Monroe v. California Co.

• Decision Date: 07 December 1937
• Docket Number: No. 8334.,8334.
• Citation: 93 F.2d 141
• Parties: MONROE v. CALIFORNIA CO.
• Court: U.S. Court of Appeals — Fifth Circuit

93 F.2d 141 (1937)

MONROE v. CALIFORNIA CO.^*

No. 8334.

Circuit Court of Appeals, Fifth Circuit.

December 7, 1937.

Clay Cooke, of Fort Worth, Tex., and Geo. W. Reed, Jr., of Tulsa, Okl., for appellant.

W. R. Harris, of Dallas, Tex., for appellee.

Before FOSTER and HUTCHESON, Circuit Judges, and STRUM, District Judge.

HUTCHESON, Circuit Judge.

This is an appeal from a judgment in trespass to try title. The issue on which the case went off below was, the question presented here is, the effect upon appellee's title to lands and mineral leases it had bought subject to a mortgage on it and other lands of the foreclosure proceedings instituted by appellee after, by purchase, it had become the owner of the mortgage. The appellant was the purchaser at the foreclosure sale. She claimed below, and claims here, that as such purchaser she acquired not only the right, title, and interest of the foreclosure defendants in all the lands described in the mortgage, but that of appellee, the foreclosing plaintiff as well. Appellee on its part claimed below, and claims here, that when, as owner of part of the mortgaged lands and leases, in order to protect them against foreclosure, it purchased and became the owner of the mortgage, there was a merger of lien and title with a resulting extinguishment of the lien as to that part of the land and leases owned by it. When, therefore, it later foreclosed the mortgage lien against named defendants, the foreclosure did not, it could not, affect the lands and leases it owned, because, as to them, the lien had merged with the title and was no longer in existence.

The District Judge heard the case on jury waiver. Holding with appellee, he filed findings of fact and conclusions of law, and rendered judgment in its favor. This appeal tests whether that judgment was rightly rendered.

The facts are without dispute. After the execution of the mortgage on the 160 acres of land of which the land in controversy in this suit is a part, the mortgagor sold various portions of and interest in the land, including those parcels sold to appellee. In order to protect its holdings from foreclosure appellee caused the mortgage lien to be purchased, and thereafter brought its suit in the state district court to foreclose, and obtained a decree foreclosing, the lien upon all of "the right, title and interest" of certain named defendants. The findings of fact of the District Judge and the documentary evidence brought up in the record, make it clear that neither the plaintiff nor the defendants in foreclosure, nor the purchaser at the sale, had, or could have had, any idea or notion that the plaintiff in foreclosure was intending, or attempting, to sell its own property by foreclosure under the lien, which it had purchased to protect its lands, and which as to them, had been extinguished by merger.

The District Judge found that the interests of defendants which were sold under the decree, were fully worth the amount paid at the sale. Indeed, no claim of inadequacy is made by the purchaser.

Here appellant plants herself upon three propositions: (1) That a purchaser at a foreclosure sale takes the mortgagor's title to the mortgaged premises as that title stood when the foreclosure lien was created, and unaffected by subsequent dealings and encumbrances.¹ (2) That while the purchaser at an ordinary execution sale gets only such title as the defendant in execution had, the purchaser at a foreclosure sale holds by estoppel under the foreclosure plaintiff as well, and thus, as to the premises foreclosed, succeeds not only to the rights the mortgagor granted, but to those the foreclosure plaintiff has in the premises when the lien is foreclosed.² (3) That when the foreclosure plaintiff has any right, title or interest in the premises which it wishes reserved from foreclosure, it must definitely except it from the proceedings, or it will pass by the foreclosure sale.³

Appellant insists that no such effective reservation was made in these proceedings, but that the entire body of land included in the mortgage as well that which plaintiff owned, as the balance of it, was subjected to foreclosure. She therefore maintains though no one intended that it should be, nor supposed that it was, so included, that under the letter of the law appellant, a purchaser at foreclosure, acquired not only the interest in the land which the foreclosure plaintiff intended to subject to sale under the lien, but also the interest in the premises which the plaintiff in foreclosure had bought the mortgage to protect, and had not intended to sell.

Appellee, not at all contesting the general principles appellant...