Fagerstrom v. Keller

• Court: Kansas Supreme Court
• Writing for the Court: DAWSON, J.:
• Citation: Fagerstrom v. Keller, 260 P. 632, 124 Kan. 386 (Kan. 1927)
• Decision Date: 05 November 1927
• Docket Number: 27,336
• Parties: MRS. GEORGIA T. FAGERSTROM, Appellee, v. RAY KELLER, THE DELIA STATE BANK, Appellees; THE FIDELITY SAVINGS STATE BANK et al., Appellants

260 P. 632

124 Kan. 386

MRS. GEORGIA T. FAGERSTROM, Appellee, v. RAY KELLER, THE DELIA STATE BANK, Appellees;

THE FIDELITY SAVINGS STATE BANK et al., Appellants

No. 27,336

Supreme Court of Kansas

November 5, 1927

Decided July, 1927.

Appeal from Jackson district court; MARTIN A. BENDER, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

MORTGAGES -- Foreclosure Sale -- Report and Confirmation -- Amendment of Return. In an action to foreclose a first mortgage, a junior mortgagee and the holder of a third lien were impleaded. Priorities were decreed and the property sold. The judgment debtor bid in the property as agent for the junior mortgagee under an arrangement whereby he was to repurchase it. The junior mortgagee furnished the money for the purchase price, which was just enough to satisfy the claims of the first and second mortgages and costs, leaving nothing for the third lienholder. The latter contended that the money furnished by the junior mortgagee was merely a loan to the judgment debtor whereby the prior judgments were satisfied leaving the appellant's judgment a subsisting and exclusive lien on the property; but the trial court, on competent oral testimony, although controverted by certain evidential circumstances, found that the judgment debtor did not bid at the foreclosure sale in his own behalf, but as agent for the junior mortgagee. Held, that the trial court's findings of fact were conclusive, and these findings, together with due consideration to the outstanding equities of the case, justified the order of the trial court amending the sheriff's return and confirming the sale over the objections of the third lienholder.

Clad Hamilton and Donald A. Campbell, both of Topeka, for the appellants.

B. J. Lempenau, of Topeka, for appellees The Delia State Bank, Ray Keller and Lillie M. Keller.

Paul H. Edgar, of Topeka, for appellee Mrs. Georgia T. Fagerstrom.

Dawson J. Burch, J., not sitting.

OPINION

DAWSON, J.:

This is an appeal from a judgment requiring a sheriff to amend his return of an order of sale of real estate in foreclosure and confirming that sale according to the sheriff's return as amended.

The salient facts were these: The defendant Ray Keller was the owner of forty acres of Jackson county land covered by a first mortgage held by the plaintiff Mrs. Fagerstrom, and by a second mortgage held by the Delia State Bank, and incumbered also by a third lien based on a judgment in favor of the Fidelity Savings State Bank.

Mrs. Fagerstrom brought suit to foreclose her mortgage. The second mortgage and the third lienholder were impleaded, and foreclosure was decreed and the property ordered sold to satisfy claims in the order of their precedence, viz.:

First, Mrs. Fagerstrom

$ 1,500.00

Second, Delia State Bank

1,770.00

Third, Fidelity Savings State Bank

1,034.46

Pursuant to an order of sale the sheriff sold the property for $ 3,606.99 to Ray Keller, the judgment debtor, who paid for it on the spot by two checks drawn on the Delia State Bank. Keller's bid was just enough to satisfy the judgments in favor of the first and second mortgagees, together with interest and costs, leaving nothing to apply on the judgment of the Fidelity Savings State Bank. On the day of sale the clerk of the court receipted the docket for the sum of $ 3,606.99, and the attorney for plaintiff and the cashier of the Delia State Bank likewise receipted the docket for the several amounts due them under the judgment of foreclosure with interest to date of sale.

Within a few days thereafter the Fidelity Savings State Bank lodged objections to the sale, chief of which were these:

"1. That no sale of real estate actually took place as prescribed by law.

"2. That the transaction which took place on said date was in effect a payment by Ray Keller, one of the judgment debtors of the judgment in favor of plaintiff and the judgment in favor of the Delia State Bank.

. . . .

"4. That the judgment debtor was not authorized by law to buy said real estate at sheriff's sale."

Some time later the Delia State Bank filed a motion to direct the sheriff to amend his return so as to show that the sale was made to it. Issues of fact were joined on this motion and on defendants' written objections to the sale, and the trial court made findings of fact, some of which must be set down here:

"(3) That at the time of said sale the cashier of the Delia State Bank appeared at said sale, prepared to bid the amount due on the first mortgage, with the amount due the Delia State Bank added thereto;

"(4) That immediately prior to said sale the cashier of said Delia State Bank, in order that the same might be more properly carried in said bank, made an arrangement with the defendant Ray Keller, the owner of said real estate, to bid the amount due on the first and second mortgages for said bank;

"(5) That said cashier failed to inform the sheriff of Jackson county, Kansas, at the time of said sale of such arrangement, and upon the said Ray Keller making a bid for the aggregate of said two first mortgages, the taxes and costs, declared sale of said real estate to be made to Ray Keller, and made his return in accordance therewith;

"(6) That following out said arrangement, the cashier of said Delia State Bank caused said Ray Keller to issue checks to the clerk of the district court for the payment of the various sums included in said bid, drawn upon the Delia State Bank, which checks were thereafter honored by said bank, and paid;

"(7) That immediately after said sale, in addition to the giving of said checks, entry was made upon the books of the clerk of the district court of the payment of said sums by Ray Keller, and in turn, said clerk issued his check to the plaintiff and the Delia State Bank respectively, for the payment of the amount due each;

"(7 1/2) That part of the arrangement between the said Moore [cashier] for the Delia State Bank, and the defendant Ray Keller, was that Ray Keller was to repurchase said real estate after being bid in by the said Delia State Bank.

"(...