, her lands were ordered sold by the probate court for partition among the heirs. Caleb White was appointed commissioner to make the sale, which was to be conducted at the courthouse door with terms requiring one-half of the purchase money in cash and the balance at twelve months. On December 2, the lands were sold and W. H. Perry was ascertained as the proposed purchaser. The commissioner immediately reported the sale, stated the price fair and compliance with the terms (accepting Perry's payment as conforming), and the probate court entered an order confirming the sale the same day.

Within twenty days, the commissioner filed a subsequent report stating that Perry had not in fact made the cash payment but had given a due bill, and that a third party, Harrell, had offered and secured a ten percent advance above Perry's price. The commissioner petitioned to open biddings; the probate court granted the petition and, without notice to Perry, held a second sale. Harrell became the highest bidder at the advance, made the cash payment and secured the balance, and the commissioner reported that sale. Perry then appeared and asserted that by the first confirmation he had acquired rights which should preclude confirmation of the resale to Harrell.

The probate court confirmed the sale to Harrell. Perry appealed to the superior court, which reversed the probate court's confirmation of the resale. The petitioners and Harrell appealed that reversal to the Supreme Court of North Carolina.

Legal Issues Presented

Whether confirmation of a sale of land for partition must ordinarily be made after notice to interested parties to file exceptions (per Bat. Rev., ch. 84 § 5), unless the parties are present at confirmation such that notice may be considered waived.
Whether, after a sale has been confirmed, a resale may be ordered and under what procedural protections — specifically whether a resale must be on petition or notice to the purchaser who has acquired equitable rights under the first confirmation.

Arguments of the Parties

Perry's Arguments

Perry asserted that, upon the probate court's immediate confirmation of the first sale, he had acquired equitable rights to insist on performance (payment and title) and that the confirmation order remained in full force and protected his claim.
He contended that the subsequent resale and confirmation to Harrell, conducted without notice to him, could not deprive him of the equitable rights arising from the first confirmation.

Petitioners / Harrell (as reflected in the record)

The commissioner and petitioners represented that Perry had not actually paid the cash required but had given a due bill, and that Harrell had offered a ten percent advance; they petitioned to open biddings and proceeded to a resale without giving notice to Perry.
It was urged in support of Harrell's right that the prior sale had been confirmed on the day of the sale and was therefore voidable, if not void, for being done without the notice otherwise required.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Ex parte Bost, 3 Jones Eq., 482	Supports the principle that the court may refuse to accept a bid and order another sale (for reasons such as a ten percent advance, fraud, inadequate price, or other sufficient causes).	The Court cited this case to show that prior to confirmation the court has discretion to reject bids and order resale for sufficient reasons.
Wood v. Parker, 63 N.C. 379	Cited with other cases for the same principle that the court may refuse to accept a bid and order another sale before confirmation.	The Court grouped this case among authorities permitting rejection of proposed bids prior to confirmation.
Pritchard v. Askew, 80 N.C. 86	Cited with other cases supporting the court's power to reject bids and order resale prior to confirmation.	Used to corroborate the rule that the court can reject a bidder's proposal before confirmation.
Ex parte Yates, 6 Jones Eq., 306	Supports the proposition that on confirmation of a sale the bidder is promoted to purchaser and acquires equitable rights to enforce the contract (payment and title).	The Court relied on this authority to explain that confirmation creates enforceable equitable rights in the purchaser which cannot be destroyed at will.
Ashbee v. Cowell, Busb. Eq., 158	Announces the orderly procedure for applications to set aside a confirmation: the grounds must be presented by petition or notice so the purchaser under confirmation may be heard.	The Court invoked this case to require that a resale (or vacating of confirmation) be sought on petition or notice to the purchaser so he can contest the sufficiency of the grounds.
Blue v. Blue, 79 N.C. 69	Holds that confirmation done without notice is erroneous or irregular, but that such an order, while irregular, nevertheless protects the purchaser so long as it remains in force.	The Court used this authority to explain that even if the immediate confirmation without notice was irregular, the unvacated order still conferred equitable protection on Perry.

Court's Reasoning and Analysis

The Court analyzed separately the legal status of a proposed purchaser before confirmation and the rights that arise upon confirmation.

Pre-confirmation: The bidder at a judicial sale is initially only a proposer; acceptance is within the court's power. Consistent state practice allows the court to refuse to accept a bid and order another sale for reasons such as a ten percent advance by another bidder, fraud, inadequate price, or other sufficient cause. Authorities cited (including Ex parte Bost, Wood v. Parker, Pritchard v. Askew) support this principle.

Post-confirmation: Upon confirmation the bidder is promoted to purchaser and acquires equitable rights to compel performance (payment and conveyance). These rights cannot be destroyed at will. While the court retains power to vacate a confirmation and order a resale for legally sufficient causes, that power must be exercised with due regard for any rights that have arisen and according to established procedural rules.

Procedure for ordering a resale: The proper course to obtain a resale is to set aside the prior confirmation by presenting the grounds in a petition or by giving notice so that the purchaser under the existing confirmation may be heard in defense of his title (Ashbee v. Cowell).

Application to the facts: Perry's bid at the first sale led to a report and an immediate confirmation by the probate court. The court found Perry had given a due bill accepted by the commissioner as cash and had executed the bond for deferred payment. That confirmation, so long as it remained unvacated, conferred on Perry an equitable right to pay and obtain title. The attempted resale and subsequent confirmation to Harrell, conducted without giving Perry a day in court to contest the sufficiency of the grounds for resale, could not defeat Perry's equitable right.

The Court considered the argument that immediate confirmation without formal notice was voidable. It explained that the statutory notice requirement is designed to give parties an opportunity to except, but if all parties (adults in person and infants by prochein ami) were present at the confirmation and made no exception, that presence operates as a waiver of formal notice. Even if the probate judge erred in treating presence as dispensing with notice, any such confirmation would be at most irregular; nevertheless, while such an order remains in force, it protects the purchaser (Blue v. Blue).

Holding and Implications

Holding: The Supreme Court found no error in the superior court's reversal of the probate court's confirmation of the resale to Harrell. The probate court's order of resale without giving Perry a day in court to contest the sufficiency of the grounds was ineffective to deprive Perry of his equitable rights under the first confirmation.

The Court directed that the matter be remanded to the probate court with instructions to receive Perry's purchase money and execute title to him, unless the petitioners can procure a lawful vacation of the first order of confirmation and a new sale on legally sufficient grounds, in which event the petitioners must give Perry a day in court to contest the application. The core ruling is therefore that a confirmed purchaser's equitable rights are protected against a subsequent resale conducted without the procedural safeguards (petition/notice) required to vacate the confirmation.

Implications: The decision enforces two procedural principles: (1) confirmations ordinarily follow notice to interested parties (unless presence at confirmation operates as waiver); and (2) a resale after confirmation may be ordered only for sufficient cause and only after giving the confirmed purchaser an opportunity to be heard. The opinion does not announce a broader new rule beyond applying these established principles to the facts of the case.

Counsel of record in the original: Mr. J. W. Albertson for petitioners; Mr. W. A. Moore contra. Decision authored by Dillard, J.

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CALEB WHITE and others, to the court.

Partition of Land — Confirmation — Resale — Equity.

1. Confirmation of a sale of land for partition ought regularly to be made after notice to parties interested to file exceptions, as prescribed in Bat. Rev., ch. 84 § 5, unless they be present at the confirmation of the report of sale, when notice may be considered as waived.

2. After confirmation had, a resale may be ordered for sufficient cause shown; but should be upon petition or notice to the purchaser who has acquired equitable rights under the first confirmation.

( Ex parte Bost, 3 Jones Eq., 482; Wood v. Parker, 63 N.C. 379; Pritchard v. Askew, 80 N.C. 86; Ex parte Yates, 6 Jones Eq., 306; Ashbee v. Cowell, Busb. Eq, 158; Blue v. Blue, 79 N.C. 69, cited and approved.)

On the death of Henrietta Winslow her lands were sold by decree of the probate court for partition among the heirs-at-law by Caleb White, appointed a commissioner for that purpose. The sale was ordered to be made at the court house door, on the terms of one-half the purchase money to be paid in cash, and the other half at twelve months, and the sale was made as directed on the second day of December, and W.H. Perry was ascertained as the proposed purchaser. The commissioner reported the sale immediately, setting forth the price fair, and a compliance with the terms of sale by the purchaser, and he recommended to the court its confirmation, and accordingly an order of confirmation was entered on the same day.

Within twenty days after the confirmation of the sale, the commissioner made another report, wherein he represented that Perry, the purchaser, on the day of the sale did not in fact make the cash payment required in the decree of the court, but gave his due bill therefor, and had not paid the same. He also reported that one Harrell had offered and secured a ten per cent. advance on the sum at which the lands were knocked off to Perry, and in the petition he prayed an order to open the biddings, which was granted on the same day, and without notice to Perry, the former purchaser.

The commissioner made the second sale, and at that sale Harrell became the highest bidder at the advance of ten per cent, and complied with the terms of sale by making the cash payment, securing the balance by his bond. The commissioner reported the sale on the same day, and Perry then came into court and showed for cause against the confirmation, that he had required rights by the acceptance of himself as purchaser by the court at the first confirmation, and that said order was in full force and not reversed.

The probate court held the cause shown in opposition to the confirmation of the sale to Harrell as insufficient, and thereupon entered a confirmation of the sale, from which Perry appealed to the superior court, and in the superior court the order for confirmation was reversed, and from that ruling of the superior court, the petitioners and Harrell appeal to this court.

DILLARD, J., after stating the case.

A purchaser at a sale under a decree of court is an ascertained proposer, and forthwith acquires no other right, on compliance with the terms on his part, than to be accepted as such by the commissioner. And this right is subject to the power of the court to accept or reject the offer. While the proposed bargain is thus incomplete, the practice and law in this state are that the court may refuse to accept the bid, and order another sale for the reason of a ten per cent. advance, offered and secured, above the sum at which the land was knocked off to the former bidder, or for fraud, inadequate price or for any other cause deemed sufficient by the court; and the purchaser will have no legal ground of complaint at the rejection of his offer any more than a proposing party at a private sale would have to complain that the owner of the land was not willing to sell to him at the price offered. Ex parte Bost, 3 Jones Eq., 482, and cases cited, and Wood v. Parker, 63 N.C. 379; Pritchard v. Askew, 80 N.C. 86.

But on the confirmation of the sale, the bidder is promoted to be purchaser, and has then the right to hold the parties selling through the decree of the court as bound to performance of the contract, while he is himself bound to pay the money and take the title. These are rights which neither party can destroy at his will. Cases supra and Ex parte Yates, 6 Jones Eq., 306. The court undoubtedly may, after confirmation, set aside an order confirming the sale, and order a new sale, for causes legally sufficient; but then the power must be exercised always with a due regard to any rights which have arisen, and consistently with the settled principles and rules of procedure applying in such cases.

In the case of an application to have a resale, the orderly proceeding is to set aside the order confirming the sale which has been already made; otherwise, the power of the court has been once exercised, and the second sale will not displace the first purchaser, and in doing this, the rule is, to present the grounds on which the application is based by petition or notice, on which the purchaser under the existing confirmation may be heard in vindication of his own title. Ashbee v. Cowell, Busb. Eq., 158.

Now apply these principles to our case, and let us see what is the result. Perry bid off the land at the first sale, and he gave his due bill for the cash payment, which the commissioner accepted as cash, and executed his bond for the deferred payment. Thereupon, on the report filed, the sale was confirmed by an order in the cause. So long as that order stands in force and not set aside, he had an equitable right to pay the purchase money and have the title, and no subsequent sale to Harrell under a mere order of sale without notice to him would affect his right, or operate a vacation of the order of confirmation on which he rests.

But it is urged, in support of the right of Harrell, that the previous sale to Perry was confirmed on the day of the sale, and was therefore voidable, if not void, for being done without notice. The answer to that objection is, that the design of the statute requiring notice to be given before confirmation is to give the parties a day in court to except to the report, and thereby to conclude them; but if they be all present at the time the report is filed and confirmed and make no exception to it, they ought to be held as much bound as if they were brought in by service of a formal notice. Here, it appears from the judge's statement, that all the parties were present at the confirmation, the adults in person, and the infants by their prochein ami, and knew the result of the sale which had just occurred at the court house door in their presence, and they ought to be held concluded from objecting a want of notice. But even if the judge of probate was mistaken in supposing such presence of the parties dispensed with notice and authorized an immediate confirmation, still the order of confirmation was erroneous, or at most, only irregular, as held in Blue v. Blue, 79 N.C. 69, and so long as it remained in force, it protected the claim of Perry.

We conclude therefore that the order of resale by the probate judge without a day in court to Perry to contest the sufficiency of the grounds on which it was asked, was unavailing to deprive him of his equitable right under the first sale, and that His Honor was correct in reversing the confirmation of the sale to Harrell in the probate court.

It does not necessarily follow from the insufficiency of the order of sale under which Harrell purchased, that therefore the order of confirmation on which Perry rests his claim may not be vacated and a resale ordered; but it is to be understood, that that can only be done on sufficient cause, and on a rule or notice to Perry to contest the sufficiency of the cause on which it is asked.

There is no error in the judgment of the superior court, and this will be certified, with directions to remand the cause to the probate court, with directions to that court to receive the purchase money of Perry and have title executed to him, unless the petitioners shall be able to procure a vacation of the order of confirmation under which Perry claims, and a new sale, on grounds legally sufficient therefor, with a day in court to Perry to contest the application.

No error. Judgment accordingly.

WHITE EX PARTE