First State Bank of Taos v. Wheatcroft

• Decision Date: 10 October 1931
• Docket Number: No. 3567.,3567.
• Citation: 36 N.M. 88,8 P.2d 1061
• Parties: FIRST STATE BANK OF TAOSv.WHEATCROFT et al.VOKICHv.WHEATCROFT.
• Court: New Mexico Supreme Court

36 N.M. 88

8 P.2d 1061

FIRST STATE BANK OF TAOS

v.WHEATCROFT et al.VOKICH

v.WHEATCROFT.

No. 3567.

Supreme Court of New Mexico.

Oct. 10, 1931.On Rehearing Jan. 2, 1932.Application for Leave to File Second Motion for Rehearing Denied Jan. 19, 1932.

Syllabus by the Court.

Redemptioner may redeem by paying redemption money to purchaser at foreclosure sale holding legal title (Comp. St. 1929, § 117-119).

Under 1929 Comp. St., § 117-119, the redemptioner may redeem by paying the redemption money to the purchaser at the foreclosure sale, as shown by the court record, so long as he is not divested of the legal title.

Mortgagors' judgment creditor in possession under purchaser at foreclosure sale held not entitled to assert claim as against redemptioners, where judgment creditor, during redemption period, remained passive.

In answer to a petition for writ of assistance by the assignee of the mortgagors, who had redeemed, a judgment creditor of mortgagors in possession of the mortgaged premises under the purchaser at the foreclosure sale set out his judgment and allegations in the nature of a judgment creditor's bill. Held, that where judgment creditor had taken no steps to realize on his judgment during the period of redemption, his answer did not state defense to petition.

Appeal from District Court, Taos County; Kiker, Judge.

Suit by the First State Bank of Taos against George B. Wheatcroft and another, wherein Rebecca C. Wheatcroft filed a petition for a writ of assistance, and John Vokich intervened. From the judgment rendered, the intervener appeals.

Affirmed.

Mortgagors' judgment creditor in possession under purchaser at foreclosure sale held not entitled to assert claim as against redemptioners, where judgment creditor, during redemption period, remained passive.

Crampton & Darden, of Raton, for appellant.

A. C. Voorhees, of Raton, for appellees.

HUDSPETH, J.

Real estate and chattels were sold under a decree foreclosing mortgage liens of the First State Bank of Taos, plaintiff, against George B. Wheatcroft and Rebecca C. Wheatcroft, defendants, who executed the mortgages. Plaintiff became the purchaser at the master's sale. Upon the hearing on the special master's report of sale, the court rendered a deficiency judgment for $1,536.58 on that portion of the indebtedness secured by the chattel mortgage, approved the sales, and ordered the special master to execute and deliver the certificate of purchase, copy of which was attached to the report of sale. The certificate of purchase is dated the day of the sale, and recites that the special master has sold and conveyed the real estate (describing it) and the chattels (describing them) to the plaintiff. Later the defendants conveyed the right of redemption to their daughter, Rebecca E. Wheatcroft, appellee, who, within nine months from the date of sale, attempted to redeem from the purchaser. The purchaser received her money, and issued to her a receipt therefor “in full redemption” of the land sold by the master. Thereafter, appellee filed her petition for a writ of assistance.

John Vokich, appellant, intervened, and in his answer to the amended petition of appellee alleged that he was the owner and in possession of the premises, and the only person entitled under the statute to receive the money in redemption of the property; that the purchaser, the First State Bank of Taos, so informed appellee before it received the redemption money. In support of his allegation of ownership, he set out an assignment of the certificate of purchase and of the deficiency judgment, which is in the ordinary form of an assignment of judgment. Appellant further alleged that the appellee had personal knowledge of his possession, and that her attorney inspected the assignment before the attempted redemption. As a further defense, appellant alleged that the conveyance of the right of redemption by the mortgagors to the appellee was without consideration; that the mortgagors were insolvent, and furnished a part of the money paid to the bank by the appellee in her attempt to redeem, all for the purpose of preventing the appellant from collecting his deficiency judgment; and that the appellee was in a court of equity with unclean hands.

The court rendered judgment on the pleadings in favor of the petitioner Rebecca E. Wheatcroft, and the intervener, John Vokich, appeals.

[1] 1. Appellant maintains that the certificate of purchase and the assignment thereof by the First State Bank of Taos to appellant were, in fact, deeds; that the purchaser was divested of all of its title, whether legal or equitable, in the mortgaged premises; and that the payment by appellee to the purchaser, after notice of the assignment and possession of appellant, was ineffective as a redemption of the mortgaged premises.

New Mexico Statutes Annotated 1929, § 117-119, is our redemption statute, and so much of that section as is pertinent reads as follows: “Any real estate which may be sold under any order, judgment or decree of any court, may be redeemed by the mortgagor, or his assign or any other party interested in said real estate by paying to the purchaser or his assign the amount paid, with interest from the date of purchase at the rate of twelve per centum per annum at any time within nine months from the date of sale.”

Both parties cite Gunby et al. v. Doughton, 30 N. M. 144, 228 P. 603, where Mr. Justice Parker, in the opinion of the court, said: “The question involved in this appeal is whether a mortgagor of real estate retains the right to possession after sale under a decree of foreclosure, and until the nine months' period of redemption has expired, or whether the purchaser at the sale is entitled to be let into possession immediately upon the confirmation of the sale. The subject is not specifically regulated by statute as it is in some states. These statutes provide that a certificate of sale, only, shall be delivered to the purchaser, but that deeds shall be delivered only after the redemption period has expired. In such case, of course, the mortgagor may retain possession during the redemption period, for his title, until that time, has not been passed to the purchaser. But in this jurisdiction, we have a different situation. In this connection it is to be remembered that by a decree of foreclosure, and a decree of confirmation of sale there under, all of the rights of the parties are merged and passed to the purchaser. The mortgagee no longer has any mortgage lien, and the mortgagor no longer has any title to the property. The sole right remaining to the mortgagor is the right to redeem, a right, which does not arise out of the mortgage or the decree, but a right, which is extended to him by statute, whereby he may defeat the title of the purchaser.”

It is the usual practice in this jurisdiction for a deed to be delivered to the purchaser upon the confirmation of a sale. Appellant contends that the so-called certificate of purchase is, in fact, a deed. In some states, statutes provide for the issuance of certificates of purchase, and make them assignable by indorsement. Chytraus et al. v. Smith, 141 Ill. 231, 30 N. E. 450; Roberts v. Clelland, 82 Ill. 538. A deed is issued only after the expiration of the period of redemption in these states. We have no statute authorizing the issuance of such a certificate, but it does not follow that the parties intended the certificate of purchase to be...