Fields v. Dannenhower

• Decision Date: 11 June 1898
• Citation: 46 S.W. 938,65 Ark. 392
• Parties: FIELDS v. DANNENHOWER
• Court: Arkansas Supreme Court

46 S.W. 938

65 Ark. 392

FIELDS v. DANNENHOWER

Supreme Court of Arkansas

June 11, 1898

Appeal from Lee Circuit Court HANCE N. HUTTON, Judge.

STATEMENT BY THE COURT.

Action of ejectment by F. C. Danenhower against Richard Fields and Jack Dawson to recover possession of a tract of land held by defendants.

The land was formerly owned by F. Trunkey, and he sold and conveyed the land to defendants, Field and Dawson, upon credit, for the sum of $ 1,381. To secure payment of the purchase price, Fields and Dawson executed and delivered a deed of trust to R. D. Griffis, as trustee, with power of sale. The debt not being paid, the trustee sold the land under the power contained in the deed, and, Trunkey having died, the land was purchased by his widow and heirs for the sum of $ 900, leaving several hundred dollars of the purchase price still unpaid. The trustee conveyed the land to the widow and heirs of Trunkey, and they in turn sold and conveyed the land to Danenhower. Within one year from the date of the sale by the trustee, the attorney of defendant Fields, who had purchased the interest of Danenhower in the land, tendered to the attorney of Danenhower and the Trunkeys, who was authorized to receive same, $ 1,000, to redeem the land from the sale under the deed of trust. But this tender was made on the condition that the attorney for Danehower and the Trunkeys would execute a receipt for his clients releasing the lands from all liens held by either Danenhower or the Trunkeys.

The attorney for Danenhower and the Trunkeys admitted that Danenhower and the Trunkeys had no other claim or lien on the land except such as were claimed by virtue of the trust deed and admitted that the $ 1,000 was sufficient to cover the amount of the purchase price for which said land sold at the sale under the trust deed, together with interest at ten per cent. thereon and costs of sale, and offered to accept the same as a redemption from said sale, but contended that, to release the land from the lien of the mortgage, it was necessary to tender, not only the amount for which the land was sold under the trust deed, interest and cost, but also the balance of the mortgage debt remaining unpaid; and he declined to execute the receipt or accept the tender on the conditions imposed, solely because the effect of the execution of the receipt and the acceptance of the tender would be the absolute redemption of said lands from the mortgage lien.

The answer of the defendants set up this tender as a defense to the action of ejectment, stated that they had at all times been ready and willing to pay it, and offered to bring the money into court. The finding and judgment of the circuit court was in favor of plaintiff.

Judgment affirmed.

Jas. P Brown, for appellant.

Payment or tender of the amount brought by land, at a foreclosure sale under a mortgage, with interest and costs thereon, at any time within a year after foreclosure is sufficient to affect absolute redemption (Sand. & H. Dig., § 5111) and this redemption is of the title itself, and hence does not revive the old equity of redemption and its accompanying mortgage lien. 10 S.W. 642; 15 N.W. 421; 6 N.W. 274; 7 N.W. 578; 22 C. C. 16; Jones, Mort. § 1051c; 57 Ark. 533. Where there is no controversy between the debtor and creditor as to the amount due, but only as to a legal right which might inure to the debtor by virtue of his making the payment, the fact that the debtor demanded, at the time of tender, a receipt showing full redemption from the lien of the mortgage, does not invalidate the tender. A legal right may be demanded by way of condition. 7 N.W. 188; 23 N.E. 282; 118 N.Y. 165; 22 N.E. 155; 115 N.Y. 297; 39 N.Y. 486; 3 N.E. 189; 5 Am. St. Rep. 435; 84 Wis. 218; 54 N.W. 500; 59 N.H. 46; 33 S.W. 596.

McCulloch & McCulloch, for appellee.

One who redeems after a foreclosure sale must pay the whole amount of the mortgage debt, although the land sold for a less sum. Jones, Mort. § 1075; 53 Ark. 69; 57 Ark. 198; 40 S.W. 704; 57 Ark. 533; Kerr's Supp. to Wiltsie, Mort. Foreclosures, pp. 1627-8, 1635; Pingrey, Mort. p. 2011, § 2175; ib. p. 2020, § 2184; 14 Wall. 491; 4 Paige, 58; 23 Minn. 13; 6 Mich. 522; 7 Cush. 220; 7 Gray, 148; 130 U.S. 684; ib. 43; 74 Ind. 479; 116 Ind. 268; 14 Ill. 263; 12 So. 163; 16 O. St. 193; Rorer, Jud. Sales, § 1178; 29 N.E. 563; 29 N.E. 35; 70 Iowa 589; 9 Cal. 413; 52 Cal. 644. The agreement on the face of the mortgage, whereby the mortgagors waived their statutory rights to redeem, is binding upon them. Jones, Mort. § 1542 et seq.; ib. § 1051. A tender coupled with a condition is no defense. 2 Benj. Sales, § 1074 et seq., and note; 1 Add. Cont. § 357, and note; 2 Wharton, Cont. § 997; 34 Vt. 201; 39 id. 51; 43 Vt. 439; 52 Minn. 83; 107 Mo. 50; 25 Am & Eng. Enc. Law, 912; 7 Wait, Act. & Def. 588; Jones, Mort. § 900; 1 Cranch, 321; 55 Ind. 397; 12 Mass. 450; 4 Pick. 51; 9 Metc. 42; 38 F. 926.

RIDDICK J. BUNN, C. J., dissenting.

OPINION

RIDDICK, J., (after stating the facts).

This case presents the following question: When land is sold under a power contained in a mortgage for an amount less than the debt secured by the mortgage, does the redemption allowed by the statute from such sale leave the premises still subject to the mortgage lien, or does such redemption restore the land to the grantor relieved of both the sale and the mortgage lien. In other words, can an absolute redemption be effected in such a case by tender of the amount for which the property sells at the mortgage sale, together with interest and costs of sale, or is it necessary that the full amount of the mortgage debt shall be paid?

The statute provides that real property sold under a mortgage "may be redeemed by the mortgagor at any time within one year from the sale thereof by payment of the amount for which said property is sold, together with ten per cent. interest thereon and costs of sale." Sand. & H. Dig., § 5111. If the effect of a redemption under this statute, when the property has sold for less than the mortgage debt, is to restore the mortgage lien, it is obvious that there is no limit to the number of sales that may be made under the same mortgage. So long as any balance of the debt remained unpaid, and the mortgagor redeems, the mortgage may, if this be the meaning of the act, continue to sell the property, thus piling up the costs against the mortgagor.

Mortgages and deeds of trust to secure debts can, in this state, be drawn so that the creditor may bid at the mortgage sale (Ellenbogen v. Griffey, 55 Ark. 268, 18 S.W. 126), and this is now usually done; but, under such a construction of the statute, the creditor would be encouraged to bid less than the value of the property; for in that event, if the mortgagor redeemed, the creditor could still hold and sell the property for any balance remaining unpaid, while, if the necessities of the mortgagor prevented him from redeeming, the creditor would obtain the property for less than its value, and have the remainder of the debt as a personal claim against the mortgagor.

There is little reason why a creditor should be allowed thus to subject the property of his debtor to repeated sales under his mortgage; and a construction which permits it should not be adopted unless clearly required by the language of the statute. Hervey v. Krost, 116 Ind. 268, 19 N.E. 125. On the contrary, it would seem to be good public policy to allow the creditor to sell only once under his mortgage, and to make it to his interest to secure a fair price for the property at such sale. Anderson v. Anderson, 129 Ind. 573. Poverty may prevent the debtor from bidding the value of this property, for he must pay or secure the price he bids; but the creditor is usually in a position to make the property bring its value, at least to the extent of the debt for which he exposes it for sale. If the mortgage does not permit him to bid at the sale, he can foreclose in a court of equity, and thus place himself in a position to make the property bring its value. It is not therefore unjust, as between him and the mortgagor, to presume that the amount for which he permits the property to sell represents its true value. And this is the basis upon which rests the redemption statute. For the purpose of redemption, the statute conclusively presumes that the price for which the property sells at the mortgage sale represent its actual value, and it allows the mortgagor, within a reasonable time after the sale, to redeem and reclaim the property by substituting therefor its money value, as determined by such facts.

There is nothing in the statute to support the contention that when a redemption is made the mortgage lien is restored, and remains upon the property for any unpaid balance of the debt. We do not believe that the legislature intended any such result. Previous to the passage of this act allowing a redemption, the mortgage lien did not exist after the sale under the power contained in the mortgage. After such sale the mortgage was functus officio, except as a part in the chain of title from the mortgagor to the purchaser at the mortgage sale, for the mortgage lien was exhausted and discharged by the sale. Makibben v. Arndt, 88 Ky. 180, 10 S.W. 642. Now, the statute does not attempt to make any change in the law in this respect, but, recognizing that the mortgage lien was terminated by the sale, and that afterwards there was not a mortgagee holding under a mortgage, but a purchaser holding under a sale, it provides for redemption from such sale only. The language of this statute granting the right to redeem upon payment of amount for which the property sells, with interest and costs of sale, means, we think, an absolute redemption, and the mortgage lien is not revived...