Wilder v. Haughey

Decision Date21 October 1874
Citation21 Minn. 101
PartiesAmherst H. Wilder v. John Haughey & Wife
CourtMinnesota Supreme Court

Appeal by defendants, from a judgment of the district court for Hennepin county, Vanderburgh, J., presiding, the action having been tried by the court without a jury.

Judgment reversed, and case remanded for judgment in accordance with the views herein expressed.

Davis O'Brien & Wilson, for appellants.

Harvey Officer, for respondent.

OPINION

Berry J.

In November, 1862, the defendant John Haughey, having purchased of the state a quarter-section of school land, and paid fifteen per cent. of the purchase price, together with interest upon the residue to June 1, 1863, received from the commissioner of school lands the usual certificate of purchase, and immediately thereafter took possession of the land, which he has ever since held and occupied. The annual interest upon the residue of purchase money was duly paid by him for five successive years, and up to June 1, 1868, and he also paid the taxes levied upon the premises for 1863 and 1864. On June 7, 1867, he assigned his right and interest in the certificate, and the land described therein, to A. H. Wilder & Co., as security for a promissory note for $ 659.49, agreeing to pay the taxes levied and to be levied on the property, and also to pay to the state the annual interest upon the unpaid residue of purchase money, as the same became due. In case of his default to pay such interest and taxes, Wilder & Co. were to pay the same, and were to hold the assignment as security for such payment, as for the note. The note fell due November 1, 1867, and no part of the principal or interest of the same has been paid, save the sum of $ 71.00 paid January 16, 1868. On June 1, 1868, the plaintiff succeeded, by assignment, to all the rights of A. H. Wilder & Co. in the note and under the assignment. On June 9, 1868, plaintiff paid taxes on the land for 1865, 1866 and 1867, to the amount of $ 141.60, of which sum $ 130.00 was refunded by defendant in 1869. The plaintiff, on June 1, 1869, and June 1, 1871, paid the annual interest due the state on those days, being $ 76.16 on each. He also paid the taxes for 1868, 1870 and 1871, amounting to $ 90.38. No part of the sums thus paid by plaintiff has been refunded to him, except as before mentioned. The complaint states that in order to preserve his security, the plaintiff will be compelled to continue to pay the interest to accrue to the state, and taxes to be levied, until the debt secured is paid, or until foreclosure.

The pleadings admit, and it is found by the court below, that the assignment made by defendant was a mortgage, and this action is brought to foreclose the same, the plaintiff praying, in the alternative, for a strict foreclosure, or for a sale under the direction of the court. A strict foreclosure was decreed.

The first question presented is, whether this was a proper case for a strict foreclosure. Title 2, ch. 81, Gen. Stat. provides for and regulates the foreclosure of mortgages by action. Ch. 58, Laws 1870, after repealing the section of Title 2 which required a sale at public auction in all cases of foreclosure by action, adds to such title the following section, viz: "Nothing contained in this chapter shall be so construed as to prevent judgment being given for the strict foreclosure of a mortgage, in cases where such remedy is just or appropriate; but in case of strict foreclosure, no final decree of foreclosure shall be rendered until the lapse of one year after the judgment adjudging the amount due on such mortgage." When the mortgaged premises are sold under the direction of the court, six weeks' notice of sale is required to be given, and redemption is allowed for one year after the date of the confirmation of the sale. So far, then, as the mere question of time is concerned, the remedy by strict foreclosure is but little more speedy than the remedy by sale. And in addition to this consideration, when it is observed that the mortgagee may, in this state, bid at a sale, we are of opinion that the cases are very rare in which a strict foreclosure should be adjudged.

In this country, as a general rule, a sale is almost universally regarded as the just and appropriate remedy. 2 Story, Eq. Jur. § 1025; 2 Hilliard on Mortgages, 30-38. The statutes already cited show very clearly that it has not been the intention to depart from this general rule in this state. As applied to cases of this kind, the reasons for the rule are very clearly stated by Chancellor Jones, in Lansing v. Goelet, 9 Cowen 346, who says, (p. 356,) "Where the estate is pledged as collateral security, merely, for the payment of the debt, a strict foreclosure would often be unjust and inequitable, disappoint the intentions of the parties, defeat the object of the security, * * * and sometimes produce most serious injury to the mortgagor, or inconvenience and loss to the mortgagee. * * * A public sale is the truest test of the value of the estate as a resource for the payment of the demand; and to such a sale, upon sufficient notice, and under the direction of a master by whom it will be fairly conducted, neither party can justly object: it is the best mode of disposing of the property for the interest of both. If the estate is worth more than the debt, the mortgagor will have the benefit of the surplus; and if it produces, by a fair sale of it, less than the amount due upon the bond, the debtor ought to make up the deficiency." The opinion of the chancellor in the case cited contains a very full examination of the subject of strict foreclosure, and in addition to the passage above quoted, we refer to it generally. See also Drew v. Smith, 7 Minn. 301.

There are no facts alleged or found in the case at bar which should take it out of the general and salutary rule, and, therefore nothing to show that a strict foreclosure is just or appropriate. It is true that the...

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