Brown v. Crookston Agricultural Ass'n

• Decision Date: 01 March 1886
• Citation: 34 Minn. 545
• Parties: MORRIS R. BROWN <I>vs.</I> CROOKSTON AGRICULTURAL ASSOCIATION.
• Court: Minnesota Supreme Court

34 Minn. 545

MORRIS R. BROWNvs.

CROOKSTON AGRICULTURAL ASSOCIATION.

Supreme Court of Minnesota.

March 1, 1886.

Plaintiff brought this action in the district court for Polk county and garnished one Zwickey, who disclosed that he had in his hands, as sheriff, the sum of $580.85 and that this sum was the surplus (after satisfying the mortgage debt) of the purchase-money received by him at a sale, on foreclosure by advertisement, of certain land of the defendant. One McKinnon appeared at the taking of the disclosure, and claimed the fund under a second mortgage, made by defendant, upon the same land. These facts were admitted, and an order was made by Stearns, J., discharging the garnishee from the claim of the plaintiff, and directing that the money be paid to the claimant. From this order the plaintiff appeals.

Wm. Watts, for appellant.

Pierce & Wilkinson, for respondent.

DICKINSON, J.

The owner of real estate executed, at different times, two mortgages upon it. Upon a statutory foreclosure sale, by advertisement, under the senior mortgage, the land was sold for a price which left a surplus in the hands of the sheriff after satisfying that mortgage. The only question necessary to be considered is as to whether the junior mortgagee or the mortgagor is entitled to receive that surplus, through the proper determination of the court. According to the well-established rule in such cases, the second mortgagee was entitled to the surplus, or to so much of it as might be necessary to satisfy his mortgage, in preference to the mortgagor. 2 Jones, Mortg. §§ 1688, 1929; Buttrick v. Wentworth, 6 Allen, 79; Andrews v. Fiske, 101 Mass. 422; Cook v. Basley, 123 Mass. 396; Ballinger v. Bourland, 87 Ill. 513; 2 Washb. Real Prop. 71. In the contemplation of equity, by the sale of the whole estate, under foreclosure proceedings affecting and binding the junior mortgagee, the land is converted into money, and this fund being treated as a substitute for the mortgaged estate, the lien of the junior mortgagee is transferred from the land to the surplus of the money arising from the sale. The rights of the parties, as they before existed, are not transposed by the sale, and the court will apply the fund in accordance with their rights as they existed in respect to the land. Jones, Mortg. § 1935; Astor v. Miller, 2 Paige, 68; Bartlett v. Gale, 4 Paige, 503; Averill v. Loucks, 6 Barb. 470; De Wolf v. Murphy, 11 R. I. 630; Fry's Appeal, 76 Pa. St. 82; Douglass's Appeal, 48 Pa. St. 223. See, also, Fowler v. Johnson, 26 Minn. 338, and authorities cited above.

This question was presented in Ayer v. Stewart, 14 Minn. 68, (97;) and, while not expressly decided, yet the opinion of the majority of the court, denying a right of recovery because a recovery was deemed barred by the statute of limitations, leaves it to be inferred that the right of the second mortgagee to the surplus was as we now declare it to be; and such was the expressed opinion...