Priddy & Chambers v. Smith

• Decision Date: 23 December 1912
• Citation: 152 S.W. 1028,106 Ark. 79
• Parties: PRIDDY & CHAMBERS v. SMITH
• Court: Arkansas Supreme Court

152 S.W. 1028

106 Ark. 79

PRIDDY & CHAMBERS v. SMITH

Supreme Court of Arkansas

December 23, 1912

Appeal from Yell Chancery Court, Danville District; Jeremiah G Wallace, Chancellor; reversed.

Decree reversed and cause remanded.

Priddy & Chambers, for appellants.

From the expiration of the time fixed by the court in its decree in which to redeem, the appellees' right of redemption was barred. 66 Ark. 490, 492.

Sections 5416 and 5420 have reference to mortgages and deeds of trust only, and can not be extended to include a vendor's lien reserved in the deed.

Sam Frauenthal, for appellees.

The court correctly determined that the lien was an equitable mortgage. The language used in the deed, viz: "It is hereby understood and expressly agreed that a lien is hereby retained on the lands hereinafter granted to secure the payment of the said residue of the purchase money so evidenced by said notes," made of the lien for the purchase money a matter of contract and not merely a lien by implication of law. 1 Jones on Real Estate Mortgages §§ 228, 229; 3 Pomeroy, Eq. Jur., § 1257; 51 Ark. 433; 3 Otto. (U.S.) 199; 37 Ark. 511; 60 Ark. 595; 91 Ark. 268; 93 Ark. 371; 97 Ark. 534. If by the contract the property is made security for the debt, the right of redemption necessarily follows. The mere fact that the debt was for the purchase money did not exclude this right of redemption, if the transaction securing the debt resulted also in an equitable mortgage. 53 Ark. 69.

By the statute, Kirby's Dig., § 5420, the right of redemption, which, as an equitable right, existed up to the time of the decree of foreclosure, or to the time fixed by the decree, was extended for one year beyond the date of sale. Statutes giving the right of redemption should be liberally construed where the party asserting the right has done so in the time and manner named in such statutes. 99 Ark. 324; 10 Pet. 11; 27 Cyc. 1800.

OPINION

MCCULLOCH, C. J.

The question involved in this case is, whether or not the statute which confers the right of redemption "under an order or decree of the chancery court, * * * in the foreclosure of mortgages and deeds of trust," (Kirby's Digest § 5420), applies to sales of property under decrees enforcing vendor's equitable liens.

A vendor's lien is the creation of equity and does not exist at law. Harris v. Hanie, 37 Ark. 348; Waddell v. Carlock, 41 Ark. 523; Stephens v. Shannon, 43 Ark. 464. It is enforced by a court of equity as a trust or as an equitable mortgage. Does the statute apply to sales ordered for the enforcement of such rights? We hold that it does not, as it applies only to mortgages or deeds of trust legally speaking and not such liens as are treated by courts of equity as equitable mortgages and enforced as such. A consideration of the language of the statute and its relation to prior statutes, as interpreted by this court, leads irresistibly to that conclusion. The act of 1879, as amended by the act of 1883, Kirby's Digest, § 5416, provides that at all sales of real property "under mortgages and deeds of trust in this State," the property sold thereunder may be redeemed by the mortgagor at any time within one year from the sale thereof. Notwithstanding the fact that the act broadly declares that at all sales of real property under mortgages and deeds of trust the right of redemption existed, this court held that the act did not apply to sales under decrees of court to foreclose mortgages. Martin v. Ward, 60 Ark. 510, 30 S.W. 1041; Southwestern Ark. & I. T. Ry. v. Hays, 63 Ark. 355, 38 S.W. 665.

RIDDICK, Judge speaking for the court, on this point said:

"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, nor dependent for its validity upon, such power of sale, but upon the decree of the court." Martin v. Ward, supra.

The Legislature then enacted the statute now under consideration, extending the right of redemption to sales under decrees of chancery courts in the foreclosure of mortgages and deeds of trust. It is manifest that the Legislature merely meant to extend the right of redemption to decrees for foreclosures of mortgages, and not to all decrees enforcing liens or other equitable mortgages.

It is not accurate to say that a vendor's lien is an equitable mortgage, for such a lien is merely treated in equity as a mortgage and enforced as such. The manifest design of the Legislature in both of the statutes was to preserve the right of redemption under a legal mortgage, whether the foreclosure be made by a sale under the power contained in the instrument or by decree of the chancery court.

The decision already referred to shows that the holding of the court had been to give a restricted meaning to the statute and not to enlarge...