Duro Steel Products v. Neubrecht , 303 Mich. 175 ( 1942 )

MR. Justice STARR has reached the correct conclusion, but I prefer to assign a different reason for decision, as did the circuit judge. Plaintiffs seek cancellation of the sheriff's deed under which defendant holds title to the property in suit on the ground that the sheriff should have levied on personal property which the judgment debtor is alleged to have possessed, instead of having levied on the real estate which was sold to defendant on the execution sale. But even under such circumstances the levy on the real estate (instead of on the personalty) was a mere irregularity and any relief sought in consequence of such irregularity was obtainable, if at all, only in the court and proceeding out of which the execution issued. Rhode v.Hassler, 113 Mich. 56. Such relief is not obtainable by an independent suit in chancery instituted after sale and expiration of the period of redemption, as is attempted in the instant case. Nor under such conditions can the judgment debtor or those who have subsequently taken an alleged title from him avoid the sale by a separate suit in chancery on the ground that the amount bid at the sale was much less than the actual value of the property sold.

"The sale being at public auction, open and fair, and no fraud being shown or pretended, we do not think it can be set aside or treated as invalid in this proceeding (a subsequent bill in chancery), on the ground of an excessive levy, or because it sold for much less than its value, especially as the sale was subject to a year's redemption.

"As an excessive levy merely, it is clear the remedy would have been by motion to the court from which the execution issued, and before sale, to set it aside. Every court controls its own process. No such motion having been made, and the whole year's redemption having expired and the deed been given before any relief is sought, the objection is one purely of inadequacy of price for which the sale was made. The remedy for this also, if any, was by motion * * * which should have been promptly made."Campau v. Godfrey, 18 Mich. 27, 43 (100 Am. Dec. 133).

In Cameron v. Adams, 31 Mich. 426, a bill was filed to redeem from a mortgage which had been foreclosed by advertisement; and there, as in the instant case, the sale was in compliance with statutory requisites. The court said:

"Where a valid legislative act has determined the conditions on which rights shall vest or be forfeited, and there has been no fraud in conducting the legal measures, no court can interpose conditions or qualifications in violation of the statute. The parties have a right to stand upon the terms of the law. This principle has not been open to controversy, and is familiar and elementary.

"The inadequacy of price cannot vitiate such a sale, if otherwise fair and regular. The owner of the right of redemption can always redeem within the year, by refunding the amount paid, with interest at the rate fixed by the statute. It is only his failure to do this which has been the cause of his loss."

In harmony with the foregoing, see Jensen v. Oceana CircuitJudge, 194 Mich. 405; Emery v. Tant, 295 Mich. 669. In theJensen Case we said (p. 412):

"The usual and proper method of attacking a levy is by motion to quash it in the court under whose writ it is made, where such course will furnish adequate relief (2 Freeman on Executions [3d Ed.], § 271a), and along the same line it was held in Campau v.Godfrey, 18 Mich. 27 (100 Am. Dec. 133), that one who complains of a levy upon his property should move for relief in the court which issued the execution rather than by a bill in equity."

We are not in accord with appellants' contention that the inadequacy of the price bid by defendant at the execution sale was a fraud in law, and therefore plaintiffs' bill of complaint should be held to have stated a case and to have been wrongfully dismissed. Inadequacy of the bid was urged as a ground for relief in cases above cited, but notwithstanding this the bill of complaint in each instance was dismissed. See Campau v.Godfrey and Cameron v. Adams, supra. Aside from the alleged inadequacy of price bid at the execution sale and the asserted irregularity of having levied upon real property instead of personal property, nothing in this record is claimed to constitute fraud or unfairness.

Brock v. Rich, 76 Mich. 644, and In re Dissolution ofField Body Corporation, 240 Mich. 28, cited by appellants, are not within the field of the instant case.

In the Brock Case plaintiffs, as judgment creditors, filed a bill in aid of execution. Defendants demurred on the ground that plaintiffs (judgment creditors) had levied upon real estate which the judgment debtor had conveyed to his wife notwithstanding at the time of the levy the judgment debtor had ample personal property within the county to satisfy plaintiffs' judgment. On appeal to this Court the demurrer was sustained. But the suit in which the issue was raised was filed only 11 days after the levy was made and before there had been an execution sale of the property. No deed had been given at a sheriff's sale, and, of course, there was no expiration of statutory period of redemption, as in the instant case. The defendants in the Brock Case could raise the question in equity because they had been brought into that court by the plaintiffs, the exact opposite in that respect of the instant case.

In re Dissolution of Field Body Corporation, supra, was a receivership proceedings. The receiver upon petition obtained an order in winding up the estate to sell the corporation's property "as a unit, free from all liens." Notice of hearing this petition was given to stockholders, creditors and lien claimants, including the Athol Manufacturing Company. Prior to the order of the court for such sale, the Athol Company had levied upon a portion of the real estate of the Field Body Corporation. The Athol Manufacturing Company, notwithstanding notice to it, did not appear at the hearing of the receiver's petition for the sale of the insolvent corporation's property "as a unit, free from all liens." No appeal was taken from that order, the property was sold, the sale confirmed, and a receiver's deed given. Thereafter the Athol Company by petition in the receivership proceedings asked that it be permitted to sell the real estate upon which it had levied or that its judgment be paid by the receiver from funds in its hands. Such payment would have given the petitioner a preference over other creditors because of insufficient funds in the hands of the receiver to pay all claims. It was held that by failing to appear in response to the notice of the receiver to sell all the property of the insolvent corporation "as a unit, free from all liens" the Athol Company was bound by the order made and its levy was nullified; and further that since the Field Body Corporation had ample personal property within the county subject to execution at the time of the levy upon its real estate in behalf of the Athol Company, the latter was not entitled to priority in payment of its claim out of funds in the hands of the receiver. But it must be noted that Mr. Justice FELLOWS, who wrote for the Court in theField Body Corporation Case, was careful to state the following:

"Numerous cases hold that this question (levy upon real estate where there is available personal property) may not be raised by a collateral attack. But this is not a collateral attack."

In justification of the sentence last above quoted, Justice FELLOWS pointed out that the Athol Company had notice and was made a party to the proceedings in consequence of which the Field Body Corporation property was sold "free from all liens;" and further, that it was in the same proceedings that the Athol Company filed the petition by which it sought to obtain a preference in payment of its claim over those of other creditors. Clearly, as stated by JUSTICE FELLOWS, under such circumstances the judgment creditor's levy was not assailed by a collateral attack. In the case now pending before us, the attack upon the levy and execution sale was not only belatedly made to the extent forbidden by the cited decisions of this Court, but it was definitely a collateral attack by a bill in chancery upon such levy and sale, which, as stated by Justice FELLOWS, numerous cases hold may not be done. Again it may be noted, in the Field Body Corporation Case as in the BrockCase, the judgment creditor's levy was an attack before the sheriff's sale and hence before delivery of a sheriff's deed and expiration of a period of redemption. There is no conflict between the cases cited and relied upon in the earlier part of this opinion and our decision in either of the two cases just above reviewed.

The trial court's decretal order dismissing the bill of complaint is affirmed, with costs to appellee.

BUSHNELL, J., concurred with NORTH, J. WIEST, J., did not sit.