This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
88. Sloan v. Frothingham, 72 Ala. 589; Littell v. Grady, 38 Ark. 584; Lewis v. Hamilton, 26 Colo. 263, 58 Pac. 196; Bruschke Rep. 125, 46 N. E. 813; Muir v.
Berkshire, 52 Ind. 149; Clark T. Wilson, 56 Miss. 753; Bonner v. Lessley, 61 Miss. 392; Brewer V. Nash, 16 R. I. 458, 27 Am. St. Rep. 749, 17 Atl. 857; Johnson v. Robertson, 34 Md. 165.
89. Brobst v. Brock, 10 Wall. (U. S.) 519, 19 L. Ed. 1002; Dearnaley v. Chase, 136 Mass. 288; Gilbert v. Cooley, Walk. Ch. (Mich.) 494; Lariverre v. Rains, 112 Mich. 276, 70 N. W. 583; Jackson v. Bowen, 7 Cow. (N. Y.) 13; Robinson v. Ryan, 25 N. Y. 320; Nash v. Northwest Land Co., 15 N. D. 566, 108 N. W. 792; Williams v. Washington, 40 S. C. 457, 19 S. E. 1; Cooper v. Harvey, 21 S. D. 471, 113 N. W. 717; see Johnson v. Sandhoff, 30 Minn. 197, 14 N. W. 889.
90. Sulphur Mines Co. of Vir. v. Wright, 166 111. 183, 57 Am. St. ginia v. Thompson's Heirs, 93 Va.
Bona fide purchasers. It is impossible to deduce from the cases any general rule or rules as to when a purchaser claiming under a sale made, or attempted to be made, under a power of sale given to secure a debt, can claim protection as an innocent purchaser as against defects in the power or irregularities in the sale. The matter lacks the importance which it would otherwise have, by reason of the fact that the purchaser at the sale is, upon his payment of the purchase money, subrogated to the rights of the mortgage creditor, or, it seems, by some decisions, substituted in the place of the mortgagee by the conveyance made under the invalid sale.
In case the power itself is defective in form or execution, any purchaser would necessarily be charged with notice of such defect, since it is his duty to examine the instrument under which he claims.91 He cannot however be charged with notice that the debt secured is in any way fraudulent92 or, it would seem, that it never existed, and, since the power of sale is not in terms made dependent upon the existence or legality of the debt, a subsequent purchaser claiming under the sale would seem to be protected in this regard.
The power of sale is ordinarily conditioned upon a failure to pay the debt at a time named, and consequently a sale before that time would, it seems, ordinarily be invalid for any purpose, even in favor, of an innocent purchaser from the purchaser at the sale.93
293, 25 S. E. 232; Hayes v. Lien-lokken, 48 Wis. 509, 4 N. W. 584.
91. Schmertz v. Hammond, 47 W. Va. 527, 35 S. E. 945.
92. Mathews v. Lecomte, 24
Mo. 545; Moseley v. Rambo, 106 Ga. 597, 32 S. E. 638 (usury).
93. Rogers v. Barnes, 169 Mass. 179, 38 L. R. A. 145, 47 N. E. 602; Long v. Long, 79 Mo.
That the sale was made before the day named for maturity of the debt would, however, be discoverable, ordinarily, by a subsequent purchaser. It has been held that a sale was not invalid as against an innocent purchaser because made during the period agreed upon for an extension of the debt.94
The original purchaser at the sale under the power is charged with notice of any irregularities in the actual exercise of the power.95 And the sale may accordingly be set aside as against him,96 while valid as against persons purchasing under him without notice of the irregularities.97 An innocent purchaser may be protected in this regard, as in others, by inserting in the mortgage instrument a clause relieving the purchaser from any obligation to inquire into the validity or regularity of the proceedings for sale.
Proceeds of sale. Any surplus over and above the amount of the debt secured and costs of sale must be paid over to the mortgagor, or his transferee,98 or to the holders of subsequent liens on the land, these attaching to the surplus proceeds of sale as they at644. But in Chicago, R. I. & P. R. Co. v. Kennedy, 70 111. 350, a contrary view is suggested.
94. Missouri Real Estate Syndicate v. Sims, 179 Mo. 679, 78 S. W. 1006.
95. Grinnell v. Cockerill, 79 111. 79; Equitable Trust Co. v. Fisher, 106 111. 189 (semble); Pratt v. Tinkcom, 21 Minn. 142 (semble)', Sears v. Livermore, 17 Iowa, 297, 85 Am. Dec. 564. See Bigler v. Waller, 14 Wall. (U. S.) 297, 20 L. Ed. 891.
96. Fountain v. Pateman, 189 Ala. 153, 66 So. 75; Bent-Otero Imp. Co. v. Whitehead, 25 Colo. 354, 71 Am. St. Rep. 140, 54 Pac. 1023; Cassell v. Ross, 33 111. 244, 85 Am. Dec. 270; Dearnaley v. Chase, 136 Mass. 288; Sears v.
Livermore, 17 Iowa, 297, 85 Am. Dec. 564; Martini v. Emery, 39 R. I. 463, 98 Atl. 52; Shears v. Traders Bldg Ass'n, 58 W. Va. 665, 52 S. E. 860.
97. Fountain v. Pateman, 189 Ala. 153, 66 So. 75; Hamilton v. Lubukee, 51 111. 415; Grinnell v. Cockerill, 79 111. 79; Wilson v. South Park Commrs, 70 111. 46; Burns v. Thayer, 115 Mass. 89; Adams v. Carpenter, 187 Mo. 613, 86 S. W. 445. But see Enochs v. Miller, 60 Miss. 19.
98. Buttrick v. Wentworth, 6 Allen (Mass.) 79; Johnson v. Wilson, 77 Mo. 639; Seller v. Wilber, 29 Minn. 307, 13 N. W. 136; Dennett v. Perkins, 214 Mass. 449, 101 N. E. 994.
Tached to the land itself.99 In case of the mortgagee's failure to pay over such surplus, the remedy is by an action against him as for money had and received.1