New York Life Ins. Co. v. Erb
| Decision Date | 02 September 1936 |
| Docket Number | No. 47.,47. |
| Citation | 268 N.W. 754,276 Mich. 610 |
| Parties | NEW YORK LIFE INS. CO. v. ERB et ux. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Action by the New York Life Insurance Company against Charles F. Erb and wife. Judgment for plaintiff, and defendants appeal.
Affirmed.
Appeal from Circuit Court, Oakland County; Glenn C. gillespie, judge.
Argued before the Entire Bench, except POTTER, J.
Verne C. Hampton, of Pontiac (Henry A. Balser, of Pontiac, of counsel), for appellants.
Goodenough, Voorhies, Long & Ryan, of Detroit, for appellee.
Plaintiff had summary judgment against defendants, who are husband and wife, for deficiency on mortgage foreclosure.
March 11, 1931, defendants executed to plaintiff a joint and several note for $55,000, secured by mortgage on real estate. January 23, 1933, plaintiff commenced proceedings to foreclose the mortgage by advertisement. Sale was had April 21, 1933, and plaintiff bid in the property for $58,988.85. In plaintiff's affidavit for summary judgment it is claimed that the amount due at the time of sale was $63,001.06, which included taxes on the property, some of which had been paid by the mortgagee about a month before and some within a month after foreclosure proceedings were instituted. The mortgage provided that taxes paid by the mortgagee shall be ‘secured by this instrument.’
The first question is whether suit at law may be maintained for a deficiency on foreclosure of a mortgage by advertisement.
The general rule is that it may. 41 C.J. p. 1022, 19 R.C.L. p. 665. In fact, in the absence of statute and where the mortgage was collateral to a note or other direct obligation to pay the debt, no decisions to the contrary have been found.
The question has never been presented to and passed upon by this court, presumably because the profession has assumed that there is no doubt of the right to sue. The Legislature early recognized the right when it enacted the law giving courts of chancery the then new jurisdiction to enter deficiencydecrees on mortgage foreclosures and provided for such decree against the mortgagor ‘in the cases in which such balance is recoverable at law.’ Rev.St.1846, c. 90, § 112. The provision governed deficiency decrees in chancery until the enactment of the Judicature Act of 1915 (Pub.Acts 1915, No. 314), in which the phraseology of many of the practice statutes was changed. Comp.Laws 1929, § 14366. Unless a deficiency on mortgage foreclosure is recoverable at law, the multitude of deficiency decrees entered before 1915 were without jurisdiction.
‘The express purpose of the statute [as to deficiency decree] is to save the necessity of suing at law for any part of the same debt.’ Sheldon v. Estate of Warner, 59 Mich. 444, 449, 26 N.W. 667.
And in Moore v. Smith, 95 Mich. 71, 76, 54 N.W. 701, 703, the court evidently had the rule in mind when it said (italics ours):
‘While it is true that a sale on statutory foreclosure satisfies the debt secured by the foreclosed mortgage to the extent of the proceeds of the sale, and thus far releases the personal obligation, yet.’
As the general rule has been recognized by our Legislature and court and is fundamentally sound, we hold that an action at law may be instituted for the deficiency on statutory foreclosure of a mortgage.
May the taxes paid by the mortgagee after the commencement of foreclosure proceedings and before the sale be added to the mortgage debt of principal and interest to find the whole amount of the mortgage lien and to compute the deficiency?
The advertised foreclosure notice must set up the amount claimed to be due at the date of the notice. Comp.Laws 1929, § 14428. If the mortgagee had paid the taxes before instituting foreclosure proceedings and had failed to include them in the amount claimed in the notice to be due, or if it had paid after the foreclosure, sale, a much different question would arise.
In Vincent v. Moore, 51 Mich. 618, 17 N.W. 81, relied upon by defendants, it was held that a mortgagee who forecloses the mortgage without making claim for taxes paid cannot, after sale, maintain a...
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...it applicable to any sale under a foreclosure by advertisement made after February 11, 1933. Plaintiff, citing New York Life Ins. Co. v. Erb, 276 Mich. 610, 268 N.W. 754, argues that the foreclosure sale established the amount of deficiency and gave rise to a cause of action for that defici......
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