Clark v. Kraker

51 Minn. 444 | Minn. | 1892

Dickinson, J.

In November, 1891, this action was commenced, the relief sought being the setting aside of a mortgage foreclosure sale which was made by the defendants in April, 1891, in the exercise of the power of sale contained in the mortgage. The alleged defect in the foreclosure sale was that while the mortgaged premises are claimed to have embraced separate tracts they were sold together. The following abbreviated statement of the facts as found by the court will suffice for an understanding of the matter to be decided:

The mortgage thus foreclosed was executed in October, 1884, by Edwin Clark to William Bohmer, whose estate is represented by the •defendants. The mortgaged premises were described as “Mill block, in Clark’s addition to Melrose, according to the recorded plat, * * * ,[here follows a description of certain rights of flowage as appurtenant to or connected with the water power conveyed;] also lots one, •seven, eight, and nine, in block four, in the town, now village, of Melrose.”

At that time the “Mill Block” so described was one entire tract, not subdivided into lots or parcels, and had a mill on it. Immediately west of the south end of the mill lot, and near the mill, was a public highway or street called “Morris Avenue,” running north and south. Immediately across this street, west of the mill lot and mill, was the mortgaged lot one, (1,) in block four, (4,) and immediately west of that lot were the other mortgaged lots, nine, (9,) eight, (8,) and seven, (7,) in the same block, and in the order named; all being contiguous lots. Lot one (1) in that block, ever since the giving of the mortgage, has been used in connection with the operation of the mill. Lots nine, (9,) eight, (8,) and seven (7) were and have remained unimproved, except that across lots eight (8) and nine, (9,) as well as across lot one, (1,) is a railroad side track, connecting the mill with a railroad line, and used for transporting grain and flour between the mill and the railroad line.

In 1886, Clark, the mortgagor, sold and conveyed to the defendant Kraker a small part of the mortgaged premises which may be designated as “Lot 2,” for the price of $50; and in February, 1891, as the court has found, the defendants Kraker and Haskamp, as executors, released and discharged this “Lot 2” from the lien of the mortgage, without the consent of the plaintiffs, and without releasing any part of the mortgage debt.

In 1889 the mortgagor, Clark, platted the Mill block into eighteen lots, as an “addition to Melrose,” the plat of which was recorded. An alley was platted across the property, and this separated lots numbered from ten (1Ó) to eighteen, (18,) inclusive, from the other platted lots. Afterwards the mortgagor, Clark, erected a block of stores on lots fifteen (15)to eighteen, (18,) inclusive, apart of which was occupied as an office for the mill, and a part of which was rented for other purposes.

The plaintiff Johnson, who has not joined in this appeal, became 'the owner of two mortgages executed by Clark subsequent to the Bohmer mortgage, and covering parts of the premises included in the Bohmer mortgage.

A part of the previously mortgaged property was conveyed by the mortgagor, Clark, to the plaintiff the Clark Milling Company, and •other parts of it were mortgaged to the plaintiff John M. Clark, and these conveyances and mortgages were recorded prior to the foreclosure proceedings in question.

At the foreclosure sale in April, 1891, all of the property as mortgaged to Bohmer, excepting “Lot 2” which had been released as aforesaid, was sold as one entire tract for the gross sum of $17,->020.50, the full amount of the mortgage debt; the executors, these defendants, being the purchasers. In November following this action was commenced to set aside the sale. The whole of the property sold was worth over $95,000 at the time of the sale.

Upon the facts found, to which we have referred, judgment was directed and entered for the defendants. This appeal is from the judgment.

There is no allegation of fraudulent conduct on the part of the defendants in connection with the sale. The real ground upon which relief is sought is that the appellants are prejudiced in the exercise •of their rights of redemption by reason of the entire mortgaged property having been sold for one gross sum, so that none of the appellants who have interests in separate portions of the premises could protect their respective interests by redemption without paying the full amount for which the whole mortgaged property (excepting “Lot 2”) had been sold. It is conceded by the appellants that under the law of this state, as settled by judicial construction, the sale was not void, but only voidable, for good cause shown.

If, at the time of the giving of the mortgage, the mortgaged premises did not consist of separate and distinct tracts, within the meaning of the statute, a foreclosure sale of the entire tract as mortgaged would have been rightful, and not invalid, even though, by reason of a subdivision of the property by the mortgagor, subsequent to the giving of the mortgage, and an acquisition of interests by other persons in separate portions of the property, such equities may have arisen that a court of equity, upon timely application, would have required the sale to be made in separate parcels. Johnson v. Williams, 4 Minn. 260, (Gil. 183;) Paquin v. Braley, 10 Minn. 379, (Gil. 304); Abbott v. Peck, 35 Minn. 499, (29 N. W. Rep. 194;) Willard v. Finnegan, 42 Minn. 476, (44 N. W. Rep. 985;) Ryder v. Hulett, 44 Minn. 354, (46 N. W. Rep. 559.) The decisions in Tillman v. Jackson, 1 Minn. 183, (Gil. 157,) and Lamberton v. Merchants’ Nat. Bank, 24 Minn. 281, established the rule for this state that execution sales in gross, as one parcel of lands consisting of separate tracts, are not void because of such noncompliance with the statutory direction, but only voidable for cause shown. In Willard v. Finnegan, supra, it was considered that the same rule was applicable with respect to foreclosure sales of separate parcels. We are thus led to the conclusion that even though, as the appellants contend, the four lots in block four (4) should be regarded as having constituted a tract or tracts distinct from the Mill block, at the time of the giving of the mortgage, still the sale in gross was only voidable, and not void.

But while interested parties may, if they will, protect themselves from a mode of sale which would be prejudicial and inequitable as to them, we are of the opinion that these plaintiffs do not show themselves entitled to have this sale set aside. Presumably they were seasonably notified of the sale, and might have been present to attend to their interests which they knew would be affected by the sale. Whether or not they were present is not shown. They knew that the mortgage being foreclosed was executed before there had been any subdivision of the property, unless as to the four lots in .block four (4;) and, in view of this fact and of the situation and use of the property, concerning which they presumably had knowledge, it would seem that they should have anticipated that the mortgagee, might sell the property in gross, as it bad been mortgaged, unless they should object thereto. Yet no excuse is shown for their neglect to object to this mode of selling. If they were present, and did not object, they would be deemed to have acquiesced. But assuming that they did not attend the sale, and hence did not object, such neglect, unexcused, under the circumstances here referred to, is a sufficient reason why their suit to set aside the sale commenced some seven months thereafter should not be entertained with favor. If they had sought by request or objection to have the sale made in parcels, their wishes might have been complied with. It was said in Johnson v. Williams, supra, “when the mortgagor allows the sale to take place without interference or objection on his part, he must excuse such neglect fully, or a court of chancery will not relieve him.”

There was nothing to invalidate the sale in the fact of the sale of “Lot 2” by the mortgagor in 1886, and the subsequent release of that lot by the defendants. Upon such sale the vendee became equitably entitled to have the other mortgaged premises first sold or applied in satisfaction of the debt, and the mortgagee would be justified in first selling the remaining lands. Johnson v. Williams, 4 Minn. 260, (Gil. 183.) Forbearance to sell “Lot 2” under the mortgage would be sanctioned in a court of equity, and the validity of the sale of the other lands was not impaired by the fact that the previous equity in favor of the purchaser of “Lot 2” had been supplemented by the formal release.

There is no merit in the assignment of error based on the fact that the court on motion and 'hearing amended its findings of fact and conclusions of law.

Judgment affirmed.

(Opinion published 53 N. W. Rep. 706.)