Local Realty Co. v. Lindquist Et Ux

• Decision Date: 17 December 1938
• Docket Number: 6004
• Citation: 96 Utah 297,85 P.2d 770
• Court: Utah Supreme Court
• Parties: LOCAL REALTY CO. v. LINDQUIST et ux

85 P.2d 770

96 Utah 297

LOCAL REALTY CO. v. LINDQUIST et ux

No. 6004

Supreme Court of Utah

December 17, 1938

Appeal from District Court, Third District, Salt Lake County; Allen G. Thurman, Judge.

Action by the Local Realty Company against V. A. Lindquist and Mary Lindquist, his wife, to recover rental value of mortgaged premises during redemption period. From a judgment for defendants, plaintiff appeals.

AFFIRMED.

Stephens Brayton & Lowe and Calvin Behle, all of Salt Lake City, for appellant.

F Henri Henroid, of Salt Lake City, for respondents.

LARSON Justice. HANSON and MOFFAT, JJ., concur. WOLFE, Justice, FOLLAND, Chief Justice, dissenting.

OPINION

LARSON, Justice.

This action presents the question: Is the owner-mort-gagor who is in actual possession of real estate from the time of sale under mortgage foreclosure to expiration of the redemption period,--when he does not redeem,--liable to the mortgagee-purchaser at the sale for the rental value of the premises during the redemption period?

This involves a construction of Section 104-37-37, R. S.U. 1933, which reads as follows:

"The purchaser from the time of sale until a redemption, and a redemptioner from the time of his redemption until another redemption , is entitled to receive from the tenant in possession the rents of the property sold or the value of the use and occupation thereof. But when any rents or profits have been received by the judgment creditor or purchaser, or his or their assigns, from the property thus sold preceding such redemption, the amounts of such rents and profits shall be a credit upon the redemption money to be paid; and if the redemptioner or judgment debtor, before the expiration of the time allowed for such redemption, demands in writing of such purchaser or creditor, or his assigns, a written and verified statement of the amounts of such rents and profits thus received, the period for redemption is extended five days after such sworn statement is given by such purchaser or his assigns to such redemptioner or debtor. If such purchaser or his assigns shall for a period of one month from and after such demand, fail or refuse to give such statement, such redemptioner or debtor may, within sixty days after such demand, bring an action in any court of competent jurisdiction to compel an accounting and disclosure of such rents and profits, and until fifteen days from and after the final determination of such action the right of redemption is extended to such redemptioner or debtor." (Italics added.)

This section however must be read in connection with certain others which we now set forth. Chapter 55 of Title 104 deals with "Foreclosure of Mortgages," and two sections therein are important, which so far as material here read:

104-55-1: "There can be but one action for the recovery of any debt or the enforcement of any right secured by mortgage upon real estate or personal property, which action must be in accordance with the provisions of this chapter. Judgment shall be given adjudging the amount due, with costs and disbursements, and the sale of the mortgaged property, or some part thereof, to satisfy said amount and accruing costs, and directing the sheriff to proceed and sell the same according to the provisions of law relating to sales on execution, and a special execution or order of sale shall be issued for that purpose." (Italics added.)

104-55-6: "Sales of real estate under judgments of foreclosure of mortgages and liens are subject to redemption as in case of sales under executions generally. * * *"

Chapter 37 of Title 104 deals with executions and as far as material here reads:

104-37-29: "Upon a sale of real property the purchaser is substituted for and acquires all the right, title, interest and claim of the judgment debtor thereto; and when the estate is less than a leasehold of a two-years' unexpired term the sale is absolute. In all other cases the real property is subject to redemption as provided in this chapter. * * *"

104-37-35: "Until the expiration of the time allowed for redemption, the court may restrain the commission of waste on the property by order granted, with or without notice, on the application of the purchaser or the judgment creditor. But it is not waste for the person in possession of the property at the time of sale, or entitled to possession afterwards, during the period allowed for redemption, to continue to use it in the same manner in which it was previously used, or to use it in the ordinary course of husbandry, or to make the necessary repairs of buildings thereon or to use wood or timber on the property therefor, or for the repair of fences, or for fuel for his family while he occupies the property." (Italics added.)

104-37-36: "When real property has been sold on execution, the purchaser thereof, or any person who may have succeeded to his interest, may, after his estate becomes absolute, recover damages for injury to the property by the tenant in possession after sale and before possession is delivered under the conveyance." (Italics added.)

The last section of the chapter (104-37-40) deals with "redemptions on Sales under Trust Deeds." It provides for redemption from such sales in the same way as from execution sales; provides for giving of a similar certificate of sale, and the execution and delivery of a deed at the expiration of six months if there is no redemption.

These statutes give rise to the following questions:

1. Do the provisions quoted above from Chapter 55 fix the rights as between the purchaser and the mortgagor or owner of the premises on foreclosure sale as the same rights which exist between the purchaser at an execution sale and the judgment debtor on an unsecured debt, or are those sections referring to executions merely procedural sections covering only the way or method in which a sale and redemption shall be made and not attempting to define, limit, or grant rights to either?

2. Under Section 104-37-29, supra, when is the purchaser substituted to all the right and title, etc., of the judgment debtor--at time of the sale or at time of the deed?

3. Who is entitled to the possession during the redemption period?

4. Is such possession merely a naked one, or does it carry with it the usufruct or use and benefit of the property?

5. Can the purchaser or a redemptioner compel the judgment debtor in possession to pay rent or the value of the use and occupation during the redemption period?

We shall note them in order.

1. Even a casual reading of Section 104-55-1, supra reveals that the reference to provisions of the law relating to sales on execution, in that section, has merely procedural significance, i. e., it does not attempt to fix or define any rights of the mortgagor or mortgagee in reference to the property, but merely directs that in making the sale under foreclosure proceedings the sheriff shall proceed in the same way as he does in making sales under executions generally.

But Section 104-55-6, supra, is more than a procedural section; it involves more than the method by which redemptions may be made. It declares in effect that all persons who could redeem were the sale made on an execution issued on a straight money judgment in personam, shall have the same rights to redeem, and in the same way, when the sale is made in foreclosure proceedings. This section confers and defines the extent of the right to redeem as well as providing the method in which a redemption shall be made. Both the right and the method shall be as provided in the law governing sales on execution.

2. This question on has never before been considered in this state and our attention has not been called to any case which has considered or answered the same. The statute reads:

104-37-29: "Upon a sale of real property the purchaser is substituted for and acquires all the right, title, interest and claim of the judgment debtor thereto; and when the estate is less than a leasehold of a two-years' unexpired term the sale is absolute. In all other cases the real property is subject to redemption as provided in this chapter. * * *"

When does the purchaser acquire all the right, title, interest and claim of the judgment debtor? Does he acquire it at the time the property is bid in at the sale, or upon expiration of the redemption period? We have no hesitancy in holding it is at the end of the redemption period, and not at the time of bidding in the property. It is self-evident that the purchaser does not have all the right or title of the judgment debtor until redemption has expired. The right of possession is one the judgment debtor has at the time of sale, and that right remains in him until the execution of the sheriff's deed. So too the legal title is often in the judgment debtor and that cannot vest in the purchaser until after the redemption period, and he cannot under any circumstance obtain that at the sale, and so too is the right of redemption. So also all crops harvested during the redemption period belong to the debtor or person in possession and cannot be claimed by the purchaser under the sale.

It is evident from both logic and other provisions of the statute that it was not intended that this provision should be effective until the expiration of the redemption period. That is to say, that the sale which is initiated when the property was offered for sale by the sheriff and bid in by the purchaser is a continuing matter and not concluded and completed until the expiration of the redemption period. Then when the sale is consummated and completed, the purchaser is subrogated to and acquires all the right, title, interest and claim of the judgment debtor in and to the property. Until that time the interest of the purchaser is an equitable...