Bolln v. La Prele Live Stock Co.

• Decision Date: 04 April 1921
• Docket Number: 978
• Citation: 196 P. 748,27 Wyo. 335
• Parties: BOLLN v. LA PRELE LIVE STOCK CO
• Court: Wyoming Supreme Court

196 P. 748

27 Wyo. 335

BOLLN v. LA PRELE LIVE STOCK CO

No. 978

Supreme Court of Wyoming

April 4, 1921

Error to District Court, Converse County; Ernest C. Raymond, Judge.

Judgment reversed.

Maurer & Walker, and W. B. Ross, For Plaintiff in Error.

The mortgage and deed executed to Lambe merely passed Sprachlen's equity of Redemption and did not effect Mrs Bolln's mortgage. Mrs. Bolln foreclosed her ed to redeem under either the first or second mortgage. mortgage subject to Lambe's first mortgage, but Lambe fail-She therefore had a right to possession. Nobody is entitled to possession under Lambe's first mortgage since it was outlawed. The deed received by Lambe prior to the issuance of a sheriff's deed to Mrs. Bolln under her foreclosure, would not incumber Mrs. Bolln's title. Defendant has no interest in the land whatever except what is claimed under the first Lambe mortgage given 14 years before this suit was started. The deed to Lambe merely conveyed Sprachlen's equity of redemption. If Lambe's first mortgage were alive it would not entitle plaintiff in error to possession.

Harvey Hawley & Garst, For Defendant in Error.

A sheriff's deed merely passes the interest of persons whose property the sheriff has sold. (4709 Comp. Stats 1910). Mrs. Bolln merely took what the officer could sell. to-wit, what was covered by her mortgage from Sprachlen. Under Lambe's first mortgage he received all the interest and title which the mortgagor had in the premises. (3667 Comp. Stats. 1910; 27 Cyc. 1138) Mrs. Bolln's mortgage was second and under the deed the mortgagor conveyed his equity of redemption. But Mrs. Bolln could have redeemed from Lambe in case of foreclosure. A first mortgagor is perfectly secure in his rights as such as against a second incumbrancer. (Bank v. Paper Co., 1 L. R. A. 334.) Althought barred by limitations a mortgagor cannot quiet his title against the mortgage without paying or offering to pay the debt (19 R. C. L. 242), so, all that passed under the Bolln foreclosure was Sprachlen's equity of redemption. (4709 Comp. Stats. 1910.) Lambe, under his first mortgage received all the title which the mortgagor then had in the premises. (27 Cyc. 1338.) In his third mortgage, he acquired his equity of redemption from the Bolln second mortgage. Subsequent to September 27th, Lambe had all the title which the mortgagor then had, except the equity of redemption, plus right of possession under his deed. A mortgagee purchasing the equity of redemption succeeds to the mortgagor's title as it stands and is entitled to possession, (19 R. C. L. 248; 34 L. R. A. 356). Lambe and his successors in interest have continued in possession since September 27, 1910, which arrested the running of the statute of limitations. (19 R. C. L. 248.) The doctrine of merger does not apply as against defendant in error since there was no intention that the prior mortgage should be merged and thus discharged. It still remains as a prior lien upon the land. The foreclosure proceedings did not join Lambe as a party and he was not required to come in and prove his mortgage.

Maurer & Walker, and Ross & Ellery, for Plaintiff in Error on Submission.

The question in issue is the right of possession. No equitable defense was pleaded, (15 Cyc. 100). The legal right of possession at the time of the commencement of the suit is all that is required, (Anderson v. Rasmussen, 5 Wyo. 44). The legal title was the sole issue. (Mathews v. Nefsy, 13 Wyo. 458.) Plaintiff established a prima facie case by the sheriff deed. (Mathews v. Nefsy, supra, 15 Cyc. 125.) This shifted the burden of proof to defendant. (Barber v. Robinson, 80 N.W. 968; Swift v. Mulkey, 12 P. 76; Norris v. Hall, 82 N.W. 832.) The plaintiff's title relates back to the date of the mortgage. (Powers v. Pense, 20 Wyo. 327.) The sheriff's deed did not affect Mrs. Bolln's title. A mortgage is not a conveyance, but a mere security. (Robinson v. Davis, 26 Wyo. 484; Balch v. Arnold, 9 Wyo. 17.) The deed from Sprachlen to Lambe was given as security and for all purposes was a mortgage in effect. (27 Cyc. 1029; Balch v. Arnold, supra; Ingersoll v. Davis, 14 Wyo. 120; Brinkerhoff v. Jones, 44 Wis. 398; Holland v. Company, 15 Mont. 460.) Defendant's interest was cut off by the sheriff's deed. Defendant is presumed to have had notice of the commencement of foreclosure. (Walter v. Kressman, 25 Wyo. 292.) Plaintiff by her sheriff's deed showed a right to possession of the land involved.

Harvey, Hawley & Garst, for Defendant in Error on Submission.

There was no apparent intention on the part of Sprachlen and Lambe to merge the first mortgage dated February 9th, 1903; it still remains of record unreleased. For the purpose of brevity we believe that some of the various transactions affecting the title of this land can be eliminated without affecting the rights of either party hereto either one way or the other; Lambe took a first and third mortgage from Sprachlen; a second or intervening mortgage was taken by Mrs. Bolln. The question of merger is one of fact not settled by the record of a deed from the mortgagor, (27 Cyc. 1380). Merger will not be applied where it will result in an injury or injustice to the mortgagee, which he could preserve by keeping the two estates distinct. The rule is applied in the taking of renewal notes; the mortgage continues as security for the debt in its new form, (27 Cyc. 1410). The note is merely evidence of the debt and a change in such evidence does not affect the debt itself. (3 Tiffany Real Property 2622.) We believe we can eliminate the third mortgage of record, also the second mortgage to Lambe and stand on the indebtedness and prior lien of the first mortgage. Lambe was put in possession by the mortgagor prior to the foreclosure of Mrs. Bolln's mortgage and therefore has the right to possession. (Jones v. Rigby, 43 N.W. 290.) One claiming through a mortgagor who has placed his mortgagee in possession cannot maintain ejectment against the mortgagee while the mortgage remains unsatisfied, even though an action thereon by the mortgagee is barred by the statute of limitations. (Spect v. Spect, 26 P. 203; Burns v. Hiatt, 87 P. 196; 7 L. R. A. 276; Bryan v. Kales, 162 U.S. 802.) Defendant is entitled to the same equities and defenses in this action as Lambe would have been. (Cook v. Cooper, 22 P. 945.)

KIMBALL, J. POTTER, C. J., and BLYDENBURGH, J., concur.

OPINION

KIMBALL, J.

This is an action under the statute, now § 6236, Wyo. Comp. Stat. 1920, for the recovery of real property. George H. Sprachlen, being the owner of the land in question, gave three mortgages upon it. The first, in 1903, to George I. Lambe, to secure a note for $ 414; the second, in 1904, to Pauline Bolln, as administratrix, to secure a note for $ 264; and the third, in 1907, to George I. Lambe, to secure a note for $ 1681, which included the debt secured by the first mortgage. While the land was thus encumbered, Bolln, as administratrix, the holder of the second mortgage, commenced a foreclosure action in which Sprachlen was the sole defendant, and in 1909 obtained in that action judgment for the debt secured by the second mortgage, with decree for its foreclosure by sale of the mortgaged lands. In 1910, before levy or sale under that decree, Sprachlen gave a warranty deed of the lands to George I. Lambe, the holder of the first and third mortgages. This deed recited a consideration of $ 2500.00. It contained no reference to the mortgages or the judgement, and upon its face was unconditional. By parol evidence, it was proved at the trial that the consideration for this deed was the payment of the amount owed Lambe by Sprachlen, and the promise by Lambe to pay "the Bolln mortgage and judgment." Sprachlen's notes, held by Lambe, were to be delivered to the former, but it does not appear whether or not this was done, and the mortgages by which they were secured were not released. It was proved, also by parol, that it was agreed between Sprachlen and Lambe, at the time of giving this deed, that Sprachlen should have a year "to redeem the land; that is, Sprachlen should have the land back if, within a year, he paid Lambe the consideration mentioned in the deed. Upon the delivery of this deed, Lambe took possession of the land, and he and his grantees have continued in possession.

The Bolln judgment was not paid, and in 1911, under an order of sale issued thereon, the mortgaged premises were sold to Pauline Bolln, the plaintiff in this action, for $ 645, which was about $ 200 more than the amount of the judgment, and in June, 1912, after the expiration of the redemption period, sheriff's deed was executed and delivered to her. In September, 1912, George I. Lambe and Anna R. Lambe, by warranty deed, conveyed to Thomas H. Lambe and George A. Lambe; in 1915, Annie R. Thomas H., and George A. Lambe conveyed by quit-claim deed to S. H. Clammer, who in the same year by similar instrument conveyed to the defendant. In none of these deeds is any reference made to any mortgage, judgment or other lien affecting the property. All of the evidence in the case was introduced by plaintiff, and the facts proved, as stated above, are undisputed.

This action was commenced in 1917. Trial was to the court without a jury, and resulted in a judgment for defendant. The plaintiff brings error.

The acceptance by Lambe of the third mortgage, which included the amount due on the first mortgage, did not, in the absence of an agreement to the contrary, discharge the lien of the first mortgage. (1 Jones on Mtgs. § 355, 930; First Nat'l. Bank v. Citizens' State Bank, 11 Wyo. 32 70 P. 726; Bachmann v. Hurtt, 26 Wyo. 332, 184 P. 709.) Lambe continued to hold first and third liens on the property, unaffected by the decree foreclosing...