Jack v. Cold

• Decision Date: 29 May 1901
• Citation: 114 Iowa 349,86 N.W. 374
• Parties: JACK v. COLD ET AL.
• Court: Iowa Supreme Court

114 Iowa 349

86 N.W. 374

JACK

v.COLD ET AL.

Supreme Court of Iowa.

May 29, 1901.

Appeal from district court, Shelby county, N. W. Macy, Judge.

Cold, being indebted to the Irwin Bank, executed three promissory notes, of $1,000 each, to J. T. Jack, president, January 10, 1896, payable, respectively, November 1, 1896, January 1, 1897, and March 1, 1897, and six days later gave a mortgage to Jack, individually, securing payment, on the following described land: S. W. 1/4 and S. W. 1/4 N. W. 1/4 section 23, township 81, range 38, W. 1/2 and S. 1/2 S. E. 1/4 section 26, township 81, range 38,--subject to prior mortgages aggregating $8,700. On March 3, 1897, to further secure payment, and in consideration of extension of time, he executed another mortgage on the W. 1/2 N. E. 1/4 section 36, township 81, range 38, and the E. 1/2 S. E. 1/4 section 31, township 81, range 37, subject to incumbrances of $1,300 on each place. The senior mortgage was foreclosed on N. 1/2 S. W. 1/4 and S. W. 1/4 N. W. 1/4 of section 23, also on N. W. 1/4 and N. W. 1/4 S. W. 1/4 of section 26, and on S. 1/2 S. W. 1/4 of section 23, and at the sale the first two bid in by Jack February 22, 1897, and the last by Burmeister five days later, and the certificate of sale assigned to Jack November 16, 1897. When the year of redemption had expired, plaintiff obtained sheriff's deeds for all this land. The senior mortgage on the W. 1/2 N. E. 1/4 section 36 was also foreclosed, and at the sale, February 27, 1897, bid in by Jack; but Cold's grantee deposited the amount of the bid, together with interest and costs, with the clerk of court, for the purpose of redemption. Two days later Jack filed an affidavit to the effect that he was owner and holder of the $3,000 mortgage mentioned, as well as of the certificate of sale, claimed the right to redeem from the latter, and offered to credit $1,000 on the mortgage debt, and notified said grantee that he refused to accept the amount deposited. Subsequently this redemption was adjudged sufficient, and the certificate surrendered. It should also be noted that Cold, having made arrangements with a party at Council Bluffs to furnish the money with which to redeem, applied to Jack for a statement of the amount required, and the latter furnished the figures, which included the amount due on the $3,000 mortgage. This action, in which plaintiff asks for the foreclosure of said $3,000 mortgages against all the land covered thereby, save that on which sheriff's deeds have been issued, was begun August 19, 1897. Cold answered that plaintiff's debt was canceled by operation of law; that is, Jack's purchase at the sales, and procuring the assignment from Burmeister, followed by sheriff's deeds, constituted a redemption under said mortgages, and extinguished the debt secured thereby. This view was taken by the district court, and the petition was dismissed. The correctness of the decree as to the 80 acres redeemed by Cold's grantee is not questioned. The plaintiff appeals. Affirmed.I. M. Earle and Harl & McCabe, for appellant.

Byers & Lockwood, for appellees.

LADD, J.

It will be observed that Jack purchased part of the land at sheriff's sale, and took an assignment of the certificate of sale of the other part; and the question is, did this in either instance amount to a redemption under his junior mortgage, or was he a mere purchaser? A somewhat radical change in the mode of redeeming was effected by the Code of 1897. Formerly payment might be made by the creditor, before the expiration of nine months after the sale, to the party, clerk, or sheriff. Section 3109, Code 1873. Only when made after the lapse of nine months was it essential that the clerk receive the money and enter the transaction of record. It was said in Goode v. Cummings, 35 Iowa, 67: “Before the expiration of nine months, it appears that redemption is performed by the parties themselves without the aid of the clerk,--without the transaction being of record. After the nine months the transaction is made of record by the clerk, and the money required for redemption is paid into his office for the use of the party entitled thereto.” Lamb v. Feeley, 71 Iowa, 742, 30 N. W. 653;Fry v. Warfield-Howell-Watt Co., 105 Iowa, 559, 75 N. W. 485. But that portion of section 3109 of the Code of 1873 authorizing payment “to the party, the clerk, or the sheriff” was entirely omitted from Code, and in lieu of it and section 3118 was enacted section 4056: “The mode of redemption by a lien holder shall be by paying in to the clerk's office the amount necessary to effect the same, computed as above provided, and filing therein his affidavit, or that of his agent or attorney, stating as nearly as practicable the nature of his lien and the amount still due and unpaid thereon. If he is unwilling to hold the property and credit the debtor thereon the full amount of his lien, he must state the utmost amount he is willing to credit him with. If the amount paid to the clerk is in excess of the prior bid and liens, he shall refund the excess to the party paying the same, and enter each such redemption made by a lien holder upon the sale book, and credit upon the lien, if a judgment in the court of which he is clerk, the full amount thereof, including the interest and costs, or such less amount as the lien holder is willing to credit thereon, as shown by the affidavit filed.” This is the only mode of redeeming authorized, and a complete record in the clerk's office is always accessible. Lienholders may know therefrom at any time precisely what has been done, and are not compelled to keep a lookout for secret transactions between other creditors. The provisions relating to redemption by a lienholder after the lapse of nine months are entirely eliminated. Heretofore it has sometimes proven difficult to determine whether a lienholder, in taking an assignment of a certificate of sale, became a mere purchaser or redemptioner, for in either event the transaction could only differ in the matter of intention. Hence, when that has been done which the statute, as interpreted, declared might constitute a redemption, the purpose of redeeming has been inferred, unless a contrary intention appeared. Lamb v. Feeley, supra; West v. Fitzgerald, 72 Iowa, 306, 33 N. W. 688. But under the present statute the lienholder, as freely as others, may purchase certificates of sale or other liens, and no presumption with respect to redemption will arise therefrom. In doing so he simply takes the place of the seller, and in that situation as assignee holds subject to redemption, unaffected by any other incumbrances he may have. In other words, he can only tack another to his own lien, or his own to another lien, so as to compel payment of both, in redeeming from him, by obtaining that other through redemption by payment thereof into the clerk's office, and making a record of the transaction. The mere assignee of a lien no longer acquires the right of a redemptioner through the assignment alone, but, to accomplish this, must acquire it in the manner pointed out by statute. Nor is it necessary that the title owner, in order to redeem from the sale, as suggested by appellees, pay any lien procured by the certificate holder otherwise than by redemption. Section 4051 reads: “The terms of redemption, when made by the title holder, shall be the payment into the clerk's office of the amount of the certificate, and all sums paid by the holder thereof in effecting redemptions, added to the amount of his own lien, or the amount he has credited thereon, if less than the whole, with interest at contract rate on the certificate of sale from its date, and upon sums so paid by way of redemption from date of payment, and upon the amount credited on his own judgment from the time of said credit, in each case including costs.” By “his own lien” is evidently meant that on which redemption was made, and no other. If he has other liens, not procured through redemption, they are not to be taken into consideration in computing the amount to be exacted. As contended, no way is pointed out by which a senior incumbrancer who has taken an assignment of the certificate of sale as purchaser may be compelled to signify what amount, if any, he is willing to credit on his incumbrance, and allow the lien thereof to be extinguished. Nor was there any such provision in the...