White v. Melchert
| Decision Date | 12 November 1929 |
| Docket Number | 40037 |
| Citation | 227 N.W. 347,208 Iowa 1404 |
| Parties | H. M. WHITE, Appellant, v. S. S. MELCHERT et al., Appellees |
| Court | Iowa Supreme Court |
Appeal from Davis District Court.--R. W. SMITH, Judge.
Suit in the nature of strict foreclosure of mortgage by mortgagee who has purchased the mortgaged premises at foreclosure sale to cut off the claimed right of redemption of subsequent purchasers from the mortgagor who were not made parties to the original suit to foreclose. Decree of foreclosure granting defendants right to redeem within one year. Both parties appeal.
Affirmed.
Verne J. Schlegel and Buell McCash, for appellant.
H. C. & H. C. Taylor and T. A. Goodson, for appellees.
OPINION
Schultz, on March 1, 1925, executed to plaintiff a mortgage on his farm. On October 24, 1927, Schultz made a written agreement with defendant Melchert to sell the farm to Melchert, and to deliver deed March 1, 1928. On October 28, 1927, defendant Melchert sold to defendant Merryman a half interest in the land. On January 4, 1928, petition for foreclosure, brought by plaintiff against Schultz and wife, was filed. Melchert and Merryman were not made parties to the foreclosure suit. However, plaintiff testifies that, on January 30 or 31, 1928, about a week after foreclosure was commenced, Schultz told plaintiff that Schultz had sold the farm to Melchert. Decree in the foreclosure suit was rendered April 4, 1928, and the land sold under special execution, May 9, 1928, to plaintiff. On December 27, 1928, petition in the suit now before us was filed. In this petition, plaintiff sets up the mortgage and foreclosure proceedings, and alleges that defendants were not made parties because the contract between Schultz and Melchert was not recorded, and plaintiff had no knowledge of it at the time of the commencement of the foreclosure. The prayer of the petition is for a decree barring defendants from all interest and equity of redemption, "reserving * * * to them [defendants] and each of them only such rights of statutory redemption to redeem said land above described from said sheriff's sale in said foreclosure proceedings as are by law specifically provided." Defendants, in answer, set up their contracts and a deed by Schultz, dated April 14, 1928, in which a blank was left for the name of the grantee, no name ever having been inserted in it, and which was given on terms differing from the contract, but which states that it is "delivered in satisfaction of a real estate contract entered into with" the grantor.
It appears that, when the contract of October 24, 1927, between Schultz and Melchert was made, Merryman had a lease of the premises in question, and had a hired man living on and operating the land. Merryman himself later moved upon the land, and was personally occupying it at the time the foreclosure suit was commenced. The lease from Schultz to Merryman did not expire until March 1, 1928, during which time Merryman continued to pay rent; and plaintiff argues that he was chargeable with notice only of Merryman's occupancy under the lease.
Plaintiff complains of the action of the court in granting defendants the right to redeem after the expiration of the statutory period of redemption by Schultz, which would be May 9, 1929, the decree in this case having been rendered, as stated, April 27, 1929. The theory of the suit seems to be that plaintiff, without knowledge of defendants' rights as vendees, failed to implead them as parties defendant to the foreclosure, and therefore is entitled to maintain the present action, on the principle recognized in Nelson v. First Nat. Bank, 199 Iowa 804, 202 N.W. 847, and cases there cited. The prayer of plaintiff's petition in his present suit is that any equity of redemption which defendants may have, be cut off, saving to them "such rights of statutory redemption to redeem" from sheriff's sale as are by law specially provided. This prayer is renewed in the reply, with the further one:
"And in the event the court decrees said defendants, or either of them, to have an equity of redemption in said land, then to allow said defendants not to exceed sixty days from the institution of this suit, either to redeem said land or to have their said equities of redemption, if any, thereafter forever barred and cut off."
Plaintiff is appealing to equity. He is asking, in effect, a strict foreclosure. On his own theory, as well as in equity, defendants are entitled to a reasonable time in which to exercise their right of redemption. While it may be conceded that the foreclosure sale was not void (Douglass v. Bishop, 27 Iowa 214), and, for the purpose of this case, that the doctrine of Nelson v. First Nat. Bank, 199 Iowa 804, 202 N.W. 847, is applicable to the case of a vendee omitted from foreclosure proceedings, as well as to a junior incumbrancer, nevertheless the original foreclosure suit was wholly ineffective to cut off defendants' right of redemption. Plaintiff argues that a new arrangement was made between Schultz and Melchert, by which the deed in blank was executed, and which was, in effect, an abandonment of the original contract; that, the name of the grantee having been left blank, the legal title remained in Schultz, and until the name of the holder was inserted, it conveyed no title and conferred no right of redemption; that any interest which defendants now have is subsequent to the commencement of the foreclosure suit, and cut off thereby.
There is no doubt of the execution of the contract of sale by Schultz to Melchert before plaintiff commenced his foreclosure suit, and consequently no doubt of the defendants' rights as vendees at the time that suit was commenced. We see no reason for holding that those rights have ever been abandoned. Within...
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