Grant County v. Colonial & U. S. Mortg. Co.

• Decision Date: 08 December 1892
• Parties: GRANT COUNTY, Plaintiff and respondent, v. COLONIAL & UNITED STATES MORTGAGE CO. , Defendant and appellant.
• Court: South Dakota Supreme Court

3 S.D. 390

53 N.W. 746

GRANT COUNTY, Plaintiff and respondent, v. COLONIAL & UNITED STATES MORTGAGE CO. ,

Defendant and appellant.

South Dakota Supreme Court

Appeal from Circuit Court, Grant County, SD

Hon. J. O. Andrews, Judge

Reversed

B. A. Dodge

(Little & Nunn of counsel)

Attorneys for appellants.

E. M. Bennett

(Crawford & DeLand, Pierre, SD of counsel)

Attorneys for respondent.

Opinion filed Dec. 8, 1892

KELLAM, J.

This is an action brought by respondent, claiming to be the owner of the real estate described in the complaint, to cancel a certain mortgage as a lien upon said real estate, and to enjoin its foreclosure and a sale of the mortgaged premises, on the ground that such sale would cast a cloud upon respondent’s title. Upon the complaint a temporary injunction was issued by the court. The appellant answered, and upon the complaint and answer moved to dissolve the injunction. The motion was denied, and this appeal is from such denial.

The complaint alleges that on the 8th day of August, 1884, William W. Evans and wife “made their certain mortgage dated on that day, and by the terms thereof mortgaged to the defendant … the aforesaid premises.” It further alleges that afterwards said defendant, claiming that there had been default in payment, began foreclosing said mortgage by advertisement, and threatened to sell said mortgaged premises. These are all the allegations of the complaint in respect to the threatened sale, and, accepting the statements of the complaint as showing a good title in plaintiff, they are insufficient to justify the temporary injunction restraining the sale, in order to prevent the creation of a cloud upon such title, for the reason that they do not show any authority in the mortgagee to make such sale on account of default in payment. A mortgage of real estate is complete without any power of sale, (section 4366, Comp. Laws,) so that the allegation that Evans and wife “made their certain mortgage” is not an allegation that they made a mortgage containing a power of sale. If the mortgage contain an express power of sale, it may be foreclosed by advertisement, (section 5411, Comp. Laws;) otherwise it can only be foreclosed by action, (section 5430.) If, therefore, this mortgage contained no power of sale, any attempt by the mortgagee to make such sale would be nugatory and void, and a deed given in pursuance of such sale would be insufficient and worthless; for it would be evidence of title in the grantee only after it was shown that the mortgagee was authorized to sell, which in such case could not be done. An instrument constitutes no cloud upon title, if its invalidity either appear on its face, or if it necessarily appear in the evidence which the party claiming under it must offer in order to enforce it. This rule, while criticised by Mr. Pomeroy, is recognized by him as settled by the weight of authority. See 3 Pom. Eq. Jur. p. 437, and a large number of cases there cited. In this jurisdiction, however, this rule is established by statute.. Sections 4644, 4645.

There is no law making the deed to be given upon this threatened foreclosure sale prima facie evidence of title, so that the purchaser, before his deed would be admissible as evidence of title, must show that the sale was authorized by the mortgage; in other words, that the mortgage contained a power of sale. But no such power or fact is alleged in the complaint. It would be perfectly consistent with the complaint that the threatened sale should be entirely unauthorized, in...