mere fact that the officer of Perpetual Building Association, the lender, was trustee in the trust deed, made the foreclosure defective in any way.
(3) It appears that the auctioneer waived the payment of the $ 500 deposit and this is common practice where there is reliability in the bidder. No authority has been advanced to indicate that this makes the sale illegal.
It appears, also, that Perpetual bid in at the sale for the amount owing it under its first deed of trust and that there was not such a substantial variance between this bid and what appears to be the agreed value of the property (between $ 12,000 and $ 12,800) so as to create any defectiveness in the sale.
The mere fact that Thomas, an officer of Perpetual, purchased the property at foreclosure through a straw party would not, in the Court's opinion, make the sale defective, absent any fraud and over-reaching.
By this holding the Court is not approving the practice of an officer of defendant, associated so closely with another officer of defendant who is a trustee under the trust deed, to bid in the property in his own name for a profit.
Plaintiff did not try this case on the theory of fraud or over-reaching and the evidence does not sustain such a finding. Plaintiff relies, rather, upon the theory that there was not actually a sale, due to certain claimed irregularities aforementioned.
However, plaintiff was not in any way prejudiced by the waiver of the deposit or the fact that the property was bid in by an officer of defendant for his own use and profit.
Through plaintiff's own fault in failing to notify defendant that it had purchased a second deed of trust; in failing to record it; in failing to keep advised as to whether the first deed of trust was getting in default, particularly when there were five monthly payments in arrears in the second deed of trust -- all these factors prevented plaintiff from protecting its own rights and being present at the foreclosure.
Be that as it may, the Court is of the opinion that it is not good policy for defendant, one of whose officers is a trustee under its deed of trust, to permit another officer to bid in the property at the sale in his own name and for his own individual profit.
Though the Court is unable to find that the sale was illegal, or that plaintiff was prejudiced in any way because of this procedure, the Court feels this practice should be discontinued so that no contention may be made that there is not complete objectivity on the part of the trustee. Counsel will present appropriate order.