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(146 N.E.) (315 III. 454)

erty was reasonably worth and would sell on MOELLER V. MILLER et al.

resale for at least $6,000, supported by offer of

prospective purchaser to bid $6,000 at a reHAMOWITZ v. MILLER.

sale accompanied by certified check for $1,500, (No. 15323.)

held to establish such gross inadequacy of sale

price as to constitute legal fraud and warrant (Supreme Court of Illinois. Feb. 17, 1925.) refusal of confirmation of sale in granting of

resale. 1. Mortgages 494—Requirement that commissioner's sale of property be confirmed by

8. Mortgages m529(7)—Any circumstance incourt is good and safe practice.

dicating unfairness in addition to inadequacy Though there is no statutory provision re

of price warrants resale. quiring court's confirmation of sale by com

If in addition to alleged inadequacy of price missioner in proceedings to foreclose trust paid for property at master's sale and foreclodeed, such requirement in decree of sale is good sure proceedings there be any appearance of and safe practice.

unfairness or any circumstance, accident, or

occurrence tending to cause such inadequacy, 2. Mortgages em 529 (3)—Though sale not re- sale will be set aside and held that reliance on quired to be confirmed by court, it should on promise of notice of time and place of sale proper complaint be set aside for fraud or which was not given coupled with gross inadegross irregularity.

quacy of price clearly warranted resale. Even in absence of provision for confirmation of sale by court in decree of sale in fore- Appeal from Circuit Court, Cook County ; closure proceedings, it is duty of court on prop- Hugo M. Friend, Judge. er complaint made to set aside sale for fraud

Suit by E. P. Moeller against Peter Miller, or any gross irregularity.

Emma Miller, and others to foreclose trust 3. Mortgages Ow526(1)-Where decree of sale deed, wherein Samuel Mayer Haimowitz,

requires confirmation by court sale is not con- | purchaser of property at master's sale, was summated until confirmed.

on petition made party of record. From an All parties to proceedings to foreclose deed order disapproving master's report of sale of trust are bound by decree of court ordering and ordering resale, Samuel Mayer Haimosale

, and, where such decree requires confirma; witz, purchaser, appeals. Order affirmed. tion of sale by court, sale is not consummated until confirmed.

John W. Ellis, of Chicago, for appellant. 4. Mortgages m526(1)-Chancellor has broad

Beach & Beach, of Chicago, for appellees. discretion in matter of approving sale, where no right of redemption exists, and deed is not DUNCAN, C. J. E. P. Moeller filed his made until after confirmation.

bill in the circuit court of Cook county Chancellor has broad discretion in matter against Peter Miller, as trustee, Emma Millof approving or disapproving of foreclosure sale er, Hubbard Miller, Walter Froehlich, and by master in chancery, where there is no right John Almdale, to foreclose a second trust of redemption, and where deed by terms of deed executed by Laura Moeller, a widow, in sale is not to be made until after confirmation favor of Peter Miller as trustee, on certain

premises therein described located in Cook 5. Mortgages Em526 (2)—Where master's sale county, given to secure a note for $300, due properly conducted, mere inadequacy of price one year after date, and bearing interest at will not justify court in refusing confirmation 6 per cent. Appellee, Emma Miller, was the of sale, unless so great as to amount to fraud.

owner of the equity in the premises at the Where foreclosure sale by master in chan- time the bill was filed. The bill alleged that cery is conducted in accordance with order of court, and purchaser is stranger to order of there was a prior incumbrance on the presale, inadequacy of price alone will not justify ises of $2,000 which was past due. Appellee court in refusing confirmation, unless so great answered the bill, and upon a hearing a deas to amount to fraud.

cree of foreclosure was entered with a find6. Mortgages 526 (2)-To warrant refusal of ing that default in payment of the indebtedconfirmation of sale on ground of inadequacy

ness had been made, and that the amount of price amounting to fraud, further fact that

of $470.85 was due. The decree provided there is no right of redemption must exist.

that the lien was subject to the prior lien To warrant court in refusing confirmation for $2,000. A master in chancery was orderof master's sale on ground of gross inadequacy ed to issue to the complainant a certificate of price amounting to fraud, there must exist of indebtedness in the amount found due, and a further fact that there is no right of redemp- if the amount of the certificate was not paid

within 15 months that the premises be sold 7. Mortgages Ew526 (2)—Sale price of prop- to satisfy the indebtedness

. The decree proerty held so grossly inadequate as to amount vided that the sale be held at the Chicago to legal fraud warranting refusal of con- real estate board rooms, and that the master firmation, and granting resale.

give notice of the time, place, and terms of Showing on objection to confirmation of the sale by publishing such notice at least master's sale of property for $575 that prop- once each week for three weeks in a secular

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

146 N.E.-29

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of sale.

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tion.

newspaper of general circulation at least 20 cure a purchaser, or to obtain money to pay days before the date of sale. The decree also the judgment, or to purchase the premises, provided that the master report the salé, and and by the sale was thus deprived of her upon confirmation of the same by the court equity in the premises. (5) That, if the rethat a deed be delivered to the purchaser. port of sale be not approved and the premNo redemption was made within the 15 ises be again offered for sale, the resale months' period, and the master in chancery would bring at least $6,000, and that she has who had issued the certificate of indebted- a purchaser ready, able, and willing to pay ness was appointed by the court as a spe- $6,000 cash for the premises, and submits cial commissioner to conduct the sale; his a written offer by such proposed purchaser, commission as master in chancery hav- who is financially responsible, that she preing expired. The time, place, and terms of sents to the court a certified check for $1,the sale were advertised as provided by the 500, signed by the proposed purchaser as decree. At the time and place so designated a guaranty that he will bid $6,000 if the the special commissioner appeared and of- premises be again offered for sale. She there. fered the premises for sale. The complain- fore prayed that the report be not approvant bid the amount of the debt and costs, ed, and that the premises be reoffered for and appellant, Samuel Mayer Haimowitz, sale. Samuel Mayer Haimowitz, the highthen bid the sum of $575, and being the best est bidder at the sale, thereupon filed his pebidder was pronounced the purchaser. Nei tition to be made a party of record in the ther appellee nor her attorney attended the cause, and in his petition prayed that the sale. The special commissioner made his report of sale of the special commissioner be report to the court that Haimowitz had paid approved and the commissioner ordered to to him the amount of his bid, $575, and that make to him a deed to the premises. such amount was sufficient to pay the certif- The record contains a letter signed by A. icate of indebtedness issued to complainant B. Galbraith, the proposed purchaser, adand the commissioner's fees and expenses, dressed to the attorneys for appellee, in and that there remained a balance of $2.34, which he states that in case the report of and that upon the approval of his report of sale be not confirmed by the court and the sale by the court he was prepared to deliver premises be again offered for sale, “I offer a deed to the purchaser.

and guarantee that at such sale I will bid The appellee, Emma Miller, filed the fol- for the premises $6,000, and as a guarantee lowing objections to the report of sale, verified that I will so bid I attach and inclose certiby her affidavit: (1) That the premises fied check for $1,500 to my order, and by me constitute her entire and sole estate. (2) | indorsed to the order of said special commisThat she is now living separate and apart sioner." The check so drawn and indorsed, from her husband, who many years ago de dated December 7, 1922, and directed to the serted her, and for many years has con- Northern Trust Company, accompanied the tributed nothing to her support, and she has letter. no means of support or income, except from Upon a hearing upon the report of sale the renting of two small flats in the premises. the court disapproved the report of sale and (3) That the premises are fairly and reason- ordered the premises resold, after duly adably worth in the open market, and were so vertising the same as required in the former worth when sold by the commissioner the decree for sale. Haimowitz excepted, and sum of $9,000, and that they were sold by the has perfected this appeal. commissioner for not more than one-eighth [1-3] Although there is no statutory proof the fair cash market value of the prem- vision requiring the confirmation of a sale ises, and if the sale be confirmed she will be by the court, and such confirmation is not left penniless, and without means of support. necessary, yet it is a good and safe practice (4) That several weeks prior to the sale of for the court to make such requirement in the premises, in order to arrange to pro- its decree of sale. Miller v. McMannis, 104 tect her rights and interests in the premises I. 421. Even in the absence of any such at the time of sale, she called upon one of provision in the decree it would be the duty complainant's solicitors, and stated to him of the court, on proper complaint made, to that she desired to make arrangements at set aside the sale for fraud or any gross the time of the proposed sale to raise the irregularity in the sale, as the owner of the money to purchase the premises or to have equity is entitled to have the sale conducted friends purchase the same for her, and according to law and free from fraud whereasked him to notify her when sale would by he might be deprived of valuable rights. take place; that he stated to her that he | The circuit court in this case by its decree of would do so and afford her ample time in sale expressly ordered that the sale be rewhich to arrange to pay the judgment or pur- ported to the court, and that upon confirmachase the premises; that she failed to re tion by it a deed be delivered to the purchasceive any notice whatever, either from him er. This decree was the authority for the or from any other source, of the time and sale, and its provisions were mandatory upplace of sale; and that as a result made no on the officers conducting the sale. Its proarrangements to protect her rights, or to se- / visions were followed by the special com. (146 N.E.) missioner, and the sale was not consummat- the sale will be set aside. Rorer on Judicial ed until confirmed by the court. All the Sales, p. 234. In this case appellee was parties were bound by the decree of the promised by the solicitor for complainant in court ordering the sale, and the order of the the foreclosure suit that he would notify her court determined the character and manner of the time and place of the sale. This he of the sale.

failed to do. It does not appear from the [4-7] The chancellor has a broad discre- record that there was any intentional mistion in the matter of approving or disapprov- conduct on the part of the solicitor, yet aping a sale made by the master in chancery, pellee relied upon that promise to her prejuwhere there is no right of redemption from dice. She had a right to rely on such statethe sale, and where the deed is by the terms ment. She not only received no notice from of the sale not to be made by the master to the solicitor but received no notice from any the purchaser until after confirmation of the source, as the record shows. This circumsale by the court. Where the sale has been stance, coupled with the gross inadequacy of conducted in accordance with the order of price, clearly entitled her to the right to the court and the purchaser is a stranger have the sale set aside. to the order of sale, as in this case, mere The order of the circuit court disapproving inadequacy of price will not justify a court the report of sale and ordering a resale is in not confirming the sale and depriving the affirmed. purchaser of the benefits of his bargain, un- Order affirmed. less the inadequacy is such as to amount to fraud. Where inadequacy of price is relied upon as a ground for disturbing the sale, and

(315 Ill. 521) the claim is that the price is so inadequate as to amount to fraud, there must exist the THOMSON v. THOMSON et al. (No. 15453.) further fact that there is no right of redemp- | (Supreme Court of Illinois. Feb. 17, 1925.) tion from the sale. Skakel v. Cycle Trade Publishing Co., 237 III, 482, 86 N. E. 1058; ВІ ers Om 15-Broker entering into absoRader v. Bussey, 313 Ill. 226, 145 N. E. 192.

lute and unconditional contract for principal In this case there is no right of redemption

is liable for damages resulting from cancella

tion without principal's consent, notwithfrom the sale, as the 15 months' period given

standing broker and his contractee act under by the statute for redemption had expired be- rules of Board of Trade of which they are fore sale. In the case of Rader v. Bussey, members. just cited, the rule is laid down that, where Broker, who as agent enters into absolute the bid at a judicial sale is so inadequate as and unconditional contract for purchase and to shock the conscience of the court or to delivery of goods to his principal, and thereamount to sufficient evidence of fraud in after without principal's knowledge or consent

releases seller is liable to principal for damlaw, the sale will be set aside on that ground ages, and it is no defense in action to recover alone. In determining this question no def- such damages that such parties and those with inite rule is laid down as to what per cent. whom they contracted were members of a of the value of the property must be bid at board of trade, and that cancellation of conthe sale in order to amount to such gross

tracts was required by regulations of board, inadequacy as to be evidence of a legal fraud, fense against board incurring severe penalties.

or that failure to cancel would constitute ofbut each case must be determined by its own circumstances. In this case the property is 2. Sales Om 172–Difficulty or even impossibil. shown to be worth at least $6,000, or $5,425 ity of performance of contract for sale and more than was bid for it. The record con- delivery of grain is not defense to action for tains a sufficient guaranty that the property

its breach, in absence of limitations of lia. will sell for $6,000 or more if resold, or more

bility in such respect. than 10 times as much as appellant bid for

That compliance with absolute and unconit . While the record contains no evidence ditional contract for purchase and delivery of

grain would, by reason of exigencies of war of misconduct whatever on the part of the demands, entail great hardship and become excommissioner or on the part of appellant, the tremely difficult or even impossible of performpurchaser, still the amount bid by the pur- ance, is not defense to a suit for damages arischaser was so inadequate as to amount to a ing from such breach, where contract contains legal fraud on appellee, if such sale should no limitation of liability in respect to such conbe confirmed.

tingencies.
[8] There is another reason for sustaining
the order of the circuit court in disapproving

3. Brokers M36–Purchaser of corn through

broker, who ratified contract made subject to the report of sale. The rule has often been

regulations of Board of Trade, held bound by announced that if in addition to the inade

contract, though not absolute and uncondi. quacy of price there be any appearance of tional in accordance with instructions to bro. unfairness, or any circumstance, accident, or ker. occurrence in relation to the sale of a char- Plaintiff for whom, as undisclosed principal, acter tending to cause such inadequacy, then corn was purchased by broker under contracts

mFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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made subject to rules and regulations of Board Action by W. A. Thomson against Alexanof Trade of City of Chicago, who ratified and der W. Thomson and others. Judgment for sued upon such contracts, though not absolute plaintiff was affirmed by the Appellate Court and unconditional in accordance with his orig. (229 11. App. 629), and defendants bring inal instructions, held bound by terms and con

certiorari. ditions contained in them.

Reversed and remanded.

Henry S. Robbins and Winston, Strawn & 4. Brokers 15-Contract for purchase of!

corn subject to rules and regulations of Board Shaw, all of Chicago (Silas H. Strawn and of Trade held not absolute and unconditional. Walter H. Jacobs, both of Chicago, of coun

Contracts for purchase of corn made by sel), for plaintiffs in error. member of Chicago Board of Trade for undis

Keith L. Bullitt, of Seattle, Wash., and closed principal “subject to rules, regulations, King, Brower & Hurbut, of Chicago, for de and customs of the Board of Trade,

fendant in error. and the rules, regulations, and requirements of its board of directors and all amendments

HEARD, J. Defendant in error, W. A. that are made thereto," held not absolute and unconditional as affecting broker's right to

Thomson (hereinafter called plaintiff) brought make settlement in accordance with regulations suit in the municipal court of Chicago against of board without consent of principal; the con- plaintiffs in error, partners under the firm ditions being an integral part of it.

name and style of Thomson & McKinnon

(hereinafter called defendants), to recover 5. Brokers 38(4)-Resolution of directors

of Chicago Board of Trade held admissible damages for alleged breaches of contracts of as affecting terms of contract in action agency with reference to the purchase and against broker for damages for alleged un delivery of grain. The court directed a verlawful settlement.

dict for defendants, and plaintiff appealed to In action by purchaser of corn against bro- this court on the ground that his constitutionkers, members of Chicago Board of Trade, who al right had been violated by the impairment had negotiated such purchase, for damages for of the obligation of the contracts. This court alleged unlawful release of persons from whom finding that no constitutional question was they had purchased such corn, where contract involved, transferred the case to the Appelof purchase was made subject to regulations late Court for the First District. The Apof Board of Trade and requirements of board of pellate Court being of the opinion that the directors and amendments thereto, held, that resolution of board fixing settlement price of municipal court erred in directing a verdict contracts such as one involved was not only for defendants, reversed the judgment and properly but necessarily admitted in evidence remanded the cause to the municipal court to establish true terms of contract,

for another trial. The cause was reinstated 6. Brokers Cw36–Person notified that con. tried the court instructed the jury to return

in the municipal court, and upon being retract made for him has been made subject to certain rules, and regulations may not a verdict for plaintiff for $15,588.50, and avoid effect of such regulations by denying judgment was entered accordingly. Defendnotice or knowledge of them.

ants appealed to the Appellate Court, where Purchaser of corn, notified by his brokers the judgment was affirmed. This court althat contracts made in his behalf were made in lowed a petition for a writ of certiorari to accordance with rules, regulations, by-laws, and the Appellate Court, and the record is now requirements of Chicago Board of Trade, is under review. charged with duty to ascertain such rules, reg. The statement of the claim in the municulations, etc., and cannot avoid their effect by ipal court, with its amendments, alleged that denying notice or knowledge of them.

plaintiff was a dealer in grain at Louisville, 7. Brokers w15_Broker making settlement Ky., selling the same to his customers and

of contract for undisclosed principal on basis purchasing the same for such sale from divers fixed by resolution of Board of Trade subject brokers, warehousemen, and producers; that to which contract was made held not liable to on or about May 23, 1917, plaintiff employed principal.

Williams & Monroe, brokers at Louisville, Broker, member of Chicago Board of Ky., to purchase for him 10,000 bushels of Trade, who had purchased corn for undisclosed corn at $1.5748 per bushel, and on or about principal under contract made subject to rules June 12, 1917, he employed said brokers to and regulations of Chicago Board of Trade, and to rules and requirements of its board of purchase for him 10,000 bushels of corn at directors and amendments thereto, held not lia- the price of $1.58 per bushel; that on or ble to such principal for unauthorized settle about May 23, 1917, Williams & Monroe em. ment of such contract on a basis fixed by reso- ployed defendants, who were brokers in the lution of board of directors in an effort to meet city of Chicago and members of the Board conditions arising out of World War.

of Trade of the City of Chicago, to purchase Dunn, Stone, and Thompson, JJ., dissenting. 10,000 bushels of corn at $1.5748 per bushel

on behalf of their undisclosed principal, Error to First Branch Appellate Court, plaintiff ; that on or about June 12, 1917, First District, on Appeal from Municipal Williams & Monroe employed defendants to Court of Chicago; Hosea W. Wells, Judge. purchase for an undisclosed principal, plain

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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(146 N.E.) tiff, 10,000 bushels of corn at $1.58 per bushel; I lawful authority, by resolution of the board that said two orders, for 10,000 bushels each, of directors provided that after July 5, were first contracted for by defendants with | 1917, all trading by members of the exchange Ware & Leland and Lamson Bros., respective in corn for delivery by grade, alone, in Chily; that said firms were both then mem- cago for the month of July should cease, bers of the Chicago Board of Trade; that by and a committee was appointed to fix the agreement between defendants, Ware & Le-true commercial value of contract grades of land, and Lamson Bros., the firm of Clement-corn on that day; that the committee found Curtis & Co. was substituted to deliver both the true commercial value to be $1.65 per of said orders for 10,000 bushels of corn; bushel; that the resolution provided that that defendants in buying the corn provided any member so trading after said day should for the delivery thereof to defendants at be deemed to have committed a grave ofChicago at said price during the month of fense against the good name of the associaJuly, 1917, on any day which the sellers tion; that the plaintiff knew of a similar might elect; that by means of the employ action previously taken respecting other ment of defendants by plaintiff, defendants grain; that after the passing of the resolu. became the agents of plaintiff for the pur- tion on July 9, 1917, the sellers of the corn pose of effecting said purchases and obtain- to defendants notified defendants of their ing the delivery of the corn; that defendants intention to settle the contracts on the basis were bound and undertook to exercise their of the settlement price of $1.65 per bushel, in skill, diligence, zeal, and fidelity for the in- accordance with the resolution; that defendterests of plaintiff which were created by ants immediately notified Williams & Monthe contracts of purchase; that defendants roe, who then first informed defendants that violated their undertaking, and before the the purchases were made for the account of persons from whom they had purchased the plaintiff, and Williams & Monroe protested corn had offered to deliver the same, de-against the settlement; that defendants and fendants, without the authority of plaintiff the persons from whom they had purchased and without informing him of their action such corn were members of the Board of in that respect, released the persons from Trade of the city of Chicago, and each of whom they had purchased the corn from them was bound by its rules, regulations, bytheir obligation to deliver the same; that laws, and requirements. The affidavit of plaintiff, on or about the 31st day of July, merits also set out a copy of the charter of 1917, not having received delivery or tender the Board of Trade and a portion of the of the corn, made tender to defendants of rules, regulations, and by-laws for the manthe sum of $31,512.50, the full amount of agement of the business of its members and the purchase price of said 20,000 bushels of the mode in which it should be conducted. corn, and demanded that defendants deliver The statement of claim and affidavit of merto plaintiff said 20,000 bushels of corn, which its formed the issue tried in the municipal tender defendants refused, and refused to court. deliver any part of the corn upon the ground Two principal questions arise upon this that the contracts for the delivery thereof record: First, what were the terms of the had been canceled; that on July 31, 1917, contracts between plaintiff and defendants? the market price at Chicago of said corn was Second, was there a breach of such con$2.40 per busbel.

tracts ? The amended affidavit of merits admitted [1] If plaintiff employed defendants to purthe receipt of the orders from Williams & chase corn for plaintiff, and defendants, as Monroe for the purchase of the corn and the such agents, entered into absolute and uncontracts with Clement-Curtis & Co. for such conditional contracts for the purchase and purchases, and alleged that upon making delivery of the corn to plaintiff, and thereeach contract for the purchase of corn they after, without plaintiff's knowledge or consent to Williams & Monroe a statement con- sent, released and canceled said contracts, firming the transaction, stating that it was then defendants are liable to plaintiff for made in accordance with and subject to the such damages as he may have sustained, if rules, regulations, and customs of the Board any, as the proximate result of such unauof Trade of the City of Chicago and the thorized action, and it would be no defense Tules, regulations, and requirements of its in an action to recover such damages if the board of directors and all amendments that agents and the parties with whom they made are made thereto; that Williams & Monroe, the contracts were members of the Board of upon receiving each of said statements, sent Trade, and that such action in so canceling a like statement to the plaintiff; that on such contracts was required of them by the account of the declaration of war against rules and regulations of the Board of Trade, Germany on April 6, 1917, and unusual condi- and that their failure to comply with such tions resulting and sure to result in the fu- rules would render them guilty of a grave ture in abnormally high prices, which would offense against the good name of the Board have enabled purchasers to compel sellers to of Trade and subject them to severe penalties settle their contracts at extortionate prices, for such offense. the Board of Trade, in the exercise of its [2] An agent who makes a contract in his

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