Plаintiffs appeal from a decree dismissing a bill of complaint in which they sought to have a statutory mortgage foreclosure declared invalid.
The mortgage in question was executеd by plaintiffs on August 10, 1929, to secure the payment of $77,500, and it provided that $4,000 should be paid upon principal on the 1st day of August, 1930, and the same amount for five successive years, the entire balаnce of the mortgage being payable on August 1, 1936. Interest was to be paid upon the mortgage indebtedness semiannually. The mortgage contained the following provision:
“It is understood by sаid mortgagors that said mortgagee is engaged in the business of assisting its borrowing clients in financing buildings, or building enterprises, and that it contemplated the sale of part or the whole of this mortgage and of the promissory note to which it is collateral, to some one or more of its other clients, and that in the event it sells the *637 same, or any part thereof, it may guarantee to the purchaser the payment of all principal and interest thereon, and will attend to the collection of said principal and interest when and as they become due, and will, if default is made by mortgagors in any of the terms hereof, commence and carry to conclusion foreclosure proceedings, or such other suit or action as to it seems best, аnd that in so doing said mortgagee may act in the capacity of a trustee for the benefit of all those who may become purchasers of all or any part of this mortgage, and said mortgagors hereby give and grant to said mortgagee, in addition to all other rights and remedies either at law or in equity in case of any default in any of the terms or conditions hereof, аn assignment of the rents and profits of said mortgaged premises for the benefit of the holders of all or any part of this mortgage and of the note herein referred to, under the provisions of Act No. 228, Pub. Acts 1925 of the State of Michigan, or any amendment thereof. ’ ’
Defendant Bankers Trust Company issued and sold to the public participation certificates to the extent of the entire amount of the mortgage. These certificates contained the following stipulations:
“2d. The holder, irrevocably appoints the company his, her or its agent and authоrizes the company in its own name:
“ (A) To receive, collect and give acquittance for the sums owing upon said note and mortgage as they mature, and upon full payment to discharge such mortgage from record. * * *
“ (C) To exercise any of the rights, privileges or option in said mortgage given to the mortgagee.
“ (D) To institute any legal or equitable suit or proceedings necessary or requisite to carry out the authority granted.”
*638 Defaulted certificates totaling $4,000 were repurchased and canceled by defendant Bankers Trust Company in August of 1930. Plaintiffs admit that they were then in default as to the $4,000 principal indebtedness, and also $2,364.50 interest, which latter sum included interest on the first interest instalment which was paid after its due date. Defendant claims thаt plaintiffs were also in default on unpaid taxes, et cetera, thus making the total amount of plaintiffs ’ default $7,294.03 as of January 20, 1931. The Bankers Trust Company then commenced foreclosure by advertisement, in which they claimed the aforesaid sum was due and in default. The property involved, consisting of a three-story brick 34-family apartment building, located at 2034 Pingree avenue in thе city of Detroit, was purchased at the foreclosure sale by the Bankers Trust Company on April 28, 1931, for the sum of $9,716.96, which sum included an interest instalment that fell due on February 1, 1931, and interest thereon to date of sale. There were no other bidders at the sale. The sheriff’s deed which was delivered to the defendant contained the following-recital :
“This deed is given subject to a lien оf said mortgage on said premises which mortgage is recorded in liber 2367 of mortgages on page 348 for the balance due on said mortgage in the sum of $73,500, together with interest from the 1st day of February, A. D. 1931, in accordance with the terms of said mortgage.”
The attorney for the Bankers Trust Company, who bid in the property at the sale, testified as follows:
“I did not have any bonds or partiсipation certificates with me at the sale nor did I turn any over to the sheriff or deputy sheriff. I didn’t turn over any cash to the sheriff, except the sheriff’s fee of $3. ”
*639 Defendant took possession of the premises on April 30, 1932, two days after the year for redemption had expired, and has been in possession ever since.
Plaintiffs, in their bill of complaint filed April 28, 1932, sought relief on the sole ground that the premises “were sold under the notice of publication for a sum greater than that called for in said notice of publication. ’ ’
At the trial, almost five years later, рlaintiffs were permitted to amend their bill of complaint and include therein an allegation that the ‘ ‘ attempted foreclosure * * * was void because the Bankers Trust Company had nо interest in the mortgage at the time of foreclosure, having sold the said mortgage in portions to numerous and divers persons who did not join in the foreclosure of the mortgage.”
Appеllants argue in their briefs that, because of the sale of the participation certificates by appellee, the latter lost its power to foreclose the mortgagе and that the attempted reservation in the participation certificates of a “naked power” to foreclose the mortgage was nugatory.
The original mortgage instrument expressly conferred upon appellee the power to sell participating certificates in which the right to foreclose was reserved. At least under these circumstances the reservation of the power to foreclose was effective.
Appellants also argue that the participation certificates were “assignments” of the mortgage and that the foreclosure was invalid because of appellee’s failure to record these “assignments” as required by 3 Comp. Laws 1929, § 14426 (3) (Stat. Ann. § 27.1222). We are of the opiniоn that they were not “assignments” within the meaning of the statute. The certificates are made payable to bearer and pro *640 vide that the ‘ ‘ company shall pay the holder the principаl as and when collected from said note and mortgage.” Defendant Bankers Trust Company was obligated thereunder to pay the principal in any event within 18 months after the holder madе a demand for payment subsequent to the due date. The certificates did not substitute their holders in place of defendant Bankers Trust Company as mortgagees under the mortgage instrument.
Whаt has just been said applies with equal force to appellants ’ contention concerning appellee’s power to foreclose.
3 Comp. Laws 1929, § 14426 (4) (Stat. Ann. § 27.1222), provides in part as follows:
“In cases of mortgages given to secure the payment of money by instalments, each of the instalments mentioned in such mortgage after the first, shall be taken and deemed to be a separate and independent mortgage, and such mortgage for each of such instalments may be foreclosed in the same manner and with the like effect as if such sеparate mortgages were given for each of such subsequent instalments and a redemption of any such sale by the mortgagor shall have the like effect as if the sale for such instаlments had been made upon an independent prior mortgage. ’ ’
Appellants claim that the interest which was owing on the belatedly paid first interest instalment and which was included in the forеclosure was a part of the first instalment; that section 14426 (4) authorizes foreclosure for separate instalments only
“after
the first,” citing
Shorts
v.
Cheadle,
Appellants’ contention that the foreclosure was invalid, because the notice of sale did not specify the amount of each instalment for which foreclosure was being had, and because the sale was for the gross sum claimed to be due under the mortgage, is untеnable. This argument might possibly apply to a foreclosure involving several parcels of land, but, in the present case, the foreclosure is for several instalments, all of which pertain to a singlе parcel.
The inclusion in the amount of the bid of the amount of an interest instalment falling due between the date of the commencement of the foreclosure and the date оf the sale of the mortgaged premises does not invalidate the foreclosure.
New York Life Ins. Co.
v.
Erb,
The decree entered by the trial court is affirmed, with costs to appellee.