Hamel v. Corbin
| Decision Date | 09 July 1897 |
| Docket Number | 10,575--(215) |
| Citation | 72 N.W. 106,69 Minn. 223 |
| Parties | WILLIAM HAMEL v. THOMAS G. CORBIN |
| Court | Minnesota Supreme Court |
Appeal by defendant from an order of the district court for Hennepin county, Belden, J., denying his motion for a new trial after the court had ordered judgment for plaintiff. Reversed.
William Peet and Wilson & Van Derlip, for appellant.
Defendant insists that G. S. 1894, § 6033, prescribing what the notice of foreclosure shall contain is purely remedial. That it is not intended to prescribe or bound the contract powers or rights of parties to mortgages (that is, to make a contract in advance for them), but is intended solely to prescribe a remedy, or a mode for the enforcement of the rights upon which the parties have themselves agreed.
When the territory of Minnesota was created, the laws in force in Wisconsin remained in force in the new territory, and R. S 1851, c. 85, was a re-enactment of the Wisconsin statute, and was entitled, "Of the foreclosure of mortgages by advertisement." Section 13 of that revision (now G. S 1894, § 6046) provided that the person making the sale should pay to the mortgagor any surplus "remaining after satisfying the mortgage on which such real estate was sold and the costs and expenses of such foreclosure sale." This chapter became chapter 75 of the compilation known as "Public Statutes 1858," and the section referred to remained unchanged. The first enactment of the Minnesota legislature upon the subject was Laws 1858, c. 61, entitled "An act to regulate the foreclosure of real estate." That act merely provided for redemption by creditors of mortgagors and judgment creditors. The next enactment was Laws 1860, c. 87, bearing precisely the same title, and also prescribing conditions for redemption. The revision of 1866 changed the number of chapter 75 to chapter 81 (entitled, "Foreclosure of Mortgages,") and inserted for the first time in section 13 () a provision respecting taxes, by making the section read that the surplus to be paid to the mortgagor should be the sum remaining "after satisfying the mortgage on which such real estate was sold, and payment of the taxes and costs of sale."
By Laws 1877, c. 121, "An act to repeal title 1 of chapter 81 of the revision of 1866, except sections 3, 4, 9, 11, 14, 15 and 17, relating to foreclosure of mortgages," foreclosure by advertisement was abolished; but Laws 1878, c. 53 entitled "An act providing for the foreclosure of mortgages on real estate by advertisement," substantially re-enacted the law repealed the previous session. Webb v. Lewis, 45 Minn. 285.
The legislative purpose in enacting these laws is to be gleaned largely from the titles thereof, and we submit that "An act to regulate the foreclosure of real estate," and "An act providing for the foreclosure of mortgages on real estate by advertisement," can only be indicative of the intention of the legislature to prescribe a method by which such foreclosure can be effected, and cannot be construed as indicating a legislative intention to limit the powers of mortgagors and mortgagees to agree upon the terms of their own contracts. See Lynott v. Dickerman, 65 Minn. 471; Clifford v. Tomlinson, 62 Minn. 195; Webb v. Lewis, supra; Butterfield v. Farnham, 19 Minn. 58 (85). Johnson v. Northwestern, 60 Minn. 393, is not opposed to this view.
Section 6033 having reference solely to the forms of notice in a foreclosure proceeding, its observance or nonobservance affects merely the validity of the sale attempted to be made under it; and its provisions have no force to determine one way or the other the amount in which the mortgagee shall be reimbursed from the proceeds of the sale. The only cases which are reported in which a failure properly to state the amount claimed to be due under the mortgage has been held by the courts to be material, are actions which have been instituted to set aside and declare void mortgage foreclosures attempted to be made by advertisement. Spencer v. Annan, 4 Minn. 426 (542); Ramsey v Merriam, 6 Minn. 104 (168); Butterfield v. Farnham, supra; Menard v. Crowe, 20 Minn. 402 (448); Mason v. Goodnow, 41 Minn. 9; Bowers v. Hechtman, 45 Minn. 238.
The mortgage was the contract between the parties, and its terms control their rights. The foundation of a suit to recover surplus moneys in the hands of a mortgagee is that he has received and retains money belonging to the plaintiff which in good conscience and equity he ought to pay over to him. Bailey v. Merritt, 7 Minn. 102 (159); Spottswood v. Herrick, 22 Minn. 548; Bidwell v. Whitney, 4 Minn. 45 (76); Seiler v. Wilber, 29 Minn. 307. The terms of the contract decide the rights of the parties and they alone. Spencer v. Annan, supra; Culbertson v. Lennon, 4 Minn. 26 (51); Bidwell v. Whitney, supra; Banker v. Brent, 4 Minn. 408 (521); Ramsey v. Merriam, supra; Bennett v. Healey, 6 Minn. 158 (240); Bailey v. Merritt, 7 Minn. 102 (159); Martin v. Lennon, 19 Minn. 45 (67); Menard v. Crowe, supra; Spottswood v. Herrick, supra; Fowler v. Johnson, 26 Minn. 338; Seiler v. Wilber, supra; Bowers v. Hechtman, supra; Webb v. Lewis, supra; Fagan v. Peoples, 55 Minn. 437; Lane v. Holmes, 55 Minn. 379; Gorham v. National, 62 Minn. 327; Gair v. Tuttle, 49 F. 198; Schmidt v. Smith, 57 Mo. 135; Holcombe v. Richards, 38 Minn. 38. In the case at bar the notice substantially complied with the statute in stating that the property would be sold for the taxes, if any, paid by the mortgagee. Jones v. Cooper, 8 Minn. 294 (334); Trafton v. Cornell, 62 Minn. 442; Butterfield v. Farnham, supra; Bausman v. Faue, 45 Minn. 412; Gorham v. National, supra.
Smith, Pulliam & Smith, for respondent.
The taxes paid by defendant and the amount of which he seeks to offset against plaintiff's demand were paid long before the publication of the foreclosure notice, and were not demanded or claimed in that proceeding. The law of this case is found in G. S. 1894, §§ 1619 and 6033 and in the following decisions: Spencer v. Levering, 8 Minn. 410 (461); Gorham v. National, 62 Minn. 327; Martin v. Lennon, 19 Minn. 45 (67); Wyatt v. Quinby, 65 Minn. 537; Kirkpatrick v. Lewis, 46 Minn. 167. Other courts have followed the same rule. Walton v. Bagley, 47 Mich. 385; Vincent v. Moore, 51 Mich. 618; Davis v. Dale, 150 Ill. 239; Hanson v. Dunton, 35 Minn. 189; Thompson v. Myrick, 24 Minn. 4; Pierro v. St. Paul, 37 Minn. 314; Pierro v. St. Paul, 39 Minn. 451; Walton v. Bagley, supra; Vincent v. Moore, supra; Hitchcock v. Merrick, 18 Wis. 357; Vipond v. Townsend, 88 Wis. 285; Johnson v. Payne, 11 Neb. 269; Gorham v. National, supra.
This is an action to recover an alleged surplus in defendant's hands arising from a sale upon mortgage foreclosure of property owned by plaintiff's assignor. Judgment was ordered for the plaintiff, and the defendant appeals from an order denying his motion for a new trial.
The facts are undisputed, and are these: The defendant on June 30, 1894, was the owner of a real-estate mortgage, made by the plaintiff's assignor, which was in the usual form and contained the usual power of sale and covenants to pay taxes and insurance, and authorized the mortgagee, in case of foreclosure, to deduct from the money arising from the sale of the mortgaged premises all sums paid for taxes and insurance. On the day named the defendant proceeded to foreclose his mortgage by advertisement. His notice of foreclosure stated the amount claimed to be due for principal and interest on the mortgage, and, further, that the mortgage would be foreclosed, and the premises sold, on August 13, 1894, to pay the principal and interest, and "any sums paid for taxes or insurance on said mortgaged premises." Default was made by the mortgagor in the payment of the taxes on the premises prior to the commencement of such foreclosure proceedings, and the defendant prior thereto had in fact paid such delinquent taxes in the sum of $ 1,325.79, but he failed to state in his notice of foreclosure sale any amount claimed to be due for taxes paid by him on the premises. The owner of the mortgaged premises kept them insured, with loss, if any, payable to the mortgagee, until August 2, 1894, when he directed the insurance to be canceled, and the defendant was notified that it would be so canceled in ten days. Thereupon the defendant ordered insurance to be written for one year, to take effect from the date of the cancellation of the prior insurance, and the policies therefor were delivered to him on Monday, August 13, the morning of the sale, and he then paid therefor $ 120 as premium. The mortgaged premises were sold pursuant to the notice of foreclosure sale, and were purchased by the defendant for the amount due on his mortgage for principal, interest, costs of sale, and the amount so paid for taxes and insurance. He retained from the proceeds of the sale the amount so paid by him for taxes and insurance. This amount is the alleged surplus for which the trial court ordered judgment. It was stipulated by the parties that the foreclosure was regular and valid.
1. Was the defendant entitled to deduct from the proceeds of the sale of the mortgaged premises the amount so paid for the taxes? If the taxes had been paid after the sale, they could not have been so deducted and retained by the mortgagee. Wyatt v. Quinby, 65 Minn. 537, 68 N.W. 109. If they had been paid after the publication of the sale had been commenced, but before the day of sale, the amount so paid could be deducted and retained. Gorham v. National, 62 Minn. 327, 64 N.W. 906. Neither of these cases are decisive of the one at bar, for in this case the taxes were paid before the commencement of the publication of the notice of...
To continue reading
Request your trial