Boutelle v. Minneapolis City
| Decision Date | 28 December 1894 |
| Docket Number | 8841 |
| Citation | 61 N.W. 554,59 Minn. 493 |
| Parties | M. H. Boutelle v. Minneapolis City |
| Court | Minnesota Supreme Court |
Argued November 26, 1894
Appeal by defendant, the City of Minneapolis, from an order of the Municipal Court of that City, Stephen Mahoney, J., made March 20, 1894, denying its motion for a new trial.
Fred H Boardman owned lots one (1) and two (2) in Central Park Addition to Minneapolis, fronting on Hennepin avenue. On May 14, 1889, he and wife mortgaged them to Sarah I. Hawley to secure his notes held by her for $ 8,500 due three years from that date with interest. The city authorities commenced proceedings May 27, 1891, to widen Hennepin avenue and on June 26, 1891, condemned and took for that purpose three feet in width off the front of his lots and awarded to him $ 300 damages. No damages were awarded to the mortgagee. The award was confirmed and on October 28, 1892, a warrant for the amount was issued to Boardman. He afterwards presented it for payment, but it was not paid and on December 1, 1893, he sold and assigned it to plaintiff.
Mrs Hawley foreclosed her mortgage under a power therein and on December 5, 1892, the lots were sold by the sheriff to pay the debt secured. She bid them in for $ 9,143.32, the full amount due on the notes with interest and costs of foreclosure. She received a certificate of sale. No redemption was made. She took possession of the property and claimed also to be entitled to the $ 300 awarded to Boardman. The plaintiff commenced this action January 8, 1894, against the city to recover this money. He obtained findings and direction for judgment for the amount. Defendant moved for a new trial, but was refused and it appeals.
Order affirmed.
David F. Simpson, and L. A. Dunn, for appellant.
The city does not deny its legal liability to pay the award of $ 300 for taking three front feet of the lots, but it does deny the right of the mortgagor or his assignee to receive it. Both in reason and justice the award belongs to Mrs. Hawley. Her security was diminished, not by any act of the mortgagor but by the paramount authority of the state, presumably against her wishes. Her right to the award was a fixed legal right under the constitution and she was entitled thereto as a condition precedent to the authority of the state to take and occupy the land.
When the mortgaged property was turned into money or a claim for money by the taking of it for public uses, under authority of law, her rights remained unaltered and she became entitled to have the money applied, in place of the land, to the payment of her claim. Brown v. Stewart, 1 Md. Ch. 87; Platt v. Bright, 31 N.J.Eq. 81; Moritz v. City of St. Paul, 52 Minn. 409; South Park Com'rs v Todd, 112 Ill. 379; Sherwood v. Lafayette, 109 Ind. 411; Philadelphia W. & B. R. Co. v. Williams, 54 Pa. St. 103; Markey v. Langley, 92 U.S. 142.
Her claim was not extinguished by the foreclosure of the mortgage. On the sale she bid in the whole of the lots, not merely the part that remained after the condemnation proceedings. If the city now is to hold three feet in width of what she purchased she should have the price of it, viz the $ 300 in question. Adams v. Corriston, 7 Minn. 456; Burke v. Lacock, 41 Minn. 250; Engelhardt v. City of Brooklyn, 3 Misc. (N. Y.) 30; Bank of Auburn v. Roberts, 44 N.Y. 192; In re Eleventh Avenue, 81 N.Y. 436; Utter v. Richmond, 112 N.Y. 610.
Boardman & Boutelle, for respondent.
When mortgaged lands are taken under the exercise of the right of eminent domain by proceedings binding upon mortgagor and mortgagee alike, the interests of both in the land are annulled. The land condemned is thus released from the lien of the mortgage. In equity, however, the award is treated as a substitute for the land, and the mortgagee is held to have a lien thereon, which the courts will protect to the extent of the debt. When mortgaged lands are only in part condemned, the mortgagee becomes possessed of two funds, the award and the remaining land, to either or both of which she may have recourse until the debt is satisfied and no further. If she pursues and obtains the award and it is equal to or exceeds her debt, then the debt is paid and the remaining land is released. If, instead of pursuing the fund, she first proceeds against the land and realizes therefrom the full amount of the debt, her claim to the award is extinguished.
After a part of the land is taken by condemnation proceedings, to which she is a party, that part is released. It is not sold by the foreclosure sale. Whether the mortgagee or a stranger bids in the land at the mortgage sale the legal effect is the same. The purchaser takes only what remains after the authorities have taken what is required for public use. Mrs Hawley should have applied for and obtained the award by the aid if necessary of the courts and have foreclosed her mortgage afterwards for the residue of the debt. Instead of thus proceeding she resorted to the land first and bid the full amount of her claim. The foreclosure thus satisfied the debt and extinguished her claim to the award. Utter v. Richmond, 112 N.Y. 610; Shafer v. Shafer, 75 Ia. 349; North Hudson R. Co. v. Booraem, 28 N.J.Eq. 593; Gray v. Case, 51 N.J.Eq. 426; Calumet River Ry. Co. v. Brown, 136 Ill. 322; Devlin v. Mayor, 131 N.Y. 123; ...
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