Strollin' Pettifoggers - Auction Complaint ©
Strollin' Pettifoggers - Auction Complaint ©
This was called not presenting a"prima facia"case by Judge SR Godby. Minor editing to each end has been carried out, but substance is protected.
ROBERT HEDGES PO Box 384,Louisville,KY 40201-0384 (new address for clarity) Name of Complainant Street Address City State Zip Tele. #
H. BARRY SMITH 1004 Main St. Shelbyville, KY 40065 (502) 633-2746 Name of Auctioneer Street City State Zip Tele. #
STATE OF KENTUCKY
COUNTY OF SPENCER
ROBERT HEDGES, being first duly sworn, states :
Barry Smith was hired by two executors representing the Houston G Hedges Estate to auction certain real and personal property. Robert Hedges was notified a few weeks prior to the chosen date, and immediately notified Barry Smith that a legal dispute might prevent or delay the sale. Robert Hedges was given an ex parte hearing in the Court of Appeals on 15 March 1991, regarding an Appeal still then pending regarding the circuit court order allowing the sale of the 250 acres which the estate felt compelled to sell to the public. The result of the ex parte hearing in the Court of Appeals was the issue of an Order denying an Injunction, the purpose of which would have been to prevent the sale, at least until after the various legal aspects of the case were heard. There is a constitutional right that the common law allows a jury hearing for several of these issues, which jury trial having not yet taken place. Robert Hedges served Barry Smith with a copy of the Court of Appeals Ruling on the morning of the 16th March 1991, before the sale began. The Court of Appeals Order stated that a sale of real property could take place on 16 April 1991. John Dudley Dale jr, Council for the Executors was standing nearby at the time, and Robert Hedges suggested that Barry Smith would have presumably consulted his lawyer concerning any questions which he may have had regarding the delay suggested by Robert Hedges recent correspondence. The bids were taken on 16 March 1991, and Robert Hedges did not make any statements among the crowd to discourage or prevent bids. Robert Hedges was not aware of all the rights which had been and were being violated on or before that immediate date. The property recovery/lien enforcement case was filed soon thereafter.
Prior to this date, surveys were made to partition this 255 acres, which did not follow the comprehensive plan of Robert Hedges, and "grouping" of several tracts was the final option of any bidder.
The questions which Complainant Robert Hedges has for Barry Smith, and /or the Kentucky Board of Auctioneers are as follows :
1) What responsibility does an auctioneer who is also a real estate broker, {thereby held to a "higher standard" } have in the determination of the best line location to survey a parcel for partitioning. Do you admit or deny that there is a responsibility to the heir/owners for the monetary loss resulting from any less- than-optimum survey line ?
[A] trustee, in possession of land, is required to account to the cestui que trust, not only for the rents and profits actually received, but also for the rents and profits which might have been received: (1 Paige, 188; 2 American Chancery Digest, 589) as cited in _Weir v Weir's Adm_r, 42 Ky 645 at 669, (1843)
[c]oercive activity that prevents its victims from making free choices between market alternatives is inherently destructive of competitive conditions and may be condemned even without proof of its actual market effect. _ Kiefer Stewart v Joseph E Seagram & Sons, 340 US 211 at 213, (1951)
> 1) In your opinion as a land developer, any waste committed by > the inefficient design and lay-out of the tracts is entirely the > fault of Tingle Surveys and the executor and executrix - True or False (no additional response by Barry Smith)
2) Do you admit or deny direct involvement with the planning and zoning of the Hedges Farm, and if response is a denial, who was responsible for the planning. ?
> 2) How long before the proposed sale day did planning and zoning > have the proposed plan and plat, and when did the Planning and > Zoning meeting take place. ? The date of your contract was the > 18/19 of January 1991. Was the Tingle Survey recommended by you, > or were they already hired when you were approached. ?
3) Did the auctioneer advise the prospective client that brokers who plan to make $300,000 sales in one day, [to all known local potential buyers], frequently make contracts for lower broker fees than 7%. ?
_Wiggins v Schubert Realty_, 91-CA-2078-MR, (slip op 11 Jun 1993) 5% broker fee upon $165,000.
> 3) The auctioneer failed to mention that a commission was charged > to the "seller" on the personal property, and the document was only > signed by one individual, rather than being signed by the two > individuals who signed the "contract". The "buyer's premium" > affects sales because a buyer would have to consider the total > cost of the real estate and cease to bid above their budget ceiling. > A lower "buyer's premium" allows higher bids on the real estate. > Considering I only had $20.00 in my pocket that day, I couldn't bid > on much and pay your "buyer's premium".
4) Do you admit or deny that an auction without minimum acceptable bids, possibly known as an absolute auction is a coercive sale, because the seller is not allowed to decline a low bid. ? Do you admit or deny that this works a detriment to the financial interest of the heir/owners. ? New KRS definining "fair market value".
[i]t is common knowledge among lawyers that personal property sold under distress warrant usually brings an inadequate price. . . __In Re Ky Book Mfg_, 30 F Supp 400 at 402, (WD Ky 1930)
[I]t is common knowledge that property does not generally bring as much at forced as at voluntary sales._ Levassor v Central Sav. Bank & Trust Co. of Covington, 60 SW2d 597, (1933)
[T]he valuation of the purparts should be based on the true value of the property and not on the value at a forced cash sale. _In re Ketcham_, 171 NW 764, (SD 1919) 68 CJS Partition. 168 (1950) [emphasis mine]
. . [t]he real estate would never bring as much at public auction under adverse economic conditions as could be realized from a gradual sale at a later time. _Chamberlain v. Beam_, 304 SE2d 770. (NC App ) 59 Am Jur 2d Partition 195 (1987)
. . [i]t is conceivable that if the property were sold at public auction, it might fetch less than if it were sold at a private sale. Doan v Doan, 302 P2d 565, (Or ) 59 Am Jur 2d Partition 199 (1987)
[W]hile the purchase price in many circumstances may afford excellent evidence of the "before" market value of real estate, it rarely will have such probative value where, as here, the purchase was at a forced sale. By definition, "fair market value" represents the price that a willing seller will take and a willing buyer will pay for property, neither being under any compulsion to sell or buy. Central Ky Drying v Comm, Simms, 858 SW2d 165 at 167, (1993); Logan v Davenport, 284 SW 98, (1926); Comm v Combs, 50 SW2d 497, (1932); Comm, DOH v West, 383 SW2d 116, (1964); Comm, DOH v Mann, 387 SW2d 848, (1965); US v Chandler Dunbar Water, 229 US 80/81, (1912); US v Miller, 317 US 369 at 373/374, (1942)
> 4) The legal issue of whether the right to decline a low bid, and > the legal issue of whether the law recognizes that an auction is a > coercive sale have received no response from Barry Smith. He > substituted a conclusion of his reasoning not supported by fact. > The "right to bid" may exist in some vague way, but that "right to > buy" is elusive as the "right to travel".
> The law recognizes the right to travel, but all persons cannot > exercise that right equally due to financial restraints, and the > state has no reason to make all persons equal.
> _United Fuel and Gas v Mauk, 272 SW2d 810, (KY 1954) > . . where the buyer or seller are under compulsion, the price > paid will not indicate fair market value . .
5) Do you admit or deny that the auctioneer advised the client to sell without reserve, or by the grouping method ?
6) Do you admit or deny that the "grouping method" of sale will
prevent a smaller investor, who may be an heir, from making a successful bid. ?
Where does the influence originate which applies this non-legal principle to an
auction, to the detriment of the heir/owners ?
[g]ood will is a privilege that gives a reasonable expectancy of a preference
in the race of competition- such expectancy may come from succession in place or
name or otherwise to business that has won the favor of its customers. It is
then known as good will. _Waterbury v Waterbury, 128 SW2d 568 at 572, (1939)
[e]conomic interests or advantages must be legally protected interests if
they are to constitute property rights . _US v Willow River, 324 US 499, (1945)
[t]he term property is therefore said to include everything which is subject
of ownership, corporeal or incorporeal, tangible or intangible, visible or
invisible, real or personal, choses in action as well as in possession,
everything which has an exchangeable value, or which goes to make up one's
wealth or estate. Button v Drake, 195 SW2d 66 at 68/69, (1946)
> 5) & 6) Did the grouping method prevent any heir from investing,
> and then we arrive at the question which was asked and avoided > through
rhetoric. Was it your advice which added the grouping > method to this sale,
or did the executors say to you "I want > you to allow grouping of these
tracts as you take bids. "
> Barry Smith would like to use vague innuendo against Robert Hedges >
to reduce the impact of this complaint. - Joseph had a coat of > many colors,
and his brothers found him "impossible to deal with" > so they stole his
coat, and sold him to some traveling salesmen. > Joseph probably could not
find an honest court to complain in.
7) Do you admit or deny that the client has a right to decline to complete a
sale if the prices offered are "ruinously low". ? Did the auctioneer advise the
client of this right before or upon the "sale date" ?
Becker v Crabb, 4 SW2d 370, (1928) 21 SW2d 438, (1929) right to stop sale -
property selling at a ruinous sacrifice - withdrawal during sale
Greer v Arnold, 633 SW2d 75, (Ky App 1982) expenses and reasonable
compensation after breach of auction contract
> 7) H. Barry Smith has answered this question with a legal >
conclusion, a conclusory statement requiring expertise in the > psychology of
understanding. The question is "did you advise > those clients", and do you
believe that the law gives them the > right to decline. Only the fact of
whether you have definite > knowledge of their being advised is acceptable as
an answer > in this question.
8) Do you admit or deny that the auctioneer was served with a Court of
Appeals Order before the sale began, which stated that real property would be
sold on 16 April 1991 ?
[e]ven in cases where the direct issue of fraud is involved, knowledge may be
imputed where one willfully close their eyes to information which is within his
reach. Wrecker v Nat Enameling, 204 US 176 at 185, (1907); Lisanby v Ill Cent
RR, 272 SW 753, (1925)
[A] judge is not such at all times, and for all purposes, when he acts he
must be clothed with jurisdiction and acting without this, he is but an
individual assuming an authority he does not possess. Glazier v Hubbard, 42 SW
1114, (1887)
[j]udges . . . who step outside of the circle of duty thus drawn by the
letter of the statute, they must answer in damages to such individuals as may
suffer from such unauthorized acts. Blincoe v Head, 44 SW 374, (1898); Reed v
Taylor, 78 SW 892, (1904);
> 8) H. Barry Smith has answered this question with a legal >
conclusion also, and a lapse of memory. The Order which is > attached as an
exhibit would have prevented the sale as > representing injunctive relief had
Complainant Robert Hedges > been immediately able to "prove irreparable
damage" to the > Court of Appeals. No personal property is mentioned in the
> exhibited Order. The time lag of 30 days has to do with the > appeal
process allowed under law. This question has not been > answered properly, as
the Arbitrator Hon. VanArsdale > undoubtedly will understand.
9) Do you admit or deny that Council for the Executors, John D. Dale jr was
present, when the Court of Appeals Order was served. ?
[k]nowledge of attorney is knowledge of client; constructive notice to client
is conclusive. Lisanby v Ill Cent RR, 272 SW 753, (1925)
[o]ne cannot escape consequences of wrongful act on ground act was official
act or was directed by another without authority. . . Streipe v Liberty Mutual
Ins Co., Ky 47 SW2d 1004 (1932)
[W]hen a party asserts that something is true, when he does not know whether
it is true or untrue, he is practicing a fraud upon the party with whom he
deals. It is the policy of the courts to suppress fraud, and at the same time it
is the policy of the court not to encourage negligence and inattention on the
part of the purchaser of the property. It has been said that it is the lesser of
two evils to encourage negligence in the foolish rather than to encourage fraud
in the deceitful. The foolish and credulous should be protected against the
machinations of the designedly wicked. Bunch v Bertram, 294 SW 805 at 808,
(1927)
[a]ctual fraud is a successful deception intentionally practiced to induce
another to part with property or some legal right. . . Combs v Poulos, 44 SW2d
571 (1932)
[t]o establish fraud against which equity will relieve, it must appear
misrepresentation was a material existing fact, and not mere promise [or
opinion] for future. . . . .Coral Gables Inc v Barnes, 57 SW2d 18, (1933)
> 9) Was John D. Dale jr aware of the Court of Appeals Order, > which
Complainant spent several hours obtaining on the > previous Friday evening?
10) What responsibility does an auctioneer have to determine ownership of
personal property before accepting bids thereon. What responsibility does an
auctioneer have to examine a Court of Appeals Order which effects a sale before
the sale is presumed to be carried out. ?
[t]he grantor can transfer no greater title than he himself has. . _Keokuk
& WRR v Missouri, 152 US 301 at 314, (1894);
[t]itle of personal property, like a stream, cannot rise higher than its
source. A defect in title continues to exist in all subsequent sales. Basset v
Green, 63 Ky 560, (1866); Bozeman Mortuary v Fairchild, 68 SW2d 756 at 759,
(1934)
_Strode v Kramer, 169 SW2d 29, (1943) Administrator could not convey
partnership property in absence of power conferred by will, as partnership
[property] vests in heirs at law.
" [RH] did give notice on the day of sale that they objected. . . and
thereafter did nothing to mislead [the parties] nor did he realize any benefits
under such judgment . . . There was consequently no estoppel." Gardiner v
Gardiner, 216 SW2d 779 at 780, (1948) as cited in Burton v Dowell, 471 SW2d 708
at 711, (1971)
_Shaw v Farmer's Bank, 31 SW2d 893, (1930) cited in Grant Co Deposit Bank v
Greene, 200 F2d 835 (1953) to work estoppel, silence must amount to bad faith.
Ignorance is not bad faith.
[f]ailure to object normally constitutes a waiver, but not so in a pro se
case - pro se pleadings are held to a less stringent standard- a pro se litigant
who is not aware of a right waives no right. Chapman v Kleindienst, 507 F2d
1246, (7th Cir 1974)
[P]urchaser at the sale is always in a position to be reimbursed and placed
in status quo while the owner is liable to have his property sacrificed by
irregular or fraudulent conduct by the officer or purchaser. Jones v Miracle, 21
SW 241, (1893)
[T]here is no doubt the general principle is favored, both in law and
justice, that every man may fix what price he pleases upon his own property, or
the use of it. Lord Ellenborough, cited in Munn v Ill, 94 US 113 at 127, (1876)
> 10) Barry Smith states in Answer #12 that he would have liked >
Complainant to purchase real property in this sale, and yet > he suggested
that all Complainant's personal property should > have been previously hauled
away, possibly stored outside to be > damaged in the elements, while the
question of which real property > Complainant would keep had yet to be
determined.
> In Answer No. 5, 6, 14 and Summary Barry Smith has negative >
statements concerning Complainant. Complainant has cited the > law which
applies, and did not interfere with the sale except > to state during the
personal property auction that the law applies > different principles to
personal property than to real property, > as is indicated in the Court of
Appeals Order which states real > property, while no mention is made of
personal property. > Complainant claimed every item which belonged to
Complainant, > but was denied a hearing in Court before this sale, [said
denial > representing a constitutional deprivation]. The absence of support
> in the court on this issue kept Complainant from calling the sheriff >
to enforce the right to own, possess, benefit from, and profit from >
property. This is not waiver.
11) Do you admit or deny that the auctioneer failed to make a contract with
an owner of personal property located on the Hedges Farm. ?
KRS 330.110 (12) no contract with owner is violation under auction laws
_Lou Trust v Monsky, 444 SW2d 120, (1969) contract must be written and signed
- no quantum meruit for real estate broker -
_Clay Co v Martinez, 218 P 903, (Colo Sup Ct 1923) everyone deals with a
bailee at his own risk
_Hazard Lumber v Horn, 15 SW2d 492 at 495, (1929) a bid is not a binding sale
> 11) The legal accuracy of this denial as an answer to Question > #11
depends upon who has title to the personal property in question.
12) Do you admit or deny that the auctioneer immediately knocked down a sale
in a manner so as to exclude the only bid made by Robert Hedges during that
sale. ?
> 12) This question referred specifically to lumber, rather than > real
property. The credit to purchase a farm requires an approved > farm plan, and
as Complainant had been jailed to prevent his > occupancy and continued
business on the property which was co-owned > by all heirs as cotenants, this
credit was not available. The estate > had refused to appear in court to
answer any questions under oath, > and had refused to seek any settlement,
and Complainant was to be > required to bid against others for the property
which he owned himself, > or owned by equity as improver. Such credit was not
available. > Would Barry Smith declined his immediate "buyer's premium" to
allow > Robert Hedges to bid on the strength of being heir of the proceeds. ?
13) Where is the list of buyers of personal property and what they bought ?
Probate had no such list filed, as if someone merely handed a stack of small
bills to client and said here this is what you get. For the purposes of replevin
or detinue such a list of personality sales dated "16 April 1991 "will be
required.
[I]n all such cases the executors represent the residuary legatees and guard
their interests. It is part of that duty which requires them to protect the
interest of the estate. Dandridge v Washington's Exrs, 2 Pet 370 at
377,(18xx)Marshall CJ
. . . .at common law, tort of conversion is extant when defendant is shown to
have deprived another of latter's right of possession and use of chattel. .
.Kimberley & European Diamonds Inc v Burbank, 684 F2d 363 (6th Cir Ky 1982)
[c]ommon law cases require a jury trial by the Constitution Reiger v Schultz,
151 SW 395, (1912); Cominger v Lou Transit, 108 SW 950, (1908); O'Connor v
Henderson Bridge, 27 SW 251 at 253, (1894); Carder v Weisenburgh, 23 SW 964,
(1893); [O]ne who claims personal property in the possession of a decedent at
the time of death will be considered a creditor of the estate, and thus entitled
to require a personal representative to file an inventory and appraisement
..............in order to ascertain whether the personal representative claims
the property as part of the estate. In re Yabezynski's Estate, Pa 7 D.&C.2d
6 Fiduciary 577, 28 Northumb.L.J. 141.
> 13) The executors failed to file this list or it's contents in >
Probate, and it has been useful to Robert Hedges. Thank you for > the
courtesy.
14) Omitted
> 14) The witnesses which heard this statement on "sale day" > gave
feedback unto Robert Hedges within several months of the > event. This will
boil down to whose word is most believable. I'm > sure the various crowds
nearby heard what they heard of these > alleged scenes.
> Response to Summary - Any attorney who wishes to fill the Arbitrator
> "in on Robert Hedges" should leave a notarized statement with the >
Auctioneers Board, and forward a copy to Robert Hedges.
The responses made by Barry Smith to this complaint were conclusions,
(opinions) rather than facts from which a disinterested party might reach the
same conclusion.