May the Execution Creditor's Lawyer Purchase Property at An Execution Sale for His Own Benefit ?
In Western Flour Co. v. Alosi, 216 Pa. Super. 341, 264 A.2d 413, 415 (Pa. Super. 1970), the Court concluded that "an attorney for an execution creditor may not purchase property at an execution sale for his own benefit and to the prejudice of his client, for a sum less than the amount of the claim for the satisfaction of which the property is sold." 264 A.2d at 414.
In that case, as here, the judgment creditor sold real property at execution and incurred a deficiency.
The creditor's attorney was the sole and successful bidder at the sheriff's sale. See id.
However, he caused the name of a third party to appear on the sheriff's deed. See id.
The Court concluded that the attorney could act only in his client's interest and that as a consequence, the attorney's purchase was indistinguishable from a purchase by the creditor itself.
Thus, because the creditor's attorney made the purchase, the Act required the creditor to file a petition to fix fair market value in the trial court. See Western Flour, 264 A.2d at 415.
The Court reasoned that notwithstanding the nomination of a third party as purchaser, the property remained within the judgment creditor's de facto control because the third party was subject to control by the creditor's attorney. See id.
Implicit in our decision is the recognition that, due to the identity of interest of attorney and client and the accountability of the third party nominee to the attorney, the creditor retained the discretion, through its attorney, to dispose of the property. See id. ("The fact that the right to receive the deed may have been given to a third party by designation, assignment or otherwise for or without consideration would be of no importance since the judgment creditor, as the indirect purchaser, would have had the right to resell the property or give it away.").