Fed. Farm Mort. Corp. v. Noel, 8206

• Decision Date: 24 May 1939
• Docket Number: 8206
• Citation: 66 S.D. 481,285 N.W. 871
• Parties: FEDERAL FARM MORTGAGE CORPORATION, Appellant, v. GRACE E. NOEL, et al., Respondents.
• Court: South Dakota Supreme Court

66 S.D. 481

285 N.W. 871

FEDERAL FARM MORTGAGE CORPORATION, Appellant,

v.

GRACE E. NOEL, et al., Respondents. South Dakota Supreme Court Appeal from Circuit Court, Hyde County, SD Hon. Frank R. Fisher, Judge #8206—Reversed Matthew C. Cunningham, Highmore, SD Otto A. Gruhn, Omaha, NE Attorneys for Appellant. C.E. Noel, Highmore, SD Attorney for Respondents. Opinion Filed May 24, 1939

RUDOLPH, Judge.

Plaintiff commenced this action at law to recover a deficiency resulting from the sale of mortgaged property. The foreclosure was conducted by advertisement under a power of sale contained in the mortgage. The defendants filed an answer, and alleged in part substantially the following facts: That at the sale which was held at 10 o’clock in the morning there were no bidders other than the plaintiff, who at the time was the holder of the obligation secured by the mortgage; that in the immediate vicinity of this land and throughout the entire state there existed an agricultural depression which had driven land values to abnormally low figures; that there was no demand for agricultural land because of the depression, and because of this fact competitive bidding at the sale was wholly lacking; that the general depressed condition of agriculture had caused many loaning agencies to refuse to loan any money upon real estate, and there was no opportunity to refinance the obligation; that the said land was reasonably worth not less than $1400, and was bid in by the plaintiff at $568.00; “that the plaintiff, well knowing these conditions existed and that by setting the time of sale at an early hour in the morning, there was less apt to be any competitive bidding, took advantage of the defendants and the existing conditions by bidding said property in at far less than its reasonable market value; that the plaintiff failed to act fairly and in good faith at said foreclosure sale; that the price bid was wholly inadequate, unwarranted, inequitable and not made in good conscience.” The trial court overruled a demurrer and plaintiff has appealed.

Just what the power of the court would be, had the defendants upon the facts alleged in the answer brought an action to vacate the mortgage foreclosure, we need not now determine; neither need we determine the power of the court, had the same facts been disclosed in an action brought to foreclose the mortgage. As stated at the outset, this is an action at law based upon the note to recover the deficiency remaining due upon the note after applying thereon the proceeds of the foreclosure sale. Section 2885, RC 1919, as amended by Chapter 222, Laws of 1923. The foreclosure proceedings were not void but at the most voidable. It is the law that the sale may be conducted at any hour designated in the notice between 9 o’clock a.m. and 5 o’clock p.m. Section 2881, RC 1919. So far as disclosed by this answer the sale was open and fairly conducted. The allegation that the plaintiff failed to act fairly and in good faith is a conclusion of the pleader and adds nothing to the facts that are set forth. The allegation that the price paid at the sale was inadequate and worked an injustice to this defendant is no defense to an action brought to recover the deficiency. This court held in the case of Hollister v. Buchanan, 77 NW 103: “It is no defense to an action to recover a deficiency due on a note after foreclosure of a mortgage...