holding that a party waived the right to appeal from the ratification of the audit of a trustee's sale when he requested and accepted that the funds be distributed as the audit prescribedSummary of this case from In re K.Y-B.
Decided June 30th, 1925.
Right of Appeal — Sale of Trust Property — Distribution of Proceeds — Estoppel — Previous Decision on Appeal — Conclusiveness.
Counsel for one of the parties to a proceeding for the sale of property have no such interest as entitles them to appeal from an order overruling their exceptions to the auditor's disallowance of a fee claimed by them. p. 697
A beneficiary under a trust who requests that funds arising from a sale by the trustees be distributed in accordance with an audit, with which request the trustees comply, is estopped to appeal from an order ratifying the audit. p. 697
A decision, on an appeal by a beneficiary under a trust, which reverses an order ratifying a sale by the trustees, but provides that the title of the purchaser shall not be affected by such reversal, is conclusive as against the same beneficiary, on a subsequent appeal by him from an order directing the trustees not to proceed against the purchaser, the order being questioned on the theory that the sale was invalid. pp. 697, 698
The rule that the title acquired at a judicial sale will be invalidated by the reversal of the order of ratification, even though no appeal bond was filed, if there was unfairness in the making of the sale, does not apply merely because the trustees, acting in the honest exercise of their judgment, failed to offer the property under favorable conditions. p. 698
A beneficiary under a trust, who consents that the proceeds of a sale of trust property be distributed in accordance with an audit, which has been ratified by the court, and who shares in such distribution, cannot appeal from an order instructing the trustees not to question the title of the purchaser, from whom the audited purchase money was received. p. 699
Decided June 30th, 1925.
Appeal from the Circuit Court of Baltimore City (GORTER, C.J.).
Exceptions by Henry Shirk and James W. Bowers to an audit accounting for and distributing the proceeds of a sale, by Morris Soper and others, trustees, of certain trust property. From an order ratifying the audit, and directing the trustees to institute no proceedings against the purchaser, said exceptants appeal. Appeal dismissed.
The cause was argued before BOND, C.J., PATTISON, URNER, ADKINS, OFFUTT, PARKE, and WALSH, JJ.
David Ash and Henry Shirk, for the appellants.
Roszel C. Thomsen and Joseph Addison, with whom were Clarence A. Tucker and Bowie Clark on the brief, for the appellees.
In the case of Shirk v. Soper et al., Trustees, 144 Md. 269, an order ratifying a sale of certain real estate by the trustees was reversed on the ground that the sale was made for an inadequate price, but the opinion of this Court stated that the reversal would not "affect any right which the purchaser may have in the property sold under the decree." The reason for this reservation was that no appeal bond had been filed, and the lower court had provided that the operation of the order ratifying the sale should not be stayed by the appeal. The discretionary power of the court to so limit the effect of such an appeal is expressly conferred by article 5, section 33, of the Code. In view of that statutory provision, as construed and applied in prior decisions, we were constrained to hold that the rights of the purchaser were unaffected by the reversal of the order ratifying the sale. The question was fully discussed in the opinion, delivered by Judge Offutt, which recognized the possibility of hardships resulting from the existing statute, but stated our inability to prevent such consequences of its operation.
After the case had been remanded, an audit was filed accounting for and distributing the proceeds of the ratified sale which the appeal had disputed. Exceptions to the audit were filed by Henry Shirk and James W. Bowers, as attorneys and solicitors, because of the disallowance of their claim of compensation for professional services in Mr. Shirk's individual interest in the course of the proceedings. Mr. Shirk also, by virtue of his personal interest in the trust estate, excepted to the audit on the theory that no title had passed to the purchaser, and, therefore, no part of the purchase money should be included in the audit for distribution. The exceptions were overruled, and from an order ratifying the audit and directing the trustees, on their petition for instructions, to institute no proceedings against the purchaser, an appeal was taken by the exceptants.
By a motion to dismiss the appeal it is shown, without denial, that after the ratification of the audit, Mr. Shirk wrote a letter to the trustees, requesting the distribution of the money "as audited," and that the trustees accordingly disbursed the funds.
As counsel for one of the parties, Messrs. Bowers and Shirk have no such interest in the case as entitles them to appeal from the order overruling their exceptions to the auditor's disallowance of the fee which they claimed. This is definitely settled by the decisions in Culbreth v. Kries, 144 Md. 497; Karr v. Shirk, 142 Md. 118; and Marshall v. Dobler Mudge, 97 Md. 555.
Any right which Mr. Shirk may have had, in his individual capacity as a party, to appeal from the order ratifying the audit, has been waived by his request, with which the trustees complied, that the funds be distributed as the audit prescribed. Upon the plainest principles of estoppel, he is prevented from successfully disputing a disposition of funds thus made with his consent. The question sought to be presented by his appeal from the order directing the trustees not to proceed against the corporation from which they received the audited purchase money is concluded by the decision on the appeal from the order by which the sale was confirmed. It is argued that the question is subject to the principle of a ruling in the later case of Herman v. Mondawmin Building Loan Assn, 145 Md. 480. The statutory rule that an appeal from a decree in equity shall not suspend its operation, unless a bond be given as required by law, was held in that case not to be "available to protect a title vested under a purchase which has been unfairly accomplished." The opinion cited the cases of Raith v. Building Loan Assn., 140 Md. 546; Garritee v. Popplein, 73 Md. 324, and Lenderking v. Rosenthal, 63 Md. 28, as authority for the proposition that the title acquired by a purchaser will not be defeated by a reversal of the decree of sale or the order of ratification, on an appeal prosecuted without the filing of an appeal bond, unless there was "unfairness or collusion in making the sale by the trustee," and the conduct attributed by the evidence to the purchaser in the Herman case was held to bring it "within the reason and equity of the principle upon which the exception to the general rule is based." In that case the purchaser obtained the property for an inadequate price by interfering with the freedom of competition at a sale under a mortgage. No improper conduct prejudicing the sale is imputed to the purchaser in the present case, and no unfairness is attributable to the trustees. They acted in the honest exercise of their judgment, but, in the opinion of this Court, the property was not offered for sale under favorable conditions. The record on the former appeal required us to hold that the rights of the purchaser under the ratification of the sale were not affected by our decision of the case, and we find no occasion on the present appeal to change that conclusion. But as to this question also Mr. Shirk must be held to have waived his right of appeal by his consent to the disbursement of the proceeds of sale in pursuance of the audit after its ratification by the court. As one of the persons entitled to the trust estate, he was benefited by the distribution of the money which the purchaser had paid. The exceptions to the audit were based in part upon the theory that the distribution of the fund would preclude any action by the trustees in derogation of the sale which they had reported and which the court below had approved. Upon that obviously just theory the agreement of Mr. Shirk to the disbursement as audited of the money received from the purchaser is a bar to this appeal from an order instructing the trustees not to question the purchaser's rights.