Martin v. Ward

• Decision Date: 04 May 1895
• Parties: MARTIN et al. v. WARD et al.
• Court: Arkansas Supreme Court

Page 1041

30 S.W. 1041

MARTIN et al. v. WARD et al.

Supreme Court of Arkansas.

May 4, 1895.

Appeal from Pulaski chancery court; David W. Carroll, Chancellor.

Sam. S. Wassell, for appellants. Eben W. Kimball, for appellees.

RIDDICK, J.

The only question in this case is whether a right of redemption remains to the mortgagor of real estate after a decree of foreclosure and a sale of the mortgaged property thereunder. In the absence of a statute giving this right to the mortgagor, his equity of redemption is barred by the decree and sale. The object of the proceeding to foreclose is to cut off the equity of redemption which exists in the mortgagor, and a sale under a valid decree of foreclosure must have this effect, unless the legislature has extended the right of the mortgagor so that he may redeem after sale. Pingrey, Mortg. § 1736; 2 Story, Eq. Jur. p. 329; Bisp. Eq. § 156; Jones, Mortg. § 1586; Beard v. Wilson, 52 Ark. 291, 12 S. W. 567. It is conceded that a sale under a decree of court would ordinarily have this effect, but appellant contends that the act of March 17, 1879,¹ gives the mortgagor the right to redeem at any time within one year from the date of sale. When the sale is made under a power of sale contained in the mortgage, the statute clearly extends the right of redemption after the sale. We are asked to determine whether this act applies to foreclosure sales made under a decree of court. The title of the act designates it as "An act to regulate the sale of property under mortgages and deed of trust." Now, a sale under a decree of court is not a sale under a mortgage or deed of trust. Although the decree may have been rendered in an action to foreclose a mortgage or deed of trust containing a power of sale, still a sale under such a decree is not controlled by, or dependent for its validity upon, such power of sale, but upon the decree of the court. Johnson v. Meyer, 54 Ark. 441, 16 S. W. 121.

Taking the words according to their customary meaning, we should say that a sale under a mortgage or trust deed was a sale by virtue of a power of sale contained in such instruments. That the act in question refers to such sales only is, we think, clearly shown by the language. It undertakes to regulate such sales by requiring, among other things, that the mortgagee, trustee, or other person authorized to make the sale shall apply to a justice of the peace for the appointment of appraisers to appraise the property. It provides that the property when first offered for sale shall not be sold for less than two-thirds of the appraised value. In the event it fails to bring that amount, the act directs how and when it shall again be offered for sale. Finally, it provides that real property sold thereunder may be redeemed by the mortgagor at any time within one year from the sale thereof. An examination of the act will show that neither in the caption nor body of the act is there any reference to sales under a decree of the court. It is a settled rule of construction that "if one interpretation of a statute would lead to absurdity, the other not, we must adopt the latter." Lieb. Herm. 159. If we should hold that this act was intended to regulate sales under decrees of court, such a construction would involve the absurdity of requiring the chancellor to call to his assistance the nearest justice of the peace to assist him in enforcing his decrees. We know that the legislature did not consider the judgment and discretion of the circuit judges and chancellors of the state to be inferior to that of the justices of the peace, and, as the act requires the mortgagee, trustee, or other person authorized to make the sale to apply to the nearest justice of the peace for the appointment of appraisers, we conclude that it has no reference to sales made under decrees of court.

This view of the statute is strengthened by a consideration of the evils that the legislature intended to remedy by this act. At the time this statute was enacted the foreclosure of mortgages and deeds of trust by a sale under a power of sale contained in such instrument had grown to be quite common. The person authorized to sell was generally the mortgagee himself, or some one in sympathy with, and to a large extent under the control of, the creditor whose debt was secured by the mortgage or deed of trust. While, under general principles of law, such person was required to exercise this power in good faith, and with due regard for the interests of the grantor of the power, yet this was not always done....