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INTERNAL PROTOTYPE — NOT LEGAL ADVICE — DO NOT SEND

McCarthy v. State Bank of Townsend, 54 Mont. 319 (1918)

Citation
McCarthy v. State Bank of Townsend, 54 Mont. 319 (1918)
Parent Document
McCarthy v. State Bank of Townsend, 54 Mont. 319 (1918)
Jurisdiction
Montana (state)
Effective Date
1918-01-07

Full Text

3,191 chars
The bank insists, however, that the maxim “caveat emptor” [5] prevents McCarthy from seeking reimbursement. This might be correct from the point of view of Gleason, who, as we have seen, must be regarded as out of the case, or of the Hamiltons, who were never in it. But, according to our Code (sec. 5117), there is an implied warranty that the seller does not know the sale will not pass good title to the property, and no *330such warranty can coexist with caveat emptor as the respondents apply it. Nor has such application the support of general authority. If, at a judicial sale, which never in contemplation of law offers more than the judgment debtor’s interest in the property sold, the purchaser gets all that was offered, though it be less than he supposed, caveat emptor prevents him making complaint of that; but it is not and should not be the rule that he cannot complain of the judgment creditor if, because of defects in the proceedings for which the latter is responsible, he did not get even what was offered. (Henderson v. Overton, supra; Bond v. Montgomery, 56 Ark. 563, 35 Am. St. Rep. 120, 20 S. W. 525.) Particularly is this true in cases where the purchaser has referred to and relied on the solemn assurances of the judgment that everything was as it should be — unless the law, instead of furthering its declared policy to encourage bidding, would bait a trap with exactions beyond the power of the average laymen to meet. The Supreme Court of New York has well said — and the declaration has had the approval of this court (Elling v. Harrington, supra) : “It is doubtless true that a person claiming a right or title under a conveyance or an instrument, in execution of a power, is in general chargeable with notice of any infirmity in his title disclosed by the instrument-under which he claims, or of which, by reasonable diligence, he would have become acquainted. * * * The rule is adopted to determine the question of superior equities, and to protect innocent persons from being defrauded. * * * This principle is invoked in this ease to debar a plaintiff who has paid his money in good faith, without actual knowledge, on a purchase under a void execution, from recovering it back of the persons to whom it was paid, and who were the plaintiffs in and procured the sale under the execution, and who, at the time of the sale, knew that the purchaser would acquire no title to the property. The principle referred to has no proper application to this ease. To make out a voluntary payment, knowledge that the execution was void is imputed to the purchaser, although there was none in fact, and this for the benefit of persons having *331actual knowledge, and who took the plaintiff’s money. The language of Lord Mansfield in Moses v. Macfarlane (2 Burr. 1009) is applicable. In speaking of the equitable action for money had and received, he says: ‘It lies for money paid by mistake, or upon a consideration which happens to fail, or for money got through imposition, or extortion, or oppression, or an undue advantage taken of a party’s situation contrary to laws made for the protection of persons under these circumstances.’ ” (Schwinger v. Hickok, supra.)