Frederick v. Gehling

• Decision Date: 18 October 1912
• Docket Number: No. 17,624.,17,624.
• Parties: FREDERICK v. GEHLING (BUCKMINSTER, INTERVENER).
• Court: Nebraska Supreme Court

92 Neb. 204

137 N.W. 998

FREDERICK

v.GEHLING (BUCKMINSTER, INTERVENER).

No. 17,624.

Supreme Court of Nebraska.

Oct. 18, 1912.

Syllabus by the Court.

Ordinarily judicial sales will not be set aside for inadequacy of the price paid, in the absence of fraud or mistake, when the purchaser pays two-thirds of the appraised value of the defendant's interest in the land.

When two parties have liens on the same land, and the land is of sufficient value to pay all liens, there should be entire good faith bebetween the lienholders to realize sufficient to satisfy both liens.

The right of subrogation must depend upon the facts and equities of the particular case in which it is asserted.

F. bought land at execution sale upon a judgment owned by him. The certificate of liens showed several mortgages prior to the lien of his judgment. The land sold for more than two-thirds of the appraised value, but much less than its actual value. The prior mortgages had in fact been paid. Held, that a mortgagee, whose mortgage was on record before the execution sale, and was given to secure a loan with which the prior mortgages were paid, upon an understanding with the mortgagor that it should be a first lien, is entitled to subrogation to the lien of the prior mortgage.

Appeal from District Court, Sheridan County; Westover, Judge.

Action by Peter Frederick, Sr., against Mary Gehling, and John W. Buckminster intervenes. From the judgment, plaintiff appeals. Reversed and remanded.Isham Reavis, of Falls City, and A. W. Crites, of Chadron, for appellant.

E. Falloon, of Falls City, and J. H. Edmunds, of Rushville, for appellee.

SEDGWICK, J.

When this case was here before (89 Neb. 93, 130 N. W. 968), it was determined upon a general demurrer to the defendant's answer. The character of the case is stated in the former opinion, and the controlling allegations of the answer demurred to are also stated. The principal defense then insisted upon was that in the sale upon the judgment under which the plaintiff claims title the prior mortgages were in fact deducted as liens in the appraisement of the land. It was clearly and positively alleged in the answer “that these liens were deducted from the value of said premises, and said premises were appraised by said appraisers after said liens had been deducted at the sum of $500.” And again: “That at the time said sale was made said liens were still of record and in force on said land and deducted from its appraised value.” It was held, as against a general demurrer to the answer, that these allegations were sufficient to charge the plaintiff with these prior liens as a part of the purchase price of the land at the sale. The cause has been retried, and is now presented upon the question of the sufficiency of the evidence; the trial court having held that the defendant was entitled to have her mortgage subrogated to the lien of the prior mortgage. The principal question now presented upon this appeal is as to this defense, which was also included in the answer, and upon which the trial court has now found in favor of the defendant.

[1][2] It appears now from the pleadings and evidence that when the plaintiff purchased the land at sheriff's sale under his judgment he was not personally present at the sale, and had no actual knowledge that the prior mortgage had not been released of record, nor that the defendant's mortgage had been duly recorded. It seems, so far as he is personally concerned, that he purchased the judgment against Buckminster and also the land at the execution sale in good faith. This defendant also acted in good faith in loaning the money for which her mortgage was given, and with which the prior incumbrance was paid. The trial court found that the land, at the time of the trial, was worth $1,600. The plaintiff's judgment at that time, with interest and costs, amounted to less than $300. The defendant's mortgage was for $600 and some interest. The value of the land then was amply sufficient to pay both claims. Under such circumstances, there should be perfect good faith between the parties. The appraisers at the sheriff's sale appear to have valued the land at $500, and the plaintiff purchased it at the sale for $333.35, which was more than two-thirds of its appraised value. It is insisted that, under these circumstances, the existence of prior liens and the fact that they are shown upon the appraisement are immaterial, and in ordinary cases of judicial sale this is the rule.

[3][4] It will be remembered that Buckminster was the owner of this land, and had given this plaintiff two mortgages thereon. One of these mortgages included, also, some land in Richardson county. The plaintiff began an action in the district court for Richardson county to foreclose the last-mentioned mortgage, and obtained a judgment of foreclosure therein. Thereupon Buckminster's brother loaned him $425 with which to pay to the plaintiff the amount of the said judgment in foreclosure, with interest and costs, together with the plaintiff's other mortgage, which covered only the land in question. It is conceded in the briefs that Buckminster's brother, while he held his mortgage on this land, would have been entitled to subrogation to the prior liens held by the plaintiff as against the owner of the land and the plaintiff also. The mortgage, under which the defendant claims, was given by Buckminster to the defendant to secure the money which he borrowed with which to pay this prior mortgage. Some time before either of these two last-named mortgages was given, the plaintiff purchased a judgment in justice court of Richardson county against Buckminster, and caused the same to be duly transcripted and docketed in Sheridan county as a lien upon the lands of Buckminster. Plaintiff caused an execution to be issued upon that judgment and levied upon this land. In the meantime, and before the execution sale, the defendant's mortgage was duly recorded in Sheridan county. The appraisers at the execution sale included both the defendant's mortgage and the $425 mortgage to Buckminster's brother in the statement of liens certified by them to be prior to the lien of the plaintiff's judgment. The plaintiff obtained his title through the acts of the sheriff and appraisers, and is therefore bound by those acts, so far as they affect his title. For the purposes of this action, then, he must be held to have known that the appraisers certified and returned to the court that there were liens upon the land, prior to his own, amounting to $1,182.30. The plaintiff by his purchase took only such title as his judgment debtor, Buckminster, had in the land.

The evidence in many respects is not very clear and satisfactory; but it appears from the record that the release of the prior mortgage and the...