## Facts

- The Armstrongs sold two adjacent properties to the Csurillas under two long-term real estate contracts: a gasoline/service station (with inventory and equipment) and a residence, for a combined price of about $231,594.
- The Csurillas defaulted on payments under the service-station contract, continued operating briefly, then closed the station; it never reopened.
- When the Armstrongs regained control (including through a receivership), the station and related assets had substantially deteriorated, and much inventory had been depleted.
- The Armstrongs sued for breach and obtained a foreclosure decree on the contracts, leading to a judicial sale.
- At the judicial foreclosure sale, the Armstrongs purchased both properties for $90,000 total.
- The Csurillas objected to confirmation, claiming the price was grossly inadequate, but offered no appraisal or substantial evidence of fair market value at the time of sale.
- The trial court confirmed the sale and entered a deficiency judgment against the Csurillas.

## Issues

1. Whether a statute governing execution sales requiring a minimum bid of two-thirds of appraised value applies to judicial foreclosure sales.
2. Whether the foreclosure sale should be denied confirmation or set aside because the sale price was so grossly inadequate as to shock the conscience, or due to additional inequitable circumstances.
3. Whether the district court had authority to use a foreclosure decree and judicial sale procedure to enforce defaults under real estate contracts.
4. Whether substantial evidence supported the trial court’s findings, including the fairness of the sale price and the property’s condition and value at the time of sale.

## Decision

- The New Mexico Supreme Court affirmed the foreclosure judgment, confirmation of the sale, and the deficiency judgment.
- The execution-sale minimum-price statute did not apply because the sale was conducted under a foreclosure decree, not an execution on a money judgment.
- The debtors failed to prove the sale price was so grossly inadequate as to shock the conscience or that other inequitable circumstances justified relief.
- The district court acted within its authority in ordering foreclosure-type relief on the real estate contracts.
- The trial court’s findings were supported by substantial evidence, and the appellate court would not reweigh the evidence.

## Legal Principles

- A statutory minimum-bid requirement for execution sales does not govern judicial sales conducted pursuant to foreclosure decrees.
- A judicial sale will not be set aside, nor confirmation refused, for inadequacy of price unless the price is so gross as to shock the conscience, or unless additional circumstances (such as fraud, mistake, unfairness, or irregularity) make it inequitable to allow the sale to stand.
- The objecting debtor bears the burden to produce competent proof of value and inequitable circumstances when challenging confirmation; failure to present appraisal or comparable valuation evidence may be dispositive.
- Trial courts may, in appropriate cases, employ foreclosure-type remedies to enforce defaults under real estate contracts, including judicial sale and deficiency relief.
- On review, factual findings are upheld if supported by substantial evidence viewed in the light most favorable to the prevailing party.

## Conclusion

The court upheld confirmation of a judicial foreclosure sale and a deficiency judgment where the debtors could not invoke an execution-sale minimum-bid statute and failed to prove, with valuation evidence or other equitable grounds, that the foreclosure sale price was so extreme as to justify setting aside the sale.


Armstrong v. Csurilla, 817 P.2d 1221 (N.M. 1991)