Moore v. McPherson

• Court: Kansas Supreme Court
• Writing for the Court: DAWSON, J.:
• Citation: Moore v. McPherson, 106 Kan. 268, 187 P. 884 (Kan. 1920)
• Decision Date: 07 February 1920
• Docket Number: 22,378,22,379
• Parties: DIDO C. MOORE, Appellee, v. ABNER B. McPHERSON, and NARCISSA McPHERSON, Appellants, THE UNION STATE BANK, Appellee, et al. THE UNION STATE BANK, Appellee, v. ABNER B. McPHERSON and NARCISSA McPHERSON, Appellants, et al

187 P. 884

106 Kan. 268

DIDO C. MOORE, Appellee, v. ABNER B. McPHERSON, and NARCISSA McPHERSON, Appellants,

THE UNION STATE BANK, Appellee, et al.

THE UNION STATE BANK, Appellee, v. ABNER B. McPHERSON and NARCISSA McPHERSON, Appellants, et al

Nos. 22,378, 22,379, 22,378, 22,379

Supreme Court of Kansas

February 7, 1920

Decided January, 1920.

Appeal from Cowley district court; OLIVER P. FULLER, judge.

Judgment reversed and causes remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1. MORTGAGE FORECLOSURE--Sale--Confirmation--Finality of Judgment of Confirmation. When a mortgage on real property is foreclosed, and the property sold, and the sale confirmed such confirmation cannot be vacated nor the sale set aside after the term at which the judgment of confirmation was rendered, except in accordance with the civil code.

2. SAME--Sale--Rights of Second Mortgagee. Under section 497 of the civil code there can be but one foreclosure sale of mortgaged property, no matter how many mortgages encumber that property; and the only way that a junior mortgagee who has been impleaded can protect his interest is by seeing to it that the property, when sold, brings somewhere near what it is worth, or enough to satisfy his second lien. (Sigler v. Phares, 105 Kan. 116, 181 P. 628.)

3. SAME--No Conflict between Positive Law and Equity. Equitable considerations do not clash with positive law, nor can they be invoked to unsettle established legal principles.

4. SAME--Judgment of Confirmation Final at End of Term. A court has no discretionary control over a judgment after the end of the term of court at which the judgment is rendered.

5. SAME--Sale of Mortgaged Property a Judicial Sale. In a mortgage foreclosure, the sale of the mortgaged property is a judicial sale, and the confirmation is a final and binding judgment of the court.

W. L. Cunningham, of Arkansas City, for the appellants.

Albert Faulconer, C. L. Swarts, Kirke W. Dale, and Robert M. Yates, all of Arkansas City, for the appellee.

OPINION

DAWSON, J.:

This appeal relates to the predicament of a junior mortgagee where the mortgaged property was sold in foreclosure for a sum merely sufficient to satisfy the judgment of the senior mortgagee, and where the junior mortgagee was the purchaser at the foreclosure sale.

Abner B. McPherson and wife owned some town lots in Arkansas City, and mortgaged them to Dido C. Moore to secure an indebtedness of $ 1,500. Some time later McPherson and wife gave a second mortgage on this property to the Union State Bank of Arkansas City to secure a loan (or credit) of $ 5,000. Dido C. Moore instituted this action to foreclose her mortgage, alleging default by the mortgagors. The Union State Bank was impleaded. Meantime McPherson had become a bankrupt, and the federal trustee of his estate was also joined, but he made no appearance. The Union State Bank answered and filed a cross petition, setting up its junior mortgage and praying for its foreclosure. The defendants, McPherson and wife, admitted the execution of the note and mortgage to Dido C. Moore, and on September 18, 1916, judgment was rendered in her favor for $ 1,618.69, foreclosure was decreed, and order of sale authorized. On October 12, 1916, the order of sale issued, the sheriff sold the property on November 20, 1916, to the Union State Bank for $ 1,760, a sum which merely paid the Dido C. Moore judgment and costs. The sale to the Union State Bank was confirmed on December 21, 1916, and all the defendants were barred of all claim to the property, subject only to the McPhersons' right of redemption within eighteen months from the date of the sheriff's sale.

The answer and cross petition of the Union State Bank was filed on August 18, 1916, and McPhersons' answer thereto, filed November 16, 1916, joined issues with the bank, alleging that the property involved was their homestead; that bankruptcy proceedings were then pending against Abner McPherson; that if Mrs. McPherson ever signed the note and mortgage of the cross petitioner it was as security; that there had been extensions of time given to her husband to which she had never consented, etc. The Union State Bank filed an amended cross petition on March 10, 1917, to which each of the defendants answered, in part, as follows:

"Further answering this defendant says that the defendant, The Union State Bank, should not be permitted to further prosecute in said action to foreclose the pretended mortgage set out in its amended answer and cross petition upon Lots Twenty-five (25) and Twenty-six (26), in Block Forty (40), Arkansas City, Cowley County, Kansas, for the reason that prior hereto and on the day of November, 1916, in the above entitled action, the above described lots were sold under an order of sale issued out of this court in the above entitled action, under a mortgage foreclosure in said action, which was prior and superior to the mortgage of the defendant, The Union State Bank, and to which the pretended mortgagee, The Union State Bank, was junior and inferior, and that said sale was thereafter, and on the day of December, 1916, duly approved and confirmed by an order of this court entered in the above entitled action, and that by reason thereof said lots cannot be again sold on any order or judgment inferior to the lien of the plaintiff in this action."

On April 28, 1917, the issues raised between the Union State Bank and the McPhersons were tried by the court, and the cause was submitted and taken under advisement.

About this time the Union State Bank filed an independent action against the McPhersons, reciting all the pertinent facts and the history of the case instituted by Dido C. Moore, which we have narrated above, and alleged that the bank had no actual notice of the rendition of the judgment in favor of Dido C. Moore; that R. J. Grover, vice president of the bank, attended the sheriff's sale for the purpose of making such a bid as would protect the bank; that Dido C Moore's attorney was the only other bidder present; and that when Moore's attorney had made a bid of about the amount of Moore's lien he, the vice president of the bank, bid the sum of $ 1,760, which the sheriff accepted. The petition alleged--

"That at the time said Grover, in the interests of the plaintiff, attended and bid at such sale, the issues of fact and law arising out of the pleadings in action No. 13,325 were still pending and undetermined, and have never yet been disposed of, but are still in dispute, and have been ever since between said parties, and that the said Grover, for said plaintiff bank, at the time of the sale as aforesaid, was in doubt and perplexity as to the legal rights of the bank in the premises, and that he made said bid solely and only for the purpose of protecting the interests of the bank in said mortgaged premises, and believing and apprehending that by making the bid which he made, he was so doing; that he did not know that said sale, under the circumstances, would have the effect of denying to the bank the right to enforce its said mortgage as against the property herein described, and that said Grover at said time had no intention of waiving for the plaintiff bank its rights under its said mortgage. . . .

"The plaintiff further says that after said sale and before the plaintiff bank realized the mistake which had been made, said sale was confirmed by the order of said court, upon the 21st day of December, 1916. . . .

"The plaintiff further says that the said property, at the time of such sale and now is reasonably and fairly worth the sum of Thirty-five Hundred Dollars.

"The plaintiff therefore tenders a bid for said property in the sum of at least Thirty-five Hundred Dollars, should the same be again resold. . . .

"Wherefore the plaintiff prays that this court by an order duly made for the purpose, stay the further proceedings in said case Number 13325, entitled, Dido C. Moore, plaintiff v. Abner B McPherson, et al., defendants, until the final disposition of this case, and that on the final hearing hereof that the plaintiff be awarded a lien upon the lands described in the mortgage to it heretofore mentioned for the sum made up by the amount due said plaintiff on account of its said mortgage, together with the sums accruing to it under its certificate of purchase, and that the court order and direct either that the sale heretofore made and the order of confirmation thereof shall be set aside and vacated, and the property re-advertised and resold for the amount of the plaintiff's lien herein prayed for,...