Steinour v. Oakley State Bank

• Citation: 45 Idaho 472,262 P. 1052
• Decision Date: 05 January 1928
• Docket Number: 4297
• Parties: JOHN E. STEINOUR and DORA STEINOUR, His Wife, Appellants, v. OAKLEY STATE BANK, a Corporation, Respondent
• Court: United States State Supreme Court of Idaho

262 P. 1052

45 Idaho 472

JOHN E. STEINOUR and DORA STEINOUR, His Wife, Appellants, v. OAKLEY STATE BANK, a Corporation, Respondent

No. 4297

Supreme Court of Idaho

January 5, 1928

MORTGAGES-SHERIFF'S DEED-REDEMPTION FROM EXECUTION SALE - EXPIRATION OF STATUTORY PERIOD-BREACH OF AGREEMENT OF EXTENSION-EVIDENCE-TENDER-RELIEF IN EQUITY-ACTION TO QUIET TITLE-CONDITIONS PRECEDENT.

1. In action to quiet title to land sold under foreclosure of mortgage given by plaintiff, evidence held to show that defendant purchaser agreed to extend time for redemption, if persons from whom plaintiff expected money did not make payment, or at least caused plaintiff to believe so, thereby misleading him to his injury.

2. Mortgagors were entitled to redeem from foreclosure sale by paying assignee of sheriff's certificate face amount thereof, with ten per cent penalty and any assessments or taxes paid by assignee after purchase, and were not required to pay off subsequent debt to assignee.

3. Under C. S., secs. 6930, 6933, 6934, mortgagors effected no redemption of land from foreclosure by offer to redeem after expiration of statutory time.

4. In suit to quiet title, plaintiff must recover on the strength of his own title, not on the weakness of that of his adversary.

5. Court of equity, on proper bill declaring breach of agreement to extend time for redemption from mortgage foreclosure sale fraud, mistake or other circumstances appealing to chancellor's discretion, may relieve debtor from failure to redeem within time required by C. S., sec. 6933.

6. Mortgagors, not asking award, permitting them to redeem after expiration of time fixed by C. S., sec. 6933, nor pleading any facts warranting such request, had no title to quiet, as title, of which they were divested by certificate of sale under sec. 6930, must be "redeemed"; that is bought back from one who legally holds, before it can become available to them.

7. Debtor's tender of amount required to redeem from mortgage foreclosure sale after expiration of time allowed by C. S., sec. 6933, pursuant to agreement between parties, or voluntary assurances by purchaser, leading debtor to believe that he will be indulged beyond such time does not divest purchaser of title and restore debtor to estate, under sec. 6934, absolute title having already vested in purchaser under sec. 6930, and debtor's only recourse to enforce his contractual rights is to court of equity.

8. Deed issued by sheriff, following certificate of mortgage foreclosure sale, because of failure to redeem within time fixed by C. S., sec. 6933, is good and valid under sec. 6934 irrespective of purchaser's fraud or misconduct leading debtor to believe that time would be extended.

9. To determine the correctness or incorrectness of trial court's decree, supreme court can consider only what was before trial court at the time.

10. In absence of record showing of offer in trial court by plaintiffs, in suit to quiet title, to satisfy undisputed lien of mortgage, executed by them to defendant, supreme court cannot grant them such relief on appeal from judgment for defendant.

11. Mortgage foreclosure purchaser's assignee, whose representations that time for redemption would be extended, caused debtor to rest on false security, and forego his right to redeem, held not entitled to decree quieting title in such debtor's suit to quiet title, though such representations were made without consideration.

APPEAL from the District Court of the Eleventh Judicial District, for Twin Falls County. Hon. William A. Babcock, Judge.

Action to quiet title. Judgment for defendant. Judgment and decree modified with instructions to the district court to enter judgment denying respondent relief upon its cross-complaint. In all other respects it is affirmed.

Modified in part with directions and affirmed in part. No costs allowed.

Walters & Parry and Frank T. Wyman, for Appellants.

A false representation as to the expiration of the time for redemption from a foreclosure sale is a representation of fact from the consequences of which relief will be granted to the injured party. (Kelly v. Rogers, 21 Minn. 146; Bramel v. Burden, 7 Ky. Law Rep. 97; Bunting v. Haskell, 152 Cal. 436, 93 P. 110; Cox v. Ratcliffe, 105 Ind. 374, 5 N.E. 5; Tice v. Russell, 43 Minn. 66, 44 N.W. 886; Way v. Hill, 41 S.D. 437, 171 N.W. 206; Murphy v. Teutsch, 22 N.D. 102, 132 N.W. 435; Ann. Cas. 1913E, 1185, and note; Hamilton v. Hamilton, 51 Mont. 509, 154 P. 717; Henderson v. Harness, 184 Ill. 520, 56 N.E. 787; Daniel v. Daniel, 190 Ky. 210, 226 S.W. 1070; Leggat v. McLure, 234 F. 620, 148 C. C. A. 386; Palmer v. Douglas, 107 Ill. 204; McMakin v. Schenck, 98 Ind. 264.)

The tender of the redemption money terminated the effect of the sale and restored the estate in the lands to Steinour. (C. S., sec. 6934; Bunting v. Haskell, supra; Leet v. Armbruster, 143 Cal. 663, 77 P. 653.)

If one or both parties to a contract labor under a mistake or misapprehension as to their existing legal rights or interest in the thing conveyed or contracted about, the mistake will be treated as a mistake of fact against which relief will be granted. (10 R. C. L. 304-311; 1 Elliott on Contracts, sec. 114; Baldock v. Johnson, 14 Ore. 542, 13 P. 434; Toland v. Corey, 6 Utah 392, 24 P. 190; Rued v. Cooper, 119 Cal. 463, 51 P. 704; Hartwig v. Clark, 138 Cal. 668, 72 P. 149.)

The law requires a mortgagee to deal fairly with its mortgagor with respect to the latter's rights in the mortgaged premises. (Johansen v. Looney, 31 Idaho 754, 176 P. 778, and cases cited.)

W. J. Mitchell and Sweeley & Sweeley, for Respondent.

The right to redeem from a sale of foreclosure of a mortgage after the redemption period has expired under a claim of relying on a permission of the mortgagee to accept payment at the redemptioner's convenience or within a reasonable time, cannot be upheld unless it appears by clear and convincing evidence that such permission was made and in good faith relied on. (16 R. C. L. 141, sec. 103; 19 R. C. L. 652, sec. 468; Potter v. Fort Madison Loan & Trust Bldg. Assn., 133 Iowa 367, 110 N.W. 617; Sharpe v. Lees, 62 Ore. 506, 123 P. 1071; Lynch v. Burt, 132 F. 417, 67 C. C. A. 305, 317; Teabout v. Jaffray, 74 Iowa 28, 7 Am. St. 466, 36 N.W. 784; Taylor v. Reid, 103 Ill. 349, Hart v. Seymour, 147 Ill. 598, 35 N.E. 246; Taggart v. Blair, 215 Ill. 339, 74 N.E. 372; Kenmare Hard Coal etc. Co. v. Riley, 20 N.D. 182, 126 N.W. 241.)

As the respondent had redeemed as a junior lien holder from the sheriff's sale and had complied with the statute relating to that redemption, the appellants could only redeem from the sheriff's sale by making payment of the amount thereof besides the penalty fixed by statute and also the amount of the claim of the respondent by virtue of which it had made redemption with the four per cent penalty provided for by statute. (C. S., secs. 6933, 6934.)

Misrepresentations or misunderstanding of the law will not vitiate a contract either in equity or law where there is no misunderstanding of the facts. A mistake of law will not support an action to set aside a contract. (Upton v. Tribilcock, 91 U.S. 45, 23 L.Ed. 203; Peterson v. Woollen, 48 Kan. 770, 30 P. 128; Christy v. Sullivan, 50 Cal. 339, 19 Am. Rep. 655; Allen v. Allen, 95 Cal. 199, 30 P. 213; Kelly v. Turner, 74 Ala. 513, 520; Hedin v. Minneapolis Medical & Surg. Inst., 62 Minn. 146, 54 Am. St. 628, 64 N.W. 158, 35 L. R. A. 417; 12 R. C. L. 295; 14 Am. and Eng. Ency. of Law, 2d ed., 54; Rheingans v. Smith, 161 Cal. 362, Ann. Cas. 1913B, 1140, 119 P. 494; Choate v. Hyde, 129 Cal. 580, 62 P. 118; note to 1913B, Ann. Cas., 1144 and cases cited; Robins v. Hope, 57 Cal. 493; Cobb v. Wright, 43 Minn. 83, 44, N.W. 662; Champion v. Woods, 79 Cal. 17, 12 Am. St. 126, 21 P. 534; 12 R. C. L. 371, secs. 123, 129; Brown v. Bledsoe, 1 Idaho 746.)

The pretended redemption made by appellants was not effective for the reason, among others, that the only tenders made by them or on their behalf were checks which were refused. Payment could only be made in money or currency. (C. S., sec. 6933.)

Appellants can rescind their written contract only by placing the respondent in statu quo. This they have not done or offered to do. Depending on the validity of that contract and that appellants would respect it the respondent paid to the Milner State Bank an indebtedness of Steinour in the amount of $ 504. This has not been repaid and no offer to repay it has been made either by pleading or proof. (6 R. C. L., p. 936, sec. 319, and cases cited.)

Appellants could have maintained this action only by rescinding their contract. They lost their right to rescind, if they had any, by long delay in asserting it and by accepting the benefits of that contract. (6 R. C. L., p. 935, sec. 317, and cases cited.)

WM. E. LEE, C. J. Budge, Givens and T. Bailey Lee, JJ., concur, TAYLOR, J., Concurring in Part.

OPINION

WM. E. LEE, C. J.

Appellants owed one Edwards $ 1,500, payment of which was secured by a mortgage on the land involved in this action. On a failure to pay the debt the land was sold under mortgage foreclosure to one Hazel, who assigned the sheriff's certificate of sale to respondent. The period of redemption from the foreclosure sale expired on December 13, 1912. On December 14th appellants offered to redeem from the foreclosure. Respondent refused the tender because it did not also include a debt secured by a subsequent mortgage on the same land. Two or three days thereafter such additional sum was tendered and respondent declined it on the ground that it was not made in time. The sums tendered, having been refused, the sheriff made and delivered a deed to respondent. Some time thereafter and prior to the commencement of this...