Stacey v. Tucker
Decision Date | 12 March 1927 |
Docket Number | 27,215 |
Parties | C. A. STACEY, Appellee, v. B. O. TUCKER et al., Appellants |
Court | Kansas Supreme Court |
Decided January, 1927.
Appeal from Thomas district court; CHARLES I. SPARKS, judge.
Judgment reversed and cause remanded.
SYLLABUS BY THE COURT.
1. MORTGAGES -- Foreclosures -- Effect Upon Junior Mortgagee Not Party. Where a senior mortgagee brought suit, foreclosed his mortgage and purchased the property at sheriff's sale not having made a junior mortgagee a party: Held, (a) the junior mortgagee's rights were not affected by the proceedings; (b) the junior mortgagee was not barred for failure to redeem the land, and an action by the senior mortgagee afterwards to quiet title against the junior mortgagee was of no avail.
2. SAME -- Merger With Larger Estate. Where a mortgagee of real estate acquires the legal title to the mortgaged property, the mortgage will become merged in the larger estate or not, as the mortgagee may desire or his interest require. (Following Loan Association v. Insurance Company, 74 Kan. 272, 86 P. 142.)
John E. Wakeley and Walter H. Justin, both of Omaha, Neb., for the appellants.
E. F. Beckner, of Colby, for the appellee.
This controversy presents the questions whether or not a senior mortgagee must make a junior mortgagee a party to foreclosure proceedings in order to bar the latter's interest, whether the provisions of R. S. 60-3460, 60-3440 and 60-3441 limit the rights of a junior mortgagee who was not a party in foreclosure proceedings by his senior mortgagee, or whether, not having been a party to foreclosure proceedings, the interest of a junior mortgagee is affected thereby; also whether foreclosure of the senior mortgage and purchase of the property at sheriff's sale by the mortgagee amounted to such a merger or extinguishment of the mortgage as to make the junior mortgage a first lien on the land.
Briefly, the facts are these: On March 20, 1920, Charles D. McIllnay, the then owner of the land in question, executed a first mortgage thereon to the plaintiff. About the same time, he executed a second mortgage on the same property to defendant Tucker and wife. On January 19, 1924, the plaintiff brought suit, foreclosed his mortgage and purchased the property at sheriff's sale. The defendants were not made parties. They were living in another state, had no notice of and knew nothing of plaintiff's foreclosure suit. The plaintiff brought the present action to quiet title to the property. Tucker, having died, Mrs. Tucker filed an answer and cross petition asking foreclosure of her mortgage. A demurrer by plaintiff to her answer and cross petition was sustained and she appeals.
The plaintiff proceeded upon the theory and now contends that the Tuckers had the right to redeem from the sale, and not having done so are barred because the land once sold on order of sale is not again liable for sale to satisfy a junior lien.
The defendants contend that the provisions of the statutes under which plaintiff relies are not applicable because defendants were not parties to the foreclosure suit, and that the contentions of plaintiff carried to ultimate conclusion would result in a taking of their property without due process of law.
The statutes on which plaintiff relies (R. S. 60-3460, 60-3440 and 60-3441) provide in effect that real estate once sold upon order of sale, shall not again be liable for sale for any balance due or lien inferior thereto, etc., and also specifies the order in which lienholders may redeem.
Plaintiff cites and relies on Case v. Lanyon, 62 Kan. 69, 61 P. 406; Gille v. Enright, 73 Kan. 245, 84 P. 992, and other similar cases in which it has been held that land once sold upon order of sale and other similar process cannot again be sold in satisfaction of any inferior judgment or lien under which the holder of such lien was allowed a right of redemption contingent upon the nonexistence of the same right by the preferred classes, etc.
The statutes and cases cited above are not applicable here, because the rights of the junior mortgagee were not adjudicated. The junior mortgagees were not parties to the foreclosure proceedings. We are of opinion that the legislature in the enactment of the statutes above cited contemplated liens adjudicated as such, and this court, in construing such statutes, considered the rights of lienholders which had been determined--those about which there was no question. The question might very properly arise as to whether a junior mortgage was a lien, whether it had been paid, or whether barred by the statute of limitations, etc., therefore there is always a question to be determined whether an alleged lien is actually a lien.
A junior mortgagee is not a necessary party to the foreclosure of a mortgage so far as the jurisdiction of the court to render a decree of foreclosure binding upon all the parties to the proceeding is concerned. He is, however, a necessary party in order to foreclose and bar any right of redemption he has in the property by virtue of his lien. Unless made a party, his rights ordinarily are not affected by the decree of foreclosure. The particular point at issue appears not to have been heretofore passed upon by this court. However, a trend of opinion has been indicated. In Bradley v. Parkhurst, 20 Kan. 462, it was said in the opinion:
(p. 468.)
"It seems to us that a foreclosure suit is, as to one branch, in the nature of a proceeding in rem; that the aim and scope of such a proceeding is to seize the rem and convey it, discharged of all claims and liens; that the objections formerly existing to the adjudication of adverse titles, on account of the jurisdiction of the court, and the form of action, have been done away with; that the litigation of an adverse title is as truly and closely connected with the right to subject the real estate to the payment of the plaintiff's mortgage as the determination of the validity and extent of other liens, and that the joinder of the two is therefore authorized by the statute." (p. 470.)
In Loan Company v. Marks, 59 Kan. 230, 52 P. 449, it was said in the opinion:
(p. 235.)
In Commission Co. v. Haston, 81 Kan. 656, 106 P. 1096, it was said in the opinion:
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