Machold v. Farnan

• Decision Date: 22 June 1911
• Parties: CARL MACHOLD, Appellant, v. ROSA FARNAN, Respondent
• Court: Idaho Supreme Court

117 P. 408

20 Idaho 80

CARL MACHOLD, Appellant, v. ROSA FARNAN, Respondent

Supreme Court of Idaho

June 22, 1911

SALE OF REAL ESTATE-DEED AND CONTRACT-EQUITABLE MORTGAGE-ACTION TO REDEEM-FORM OF DECREE-REDEMPTION-TIME FOR REDEMPTION-SALE OF PROPERTY-STATUTORY REDEMPTION-EQUITABLE REDEMPTION-TENDER-WITHDRAWAL OF TENDER-DAMAGES.

(Syllabus by the court.)

1. Where a deed, absolute on its face, is taken to real property and a contract is entered into to purchase the same, and it is alleged in the complaint that said transaction was in effect an equitable mortgage, and the plaintiff prays to have the same so declared, and the court finds that the deed was a mortgage, and no application is made to foreclose said mortgage, the proper and usual form of the decree is that the plaintiff be allowed to redeem upon the payment of the sum found due within a reasonable time to be fixed by the decree, and that upon such payment the mortgage shall be adjudged to be satisfied, and that in default of such payment the title shall be quieted in the defendant.

2. In determining the form of the decree for redemption and the terms and conditions thereof, the matter rests very much in the sound discretion of the court as exercised upon the facts of each particular case, but the decree should find the exact amount due or necessary to redeem and condition the redemption upon the payment of the sum found due within a fixed time, which time for redemption should be a reasonable time under all the facts of the case.

3. In such cases it is not necessary that there be any provision in the decree for the sale of the property when the court finds the deed and agreement to be a mortgage, for the reason that the action is not an action to foreclose, and the usual order of sale in foreclosure cases is not required.

4. There is a clear distinction between a statutory redemption which is from the sale and not from the mortgage, and an equitable redemption established by the court. In the latter case the redemption is from the mortgage and not from the sale; from which the rule is deduced that the redemptioner must do equity and pay all that is due under the mortgage before he is entitled to redeem and receive a conveyance of the property.

5. Held, that the decree and the allegations and the prayer of the complaint in substance and form is in accordance with the law and violates no right of the appellant as mortgagor, but on the contrary, grants him the equitable relief for which he prays upon condition that he do equity himself.

6. Held, that the tender made in the second amended complaint on the theory that the deed and contract was a mortgage, of the exact amount theretofore tendered on the theory that the transaction was a sale and not a mortgage, was not a sufficient tender to stop the running of interest.

7. Said tender in writing was not a sufficient compliance with the provisions of sec. 6110, Rev. Codes, providing for an offer or tender in writing, as such tender must be for the full amount due.

8. Under the provisions of sec. 3402, Rev. Codes, the plaintiff is not entitled to recover any damages in this action.

APPEAL from the District Court of the Sixth Judicial District for Bingham County. Hon. James M. Stevens, Judge.

Action to have a certain deed and contract declared a mortgage and to redeem therefrom, and for damages. Judgment for plaintiff from which he appeals. Judgment affirmed.

Judgment affirmed. Cause remanded with instructions. Costs awarded to respondent.

Carl Machold, pro se.

Deed intended as mortgage does not pass legal title. (Mabury v. Ruiz, 58 Cal. 11.)

If a mortgage at the beginning, the instrument always remains a mortgage. (Burton v. Lies, 21 Cal. 89.)

Right to redeem from a mortgage cannot be waived by express stipulation of parties. (Goodenow v. Ener, 16 Cal. 461, 76 Am. Dec. 540; 27 Cyc. 1010.)

A trust deed executed to secure a given debt, payable at a specified time upon real estate, is, under our statutes, a mortgage, and cannot be foreclosed by notice and sale, under a power of sale in such trust deed, and such trust deed can only be foreclosed by judicial sale, pursuant to decree rendered in an action brought therefor in the proper court. (Brown v. Bryan, 6 Idaho 1, 51 P. 995.) A grantee by absolute deed, where there is a separate agreement for reconveyance, the two together constituting a mortgage, has his remedy for foreclosure under sec. 4520, Rev. Stat. Idaho. (Kelley v. Leachman, 3 Idaho 392, 29 P. 849.)

A mortgage cannot be foreclosed without a sale of the mortgaged premises under a decree of foreclosure. (Lulu & White v. Nevin, 10 Colo. 357, 15 P. 611.)

When it is clear that a tender will not be accepted, it need not be made. (Girard v. St. Louis Car Wheel Co., 123 Mo. 358, 45 Am. St. 556, 27 S.W. 48, 25 L. R. A. 514; Livieratos v. Commonwealth Security Co., 57 Wash. 376, 106 P. 1125.)

A tender of money made in the pleadings, followed by a payment thereof into court, is a sufficient tender. (Weaver v. Nugent, 72 Tex. 272, 13 Am. St. 792, 10 S.W. 458.)

Plea of tender is sufficient though the money is not brought into court. (Loughborough v. McNevin, 74 Cal. 250, 5 Am. St. 435, 14 P. 369, 15 P. 773.)

A tender of the whole sum due, principal and interest, at any time after debt falls due, but before suit is brought, stops the interest and discharges the party from the costs of a subsequent suit. (McCalley v. Otez, 99 Ala. 584, 42 Am. St. 87, 12 So. 406.)

When a tender has been excused by an act of the party to whom it was due, a deposit of the tender may be withdrawn without prejudice to the rights of the depositor. (Guillaume v. K. S.D. Fruit Land Co., 48 Ore. 400, 86 P. 883, 88 P. 586; 8 Current Law, 1330.)

Tender, if kept good, stops interest. (Patterson v. Sharp, 41 Cal. 133; Easterbrook v. Farquharson, 110 Cal. 311, 42 P. 811.)

Clark & Budge, for Respondent.

It was entirely proper for the court to enter the decree made in this case when he found as he did from the evidence. This being an action to redeem, it was proper for the court to find the amount due and to order that it be paid within a reasonable time, or in the event of a failure to make payment that plaintiff's action be dismissed. (Cline v. Robins, 112 Cal. 581, 44 P. 1023; Decker v. Patton, 120 Ill. 464, 11 N.E. 897; Bremer v. Dock Co., 127 Ill. 464, 18 N.E. 321; Chicago etc. Co. v. Scully, 141 Ill. 408, 30 N.E. 1062; Sloane v. Lucas, 37 Wash. 348, 79 P. 949; Rodman v. Quick, 211 Ill. 546, 71 N.E. 1087; Mack v. Hill, 28 Mont. 99, 72 P. 307.)

It is not necessary that there be any provision in the decree for a sale of the property when the court finds the deed and agreement to be a mortgage, because the proceeding is not an action to foreclose, and therefore the usual order of sale in foreclosure cases is not required. (Cowing v. Rogers, 34 Cal. 648; Cline v. Robins, supra; Mack v. Hill, supra; Decker v. Patton, 120 Ill. 464, 11 N.E. 897; Martin v. Ratcliff, 101 Mo. 254, 20 Am. St. 601, 13 S.W. 1051; Rodman v. Quick, supra.)

Damages may only be recovered when the mortgagee, after the mortgage has been satisfied, has refused to issue a certificate of discharge, or to enter satisfaction of the mortgage on the record after demand has been made upon him. (Barnes v. Pitts Agr. Works, 6 Idaho 259, 55 P. 239.)

If a debtor wishes to extinguish his liability for subsequently accruing interest, or demands some affirmative relief, he cannot retain the money subject to his own use, but must devote it to the specific purpose of paying the debt, and put it within the power of the creditor to receive it at any time. He must keep his tender good. (Nelson v. Loder, 132 N.Y. 288, 30 N.E. 369; Tuthill v. Morris, 81 N.Y. 94.)

SULLIVAN, J., AILSHIE, J. Ailshie, Presiding J., Sullivan, J., concurs.

OPINION

SULLIVAN, J.

This action is a continuation of the litigation of the parties hereto begun in April, 1907. See Machold v. Farnan, 14 Idaho 258, 94 P. 170, reference to which opinion is made for some of the facts in this case. The action was originally brought for the specific performance of the contract sued on in this action, and the theory upon which the case was then tried was that said contract was for the sale of real estate. On the first trial judgment was given to the plaintiff and on appeal the judgment was reversed and a new trial granted. After the case was remanded for a new trial, the plaintiff filed an amended complaint, wherein it was alleged that a certain deed from one Millick to the defendant Farnan and a contract between the parties hereto were intended as a mortgage to secure the payment of money loaned to appellant, and prayed that the deed from the Oregon Mortgage Company to Millick and from Millick to the defendant be adjudged and decreed to be mortgages, and that the plaintiff be adjudged and decreed to be the owner of the premises described therein; that the defendant be adjudged to account and pay to plaintiff the damages he has sustained by the breach of the covenant to convey said land to plaintiff, and that plaintiff be given a money judgment against the said defendant to comply with section 3364, Rev. Stat. of Idaho, 1887 (sec. 3402, Rev. Codes), and for costs of suit.

An answer was filed to said amended complaint in which its material allegations were denied, and respondent set forth allegations to quiet her title to said land, which cross-complaint was answered by appellant. The cause was again tried upon the new issues thus made, and the trial court made its findings of fact and conclusions of law and entered judgment holding said deed to the defendant and contract between the defendant and plaintiff to be a mortgage to secure the payment of $ 2,000, together with interest and taxes to...