Ledyard v. Phillips

• Decision Date: 05 January 1882
• Citation: 11 N.W. 170,47 Mich. 305
• Court: Michigan Supreme Court
• Parties: LEDYARD v. PHILLIPS and another.

11 N.W. 170

47 Mich. 305

LEDYARD v. PHILLIPS and another.

Supreme Court of Michigan

January 5, 1882

A mortgagee, purchasing the property sold on foreclosure of his mortgage, acquires the same rights as a third person purchasing at such sale.

Upon the facts in this case, held, that the mortgagee purchasing under foreclosure of his mortgage thereby acquired a valid title to crops growing upon the land, and was not liable for their value to defendants in error.

Error to Kent.

Hughes O'Brien & Smiley, for plaintiff in error.

Eggleston & Kleinhaus, J.W. Phillips, Jacob Ferris, and L.L. Phillips, for defendants in error.

MARSTON C.J.

Plaintiff in error brought assumpsit to recover the amount claimed to be due upon a promissory note given by defendants November 1 1872, and secured by chattel mortgage. Prior to July, 1873 the plaintiff held defendant's bond for $1,400, secured by mortgage upon their farm. "On July 14, 1873, the parties, in contemplation of an immediate foreclosure of the mortgage on the farm, entered into a written agreement concerning the disposition of the existing and future crops on the farm," a copy of which is given herewith. ^[*] On the day following the execution of this agreement proceedings were commenced in chancery for the foreclosure of the real estate mortgage, in which case the defendants did not appear. On October 14 1873, complainant therein obtained a decree for the entire sum secured and for a sale of the mortgaged premises, which took place on the eighteenth day of August, 1874. The notice of sale was in the usual form, no reference being made therein, or in any of the proceedings, or at the sale, as to the agreement of July 14th, or that the crops were to be reserved or not sold in the usual manner. At the sale there were two bidders, the complainant and a third party. The last bid made by the latter was $27,000. The complainant bid $27,100, an amount in excess of the decree, interest, and costs of over $8,000, and became the purchaser and took possession of the property thereunder.

At the time of this sale there was a corn and potato crop growing and unharvested upon the premises, which had been planted in the spring of 1874 by defendants Phillips. These crops were harvested by the plaintiff and the defendants claimed in this case that the value of the corn and potatoes thus harvested and sold by the plaintiff should be allowed them as an offset against the amount due on the note sued upon. In taking this position the defendants relied upon the agreement of July 14th, while the plaintiff claimed that he became the owner of these crops under the chancery sale freed from the provisions of that agreement. Fifteen hundred dollars was applied upon the chattel mortgage by the plaintiff in accordance with the agreement of July 14th. While this agreement was not as full and clear as it might have been made, yet there was nothing therein to prevent the complainant at once proceeding to foreclose his real estate mortgage as though no such agreement had been made. Indeed it is conceded by counsel for defendants that this agreement was entered into "in contemplation of an immediate foreclosure of the mortgage on the farm." The foreclosure proceedings continued up to and including a sale as though no such agreement had been made.

At a mortgage foreclosure sale of real estate made pursuant to a decree, the complainant stands upon an equal footing with third parties having no superior rights and subject to no disabilities, and the purchaser at such a sale takes the premises sold with the crops growing thereon. Scriven v. Moote, 36 Mich. 66; Ledyard v....