Miller v. Little
| Decision Date | 21 July 1917 |
| Citation | 164 N.W. 19,37 N.D. 612 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Stark County, Honorable W. C Crawford, Judge.
Affirmed.
Thos H. Pugh, for appellant.
There was an obligation resting upon plaintiffs to have protected their property and the security given to the defendant thereon. There was no duty devolving upon defendant to make redemption from the foreclosure sale, of any prior mortgage nor by reason of not redeeming would defendant be deemed guilty of laches in his duty to plaintiffs. If defendant had not purchased the sheriff's certificate it would have run to deed in name of purchaser, and the deed would have stood as a bar to the enforcement by defendant of his mortgage against the land. Bailey v. Hendrickson, 25 N.D 500, 143 N.W. 136, Ann. Cas. 1915C, 739.
The purchaser at foreclosure by advertisement ordinarily acquires an equitable interest in the land which he may, during the period of redemption, transfer in full to another. His assignee, if there is no redemption, will take the legal title when it matures exactly as the original bidder himself would have done. Gage v. Sanborn, 106 Mich. 269, 64 N.W. 32; Roff v. Miller, 189 Mich. 558, 155 N.W. 518; Lieblien v. Hansen, 178 Mich. 11, 144 N.W. 496; Frisbee v. Frisbee, 86 Me. 444, 29 A. 1115; 27 Cyc. 1866.
Purchasing and obtaining an assignment of a certificate of sale is a transaction wholly different in its nature and legal consequence from a redemption. Shroeder v. Bauer, 140 Ill. 135, 29 N.E. 560.
A junior mortgagee may become a purchaser at the sale under the foreclosure of a prior mortgage.
He can also purchase the certificate issued to another at such sale. Whether or not there was a redemption must depend upon what was done, and not upon the intention of the party doing the act. Any act which amounts to either a purchase or a redemption cannot be aided or prejudiced by the intention of the party doing the act. Streeter v. First Nat. Bank, 53 Iowa 177, 4 N.W. 915; Sprague v. Martin, 29 Minn. 226, 13 N.W. 34.
A junior mortgagee's claim is not merged by his purchase of land at a sale by a prior mortgagee. Union Bank v. Bates, 24 Manitoba L. R. 619; Cornell v. Woodruff, 77 N.Y. 203; Ten Eyck v. Craig, 62 N.Y. 406.
The mortgage lien transfers no title to the land. Comp. Laws 1913, § 6709; Joyce, Defenses to Commercial Paper, § 682.
"If from all the circumstances a merger would be disadvantageous to the party, then his intention that it should not result will be presumed and maintained." 2 Pom. Eq. Jur. PP 788, 792; May v. Cummings, 21 N.D. 281, 130 N.W. 826; Davis v. Randall, 117 Cal. 12, 48 P. 906; Scrivner v. Dietz, 84 Cal. 295, 24 P. 172; Carpentier v. Brennan, 40 Cal. 221; Kilmer v. Hannifan, 113 Iowa 281, 85 N.W. 16; Gilman v. Stock Exch. Bank, 64 Kan. 87, 67 P. 551; Wettlaufer v. Ames, 133 Mich. 201, 103 Am. St. Rep. 449, 94 N.W. 950; Jones, Mortg. §§ 848, 856, 857, 870, 872 and 873.
A merger only comes into existence where the junior lien holder purchases direct from the mortgagor. 27 Cyc. 1378, 1379 and cases cited; Fouche v. Delk, 83 Iowa 297, 48 N.W. 1078; Milner v. Home Sav. & L. Asso. 64 Minn. 500, 67 N.W. 346; National Invest. Co. v. Nordin, 50 Minn. 336, 52 N.W. 899; Burnet v. Denniston, 5 Johns. Ch. 35; Weston v. Livezey, 45 Colo. 142, 100 P. 404.
J. P. Cain, for respondents.
The obtaining of the sheriff's certificate of sale and subsequent deed by the defendant merged in him both the legal and equitable title to the land in question, and that prior mortgage indebtedness was discharged. Such mortgage debts being discharged, they cannot be set up as counterclaims by defendant against plaintiffs in this action. Nor can defendant plead the same as a set-off against plaintiff's valid claim for wages, and at the same time retain as fee-title owner the property he took as security for the debt which he now attempts to collect. Pom. Eq. Jur. P 778; Tiffany, Real Prop. PP 101, 547, pp. 246, 1251, 1252 and cases cited in notes; 27 Cyc. 1329, § 2, 1378, P C; McDonald v. Magirl, 97 Iowa 677, 66 N.W. 904; Belleville Sav. Bank v. Reis, 136 Ill. 242, 26 N.E. 646; Agnew v. Charlotte, C. & A. R. Co. 24 S.C. 18, 58 Am. Rep. 237; National Invest. Co. v. Nordin, 50 Minn. 336, 52 N.W. 899; Waters v. Waters, 20 Iowa 363, 89 Am. Dec. 540; First Nat. Bank v. Kreig, 21 Nev. 404, 32 P. 641; Mathews v. Jones, 47 Neb. 616, 66 N.W. 622; Clark v. Clark, 76 Wis. 306, 45 N.W. 121; Byington v. Fountain, 61 Iowa 512, 14 N.W. 220, 16 N.W. 534; Crowley v. Harader, 69 Iowa 83, 28 N.W. 446; Moore v. Olive, 114 Iowa 650, 87 N.W. 720.
Where the mortgagor purchases the equity of redemption the whole estate is vested in him. Jackson v. Tift, 15 Ga. 557; Lyman v. Gedney, 114 Ill. 388, 55 Am. Rep. 871, 29 N.E. 282; Clarke v. Peak, 15 La.Ann. 407; Marston v. Marston, 54 Me. 476; Eldridge v. Eldridge, 14 N.J.Eq. 195; 35 Century Dig. title Mortgages, PP 815 and 823.
The plaintiffs aver that from October 5, 1914, to December 1, 1915, the plaintiffs did farm work and labor for and at the request of the defendant, for which he promised to pay $ 544.67; and that he paid only $ 228.01; and the balance due is $ 316.66. In September, 1916, the plaintiff recovered a judgment, and the defendant appeals.
The answer is a counterclaim. It avers that on September 13, 1911, the plaintiff made to the defendant a promissory note to pay $ 325 on September 13, 1916, with interest, and that to secure the same they gave defendant a mortgage on a certain 80 acres of land in Adams county, subject to a prior mortgage for $ 150. That under the power in the mortgage the defendant declared the note to be due. The reply admits the making of the note and the mortgages, and that the prior mortgage was foreclosed by a sale of the premises. That defendant redeemed and obtained a sheriff's deed to the land; that the total debt against the land did not exceed $ 600, and that it was worth $ 2,000.
It also appears that on March 24, 1911, the plaintiffs made to P. D. Norton a mortgage on the same land to secure $ 22.50, which mortgage was foreclosed for the sum of $ 67.63 and the sheriff's certificate assigned to the defendant, and under the assignment defendant obtained a sheriff's deed to the land.
On the value of the land the plaintiffs both testified that it was worth $ 20 an acre; and the defendant testified that he contracted to sell the land at $ 10 an acre. The court found that the value of the land was from $ 800 to $ 1,000, and that the total mortgages against it did not exceed $ 650, and that by the merger of the title the mortgage for $ 325 was paid. The decision of the district court is manifestly fair and just, and it could not be otherwise. National Invest. Co. v. Nordin, 50 Minn. 336, 52 N.W. 899; McDonald v. Magirl, 97 Iowa 677, 66 N.W. 904; Crowley v. Harader, 69 Iowa 83, 28 N.W. 446; Moore v. Olive, 114 Iowa 650, 87 N.W. 720.
The judgment of the District Court is affirmed.
CONCUR BY: BIRDZELL
The evidence in this case seems to establish beyond question that the property acquired by the junior mortgagee in the foreclosure proceedings was worth considerably more than the amount standing against the land, including his mortgage. Under the circumstances disclosed by the record, it would be grossly inequitable to allow the junior mortgagee, who has acquired the property pledged for an amount only equivalent to the prior liens and foreclosure costs, to hold the property thus obtained, and at the same time enforce the security. 2 Pom. Eq. Jur. 3d ed. § 794. When a redemptioner acquires property by sheriff's deed, under the circumstances disclosed in this case, it is only equitable that his security should be discharged completely, if the value of the property warrants such finding, and pro tanto if the surplus value over prior liens is insufficient.
I dissent from the conclusions reached in the majority opinion prepared by Mr. Justice Robinson.
The material and undisputed facts in this case are as follows: On September 13, 1911, the plaintiffs executed and delivered to defendant a promissory note for $ 325, payable September 13 1916. At the same time plaintiffs executed and delivered to defendant a third mortgage upon an eighty (80) acre tract of land in Adams county. The holder of the second mortgage thereafter caused such second mortgage to...
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