Sanders v. Park Towne

In 1972 plaintiffs Sanders and England sold their mobile home
park in Wichita, taking back a second mortgage of almost
$200,000.00 as part of the $1,000,000.00 purchase price. The
other $800,000.00 was paid by $200,000.00 in cash and assumption
of a $600,000.00 first mortgage. As a result of participating in
the purchaser's refinancing of the project in 1973, during which
they released their original second mortgage in exchange for a
replacement, plaintiffs found that the property had passed to a
bona fide purchaser free and clear of their lien.1 When the
original purchaser-mortgagor defaulted and turned out to be
insolvent they brought this suit for damages for fraud and breach
of fiduciary duty, and to impress a lien on the property, against
all who participated in the refinancing. The original sale, from plaintiffs to Park Towne, Ltd., a
Nebraska corporation, was closed on December 28, 1972.
Unbeknownst to plaintiffs, Park Towne had already agreed to sell
the park to a California limited partnership, Carlsberg Mobile
Home Properties, Ltd. — '72, and in fact had delivered a deed to
Carlsberg on December 13. Carlsberg's business was to hold
investment property providing tax shelters for its public
investors. This mobile home park was one of around six Carlsberg
acquired from Park Towne at about the same time.