Court Opinion

ID: 9789928
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:44:01.724852+00
Date Added: 2024-06-11T07:37:25.241589
License: Public Domain

Williams, J.
(dissenting)—I am unable to concur in the majority opinion in this suit in equity, because, as I view it, Mr. Miebach's title stands no stronger than its antecedents which collapse under judicial scrutiny. The decision approves a procedure whereby Valeria Colasurdo, an elderly widow, has her $106,000 home taken from her to satisfy a $1,150.24 debt in violation of the law and simple justice.
The majority opinion is premised upon the conclusion that the order confirming sale absolutely cleared title to the property in William Miebach. I disagree. Where no bona fide purchaser is involved, an order confirming sale may "provide neither sword nor shield to a party in equity." Malo v. Anderson, 62 Wn.2d 813, 815, 384 P.2d 867 (1963). Miebach claims the order as a shield, contending that he is a bona fide purchaser. He is not.
A bona fide purchaser for value is one who without notice of another's claim of right to, or equity in, the property prior to his acquisition of title, has paid the vendor a valuable consideration.
Glaser v. Holdorf, 56 Wn.2d 204, 209, 352 P.2d 212 (1960).
Because possession of property gives notice to all persons dealing with it of whatever rights the possessor claims, a purchaser takes title subject to every right of the occupant that a reasonable inquiry of the occupant would have disclosed. Glaser v. Holdorf, supra at 210; Nichols v. DeBritz, 178 Wash. 375, 380, 35 P.2d 29 (1934). Put another way, one is not a bona fide purchaser for value if he did not make an inquiry which a reasonable person in his position would have made. Glaser v. Holdorf, supra at 209.
When Miebach purchased the virtually unwarranted9 *819title to the property he knew that Mr. and Mrs. Colasurdo were living in the house, were making improvements thereon, and would not surrender possession without a legal battle where all of their rights, legal and equitable, would be asserted. Rather than ask the Colasurdos about their rights to the property—an inquiry any reasonable person would have made—Miebach, an experienced businessman, examined the official records, learning that Washington Credit—Master Mortgages—Arctic Trading bought the property for less than 2 percent of its fair market value. As a matter of law, therefore, Miebach had full and adequate notice of the Colasurdos' claim of right to, or equity in, the property before he acquired title. He was not a bona fide purchaser.
Because Miebach was not a bona fide purchaser, equity, having jurisdiction for all purposes, Malo v. Anderson, supra, requires this court to examine all aspects of the transaction for unfairness or fraud.
It is well settled that equity will intervene and set aside an execution sale or cancel a sheriff's deed, after the redemption period has expired, where it appears the consideration was grossly inadequate and the sale was attended by unfairness and fraud.
Pender v. Dowse, 1 Utah 2d 283, 288, 265 P.2d 644, 647 (1954).
[I]f, in addition to gross inadequacy [of price], the purchaser has been guilty of any unfairness, or has taken any undue advantage, or if the owner of the property . . . has been for any other reason, misled or surprised, then the sale will be regarded as fraudulent and void . . . Great inadequacy requires only slight circumstances of unfairness in the conduct of the party benefited by the sale to raise the presumption of fraud.
(Italics mine.) Graffam v. Burgess, 117 U.S. 180, 192, 29 L. Ed. 839, 6 S. Ct. 686 (1886). Accord, Mellen v. Edwards, 179 Wash. 272, 37 P.2d 203 (1934); Triplett v. Bergman, 82 Wash. 639, 144 P. 899 (1914); Majer v. Fosseen, 15 Wn. App. 687, 551 P.2d 757 (1976), review denied, 88 Wn.2d 1001 (1977).
*820The first question, then, is: was the price paid for the Colasurdo home adequate? The home, valued in excess of $106,000 and subject to a $29,000 deed of trust was purchased for a paltry $1,346.02—less than 2 percent of its fair market value, a grossly inadequate price. Triplett v. Bergman, supra.
The next question: was the sale attended by unfairness or fraud, however slight? "Yes."
The law in effect at the time the Colasurdo home was sold provided:
If the execution be against the property of the judgment debtor it shall require the officer to satisfy the judgment, with interest, out of the personal property of the debtor, and if sufficient personal property cannot be found, out of his real property upon which the judgment is a lien.
(Italics mine.) RCW 6.04.040(1) (1929).
The only search conducted to determine whether the Colasurdos owned enough personal property to satisfy the debt was conducted by Gary Culver,10 a former member of the bar of this state,11 who casually drove by the Colasurdo home one evening. At trial, Culver admitted the superficiality of this search, stating: "I don't recall whether I just drove by or whether I stopped, or whether I got out of the car." What is clear is that Culver made no "attempt to ascertain what [was] inside of [the] house," and made no attempt to contact the Colasurdos. Nor did Culver ask Washington Credit, which had access to such information, about the Colasurdos' personal property. But knowing, as he testified, that the sheriff would accept his representation *821without question, Culver told the sheriff, in writing, that he was "unable to locate any personal property" belonging to the Colasurdos.12 Hence, no true search for the Colasurdos' personal property was ever made.
At the time of the sheriff's sale, the Colasurdos had ample personal property to cover the debt, including: (1) $2,500 in a savings account at Fidelity Mutual Savings Bank, (2) $2,000 in a savings account at City Credit Union, (3) a 1974 Toyota Corolla SR-5 automobile, (4) a 1973 Mazda pickup truck, and (5) a 1965 Ford van. Because the Colasurdos were denied the protection of the statute requiring execution first upon personal property, rather than real property, to satisfy the debt, the proceeding was unfair.
In deciding this case, we are to be guided by the principles of common decency incorporated into our law.
The law requires and will hold men to a just standard of right when they come seeking the aid of the courts. They must pursue an open and straightforward course. When judicial sales are made under circumstances inviting the interposition of the chancellor, a duty is put upon the court to "watch with suspicion and to censure with firmness the least departure from fairness in conducting them." Collier v. Whipple, 13 Wend. (N. Y.) 224.
Triplett v. Bergman, supra at 642.
Miebach was not a bona fide purchaser, a grossly inadequate price was paid for the Colasurdo home, and the execution sale was tainted by unfairness because no true effort *822was made to satisfy the debt from the Colasurdos' personal property. Equity requires that this sale be set aside. Common sense, common decency, and the common law compel me to believe that this judgment should be reversed.
Review granted by Supreme Court January 6, 1984.

The property was conveyed to Miebach by a special warranty deed which excludes all warranties, statutory and otherwise, except that Arctic Trading is the

This is not the first occasion we have had to render a decision involving Mr. Culver, Mr. Miebach, Washington Credit, Master Mortgages, and a questionable sheriff's sale. See, e.g., Washington Credit, Inc. v. Houston, 33 Wn. App. 41, 650 P.2d 1147 (1982), review granted, 100 Wn.2d 1004 (1983).

By an order dated May 9, 1983, the Supreme Court disbarred Culver.

At trial, Robert Lindquist, the Administrator of the Civil Division of the King County Police (sheriff), testified:
[T]he procedure was to accept the written communication from the attorney, which would assert that a search had been made for personal property, or make the assertion in very clear terms that there was no personal property to be found. And we considered that that was equivalent to an inquiry.
Lindquist further testified that no search for personal property was made by anyone other than Culver and that no one contacted the Colasurdos to inquire about their personal property.