Barker v. Pfund

Citations

• 80 Wash. 143
• 141 P. 327
• 1914 Wash. LEXIS 1280

Syllabus

<p>Bills and Notes—Bona Fide Purchaser—Notice. Creditors oí a trust estate who were beneficiaries of the trust, are not iona fide purchasers of a note, sold to them by the trustee, with outstanding equities against it, where.they participated in the trust, knew its purposes and conditions, and knew of the terms and conditions creating the outstanding equities in favor of the makers; hence they stand in the position of the trustee as to such equities in favor of the makers.</p> <p>Trusts—Sales oe Trust Estate—Rights of Purchaser—Notice —Caveat Emetor. Where a trustee for creditors sold a lot belonging to the trust. estate, for the sum of $4,750, agreeing with the purchaser to satisfy an existing mortgage for $4,000 which was a lien upon the lot and other property, the purchasers giving back a purchase money mortgage in reliance upon the representations that the prior mortgage would be paid, neither the trustee nor a holder of such purchase money mortgage with notice can foreclose the same without first extinguishing and satisfying the prior lien, on the theory that the purchaser bought at his peril; since the doctrine of caveat emptor in judicial sales has no application where the sale was made for the purpose of satisfying the lien with which the property was burdened.</p>