Bankers Trust Co. of Detroit v. Rose

• Decision Date: 08 September 1948
• Docket Number: No. 10.,10.
• Citation: 322 Mich. 256,33 N.W.2d 783
• Parties: BANKERS TRUST CO. OF DETROIT v. ROSE et ux.
• Court: Michigan Supreme Court

322 Mich. 256

33 N.W.2d 783

BANKERS TRUST CO. OF DETROIT

v.ROSE et ux.

No. 10.

Supreme Court of Michigan.

Sept. 8, 1948.

Appeal from Circuit Court, Wayne County; Vincent M. Brennan, judge.

Action by the Bankers Trust Company of Detroit, a Michigan Corporation against Louis Rose and Tilly Rose, his wife, to recover a deficiency judgment upon foreclosure of real estate mortgage. From a judgment for plaintiff against defendant Louis Rose, defendants appeal.

Affirmed.

Before the Entire Bench.

Harold M. Silverston, of Detroit, for defendants and appellants.

Frank C. Cook and A. L. Baumann, both of Detroit, for plaintiff and appellee.

REID, Justice.

Plaintiff brought suit at law to recover a deficiency judgment upon foreclosure by advertisement of a mortgage on real estate bid in by plaintiff, mortgagee, for less than the amount due and less than the fair value of the premises involved. Defendants, the mortgagors, after having redeemed, claim that the statute, Act No. 143, Pub.Acts 1937, Comp.Laws Supp. 1940, § 14444-21, Stat.Ann.1947 Cum.Supp. § 27.1335, bars recovery. From judgment for plaintiff against defendant Louis Rose, defendants appeal.

On May 29, 1929, defendants gave plaintiff their promissory note for $18,000, and also a real estate mortgage securing payment of the note. Default having occurred in the payments, a foreclosure sale by advertisement was held, October 3, 1945, at which sale plaintiff bid in the premises at $20,000, there being then due $27,500. Thereafter, within the allotted time, defendants redeemed. This suit is brought to recover the deficiency of $7,500 plus interest from the date of sale.

It is conceded that defendant Tilly Rose was not liable for the deficiency and the case was dismissed as to her, but apparently inadvertently she joined in her husband's appeal. The case was tried by the judge without a jury, a jury apparently having been waived. The statute which defendants claim bars recovery, Comp.Laws Supp.1940, § 14444-21 Stat.Ann.1947 Cum.Supp. § 27.1335, is in part as follows:

‘When, in the foreclosure of a mortgage by advertisement any sale of real property has been made after February eleventh, nineteen hundred thirty-three, or shall be hereafter made by a mortgagee, trustee, or other person authorized to make the same pursuant to the power of sale contained therein, at which the mortgagee, payee or other holder of the obligation thereby secured has become or becomes the purchaser, or takes or has taken title thereto at such sale either directly or indirectly, and thereafter such mortgagee, payee or other holder of the secured obligation, as aforesaid, shall sue for and undertake to recover a deficiency judgment against the mortgagor, trustor or other maker of any such obligation, or any other person liable thereon, it shall be competent and lawful for the defendant against whom such deficiency judgment is sought to allege and show as matter of defense and set-off to the extent only of the amount of the plaintiff's claim, that the property sold was fairly worth the amount of the debt secured by it at the time and place of sale or that the amount bid was substantially less than its true value, and such showing shall constitute a defense to such action and shall defeat the deficiency judgment against him, either in whole or in part to such extent’. (Italics supplied.)

Defendants claim that by the bidding in of the premises at $20,000, there occurred a ‘sale of real property’ and that the plaintiff became the ‘purchaser’ at the sale. It is very evident that plaintiff's bidding in of the property did not result in the plaintiff's taking title thereto.

It is to be noted that the statute, 3 Comp.Laws 1929, § 14433, Stat.Ann. § 27.1229, provides that the officer making the sale ‘shall endorse upon each deed the time when the same will become operative in case the premises are not redeemed according to law.'

Further, the statute, 3 Comp.Laws 1929, § 14434, Stat.Ann. § 27.1230, provides, ‘Unless the premises described in such deed shall be redeemed within the time limited for such redemption as hereinafter provided, such deed shall thereupon become operative.’ The statute further provides, Comp.Laws Supp.1940, § 14435, as amended by Act No. 197, Pub.Acts 1941, Comp.Laws Supp.1945, § 14435, Stat.Ann. 1947 Cum.Supp. § 27.1231, ‘if the mortgagor * * * shall, within 1 year from the time of such sale, redeem the entire premises sold, by paying to the purchaser * * * or to the register of deeds * * * the sum which was bid therefor, with interest * * * then such deed shall be void and of no effect.’ The statute further provides, 3 Comp.Laws 1929, § 14436, Stat.Ann. § 27.1232, ‘Upon the payment of the entire sum bid at such sale, and interest thereon, and the fee of one [1] dollar...