Bank of Steele v. Lang, 880279

• Decision Date: 06 June 1989
• Docket Number: No. 880279,880279
• Citation: 441 N.W.2d 648
• Parties: BANK OF STEELE, Plaintiff and Appellee, v. Ernest R. LANG, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 648

441 N.W.2d 648

BANK OF STEELE, Plaintiff and Appellee, v. Ernest R. LANG, Defendant and Appellant.

Civ. No. 880279.

Supreme Court of North Dakota.

June 6, 1989.

Kelsch, Kelsch, Ruff & Austin, Mandan, for plaintiff and appellee; argued by Arlen M. Ruff.

Ernest R. Lang, McKenzie, pro se.

ERICKSTAD, Chief Justice.

Ernest Lang appeals from a district court judgment determining that the Bank of Steele ["the Bank"] was entitled to the proceeds of two checks. We affirm.

The background facts of this case have been set out in detail in three prior appeals. See Bank of Steele v. Lang, 399 N.W.2d 293 (N.D.1987) ("Lang I"); Lang v. Bank of Steele, 415 N.W.2d 787 (N.D.1987) ("Lang II"); Bank of Steele v. Lang, 423 N.W.2d 504 (N.D.1988) ("Lang III"). For purposes of this appeal, the following facts are relevant. Lang defaulted on a promissory note to the Bank secured by a security interest in Lang's equipment, livestock, crops, and proceeds, and by a second mortgage on his farmland. The first mortgage on the farmland was foreclosed by the Bank of North Dakota, and the Bank of North Dakota purchased the land at the sheriff's sale and received a sheriff's certificate of sale. The Bank of North Dakota subsequently sold the sheriff's certificate of sale to the Bank of Steele.

Lang defaulted on the promissory note to the Bank of Steele, and the Bank commenced this action seeking a money judgment and foreclosure of its security interest in Lang's personal property. The Bank received judgment in the amount of $122,794.07 and was allowed to foreclose its security interest. A sheriff's sale was held and the judgment was partially, but not wholly, satisfied. The record reveals that over $80,000 remained due and owing on the judgment.

At issue on this appeal are the proceeds of two checks drawn by Kist Livestock Auction. The checks represent payment for cattle sold by Lang in late 1986 and early 1987, and were made payable jointly to Lang and the Bank because the Bank still had a financing statement on file claiming an interest in Lang's livestock and proceeds. On March 15, 1988, at Lang's request, the district court ordered that the Bank file a termination statement pursuant to Section 41-09-43(1), N.D.C.C. ¹

On March 22, 1988, a new execution was issued to the Sheriff of Burleigh County and on March 29, 1988, the sheriff levied upon the two checks in Lang's possession. ² On May 17, 1988, Lang filed a motion for release of funds which included a claim of exemption for the proceeds of the checks. Following a hearing, the court on June 20, 1988, issued its order holding that the Bank had validly levied upon the checks and that Lang's attempted claim of exemption was untimely. The court therefore ordered that the Bank was entitled to the proceeds of the checks. Lang has appealed.

The primary thrust of Lang's argument on appeal is a reiteration of his assertion, already raised and rejected on prior appeals, that the Bank could not purchase the sheriff's certificate without redeeming. We stated in Lang II, supra, 415 N.W.2d at 790-791:

"We rejected Lang's contention that the Bank was required to redeem rather than purchase the sheriff's certificate in Lang I. While we noted that the issue was not properly before us then, we did discuss the applicable law. Our view of the law has not changed. In Lang I we stated, 'No law prohibits a corporation, in protecting its security interest in real property, from purchasing an assignment of the sheriff's certificate of sale to the real property.' 399 N.W.2d at 296. Thus a creditor holding a subordinate lien upon property which has been foreclosed upon does not have to redeem, and the creditor may make an outright purchase of the sheriff's certificate. Just as any stranger to the transaction may purchase a sheriff's certificate, so may a creditor with a lien on the property. Thus the Bank did not have to redeem."

Our resolution of this issue on the prior appeals has become the law of the case and thus it is not open for reconsideration on this appeal. E.g., Tom Beuchler Construction, Inc. v. City of Williston, 413 N.W.2d 336, 338-339 (N.D.1987); Newman Signs, Inc. v. Hjelle, 317 N.W.2d 810, 813-814 (N.D.1982).

Many of Lang's other contentions on appeal appear to be premised upon the erroneous assumption that the Bank acquired the checks through its security interest. The Bank, however, clearly obtained the checks pursuant to a proper execution and levy based upon its valid outstanding judgment against Lang. Although the...