A law of the State of Indiana directing
"That real and personal estate, taken in execution, shall sell
for the best price the same will bring at public auction and
outcry, except that the fee simple of real estate shall not be sold
to satisfy any execution or executions, until the rents and profits
for the term of seven years of such real estate shall have been
first offered for sale at public auction and outcry, and if such
rents and profits will not sell for a sum sufficient to satisfy
such execution or executions, then the fee simple shall be
sold"
is not merely directory to the sheriff, but restrictive of his
power to sell the fee simple.
If he sells the fee simple without having previously offered the
rents and profits, his deed is void.
The law of Indiana, passed after the execution was issued, also
required that the property should be appraised. The sheriff's deed
was not void because of there being no appraisement.
Page 44 U. S. 708
The facts were stated by an agreement in the nature of a special
verdict, and were as follows:
"On the twenty-fifth day of December, eighteen hundred and
thirty-eight, one Jacob Linzee was indebted to Daniel W. Gantly, of
the City of New York, in the sum of nine hundred and nine dollars
and eighty-two cents, and to secure the payment of the same, Linzee
then executed to Gantly a mortgage on town lot numbered one hundred
and seventy-nine in Peru, Indiana, of which Linzee was seized in
fee. At the time of the execution of the mortgage, Linzee was in
possession of the mortgaged premises, and they were worth from one
thousand do fourteen hundred dollars. Linzee made default in the
payment, and Gantly, on the eighth day of September, eighteen
hundred and forty, obtained a decree in the state court to
foreclose the mortgage, and unless the money should be paid in
sixty days, an execution was directed to be issued for the sale of
the premises."
"In January, eighteen hundred and forty-one, an execution was
issued, and on the thirteenth of February following, before the
sale of the property, the appraisement law passed, and was
published the twenty-third day of February, eighteen hundred and
forty-one; one the first of March, eighteen hundred and forty-one,
the sheriff, having given due notice, sold the premises at public
auction, to the defendants, for seventy-six dollars, and executed a
deed to them for the same; which deed was offered in evidence to
support the title of the defendants. The property was not valued,
nor were the rents and profits offered for sale by the sheriff. And
the court was asked to instruct the jury that as the rents and
profits had not been offered nor the land valued, under the
statutes of Indiana, the sheriff's deed was inoperative and void.
And on this question the opinions of the judges were opposed, and
on motion of plaintiff's counsel, the point is certified to the
supreme court under the act of Congress. "
Page 44 U. S. 713
MR. JUSTICE CATRON delivered the opinion of the Court.
This case comes before us on a certificate of division from the
Circuit Court for the District of Indiana. As the facts fully
appear in the statement of the reporter, they need not be repeated
at large here. The action was an ejectment; the defendants set up a
sheriff's deed, and the court was asked to instruct the jury that
the deed was void for two reasons: first, because the rents and
profits had not been offered for sale before the fee simple was
sold; second, nor had the land been valued under the statutes of
Indiana before the sale was made.
The first ground of objection involves the construction of the
3d section of the Act of February 4, 1831, which is in the
following words:
"That real and personal estate, taken in execution, shall sell
for the best price the same will bring at public auction and
outcry, except that the fee simple of real estate shall not be sold
to satisfy any execution or executions, until the rents and profits
for the term of seven years of such real estate shall have first
been offered for sale at public auction and outcry; and if such
rents and profits will bring a sum sufficient to satisfy the
execution or executions levied thereon the sheriff, or other
officer selling the same shall make to the purchaser thereof a deed
conveying to such purchaser a term of seven years in and to such
real estate, and moreover forthwith deliver immediate and actual
possession thereof, and if such rents and profits will not sell for
a sum sufficient to satisfy such execution or executions, then the
fee simple, or other estate, of the execution defendant or
defendants, shall be sold, and a deed, conveying the same to the
purchaser thereof, shall be executed by the officer selling the
same."
By this provision the sheriff was governed in making the sale;
if
Page 44 U. S. 714
it was merely directory to the officer, then the deed cannot be
assailed; but if it contains an inhibition to sell the fee until
the rents and profits are first offered, and the authority to sell
the fee in this instance, did not exist before, then the sale was
void; as it is admitted on the record, that the rents and profits
were not offered by the sheriff. Had this fact not been
established, then we are of opinion the court would have been bound
to presume the sheriff did his duty, and that the sale, and deed
founded on it, were valid; they being
prima facie valid,
the proof to assail them must come from the opposing side, be it
negative or affirmative. This is the general rule applicable to all
proceedings of courts where they have and exercise general
jurisdiction, and of this description is the court of Indiana, from
which the execution issued. This being conceded, the question is
does the established fact annul the sale? At common law, the fee in
lands by a
fieri facias is not subject to sale; the
sheriff's authority to sell in this country is in the nature of a
naked power conferred by statute; he takes no title in the land by
the levy, as he does in goods, and can confer none on the
purchaser, if power to sell is wanting. We admit if the words of a
law are doubtful, the sale should be supported, and the benefit of
any obscurity in the statute be given to the purchaser, lest he
should be misled in cases where a general power is given to the
sheriff to sell, and this is limited by indefinite restrictions,
and that the safer rule is to hold such restrictions to be
directory. Further than this, no general rule need be asserted.
Giving the act in question the benefit of these favorable
intendments, and what authority did it confer on the sheriff.
The general power to sell lands at auction and outcry is given,
but then follows the explicit restriction, that the fee simple
shall not be sold until the rents and profits shall have been first
offered at public auction and outcry; if they bring the amount of
the execution, the sheriff is to convey to the purchaser the term
of seven years and put him forthwith into possession. Had the power
to sell stopped here, then no authority to convey the fee could
exist, and the question is when did the power arise? We think, on
the failure of the sheriff to get a bid of the whole amount of the
levy for a term of seven years, as before, the fee could not be
sold. Nor can we see how the legislature could have made the
exception more explicit unless negative language had been used,
repeating the inhibition, and for this there was no necessity as
the statute conferred a power not known to the common law, and
which could only be given affirmatively, and which was not given at
all, save with the positive restriction imposed in advance.
To treat the exception as directory to the sheriff would
violate, as it seems to us, the general spirit of the laws of
Indiana; they cautiously endeavor to maintain debtors in possession
and to preserve their houses, at the same time that a remedy is
afforded to creditors
Page 44 U. S. 715
against lands. It not being our province, however, to construe
the state laws on this point, so as to give any binding effect to
the adjudication on the courts of Indiana, we forbear to go into an
examination in detail of what we suppose to be the policy of that
state.
One consideration has been much pressed on us, to-wit that the
purchasers here are not proved to have had notice of a failure on
the part of the sheriff to offer the term of seven years for sale
first. It is admitted if such notice had been proved, the sale
would be void.
In our opinion, the purchaser must be held to notice. The
statute contemplates a sale of the term or an offer to sell it, and
a failure, and this at public outcry, at the same time and place,
and immediately preceding the sale of the fee. He who goes to
purchase and is present at the sale, and does purchase, rarely if
ever can want actual knowledge, as the open outcry and public
auction of the term is to be as notorious as that by which the fee
is sold, and even should the purchaser of the latter not be present
at the opening of the vendue, the slightest diligence would command
information whether the requisite previous step had been taken. To
treat a bidder at the sale in any of its stages as an innocent
purchaser, we think would be dealing with him in a manner too
indulgent, as it is quite certain in no other instance could the
doctrine of innocent purchaser be applied to one having equal
opportunities of knowledge, aside from any duty imposed on him to
acquire it. Furthermore, this would in almost every case of the
kind narrow down the issue to a single point -- whether the
purchaser had or had not notice, leaving the jury to determine on
the validity of the title, by the exercise of an undefined
discretion; its verdict being founded on an exception
in
pais, and on one the legislature did not see proper to make.
This is a question of power, and the answer to the suggestion rests
on this. The sheriff's duties are plainly prescribed; if he has no
power to sell, want of knowledge on part of the purchaser could not
confer it, and no such contingency can be let in to help his
deed.
It is insisted the question has been settled by the Supreme
Court of Judicature of Indiana, in the case of
Doe v.
Smith, 4 Blackf. 228, that the purchaser at execution sale
takes a good title to the fee, although the land had not been
previously offered for sale by the sheriff for the rents and
profits of a term of seven years.
That case does not so settle the point as to satisfy us. It
applies to a sale, made pursuant to the act of January 30, 1824,
sec. 3; it is in substance like that set forth above, of 1831, but
much less stringent and precise in its terms of exclusion, so that
the first might be held directory to the officer, and the last an
inhibition, if the decision was to the precise effect contended
for, which it is not. For another reason we suppose the question
not to be settled in Indiana. The certificate of division, although
not exclusively contrary to the assumption that the question has
been settled, must still be treated
Page 44 U. S. 716
by us as assuming
prima facie, that the construction of
the statute is open, and that it requires settlement here for the
purposes of the case, as to no other end could the question be
brought here in its present form.
It is proper to remark, that it would be our duty on this point
to follow the construction of the Supreme Judicial Court of
Indiana, had it settled any, and this we would the more cheerfully
do from the confidence we have in that tribunal, but nothing can be
deemed as settled by the court of last resort in a state, unless it
has adjudged the direct question or unless the subject has, in an
indirect form, and at various times, been brought before such court
and treated as conclusively settled, and not open to controversy.
This not appearing to be the case, it is certified to the circuit
court that the sheriff's deed is void for the reasons stated.
2. The next question certified is whether the sheriff's deed is
void, because the land was not valued according to the statute of
Indiana before the sale took place.
Linzee owed Gantly, who took a mortgage on a town lot, of which
Linzee was seized in fee. This occurred in 1838. The debt was for
$909, and the property mortgaged worth more than the debt. Linzee
made default, and Gantly filed his bill to foreclose. In September,
1840, he obtained a decree of foreclosure, on which an execution
issued in January, 1841. On 13 February following, the appraisement
law was passed. The sheriff sold the property on 1 March, 1841, to
the defendants.
1. The Act of 13 February provides that the debtor may redeem
real estate sold under execution founded on a judgment or decree at
any time within twelve months from the day of sale by paying the
money into the clerk's office, with interest thereon at the rate of
twelve and a half percent
2. That junior encumbrances may redeem in like manner.
3. That if the judgment debtor neglected, or was unable to take
the stay by the laws then in force, the property should be sold on
a credit, equal to the stay, and bond be taken by the officer
selling, for the purchase money.
4. That thereafter no property should be sold on execution for
less than one-half of its cash value at the time of the sale, to be
ascertained by three freeholders at the instance of the officer,
and if the property did not sell for half the value, the fact was
to be returned on the execution, and another might issue subject to
the same conditions.
The decree ordering foreclosure was made in conformity to the
existing laws, at the date of the mortgage, and of the decree. An
execution sale was the appropriate mode of foreclosure, and this
without any of the restrictions contained in the Act of February
13, 1841. The decree followed the provisions of the 18th section of
the act of 1831, chap. 36.
The contract of mortgage was a vested interest,
Page 44 U. S. 717
and its main incident a right to have the land applied in
discharge of the debt, either by an execution executed, as on a
judgment at law, or in some form of remedy substantially equal. The
new remedy, prescribed by the act of 1841, changed the contract,
and required among other things that the mortgaged premises should
not be sold to satisfy the debt unless they were first valued, and
one-half of that value was bid for them. If the legislature could
make this alteration in the contract, and in the decree enforcing
it, so it could declare the property should bring its entire value,
or that it should not be sold at all, thereby impairing, or
defeating the obligation under the disguise of regulating the
remedy. This Court held in
Bronson v.
Kinzie, 1 How. 319, that the right, and a remedy
substantially in accordance with the right, were equally parts of
the contract, secured by the laws of the state where it was made,
and that a change of these laws, imposing conditions and
restrictions on the mortgagee, in the enforcement of his contract,
and which affected its substance, impaired the obligation, and
could not prevail, as an act directly prohibited, could not be done
indirectly. This being the settled doctrine of the court, and
applying as forcibly to the case before us, as it did to the one
cited, we answer to the second ground of objection, that the
sheriff's deed is not void on this ground, although no valuation of
the property was made before the sale.