A-89705, JANUARY 8, 1938, 17 COMP. GEN. 551

A-89705: Jan 8, 1938

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IS NOT ENTITLED TO REFUND OF THE PURCHASE PRICE UNDER THE SALE CONFIRMED BY THE COURT BECAUSE HE LATER LOST THE PROPERTY UNDER FORECLOSURE PROCEEDINGS ON A MORTGAGE EXISTING PRIOR TO ENTRY OF SAID JUDGMENT. INSOFAR AS THE UNITED STATES IS CONCERNED. 1938: REFERENCE IS MADE TO YOUR LETTER OF JULY 2. WHEREBY WAS DISALLOWED YOUR CLAIM FOR $66.67 AS A REFUND OF THAT AMOUNT PAID BY LAWRENCE EDWARDS TO THE UNITED STATES MARSHAL FOR THE NORTHERN DISTRICT OF OKLAHOMA IN CONNECTION WITH THE SALE OF CERTAIN REAL ESTATE BELONGING TO ONE BERTHA M. THE BOND WAS DECLARED FORFEITED BY THE COURT AND THAT ON JANUARY 30. THE MOTION WAS DENIED AND THE FORFEITURE WAS MADE ABSOLUTE AND JUDGMENT WAS RENDERED IN FAVOR OF THE UNITED STATES AGAINST THE SAID BERTHA BLACK AND THE OTHER SURETY ON THE BOND FOR $1.

A-89705, JANUARY 8, 1938, 17 COMP. GEN. 551

SALES - JUDICIAL - REFUND OF PURCHASE PRICE BECAUSE OF FORECLOSURE ON PRIOR MORTGAGE - APPLICABILITY OF DOCTRINE OF CAVEAT EMPTOR PURCHASER OF REAL ESTATE UNDER EXECUTION ON JUDGMENT OF A FEDERAL DISTRICT COURT IN FAVOR OF THE UNITED STATES, ISSUED IN A PROCEEDING IN WHICH THE COURT HAD FULL JURISDICTION OF THE MATTER, IS NOT ENTITLED TO REFUND OF THE PURCHASE PRICE UNDER THE SALE CONFIRMED BY THE COURT BECAUSE HE LATER LOST THE PROPERTY UNDER FORECLOSURE PROCEEDINGS ON A MORTGAGE EXISTING PRIOR TO ENTRY OF SAID JUDGMENT, THERE BEING NO EVIDENCE OR EVEN SUGGESTION OF FRAUD; EXPRESS OR IMPLIED WARRANTY OF TITLE, OR AUTHORITY, INSOFAR AS THE UNITED STATES IS CONCERNED, TO WARRANT THE TITLE, AND THE DOCTRINE OF CAVEAT EMPTOR BEING APPLICABLE IN THE ABSENCE OF AN EXPRESS WARRANTY.

ACTING COMPTROLLER GENERAL ELLIOTT TO VINEA EDWARDS AND LAWRENCE EDWARDS, JANUARY 8, 1938:

REFERENCE IS MADE TO YOUR LETTER OF JULY 2, 1937, REQUESTING REVIEW OF SETTLEMENT DATED JUNE 23, 1937, WHEREBY WAS DISALLOWED YOUR CLAIM FOR $66.67 AS A REFUND OF THAT AMOUNT PAID BY LAWRENCE EDWARDS TO THE UNITED STATES MARSHAL FOR THE NORTHERN DISTRICT OF OKLAHOMA IN CONNECTION WITH THE SALE OF CERTAIN REAL ESTATE BELONGING TO ONE BERTHA M. BLACK, HEREINAFTER REFERRED TO, UNDER AN EXECUTION ISSUED IN THE CASE OF UNITED STATES V. LAVONE, ET AL, IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA.

IT APPEARS THAT IN THE CASE MENTIONED THE SAID BERTHA BLACK AND ANOTHER BECAME SURETY ON A BAIL BOND IN THE PENAL SUM OF $1,500, CONDITIONED FOR THE APPEARANCE OF THE DEFENDANT LAVONE BEFORE THE COURT AT A DESIGNATED TIME; THAT ON OCTOBER 17, 1928, THE BOND WAS DECLARED FORFEITED BY THE COURT AND THAT ON JANUARY 30, 1929, UPON HEARING ON A MOTION OF THE SAID BERTHA BLACK TO SET ASIDE THE FORFEITURE, THE MOTION WAS DENIED AND THE FORFEITURE WAS MADE ABSOLUTE AND JUDGMENT WAS RENDERED IN FAVOR OF THE UNITED STATES AGAINST THE SAID BERTHA BLACK AND THE OTHER SURETY ON THE BOND FOR $1,500 WITH INTEREST AND COSTS. THEREAFTER, IT APPEARS CERTAIN REAL ESTATE OF THE SAID BERTHA BLACK, SITUATE IN TULSA, OKLA., AND APPRAISED IN THE PROCEEDINGS AS OF THE VALUE OF $100, WAS SOLD BY THE UNITED STATES MARSHAL FOR THE NORTHERN DISTRICT OF OKLAHOMA UPON EXECUTION ISSUED ON THE JUDGMENT AND WAS PURCHASED BY LAWRENCE EDWARDS FOR $66.67, WHICH SALE WAS CONFIRMED BY THE COURT ON APRIL 1, 1929. THE PURCHASE MONEY WAS PAID TO THE MARSHAL AND ON APRIL 8, 1929, A MARSHAL'S DEED FOR THE PROPERTY WAS EXECUTED IN FAVOR OF LAWRENCE EDWARDS. IT IS CONTENDED BY VINEA EDWARDS THAT THE $66.67 PURCHASE MONEY WAS FURNISHED BY HER AND THAT LAWRENCE EDWARDS WAS MERELY ACTING AS HER AGENT IN THE MATTER. SUBSEQUENTLY APPEARED THAT THE PROPERTY WAS SUBJECT TO A MORTGAGE DATED JUNE 30, 1928, AND RECORDED JULY 3, 1928, FROM THE SAID BERTHA BLACK AND HUSBAND TO SECURE AN INDEBTEDNESS OF $232 IN FAVOR OF ANOTHER PARTY--- WHICH MORTGAGE WAS PRIOR TO THE JUDGMENT--- AND IN JULY 1929 PROCEEDINGS WERE COMMENCED FOR THE FORECLOSURE OF THE MORTGAGE, IT APPEARING THAT LAWRENCE EDWARDS WAS MADE A PARTY DEFENDANT TO THE FORECLOSURE PROCEEDINGS AND THAT THE PROPERTY WAS SOLD THEREUNDER TO ANOTHER PARTY.

THE PRESENT CLAIM FOR REFUND OF THE SAID SUM OF $66.67 IS BASED ON THE CONTENTION THAT THE PURCHASER AT THE EXECUTION SALE WAS UNAWARE OF THE MORTGAGE AND THAT SINCE THE PROPERTY WAS SUBJECT TO THE MORTGAGE AT THE TIME OF EXECUTION SALE AND WAS LOST TO THE PURCHASER AT SAID SALE BY REASON OF THE SUBSEQUENT FORECLOSURE, THERE WAS A FAILURE OF CONSIDERATION AND THAT THE PURCHASE MONEY PAID AT THE EXECUTION SALE SHOULD, THEREFORE, BE REFUNDED. THE CLAIM WAS DISALLOWED ON THE GROUND THAT THE DOCTRINE OF CAVEAT EMPTOR APPLIES TO JUDICIAL SALES AND THAT IT WILL BE CONCLUSIVELY PRESUMED THAT IN SUCH SALES THE PURCHASER AGREED TO TAKE THE TITLE, SUCH AS IT MAY BE.

THE DISALLOWANCE APPEARS CORRECT. THE SALE TO LAWRENCE EDWARDS WAS UNDER AN EXECUTION ISSUED ON A JUDGMENT IN A PROCEEDING IN WHICH IT APPEARS THE COURT HAD FULL JURISDICTION OF THE MATTER. IT IS WELL SETTLED THAT, EXCEPT WHERE FRAUD INTERVENES--- AND THERE IS NO EVIDENCE OR EVEN A SUGGESTION OF FRAUD IN THIS CASE--- PURCHASERS AT EXECUTION SALES MUST TAKE NOTICE OF THE TITLE FOR WHICH THEY BID; THAT THERE IS NO IMPLIED WARRANTY OF TITLE; AND THAT THE DOCTRINE OF CAVEAT EMPTOR APPLIES EXCEPT WHERE THERE IS AN EXPRESS WARRANTY. SEE 23 C.J. 746. HERE, THERE IS NO SHOWING THAT THERE WAS AN EXPRESS WARRANTY OF TITLE AND, IN FACT, THERE WAS NO AUTHORITY, INSOFAR AS THE UNITED STATES IS CONCERNED, TO WARRANT THE TITLE. SEE, ALSO, HUME V. LEWIS, 25 FED./2D) 271, 275, WHEREIN IT WAS SAID THE GENERAL RULE IS THAT THE DOCTRINE OF CAVEAT EMPTOR APPLIES TO SALES ON EXECUTION.

AS TO THE APPLICATION OF THE DOCTRINE OF CAVEAT EMPTOR TO JUDICIAL SALES GENERALLY IT WAS SAID IN HANDLAN V. BENNETT, 51 FED./2D) 21, 24, THAT---

IT MUST BE REMEMBERED THAT THE DOCTRINE OF CAVEAT EMPTOR APPLIES IN ALL ITS FORCE TO JUDICIAL SALES AND THAT IT WILL BE CONCLUSIVELY PRESUMED THAT THE PURCHASER AGREES TO TAKE THE TITLE SUCH AS IT IS AND THAT IF HE PERMITS THE SALE TO BE CONFIRMED WITHOUT OBJECTION, HE CANNOT AFTERWARD REFUSE TO PAY THE PURCHASE MONEY BECAUSE OF IMPERFECTION OF TITLE OR FOR ERRORS OR IRREGULARITIES IN THE PROCEEDINGS UNDER WHICH HE PURCHASED. * *

SEE, ALSO, IN THE SAME CONNECTION, SCRANTON CONTRACTING COMPANY V. MCCULLOCH, 64 FED./2D) 358.

THERE HAS BEEN URGED FOR CONSIDERATION IN YOUR BEHALF THE CASE OF MARONEY V. TANNEHILL, 90 OKLA. 224, 215 PAC. 938, WHEREIN THE COURT, IN SPEAKING WITH REFERENCE TO A SALE MADE BY A GUARDIAN UNDER AN ORDER OF THE COURT, SAID, IN PART---

IT MAY BE CONTENDED, HOWEVER, THAT THE DOCTRINE OF CAVEAT EMPTOR APPLIES, AND THAT PLAINTIFFS IN ERROR, PURCHASERS AT THE JUDICIAL SALE, MUST BE CONTENT WITH WHATEVER TITLE THEY ACQUIRED. THIS POSITION IS NOT SOUND. THE DOCTRINE HAS BEEN SO RELAXED THAT THE PURCHASER AT A JUDICIAL SALE IS ENTITLED TO EXPECT AND OBTAIN A SOUND AND MARKETABLE TITLE TO THE PROPERTY SOLD. BLIGHT V. BANKS (KY.) 17 AM.DEC. 136; BRADY V. CARTERET REALTY CO., 67 N.J. LAW, 641; MORRIS V. MOWATT, 2 PAIGE (N.Y.) 586; TOOLE V. TOOLE, 112 N.Y. 333; SACKETT V. TWINING, 18 PA.ST. 199; GREENVILLE PEOPLES BANK V. BRAMLETT, 58 S.C. 477. IT HAS BEEN EXPRESSLY HELD THAT THE DOCTRINE DOES NOT APPLY TO SALES BY GUARDIANS UNDER ORDER OF THE COURT (STONEROOK V. WISNER (IOWA) 153 N.W. 351); * * *

ASIDE FROM THE FACT THAT THE DECISION IN THAT CASE IS NOWISE BINDING ON THIS OFFICE IN THE CONSIDERATION OF THE PRESENT MATTER--- AND WITHOUT CONSIDERING WHETHER IT IS IN ACCORD WITH THE WEIGHT OF AUTHORITY AS TO WHETHER THE RULE OF CAVEAT EMPTOR APPLIES IN CONSIDERATION OF SALES SUCH AS THERE UNDER CONSIDERATION--- IT MAY BE STATED THAT, UNLIKE THE SALE IN THAT CASE, THE SALE HERE IN QUESTION WAS A SALE ON EXECUTION AND THERE APPEARS NO BASIS UPON WHICH TO HOLD THAT THE RULE OF CAVEAT EMPTOR WOULD NOT APPLY THERETO.

ACCORDINGLY, THE SETTLEMENT OF JUNE 23, 1927, DISALLOWING YOUR CLAIM MUST BE AND IS SUSTAINED.