Loomis v. Stoddard

WHITING, J.

(dissenting). I am unable to agree with •Judge 'SMITH'S' conclusion herein, and I think he has failed to recognize well-established rules of law. I ibelieve Judge Corson stated the correct rule of law when, in Stacy v. Smith, 9 S. D. at page 142, 68 N. W. at page 199, he said:

“A court .of equity, in the exercise of its equitable powers, will scrutinize with care sales made ’under powers of sale contained in the mortgage; and, where there is great inadequacy of consideration, it will be astute in extracting from the facts of the case sufficient to justify annulling the sale.”

. And in this case the court cited with evident approval the following from O’Donnell v. Lindsey, 39 N. Y. Super. Ct. 523:

*279. ‘‘It will be seen, however, in' the cases that -a great inadequacy has refined- the ingenuity of the learned judges in extracting from the facts in the case sufficient to justify annulling the sale.” —many authorities being cited in support of the above.. The majority seem to be of the opinion that, .because the mortgagor, by his contract, gave to the mortgagee a power of sale, the proceedings are based upon the mortgagor’s contract, and are largely for his 'benefit, and that no such strictness should! be or is required in these foreclosures as in cases of proceedings by the state ex parte, such as tax proceedings. As stated by this court in Stacy v. Smith, supra, the true rule of law is:
“A court of equity justly scrutinizes the conduct of a party placed by law in a position where he possesses the power to sacrifice the interests of another in a manner which may defy detection, and stands ready to afford relief on very slight evidence of unfair dealing.” ' ■ .

The case of 'Stacy v. Smith was one where a foreclosure •under power of sale was being reviewed; and, while the facts were quite different from those before us, the principles announced are directly applicable thereto. In 27 Cyc; 1466, the rule is laid down that, under a power of sale, “the notice of sale, in all -things required by the statute, miist conform strictly to its provisions.” I am clearly of the opinion that the true rule of law is that, under a power of sale, especially where the mortgagee has the right to be a -bidder, the law liblds him- as a trustee possessed of an important power which he must exercise 'in the utmost good faith, and that the courts will not inquire as to whether actual fraud was committed, but only determine whether there were cir•cumstances which might have deterred bidders, and, if so, when the property has been bid in at a wholly inadequate price by the mortgagee to whom the power of sale was given, that the courts, instead of trying to uphold, the sale, should, as Judge Corson stated, “be astute” in detecting the defect which may-have given the mortgagee an opportunity to bid without competition.

I take it that the majority are of the opinion that a description which would be sufficient in a- 'deed would be sufficient in a •notice of sale — in other words, that," where - the notice is such that it conveys, information from which the property' may be. ascertained it is sufficient even though -defective -or ambiguous. , But *280such is not the law. As was well said in Herrick v. Ammerman, 32 Minn. 547, 21 N. W. 838:

“A description sufficient to convey land between man and man, or which, if contained in an agreement to convey, would authorize a decree of specific performance, might not 'be sufficient in proceedings to sell land on an execution.”

My -Colleagues rest their opinion upon the case of McCardia. v. Billings, supra; but a reading of that case discloses that what was said therein could have no application to the facts of this case. In that case, there was a foreclosure in 1886. After foreclosure sale, the land changed hands several times. No steps, questioning the foreclosure were taken for somewhere in the neighborhood of 115 years; and, so far as the question of the-notice was concerned, the only defect was that it gave -the date of the mortgage as October 1st, when it should have been given as October 10th. There are two classes of defects in notices: One of which, from its nature, could not, except in connection with an examination of the records or of the mortgage, in any way deter or discourage bidding at the sale; another of wjh'ich, being- apparent on the face of the notice itself, would have a tendency to-keep parties from bidding at sales. The notice in the North Dakota case was of the first kind — a person reading such notice-would not discover anything that would in any way tend to prevent his becoming a bidder at the sale. The notice before us is. entirely different — it is of the' second kind, and it presents a situation in principle very similar to that appearing in Jensen v. Andrews, 39 S. D. 104, 163 N. W. 571. I think that any prudent person who should chance to read this notice and should see that-there was a mistake in the description, no matter if he might know, as a matter of fact, that the correct description was lig- and not 109, would say to himself:

“Now, while I know what land was described in that mortgage, as the records fully advise me, and I therefore know what land will be offered for sale, yet I do not know .but what I will be' buying a lawsuit because of such faulty notice. I, therefore, will not become a purchaser at such sale.”

In this case now before us, an equity worth over $3,000 was. purchased for some $90, the only bidder being the mortgagee, the-party holding the power of sale. We should therefore not stop. *281to inquire whether anybody was actually mislead or deterred from bidding at the sale because of the defect in the notice; but we should “be astute” and extract, if possible — and it certainly is possible — -“from the facts of the case, sufficient to justify annul ling the sale.”