143 N.W. 952 | S.D. | 1913
This cause comes before us upon an appeal from an order overruling defendant Hill's demurrer to the complaint. The demurrer confesses the following facts: Defendants Koch gave a mortgage upon certain real estate to> one Nugent, who afterwards assigned same to Hill. The mortgage and assignment were duty recorded, and Hill foreclosed the mortgage by advertisement. Plaintiff, retying upon the representations made by Hlill in the publication of the notice of foreclosure, became the purchaser at the foreclosure sale, received the sheriff’s certificate, and paid the purchase price to the sheriff as agent for Hill. The land described in said mortgage was not, at the date of such mortgage or at any time thereafter, the property of the Kochs, which fact was known to Hill at the time of the foreclosure. Hill ordered the foreclosure with the fraudulent intent to secure from plaintiff the said sum of money which plaintiff paid on such foreclosure ; he secured this money from plaintiff by means of, and with full knowledge, of, such fraud; and he retained said money though demand has been made therefor.
Appellant contends that plaintiff is not. entitled to any relief because, being a purchaser at a mortgage foreclosure sale regularly advertised and duty conducted, the rule of caveat emptor should apply to him. Most of the authorities cited by appellant are opinions relating to judicial sales. An examination of such authorities discloses that, while they all hold the rule of caveat emptor applicable to a purchase at judicial sale, they nearly all note, as exceptions to those cases where such rule applies, cases where there has been fraud and misrepresentation on the part of ■the party for whose benefit the sale is made. Furthermore, if the sale pleaded could be deemed a judicial sale, then section 1336, C. C., would apply. This section provides: “upon a judicial sale the only warranty implied is that the seller does not know that the sale will not pass a good title to the .property.” It follows that when one directs a judicial sale he represents to> whomsoever may become a purchaser that he knows of no reason why such purchaser will not get good title to the property. Certainly if such party knows that a purchaser at the sale will not get
Appellant cites 27 Cyc. 1488 G, where, in speaking of a purchase at a foreclosure sale under power of sale, it is said: “But the rule of caveat emptor applies to such sales, and the trustee or mortgagee making such sale is not ordinarily liable to him for any defects in the title.” In support of this text Cyc. cites two cases—Brewer v. Christian, 9 Ill. App. 57, and Sutton v. Sutton, 7 Grat. (Va.) 234, 56 Am. Dec. 109. An examination of these cases reveals that in each of them the sale was made by a trustee and the suit was against such trustee; that, in the first case, the purchaser had been fully advised of the adverse claim that affected the title, and moreover, in its decision, the court clearly recognized an exception to the rule that caveat emptor applies to such a sale by stating, “It is a familiar rule that, where the defective quality of the thing sold is relied upon as a failure of consideration, there must have been a warranty of or a fraudulent representation as to its quality;” and that, in the other case, the court recognized such exception by stating, “And it is not pretended that in conducting and accomplishing the sale he (the trustee) was guilty of any fraudulent act or misrepresentation.” Appellant has. also cited 27 Cyc. 1492, subd. 8. The only part of the subdivision cited that has the remotest application to the facts in this case is the following: “A_ sale by a trustee under a deed of trust, without
The order appealed from is affirmed.