Backus v. Burke

• Decision Date: 01 February 1892
• Citation: 51 N.W. 284,48 Minn. 260
• Parties: BACKUS ET AL. v BURKE ET AL.
• Court: Minnesota Supreme Court

48 Minn. 260

51 N.W. 284

BACKUS ET AL.vBURKE ET AL.

Supreme Court of Minnesota.

Feb. 1, 1892.

(Syllabus by the Court.)

A person cannot legally foreclose a mortgage upon real property by advertisement when the record title to the instrument is in another.

Appeal from district court, St. Louis county; STEARNS, Judge.

Action by Hattie W. Backus and another, plaintiffs, to determine the adverse claims of defendants Frank Burke, Jr., and others, to certain vacant and unoccupied real estate in St. Louis county. The facts appearing of record, pertaining to the title, are as follows: June 20, 1872, one Hoffman, being the owner of the real estate in question, executed and delivered a mortgage thereon to one Tischer to secure the payment of $12,000, which mortgage was duly recorded the same day. September 6, 1873, Tischer executed and delivered to the Duluth Savings Bank an assignment of the mortgage, absolute in form, which assignment was recorded September 16, 1873. August 4, 1874, the Duluth Savings Bank reassigned the mortgage to Tischer, but the instrument of assignment was not recorded until December 7, 1874. Meanwhile, October 6, 1874, Tischer, as “mortgagee,” began to foreclose the mortgage by advertisement; and the land was sold thereunder to one Bierman, November 23, 1884. Thereafter the plaintiffs procured the Bierman title, and defendants procured the Hoffman title. Judgment was ordered for the plaintiffs. Defendants appeal from the judgment. Reversed.

Edson & Hanks and J. W. Boll, ( Cash & Williams, of counsel,) for appellants.

White, Reynolds & Schmidt, ( W. W. Billson, of counsel,) for respondents.

COLLINS, J.

When Tischer, as the mortgagee, proceeded to foreclose under the power of sale contained in the Hoffman mortgage, and on November 23, 1874, the day on which the sheriff, in conformity with the published notice sold the mortgaged premises to Bierman, through whom the plaintiffs claim title, the reassignment made by the bank to Tischer had not been recorded, although duly executed and in his possession. It was not put upon record until December 7th. So that when the foreclosure proceedings by advertisement were commenced, and completed by the execution of the sheriff's certificate of sale, the record disclosed an assignment of the mortgage, absolute in form, from the mortgagee, Tischer, to the bank; and there was nothing of record to indicate that the assignee bank had parted with its title by assignment, or in any other manner; both assignments being unnoticed and ignored. The mortgagor died prior to March 27, 1887, and defendants are grantees named in a deed of the premises executed and delivered by the heirs of the deceased on that day. From testimony produced by the plaintiffs and received by the trial court against the defendants' objections, it was made to appear conclusively that in the year 1873 Tischer had borrowed a sum of money from the bank, for which he gave his note, and that, solely as security for the payment of his debt, he transferred and assigned the Hoffman mortgage, with the note thereby secured. Upon payment of the debt, some time before the foreclosure, he received from the bank the note and mortgage, with the unrecorded assignment before spoken of. The bank, therefore, had no claim upon the Hoffman note or mortgage; and as Tischer was the owner, and unquestionably the proper party to foreclose, the inquiry is as to the validity of the proceedings had, in which the assignments were wholly disregarded. The authority conferred upon a mortgagee to foreclose a mortgage by advertisement is that found in the power of sale, as that power appears in the instrument itself, which was in this instance in the common form. It was therein provided that the authority to sell was to be exercised in case of default and the mortgaged premises were to be disposed of “agreeably to the statute in such case made and provided.” An examination of the adjudicated cases in this state, as well as in other jurisdictions in which this method of foreclosure has been permitted, will demonstrate that the courts have very properly and uniformly held that the power and authority to sell must be exercised substantially in accordance with the statute, or a sale will be invalid. This statute (title 1, c. 81, Gen. St. 1878) has become very familiar to the profession, and has frequently been commented upon by this court. By section 2 it is enacted that, to entitle any party to give the notice of sale and to make foreclosure, several things are made essential and requisite; among them, that the mortgage in which the power of sale can be found shall have been duly recorded, and also, if it has been assigned, that all of the assignments shall have been recorded. As to when and under what circumstances a foreclosure may be had, this section seems exceedingly plain. In section 6 the essentials and requisites of the notice of sale are imperatively stated. Each notice shall specify the names of the mortgagor and of the mortgagee, and of the assignee, if any. Other matters must he specified with certainty and particularity; all tending to indicate that, from the record and the notice, it must appear that the...