Geo. B. Clifford & Co. v. Henry

• Decision Date: 02 November 1918
• Docket Number: 1915
• Citation: 169 N.W. 508,40 N.D. 604
• Court: North Dakota Supreme Court

169 N.W. 508

40 N.D. 604

GEO. B. CLIFFORD & COMPANY, a Corporation, Respondent, v. JESSE HENRY, Appellant

No. 1915

Supreme Court of North Dakota

November 2, 1918

Appeal from the District Court of Nelson County, C. M. Cooley, J.

Affirmed.

Frich & Kelly, for appellant.

The foreclosure by advertisement of a real estate mortgage containing the power of sale carries to the purchaser all the rights and benefits accorded to a purchaser under foreclosure by action and sale of the land under execution. Code § 7762; Code, art. 1, chap. 30.

Unlike our Code and practice, in California mortgages are foreclosed by action, and the sale is made under execution issued upon the decree. The law and rules of procedure there in this respect are not applicable here. Cal. Code Civ. Proc §§ 675a, 684, 726, et seq.; Kerr's Codes (Cal.) pt. 1, p. 1154; Koch v. Briggs, 14 Cal. 256; Comp Laws 1913, § 7330; 1 C. J. 927; Stevens v Osgood, 18 S.D. 247, 100 N.W. 161; Golcher v Brisbin, 20 Minn. 453; McCann v. Bank, 3 N.D. 172.

The statute relating to executions generally has no application to sales made under mortgage foreclosure. Rudolph v Herman, 4 S.D. 283, 56 N.W. 901; Mayo v. Woods, 31 Cal. 268.

The foreclosure here is void. When a mortgage is given securing the payment of instalments, it is a separate and distinct mortgage for each instalment, and in case of foreclosure, it should only be had as to the instalments past due, and not upon a declaration that the whole secured debt is due. Briggs v. Briggs, 135 Mass. 306; Clark v. Simmons, 150 Mass. 357; Hedlin v. Lee, 21 N.D. 495; Wade v. Major, 36 N.D. 331; Bank v. Lansing, 2 Wend. 261; Stacy v. Smith (S.D.) 68 N.W. 198; Bailey v. Hendrickson, 25 N.D. 500.

The phrase, "tenant in possession," as found in our Code, includes within its meaning only persons who have leased the mortgaged lands from the mortgagor or owner; and an action like this is maintainable by the mortgagee, if at all, against such tenant, and not against the mortgagor or owner. 3 Kent, Com.; Tiedeman, Real Prop. § 25.

In this state, ownership of real estate carries with it the absolute dominion of the thing owned, subject only to the burdens of taxation and the right of eminent domain. Civ. Code, chaps. 38, 45, 47.

A tenant is "one who holds real property by some form of title from a landlord." 26 Ency. Brit. title "Tenant;" Webster's Dict. p. 1136; Black's Law Dict. p. 1141.

Our statute makes no exception to this rule or definition, and many cases uphold it. Lightbody v. Truelson (Minn.) 10 N.W. 67; 3 Jones, Mortg. 7th ed. §§ 1659, 1661; Comp. Laws 1913, § 7762; Reynolds v. Lathrop, 7 Cal. 43; McDevitt v. Sullivan, 8 Cal. 592; Kline v. Chase, 17 Cal. 596; Webster v. Cook, 38 Cal. 423; Walker v. McCusker, 65 Cal. 360, 4 P. 206; Pendola v. Alexanderson, 67 Cal. 337, 7 P. 756; Clark v. Cobb, 121 Cal. 595, 54 P. 74; Harris v. Foster, 97 Cal. 292, 32 P. 246; Knight v. Truett, 18 Cal. 113; Harris v. Reynolds, 13 Cal. 514; Shores v. Scott River Co., 21 Cal. 135; Hill v. Taylor, 22 Cal. 191; Walls v. Walker, 37 Cal. 424; Walker v. McCusker, 71 Cal. 594, 12 P. 725; 36 Cyc. 1123, and cases cited; Bank v. Swan, 2 N.D. 225; Clement v. Shipley, 2 N.D. 430; Whithed v. Elev. Co., 9 N.D. 224; Little v. Worner, 11 N.D. 382; Folsom v. Norton, 19 N.D. 722; Patrick v. Knapp, 27 N.D. 104; Rudolph v. Herman, supra.

The mortgagor in possession of the premises after foreclosure sale is entitled to the crops produced thereon, as against the purchaser. Mau v. Kearney, 143 Cal. 506, 77 P. 411; Aldrich v. Bank (Neb.) 57 L.R.A. 920; Aultman v. O'Dowd (Minn.) 75 N.W. 756; 3 Jones, Mortg. 7th ed. §§ 1659, 1651 and cases cited; 27 Cyc. 1729 and cases cited.

"He (the purchaser) did not become the owner by purchasing at the sale. His title was not at all changed by that fact, except that the amount of his debt was fixed, and his right to a deed, or a sum paid to redeem within six months, absolute." Pacific Mut. Ins. Co. v. Beck (Cal.) 35 P. 169; Hokanson v. Gunderson (Minn.) 56 N.W. 172; Farr v. Semmler (S.D.) 123 N.W. 835; 3 Jones, Mortg. § 1661; Sutherland v. Long, 273 Ill. 309, 112 N.E. 660.

The common-law action for use and occupation is founded on contract, express or implied, and, to sustain the action, it must appear that the relation of landlord and tenant existed between the parties. 47 Cent. Dig. col. 2051; 19 Dec. Dig. p. 2008, § 1 and cases cited.

In general, rent does not accrue as a debt until the tenant has enjoyed the use of the land for the period for which it is payable. Consequently, in the absence of some agreement or understanding between the parties to the contrary, rent is not due until the expiration of the term; and this is true whether the rent is reserved in gross or on later payments. 24 Cyc. 1170, 1198; Duryee v. Turner, 20 Mo.App. 34; Boyd v. McCombs, 4 Pa. 146; Dixon v. Niccolls, 39 Ill. 372, 89 Am. Dec. 312; McFarlane v. Williams, 107 Ill. 33; Ridgley v. Stilwell, 27 Mo. 128; Nicholes v. Swift, 118 Ga. 922, 45 S.E. 708; Watson v. Penn, 108 Ind. 21, 8 N.E. 636; Cowan v. Henika, 19 Ind.App. 40, 48 N.E. 809.

This is true in all cases where the value of the use and occupation is sought to be recovered. Shores v. Scott River Co., 21 Cal. 135; West v. Conant (Cal.) 34 P. 705; Walker v. McCusker, supra; 1 C. J. 1145, 1146, and cases cited.

Where defendant's entry or possession is rightful and lawful and the actual income can be shown, this will determine the extent of liability. 39 Cyc. 870, 871 and cases cited; Sanford v. Johnson (Minn.) 4 N.W. 245; Clark v. Cobb (Cal.) 54 P. 74; Bigham v. Alexander (Okla.) 153 P. 644.

The respondent established the actual income and showed that no profits had accrued. This fixed his liability. Walker v. McCusker, 71 Cal. 594; Jones v. Byington, 155 P. 1118.

Murphy & Toner, for respondent.

Our statute here under consideration was adopted from California, and with it was also adopted the construction placed upon it there, and it has been followed so long that its doctrine has become a rule of property in this state.

The purchaser at foreclosure sale by advertisement is entitled to the full benefits accruing under the law. Comp. Laws 1913, § 7762; Clement v. Shipley, 2 N.D. 430; Whithed v. Elevator Co., 9 N.D. 224; Little v. Warner, 11 N.D. 382; Martin v. Royer, 19 N.D. 504; Hodgson v. Finance Co., 19 N.D. 139; Folsom v. Norton, 19 N.D. 723; Bailey v. Hendrickson, 25 N.D. 511; Patrick v. Knapp, 27 N.D. 103; Reynolds v. Lathrop, 7 Cal. 43; McDevitt v. Sullivan, 8 Cal. 592; Harris v. Reynolds, 13 Cal. 514; Hill v. Taylor, 22 Cal. 191; Page v. Rogers, 31 Cal. 293; Walker v. McCusker, 71 Cal. 594; Kline v. Chase, 17 Cal. 596; Knight v. Truett, 18 Cal. 113; Walls v. Walker, 37 Cal. 424; Webster v. Cook, 38 Cal. 423.

A provision in a mortgage giving the right to declare due, upon any default in the mortgage, is not a penalty or a forfeiture, but is a valid and enforceable one, and that a court of equity will not relieve against the foreclosure of a mortgage under those conditions in the ordinary way. 37 Cyc. 1101; 27 Cyc. 1522, and cases cited; Lewis v. Lewis, 58 Kan. 563, 50 P. 454; McCormack Mfg. Co. v. Evans, 84 Va. 717; Iowa Co. v. Yeager, 54 N.Y.S. 99.

A sufficient declaration of the intention to declare all sums due under the mortgage is a foreclosure. In this case the specific statement was inserted in the notice to that effect. 27 Cyc. 1524, and cases cited.

This is a suit to recover money,--not property. The object of the suit is to recover the value in money of the use of the land during the year of redemption. Whether the mortgagor actually formed the land himself, or just what amount of crop he raised thereon, is wholly immaterial. If he prevented the purchaser from using the land during such period of time, he is liable for the value of such use. Reynolds v. Lathrop, 7 Cal. 43; McDevitt v. Sullivan, 8 Cal. 592; Harris v. Reynolds, 13 Cal. 515; Kline v. Chase, 17 Cal. 596; Knight v. Truett, 18 Cal. 113; Hill v. Taylor, 22 Cal. 191; Wall v. Walker, 37 Cal. 427; Walker v. McCusker, 12 P. 725; Webster v. Cook, 38 Cal. 423; Harris v. Foster, 32 P. 246; Patrick & Co. v. Knapp, supra; Comp. Laws 1913, § 7751; Clement v. Shipley, and Whithed v. Elev. Co. supra; Page v. Rogers, 31 Cal. 294.

This right in the purchaser to receive the rents and profits, or the value of the use and occupation of the property sold, is not limited to cases where there has been a redemption. The right begins at the time of the purchase and continues until redemption is made, or, if there is no redemption, then until the time allowed therefor has expired. Reynolds v. Lathrop, 7 Cal. 43; McDevitt v. Sullivan, 8 Cal. 592; Harris v. Reynolds, 13 Cal. 514; Hill v. Taylor, 22 Cal. 191; Webster v. Cook, 38 Cal. 423; Page v. Rogers, 31 Cal. 293.

The action for use and occupation is founded on privity of contract. But it will lie upon an implied as well as upon an express contract. Osgood v. Dewey, 13 Johns. 240; Stockett v. Watkins, 2 Gill & J. 326; Code Civ. Proc. § 369; Duss v. Randall, 48 P. 66; Yndart v. Den, 57 P. 761; Code Civ. Proc. § 707; Walker v. McCusker, 71 Cal. 594; Bennett v. Wilson, 55 P. 390; Hardy v. Herriott, 39 P. 958; Judge Engerud, No. 712, N.D. Banker, for Feb. 1916.

The rule of stare decisis applies here with all its force, for the doctrine for which we contend has become a fixed rule of property in this state. 13 Cent. Dig. title, "Courts," § 318; Seale v. Mitchell, 5 Cal. 401; Stout v. Grant Co., 107 Ind. 343, 8 N.E. 222; New Orleans v. Herman, 31 La.Ann. 529; Davis v. Holberg, 59 Miss. 362; Sedalia v. Gold, 91 Mo.App. 32; Wood v. New York, 73 N.Y. 556.

Crops growing on the land at the time of sale pass to the purchaser. Not so, if the crops are harvested. 27 Cyc. 1729; Duff...