Lindgren v. Lindgren
| Decision Date | 23 June 1898 |
| Docket Number | 11,066 - (164) |
| Parties | ANDREW G. LINDGREN v. SWANTE A LINDGREN and Others |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county against Swante A Lindgren and Anna Lindgren, his wife, and Nils O. Werner, as receiver of the rents and profits of their real estate, to foreclose a mortgage.
Defendant Swante A. Lindgren did not appear, and the other defendants answered jointly. The case was tried before Belden, J., who found as facts, among other things, as follows: The mortgage was executed May 19, 1888, by the Lindgrens to Michael and Lars Munson to secure the principal sum of $3,000, evidenced by the note of the mortgagors. By a judgment rendered December 10, 1891, Mr. and Mrs. Lindgren were separated from bed and board, and he was required to pay her a certain yearly sum, and upon his failure so to do defendant Werner was appointed receiver of the rents and profits of his real estate for the purpose of paying from them the amount awarded her. In consequence of a default in the conditions of the mortgage the mortgagees in June, 1892, proceeded to foreclose it by advertisement. The sale was set by the notice at 10 a.m. on August 8, 1892, and at the time and place named the premises were sold by the sheriff to the mortgagees, they being the highest bidders, for $3,259.58, which was the full amount due. The sheriff immediately delivered to the purchasers a certificate of sale in due form, which however was never recorded. Afterwards, on the same day, defendant Swante A. Lindgren procured the sheriff to make another sale of the property, at which plaintiff bid $7,000, for which sum the premises were struck off to him. Plaintiff and Swante A Lindgren procured the consent of the Munsons to the second sale on condition that they should be paid the $3,259.58 for which they had bid in the premises; after the second sale plaintiff paid that amount to the sheriff, who immediately paid it to the Munsons, whereupon they surrendered their certificate of sale to plaintiff and Swante A. Lindgren, who canceled it. A second certificate of sale in usual form, and reciting that the premises were duly sold to plaintiff for $7,000 pursuant to the notice, was delivered by the sheriff to plaintiff and recorded on August 8, 1892. Plaintiff at the same time delivered to Swante A. Lindgren his promissory note for the balance of the $7,000. Subsequently Mrs. Lindgren and the receiver brought action against plaintiff and Swante A Lindgren to have the sale to plaintiff and the certificate issued to him set aside, and the amount of plaintiff's lien, if any, determined; and judgment was rendered that Swante A. Lindgren and plaintiff had solicited and procured the sheriff to make said sale to plaintiff, and to issue said certificate to him, with intent to defraud said Anna Lindgren of her rights and interest in the property and to put it beyond her reach and the reach of the court, so as to prevent payment of the alimony awarded to her, and decreeing that the sale and certificate were null and void and that plaintiff had no right, title or interest in the premises under and by virtue thereof. October 30, 1895, the Munsons executed to plaintiff an assignment of the note and mortgage and the moneys secured thereby. As conclusion of law the court found that plaintiff was not entitled to any relief.
From an order, Smith, Simpson, McGee and Lancaster, JJ., denying a motion for a new trial plaintiff appealed. Reversed.
Foreclosure of Mortgage -- Judgment Setting Sale Aside not a Bar to Action to Foreclose.
A judgment that a certain sale of mortgaged real property under a power contained in a mortgage, and a sheriff's certificate based on the sale, are null and void, and that the party claiming under such certificate has no right, title or interest in or to the property under or by virtue of such sale or certificate, is no bar to an action subsequently brought to foreclose the mortgage.
Foreclosure of Mortgage -- Sale Invalid for Fraud Does not Extinguish the Lien.
A sale of mortgaged property in foreclosure proceedings, declared to be illegal and invalid on the ground of fraud therein, could not, as to a mortgagor, operate to extinguish a valid mortgage to satisfy which the sale was made.
Foreclosure of Mortgage -- Where Sheriff's Certificate Operates as Conveyance.
It is only where a sheriff's certificate of foreclosure of sale under the power has been acknowledged and recorded, and the year of redemption has expired, that such certificate is permitted to operate as a conveyance of title.
Plaintiff Cannot Recover when Compelled to Prove His Illegal Act.
The rule is that while a plaintiff cannot recover whenever it is necessary for him to prove, as a part of his cause of action, his own illegal contract, or other illegal transaction, he may recover if he can show a complete cause of action without being obliged to prove the illegal act, although such act may incidentally appear, and may even be important as explanatory of other facts in the case.
C. J. Buell, A. B. Darelius and Brooks & Hendrix, for appellant.
This mortgage has never been foreclosed. A void foreclosure does not discharge the lien of the mortgage. Folsom v. Lockwood, 6 Minn. 119 (186); Lash v. McCormick, 17 Minn. 381 (403); Rogers v. Benton, 39 Minn. 39; Fort v. Roush, 104 U.S. 142. Nothing but actual payment of the debt, or an express release, will operate as a discharge of the mortgage. Folsom v. Lockwood, supra; Geib v. Reynolds, 35 Minn. 331. Foreclosure by advertisement is in derogation of the common law and must be strictly pursued. Clifford v. Tomlinson, 62 Minn. 195. The foreclosure was invalid because the certificate was not recorded. G.S. 1894, §§ 6038, 6039; Larocque v. Chapel, 63 Minn. 517. The consideration for the assignment to plaintiff was immaterial. Fagan v. Peoples S. & L. Assn., 55 Minn. 437. If title passed by the first foreclosure, subject to redemption, such title was not revested by the destruction of the certificate. Rogers v. Rogers, 53 Wis. 36. The former judgment is not a bar. The decree did not undertake to adjudicate that plaintiff had no lien upon the premises. It cannot be interpreted to adjudge that he could never thereafter purchase, or otherwise obtain, a lien. A clear distinction exists between a "right, title and interest" to land and a lien thereon. The latter is in no sense a "right, title, interest in or to the said mortgaged premises." Wiltsie, Mort. Forec. § 10; Boone, Mort. § 221; Devlin, Deeds, § 421; 2 Jones, Mort. § 1893; Mitchell v. Bartlett, 51 N.Y. 447; Daniels v. Smith, 4 Minn. 117 (172); Donnelly v. Simonton, 7 Minn. 110 (167); Smith v. Buse, 35 Minn. 234. The claim herein sued upon at the commencement of the former action was a mere lien. It was not transferable by a conveyance in ordinary form. Hill v. Edwards, 11 Minn. 5 (22); Everest v. Ferris, 16 Minn. 14 (26). A lien upon lands is not an estate or interest therein. Bidwell v. Webb, 10 Minn. 41 (59); Brackett v. Gilmore, 15 Minn. 190 (245); Turrell v. Warren, 25 Minn. 9. The mortgagee as such has no title in the land mortgaged. He has neither jus in re nor jus ad rem, but a mere security for his debt. Gardner v. Heartt, 3 Denio, 232; Dunlap v. Stetson, 4 Mason, 349, 364. Nor could the validity of such lien have been determined in that action, which was brought to remove a specific cloud upon title, viz. the second certificate and the sale evidenced thereby. Being such, it could not be maintained as an action to determine adverse claims. Walton v. Perkins, 28 Minn. 413; Knudson v. Curley, 30 Minn. 433; Myrick v. Coursalle, 32 Minn. 153; Pfefferle v. Wieland, 55 Minn. 202, 209. The plaintiff was not required to set up by cross bill in the former suit his right of action to foreclose his lien upon the premises in question. The owner of property cannot compel a mortgagee to foreclose. Clark v. Wilson, 56 Miss. 753. The alleged fraud is no defense. The judgment made no mention of fraud. No estoppel by judgment was shown. Swank v. St. Paul City Ry. Co., 61 Minn. 423. Implied or constructive fraud does not justify denial of relief. Leqve v. Stoppel, 64 Minn. 74. The case is distinguished from cases like Sands v. Codwise, 4 Johns. 536; Bean v. Smith, 2 Mason, 252; Thompson v. Bickford, 19 Minn. 1 (17), in which there were innocent creditors on whom loss would fall, if fraudulent transfers were allowed to stand. Even though plaintiff's cause of action were based upon the sale and certificate to him, and it were claimed that there was an intent to defraud both mortgagors, and this fact had been expressly found by the court, this action would, nevertheless, lie. Billington v. Forbes, 10 Paige, Ch. 487; Francis v. Church, Clarke, Ch. 475; Banta v. Maxwell, 12 How. Pr. 479; Mead v. Combs, 19 N.J.Eq. 112; Fort v. Roush, 104 U.S. 145; Stackpole v. Robbins, 47 Barb. 212. If the plaintiff can show a complete cause of action without being obliged to prove an illegal act, although such illegal act may incidentally appear, he may recover. Gammons v. Johnson, 69 Minn. 488; Frost v. Plumb, 40 Conn. 111; Woodman v. Hubbard, 25 N.H. 67; Morton v. Gloster, 46 Me. 520; Hall v. Corcoran, 107 Mass. 251.
A. Ueland, for respondents.
Whatever the effect of the foreclosure sale to the Munsons, they could not, after receiving the amount of the mortgage debt and costs of foreclosure and after canceling the note, have maintained an action to foreclose. A purchaser at a void foreclosure sale becomes an equitable assignee of the mortgage. Jellison v. Halloran, 44 Minn. 199. The doctrine that the right of the mortgagee passes to the purchaser rests upon an equitable estoppel. Johnson v Sandhoff, 30 Minn. 197. Consequently, if any right existed under...
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