Dupee v. Salt Lake Valley Loan & Trust Co.

• Citation: 20 Utah 103,57 P. 845
• Parties: JACOB A. DUPEE, APPELLANT v. SALT LAKE VALLEY LOAN & TRUST COMPANY. RESPONDENT
• Decision Date: 24 June 1899
• Court: Supreme Court of Utah

57 P. 845

20 Utah 103

JACOB A. DUPEE, APPELLANT v. SALT LAKE VALLEY LOAN & TRUST COMPANY. RESPONDENT

Supreme Court of Utah

June 24, 1899

Appeal from the Third District Court, Salt Lake County, Hon. Ogden Hiles, Judge.

Action in ejectment to recover possession of property admitted to be in the possession of defendant. Both parties claim title through a foreclosure proceeding and a mortgage given by John W. Jones and wife to plaintiff. From a judgment and decree for defendant, plaintiff appeals.

Reversed and remanded.

Messrs Stephens & Smith, for appellant.

As sustaining our position that the Salt Lake Valley Loan &amp Trust Co. took said premises through Stephens subject to the lien of the $ 6,000, we cite the following authorities:

Weiner v. Heintz, 17 Ills. 259; Edgerton v. Young, 43 Ills. 468.

We contend that the plainest principles of justice require that Mr. Dupee should still have a lien upon the property for the balance of the indebtedness, and that it would be the grossest injustice to permit the defendant to take the property free from the lien of the plaintiff. Brinckerhoff v. Thallhimer, 2 Johns. Ch. 459; Van Doren v. Dickinson, 33 N.J. Eq. 392; Lansing v. Goelet, 9 Cowen, 361; Ellis v. Craig, 7 Johns. Ch. 14; Am. Land F. I. T. Co. v. Riason, 2 N.J. Eq. 9; Rorer on Judicial Sales, Sec. 232-234.

A motion for a further foreclosure upon default was the proper practice. Bank of Napa v. Godfrey, 77 Cal. 612.

The United States Supreme Court has also passed upon the question of selling property subject to certain claims, in the case of Central Trust Co. v. Grant's Locomotive Works, found in 135 U.S. 207, Lawyer's Co-operative Edition, 34, page 103, in which Chief Justice Fuller cites with approval the opinion in Swann v. Wright's Executor, 110 U.S 590, Lawyers Co-operative Edition, book 28, page 262.

The authorities are uniform that the rule of caveat emptor applies to purchasers at judicial sales. Sackett v. Twining, 18 Pa. 199, 57 Am. Dec., 599. McGhee v. Ellis, 14 Am. Dec., 124. Danley v. Rector, 10 Ark. 211, 50th Am. Dec., 242.

Our next contention is, that the defendant having acquired its interest, if any, in this property, pending the litigation in the foreclosure suit and before the final decree, was a purchaser pendente lite. Whittaker v. Greenwood, Utah 53 P. 736.

A purchaser at a judicial sale must take notice of the terms of the decree. McKinley v. Hamer, 72 N.W. 1042, 13 Enc. 870. Bennett on lis pendens, Sec. 12. Cases cited.

But lis pendens only terminates at that time when the court ceases to have full jurisdiction. Bennett on lis pendens, Sec. 2. 13 Enc. 887.

A purchaser at a judicial sale, after examination of the records of the suit pending in the county in which the sale is made, is a purchaser with notice of the pendency of the suit, and is bound by the whole record and all its disclosures. Smith v. Kimball, Kansas, 13 P. 801. See 72 Ills. App., 228. Black on Judgments, 550.

Messrs. Pierce, Critchlow & Barrette, for respondent.

It must be remembered that this is a case at law, not a case in equity. If the plaintiff had at any time applied, or should in the future apply, to a court of equity to reinstate his lien for $ 6,000, it will be time enough to discuss the principles of merger and to determine whether he has made such a case as a court of equity will entertain. As bearing particularly however, upon this point in question, we direct attention to 2 Jones on Mortgages, (5th ed.) Sec. 1577; Harms v. Palmer, 73 Iowa 446, 5 Am. St. Rep. 691; Poweshiek County v. Dennison, 14 Am. St. Rep. 321; Grattan v. Wiggins, 23 Cal. 16; 2 Jones on Mortgages, (5th ed.) Sec. 1619; Smith v. Smith, 32 Ill. 138.

But we insist that even if the court does find that the lien of the $ 6,000 note of Dupee was reserved in his favor he cannot, nevertheless, prevail in this action, for the reason that his foreclosure, resulting in the sheriff's deed under which he claims in this action, did not carry the right of possession against the defendant for the reason that it was not a foreclosure against the defendant; that the defendant occupies the position of a transferee of the equity of redemption and being in possession has a right to maintain it until by proper proceedings he is foreclosed. Nims v. Sherman, 43 Mich. 45; 2 Jones on Mortgages, Sec. 1615, Sec. 1619; 2 Freeman on Executions, Sec. 304c, 304e.

A person in possession or mortgagee cannot be ousted in an action of ejectment by the owner of the legal title. Bryan v. Kales, 162 U.S. 411-5.

MINER, J., delivers the opinion of the court. BARTCH, J. and BASKIN, J., concur.

OPINION

MINER, J.

STATEMENT OF FACTS.

This is an action in ejectment brought to recover possession of property admitted to be in possession of the defendant. Both parties claim title through a foreclosure proceeding and a mortgage given by John W. Jones and wife to plaintiff John A. Dupee. Dupee foreclosed the mortgage. On the 11th day of April, 1892, Jones and wife gave a trust deed to the property in controversy, to secure the payment to appellant Dupee of the sum of $ 6,000, and interest, wherein Jones and wife covenanted to pay all taxes, assessments, and certain ground rents, with a provision that if these agreements and covenants were not fulfilled that Dupee could pay the same, and the amount so paid should be considered and treated as a part of the amount secured by the trust deed, payable forthwith, and that upon any breach of the covenants the trust deed might be foreclosed to pay the amount of the indebtedness, ground rent, taxes, and interest. Default was made in the payment of ground rent and taxes, which appellant paid, and on the 26th day of January, 1893, an action was commenced against Jones and wife, to foreclose the trust deed for the full amount of principal, interest, ground rent and taxes. Lis Pendens was filed on the same day in the office of the county recorder, containing the names of the parties, a description of the property and notice of the action.

Defendant Jones filed his answer denying the appellant's right to foreclose. The case was tried on the 2d day of May, 1893, and a decree of foreclosure and order of sale made May 13, 1893. In this proceeding the court found that there was due the plaintiff from Jones and wife, $ 292, with interest, that being the sum paid for ground rents and taxes. The court also found "that plaintiff is not entitled to a foreclosure for the entire sum secured by the note and mortgage described in the plaintiff's complaint, and that plaintiff is entitled only to a foreclosure for the amount of taxes and ground rents paid by the plaintiff upon the premises covered by the said mortgage, and protected by the same; and that the principal sum of six thousand dollars and interest thereon remains a lien upon said premises, and that plaintiff is not entitled to foreclose the same until further breach of covenants in said trust deed or mortgage."

On the 31st day of July, 1893, the property in controversy was sold in one parcel by the acting United States Marshal, J. B. Timmony, on said decree to Frank B. Stephens, for $ 397.60, that being the amount of the decree and expenses. The notice of sale contained a description of the property in question without reservation. There was present at the sale the marshal, Mr. Stephens, and Mr. Hurd, the attorney for Jones. At the time the property was offered for sale the marshal announced that the property would be sold subject to the lien of $ 6,000 referred to in the decree, and that part of the decree was read at the sale. A certificate of sale was filed with the county recorder.

On the 14th day of October, 1893, before the time for redemption had expired, the respondent redeemed the property in controversy, basing it upon a judgment against Jones and wife in favor of the National Bank of the Republic, for the sum of $ 215, which was assigned to respondent. The notice of redemption recited that it was made under a mortgage dated September 18, 1893, given by Jones and wife to the respondent for the sum of $ 2,500. This last named mortgage was given to secure a promissory note dated April 1, 1891. Six months having elapsed after the sale the Marshal executed a deed for the property to the respondent, by virtue of such redemption. The respondent claims title under this deed. Thereafter Jones defaulted in payment of interest upon the principal. On October 20, 1894, the appellant Dupee, made a motion in said cause for a further decree of foreclosure and sale because of such default in the payment of interest. Notice of this motion was served on the attorney for Jones. On the hearing February 6, 1895, the principal having become due the court made a decree and order of sale reciting the former decree, and that the property was first sold subject to the lien of said principal sum; that the principal sum with interest had become due, and entered a judgment for the sum of $ 6,511.20, with attorney's fees and costs, ordered the property to be sold to satisfy the same, and that the defendants and all other persons claiming to have acquired any interest in the premises subsequent to the filing of said notice of lis pendens, be barred and foreclosed. The property was sold under this decree May 24th, 1895, after due notice to appellant Dupee, for the sum of $ 6925.35, and a certificate of sale duly recorded. On December 4, 1895, the Marshal conveyed the property to appellant under such sale. The appellant claims under this deed.

The record shows that the attorney for the respondent, testified in substance, that the judgment was purchased by respondent at a small discount in order to make the redemption, and that the second mortgage was given to secure a prior indebtedness and to tack it on...