Rudolph v. Herman
| Decision Date | 24 November 1893 |
| Citation | 56 N.W. 901,4 S.D. 283 |
| Parties | RUDOLPH v. HERMAN. |
| Court | South Dakota Supreme Court |
Syllabus by the Court.
1. A purchaser at a mortgage foreclosure sale by advertisement has only such rights as are specially given him by statute. The provision of section 5159, Comp. Laws, which says: "The purchaser from the time of the sale until a redemption, and a redemptioner from the time of his redemption until another redemption, is entitled to receive from the tenant in possession the rents and profits of the property sold, or the value of the use and occupation thereof,"--has no application to sales made at a mortgage foreclosure either by advertisement or by action. Kellam, J., dissenting.
2. Where a statute creates a liability where otherwise none exists, or increases a common-law liability, it will be strictly construed. Courts will not extend or enlarge the liability by construction, nor will they go beyond the clearly expressed provisions of the act. The intention of the legislature is to be gathered from the words of the statute if plain and unambiguous, and courts in construing them will confine themselves to the provisions of the law.
3. If the right of possession under the statute remains in and belongs to the mortgagor during the year of redemption, as well as the legal title, then the rents and profits from the premises during that period must be his also. Rents and profits of real property are the fruits of possession otherwise the right of possession which the statute expressly gives to the mortgagor would be of little or no value, and a clear provision of the law would become nugatory, and its beneficial intentions towards the mortgagor be entirely defeated.
Appeal from circuit court, Lincoln county; F. R. Aikens, Judge.
Action by Martin E. Rudolph against M. H. Herman to recover rent. From a judgment overruling the demurrer to the answer plaintiff appeals. Reversed.
M. E Rudolph, for appellant. R. B. Tripp, for respondent.
On the 1st day of June, 1889, F. L. Driggs was the owner of and in possession of a livery barn situated on lots 1 and 4 of block 18 of Hill's addition to the city of Canton, S.D. On that day he leased said barn to M. H. Herman, the defendant, until the 1st day of February, 1891, for the monthly rent of $18 payable to said F. L. Driggs on the 1st day of each month in advance. Under the lease the defendant took possession of the property as Driggs' tenant. On the 8th day of January, 1890, the said Driggs duly assigned all his right, title, and interest in and to the lease, and to all the rents and profits accruing thereunder, to Martin E. Rudolph, the plaintiff. A notice of this assignment was given to the defendant, who agreed to pay the rents from that date to the plaintiff. Thereafter there became due the sum of $36 as rent for the months of February and March, 1890, which, upon demand made upon defendant, was not paid. Upon these facts suit was brought to recover the amount. To the complaint an answer was filed setting up the following defenses: (1) A general denial of all the facts. (2) Defendant states that on the 22d day of November, 1888, F. L. Driggs, plaintiff's assignor, mortgaged the premises to secure a money obligation entered into by the said Driggs, which mortgage was duly recorded on the 24th day of November, 1888. That said mortgage provided that if the said Driggs failed to perform the obligations contained in said mortgage the mortgagee might sell the same by advertisement, or as otherwise provided by law. That thereafter the said F. L. Driggs made default in the performance of his obligations, and the premises so mortgaged were duly sold by the sheriff on the 11th day of January, 1890, to one Margret Herman, and he issued a certificate of sale to her, and she is the owner and holder of it. Immediately after the sale and receipt of the certificate the said Margret Herman notified the defendant that she was entitled to the rents and profits arising under the lease which should accrue since the 11th day of January, 1890, and threatens to sue the defendant should he refuse to pay them to her. That he is ready and willing to pay the same to the party entitled thereto. To the second defense the plaintiff demurred upon the ground that the facts stated do not constitute a defense or counterclaim to the action, which demurrer was overruled by the court, and plaintiff appeals.
The only question arising on the appeal is, who is entitled to the rents during the redemption period, the purchaser at the foreclosure sale or the mortgagor? A purchaser at a mortgage foreclosure by advertisement has only such rights as are specially given to him by statute. It is, however, insisted there is a statute regulating it, and giving the purchaser at foreclosure sale the rents and prof its during the redemption period. The only provisions of the statute relating to a purchaser's right to the rents and profits of the premises purchased during the period of redemption are contained in section 5159, Comp. Laws, which is in part as follows: "The purchaser from the time of the sale until redemption, and a redemptioner from the time of his redemption until another redemption, is entitled to receive from the tenant in possession, the rents and profits of the property sold or the value of the use and occupation thereof." The question, then, naturally arises whether this section has any application to sales made at a mortgage foreclosure, either by advertisement or by action? Section 5421 of the chapter entitled "Foreclosure of Mortgages" provides that "the property sold may be redeemed within one year from the day of sale, in like manner and to the same effect as provided in chapter 13 of this Code for redemption of real property sold upon execution so far as it may be applicable, *** and the mortgagor and his successor in interest has all the rights of the judgment debtor and his successor in interest." Section 5159 is a part of chapter 13, entitled "Of the Execution of the Judgment in Civil Actions," while section 5421 is a part of chapter 28, entitled "Foreclosure of Mortgages." It will be noted that neither section 5421 nor any part of the chapter in which it is found provides that the chapter on execution sales shall be applicable to foreclosure sales made under a mortgage; but what it does provide is that the property sold under foreclosure proceedings "may be redeemed in like manner and to the same effect as provided in chapter 13 for the redemption of real property sold upon execution;" thus clearly making it applicable only so far as the redemption is concerned, and not applying to the foreclosure the right to rents and profits during the period of redemption. So, when a redemption takes place, the effect of the foreclosure sale, so far as the rights of the purchaser are concerned, is at an end. Section 5421 applies the law of chapter 13 only so far as redemption is concerned. If it were otherwise, the law-makers would have made the section to read the mortgaged property may be "sold," instead of "redeemed," as the statute has it, in like manner and to the same effect as property sold under execution. But this is not the language of the statute. Section 5159 has reference only to sales under judgments obtained in civil actions. If it could be construed to apply to mortgage foreclosures made by advertisement, then the mortgagor could claim his exemptions, as these are given under the chapter on execution sales, the same as the rights to the rents and profits of the land during the period of redemption. The right of redemption and the right to rents and profits during the year of redemption are statutory rights, and are innovations on the common law. Section 5421, in regard to mortgage foreclosures, expressly gives the right of redemption, but that chapter does not give the right to the purchaser of the rents and profits during the term of redemption, as does chapter 13, § 5159, in regard to sale under execution. This clearly indicates that the intention of the legislature was to leave the rents and profits as well as the possession of the land in the hands of the mortgagor, down to the period of redemption, for, under section 5431, it is clearly provided that in no case under this chapter shall the possession of the premises so sold be delivered to the purchaser or person entitled thereto until after the expiration of one year from such sale.
The respondent, to support his position, cites several decisions from the supreme court of California. These decisions were rendered under the peculiar statutes of that state relating to "mortgage foreclosures." Section 726 of the Code of Civil Procedure of California is as follows: "There can be but one action for the recovery of any debt or the enforcement of any right secured by mortgage upon real estate or personal property, which action must be in accordance with the provisions of this chapter." Under the statute of South Dakota the action at law upon the debt and the action in equity to foreclose the mortgage are distinctly recognized and allowed. Comp. Laws, §§ 5430, 5432, 5435. Under the California statute the action at law upon the debt and the suit in equity to foreclose the mortgage is done away with and a new and exclusive action under their Code is substituted in place of both; and it is held by their courts that an action will not lie upon a note or mortgage except as provided under that chapter. Bartlett v. Cottle, 63 Cal. 366; Biddel v. Brizzolara, 64 Cal. 362, 30 P. 609; Brown v. Willis, 67 Cal. 235, 7 P. 682. Under the provisions of chapter 28 of our Code, relating to the foreclosure of mortgages, it is made an essential prerequisite that no action or proceeding at law shall have been instituted to recover the debt...
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