When a South Dakota sheriff conducts a foreclosure-by-advertisement sale of real estate and the only bid comes from the mortgagee bank itself (bidding in the property to clear its lien), what fee can the sheriff charge? The percentage commission for sales over $1,000 would be a meaningful amount.
Plain-English summary
A mortgagee bank started foreclosure-by-advertisement proceedings under SDCL chapter 21-48 against a borrower whose real property was in Davison County. The sale was held on the courthouse steps on April 18, 1977. The only bid came from the mortgagee bank itself, for $13,463.48. (This is a common pattern: the bank bids in the property to clear the lien, becomes the new owner, and then resells through a normal real estate transaction.)
Sheriff Swenson asked AG Bill Janklow what fee he could charge. The percentage-commission statute, SDCL 7-12-18(29), would produce a meaningful fee on a $13,463 sale (roughly $250 to $300). The flat-fee statute, SDCL 7-12-18(30), produced a $20 fee. Which controlled?
Janklow's answer was the $20 flat fee. Three intertwined reasons.
First, SDCL 7-12-18(30) is the specific provision for cases where "persons in whose favor the execution or order of sale is issued shall bid in the property sold on execution or decree." The mortgagee bank fit that description: it was the party that started the foreclosure, and it bid in the property. The specific statute controls over the more general percentage-commission statute (the standard rule for resolving conflicts between general and specific provisions, citing Sutherland on Statutory Construction).
Second, the policy underlying the percentage commission supports the same conclusion. The percentage commission is compensation for the sheriff's handling of actual funds: receiving payment from the purchaser, holding it, disbursing it to the mortgagee, the borrower, and the recording offices. When the mortgagee itself is the purchaser, there is no actual money changing hands. The mortgagee's bid offsets the debt; the sheriff prepares paperwork but does not handle funds. So the policy basis for the percentage commission is missing. Five out-of-state cases (Louisiana, Ohio, Oklahoma, Utah, Washington) had all reached this conclusion before Janklow wrote. One case (Minnesota, Sharvey v. Central Vermillion Iron) had gone the other way, but Janklow declined to follow it.
Third, SDCL 7-12-18(31) requires that the sheriff's fee for foreclosure by advertisement be the same as for judicial foreclosure. So the foreclosure-procedure label (advertisement under chapter 21-48 versus judicial under chapter 21-47) does not change the fee. The $20 cap in 7-12-18(30) applies regardless of the procedural path the foreclosure took.
The bottom line for sheriffs: when a mortgagee bids in property at a foreclosure sale, the sheriff's fee is capped at $20 (if the bid is more than $1,000) or $10 (if the bid is $1,000 or less). The percentage commission applies only when an actual third-party purchaser bids and the sheriff handles actual funds.
Currency note
This opinion was issued in 1977. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. SDCL 7-12-18 has been amended many times since 1977, and the specific subdivision numbers and dollar amounts have changed. Modern foreclosure practice in South Dakota also incorporates federal regulatory layers (TILA-RESPA, CFPB rules, FHA/VA loss mitigation) that did not exist in 1977. Anyone analyzing current sheriff foreclosure fees should consult the current statute, not this 1977 framework.
What the opinion meant at the time
For county sheriffs running foreclosure-by-advertisement sales, the opinion was important fee-setting guidance. When the mortgagee bid in the property (as happened in the vast majority of distressed-asset foreclosure sales), the sheriff got the $20 flat fee. When a third-party investor outbid the mortgagee, the percentage commission kicked in. So the fee depended on who showed up to the sale.
For county auditors processing sheriff fee claims, the opinion supplied a clear rule. A claim for the percentage commission on a mortgagee buy-in sale should be reduced to the $20 cap.
For mortgagee banks running foreclosures, the opinion was useful cost information. The sheriff fee component of foreclosure costs would be $20 when the bank bid in, regardless of the size of the bid. That made the cost calculation simple.
For borrowers facing foreclosure, the opinion was a small but real point. The foreclosure cost (which often gets added to the borrower's deficiency or reduces the surplus, depending on whether the bid exceeded the debt) was lower under the flat-fee rule than under the percentage rule.
For South Dakota statutory construction generally, the opinion is a clean example of the specific-over-general rule. When two statutory provisions overlap, the more specific provision controls. The percentage commission in 7-12-18(29) was general; the flat fee in 7-12-18(30) was specific to creditor buy-ins; the specific provision won.
Common questions
Q: Does this apply to deficiency judgments where the property doesn't cover the debt?
A: The sheriff's fee for the sale is governed by SDCL 7-12-18(30) regardless of whether there's a deficiency. The deficiency itself is a separate matter, handled in a deficiency judgment proceeding.
Q: What if there are two bidders, the mortgagee and a third party, and the mortgagee wins with a higher bid?
A: The sheriff is handling an actual money transaction (the mortgagee paying its bid amount, even if internally offset against the debt) and the result could be argued either way. Janklow's opinion focuses on the single-bidder case. A two-bidder case where mortgagee wins is similar in substance; the same logic about "no actual money changing hands" applies because the mortgagee's bid offsets the debt.
Q: Does the $20 cap apply only to real estate foreclosures, or also to personal property sales on execution?
A: SDCL 7-12-18(30) covers "execution or decree" sales, which can be real or personal property. The $20 cap applies in both contexts when the judgment creditor bids in.
Q: What about the publication and other foreclosure costs?
A: Those are separate from the sheriff's fee. Publication, recording, and other process costs are governed by their own fee schedules in other statutes. The opinion only addresses the sheriff's fee.
Q: Has South Dakota raised the $20 cap?
A: The cap has been amended since 1977. Current SDCL 7-12-18 should be consulted for the current figure.
Background and statutory framework
South Dakota recognizes two foreclosure paths for real property mortgages: judicial foreclosure under SDCL chapter 21-47 (which requires filing a lawsuit and obtaining a court judgment of foreclosure) and foreclosure by advertisement under SDCL chapter 21-48 (which proceeds out of court through the sheriff via published notice). Both end in a sheriff sale.
The sheriff's fee structure in SDCL 7-12-18 was designed for the typical sale where a third party shows up to bid and the sheriff handles actual funds. The percentage commission scaled with the sale price. The drafters realized, though, that many foreclosures end with the lender taking back the property because no third-party bidder shows up. For those cases, the flat fee in 7-12-18(30) was the answer: $10 for sales of $1,000 or less, $20 for sales of more than $1,000.
Subdivision (31) anticipates that the procedural label (advertisement versus judicial) might raise questions about whether the fee schedule applies the same way. The Legislature said no: same fees, whichever procedural path.
The five out-of-state cases Janklow cited reflected a consensus that had developed in foreclosure law by the early twentieth century. The Minnesota outlier (Sharvey) was an old case (1894) that was not generally followed. The reasoning of the majority view (the percentage commission is compensation for handling money, not for executing paperwork) made structural sense and is reflected in the South Dakota statutory scheme.
Citations
- SDCL 7-12-18(29), (30), (31)
- SDCL chapters 21-47, 21-48
- 1A Sutherland, STATUTORY CONSTRUCTION § 23.16 (4th Ed. 1972)
- 80 C.J.S., Sheriffs and Constables, § 221b
- Investors' Mortgage Co. v. Prejean, 8 La. App. 46 (1928)
- Trumbull Savings and Loan Association v. Jones, 27 Ohio N.P., N.S. 469 (1929)
- Berry v. Kiefer, 133 P. 1126 (Okl. 1913)
- Peery v. Wright, 45 P. 46 (Utah 1896)
- State ex rel. Thompson v. Prince, Sheriff, 37 P. 291 (Wash. 1894)
- Sharvey v. Central Vermillion Iron Co., 58 N.W. 864 (Minn. 1894) (contra)
Source
Original opinion text
Sheriff's fees: foreclosure by advertisement of a real property mortgage when the purchaser is the mortgagee
Dear Sheriff Swenson:
You have requested an official opinion based on the following facts:
FACTS:
The Mortgagee-Bank instituted foreclosure by advertisement proceedings against the Mortgagor of certain real property situated in Davison County pursuant to SDCL 21-48. The sale was duly advertised, and was held on the steps of the Davison County Courthouse on April 18, 1977. The only bid received was from the Mortgagee-Bank in the amount of $13,463.48.
The question presented is:
QUESTION:
To what fee is the sheriff entitled for foreclosure by advertisement of a real property mortgage when the purchaser (and sole bidder) is the Mortgagee-Bank?
Fees and traveling expenses receivable by sheriffs are governed by SDCL 7-12-18. The following three subdivisions are pertinent to your inquiry:
SDCL 7-12-18. The sheriff shall be entitled to charge and receive the following fees and traveling expenses:
(1) to (28) . . .
(29) His commission on all money received and disbursed by him on execution or order of sale, order of attachment, decree or on sale of real property or personal property, shall be, for each dollar not exceeding four hundred dollars, six cents; for every dollar above four hundred dollars, and not exceeding one thousand dollars, three cents; for every dollar above one thousand dollars, not to exceed fifteen thousand dollars, two cents; but in no case less than a sum of ten dollars such commissions to be included as a part of the cost of execution, order of sale, order of attachment, decree, or on sale of real or personal property, to be paid by redemptioner in all cases of redemption;
(30) In all cases in the circuit court where persons in whose favor the execution or order of sale is issued shall bid in the property sold on execution or decree, the sheriff or officer making such sale shall receive the following compensation: If the amount for which the property is bid in shall be one thousand dollars or less, the sum of ten dollars and no more; if the amount for which the property is bid in be more than one thousand dollars, the sum of twenty dollars and no more;
(31) The sheriff making a sale of real property under a foreclosure of mortgage by advertisement shall receive the same fees as for the sale of real property under a judgment of foreclosure and sale of real property;
It is my opinion that SDCL 7-12-18(30) is controlling in the fact situation which you presented.
First, SDCL 7-12-18(30) is a very specific statute, limited in application to those cases "where persons in whose favor the execution or order of sale is issued shall bid in the property sold on execution or decree." It is a well-settled rule of statutory construction that when two statutes are in apparent conflict, the more specific statute is controlling. 1A Sutherland, STATUTORY CONSTRUCTION § 23.16 (4th Ed. 1972).
Secondly, court decisions in other jurisdictions have generally disallowed percentage commissions in cases where the Mortgagee-Bank is the purchaser at the foreclosure sale. 80 C.J.S., Sheriffs and Constables, § 221b. The percentage commission is not chargeable on account of the sale alone, but only in the event that the sheriff actually "received and disbursed" (SDCL 7-12-18(29)) the proceeds of the sale. In those cases in which the purchaser is the Mortgagee-Bank, there is no actual receipt or disbursement of funds. There is merely a paper transaction in which the sheriff incurs no risk or responsibility for handling the money. He is, therefore, entitled only to a fee (if one is set by statute) for his services in conducting the sale. Investors' Mortgage Co. v. Prejean, 8 La. App. 46 (1928); Trumbull Savings and Loan Association v. Jones, 27 Ohio N.P., N.S. 469 (1929); Berry v. Kiefer, 133 P. 1126 (Okl. 1913); Peery v. Wright, 45 P. 46 (Utah 1896); State ex rel. Thompson v. Prince, Sheriff, 37 P. 291 (Wash. 1894), contra, Sharvey v. Central Vermillion Iron Co., 58 N.W. 864 (Minn. 1894).
Furthermore, if SDCL 7-12-18(30) is interpreted to apply only to foreclosures by judicial action (SDCL 21-47) "in the circuit court," and not to foreclosures by advertisement (SDCL 21-48), SDCL 7-12-18(31) is not given effect. SDCL 7-12-18(31) requires that in all cases, the sheriff is to receive the same fee in a foreclosure by advertisement as he would be entitled to receive for a foreclosure by judicial action in the circuit court.
In my opinion, the only interpretation which can reconcile these three subdivisions is:
SDCL 7-12-18(29) sets the sheriff's fee in foreclosure actions in all cases except where the purchaser at the foreclosure sale is the mortgagee.
SDCL 7-12-18(30) sets the sheriff's fee in the specific case where the purchaser at the foreclosure sale is the mortgagee.
SDCL 7-12-18(31) requires that in all cases the sheriff's fee for foreclosure by advertisement be the same as the sheriff's fee for foreclosure by judicial action.
Based on the foregoing, it is my opinion that in a foreclosure by advertisement of a real property mortgage when the purchaser and sole bidder is the Mortgagee-Bank, the sheriff is entitled to recover the sum of "twenty dollars and no more" when the amount for which the property is bid in is more than one thousand dollars ($1,000).
Respectfully submitted,
William J. Janklow
Attorney General
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