McCartney v. Frost

In McCartney v. Frost, 282 Md. 631, 386 A.2d 784 (1978), a sheriff sold a house, which had an "estimated value" of $ 25,000 and an existing mortgage of $ 6,000, for $ 2,000. There were two bidders at the sale and, as in this case, the judgment debtor, who was still occupying the house, "declined to permit inspection of the inside of the house." Id. at 634. At the hearing to set aside the sale, the auctioneer testified that he had told the bidders the following: "Ladies and Gentlemen, I am offering you a home, as it may appear, you are buying a pig in a bag, because I don't know what is against the property, which I have always stated at Sheriff's sales for the past fifty-six years. They are buying a pig in the bag. I don't know what is in the house and nobody has been in to see it. I can't tell you. You are buying a pig in the bag. What do I hear?" Id. at 635. The circuit court found that the purchase price was not grossly inadequate and refused to set aside the sale. On appeal, the Court of Appeals stated that the "recognized test of inadequacy is the price received in comparison with what the property would bring at a fair sheriff's sale." Id. at 638. A sale will not be set aside for mere inadequacy of price unless it is "so grossly inadequate as to shock the conscience of the court, or if there be but slight circumstances of unfairness in addition to great inadequateness of price." Id. at 639. The Court of Appeals held that the sale should have been set aside, stating: One does not expect a price produced at a forced sale to be commensurate with fair market value. This is particularly true in a case such as this where bidders were not permitted to inspect the interior of the dwelling. However, the spread here between a fair market value of $ 18,000 ($ 24,000 appraisal less mortgage of $ 6,000) and the $ 2,000 sale price is indicative of an unfair sheriff's sale, such as shocks the conscience of the Court. Id. at 640.