144 N.W. 925 | S.D. | 1914
In the view we take of this case, the facts essential -to 'the determination oif the appeal may be briefly stated. On February i, 1888, Edward 'Galkins and his wife executed a mortgage upon a quarter section of land in Kingsbury County, to the .Showalter Mortgage 'Company, securing an indebtedness of $575, which was recorded March 5, 1888, and was payable February, 1893. This mortgage was assigned to one Blaisdell, February 9, 1891, and the assignment recorded February 17, 1891. On May 15, 1891, the original mortgage was recorded in the register of -deeds office, (together with an assignment indorsed on the back of the mortgage with the name of Ruth A. Parks therein as assignee, which -assignment was dated- March 21, 1888. This purported assignment was not acknowledged so as 'to entitle it to record. Subsequently, on June 16, 1888, Calkins and his wife executed a m-ortgag on th-e same land to- J. -and G. W. Froelich, securing an indebtedness of $1,400, which was recorded July 28, 1888. This mortgage was a sealed instrument, and contained therein a direct promise to pay said indebtedness, and recited that it was subject to- the Showalter -mortgage. This action is to foreclose the latter mortgage, and to redeem -from the Showalter mortgage. The trial court found $850 of die indebtedness secured by the Froelich mortgage, with interest thereon, remained due and unpaid at the commencement of this action, and that prior to the beginning of this action J. Froelich assigned his interest in -said mortgage to G. W. •Froelich, the .plaintiff. In December, 1892, Ruth A. Parks-, as -assignee -of the Showalter mortgage, commenced an action of foreclosure; the only -defendants in- such action being th-e- mortgagors-, Edward and Luana Ca-lkins, upon whom -personal service was made. On February 16, 1893-, a decree of foreclosure was -entered in chis action. The property was sold under s-aid -decree, and a sheriff’s certificate of sale issued to Ruth A. Parks, bearing date of March 31, 1893, which was recorded May 23, 1893. On April 22, 1898, a sheriff’s deed on this .certificate -of sale was issued to- Ruth A. .Parks, and recorded in the-register of deed’s office the same -day. The defendant Swafford claims ownership- of the land through a warranty deed executed by Ru-t-h A. Parks and her husband, and divers mesne conveyances by warranty deed vesting the title of Ruth A. Parks in himself. On October 15, 1908, .plaintiff began this action to foreclose the Froelich mortgage, and to redeem from
It was never the purpose of our recording statutes to protect persons who take transfers or assignments with actu'al notice of prior transfers or assignments, or who take transfers or assignments without valuable consideration. The statutes protect only persons therein described and intended to' be protected, and, when its protection is sought, the person seeking it must assert and prove .every fact essential to bring him within the class described in .the statute. He must assert and prove, not only that he placed his assignment of record first, but that he parted with value -therefor, and purchased in "good faith” — that is that fee had ho actual notice of prior transfers, assignments, or equities. Each of ¡these facts is as essential as the other. Proof that his assignment was first recorded, and that he paid value, is not enough. . ITe must allege and show affirmatively that .his purchase was made in “good faith,” and, even though the written assignment be held to import a Valuable consideration, it does not import and cannot be held evidence of the fact that -the transaction was in “good faith,” or without notice. That fact must he shown aliunde the instrument itself. The recording statute does not and is not intended to establish a rule of evidence, but only to confer a substantive right. The effect of the statute is to change the old equity rule that, of
Appellant’s contention that the assignment to- Blaisdell must be held to defeat the rights of Ruth A. Parks under her assignment cannot he sstained, and the trial -court was justified in holding that Ruth A. Parks .became the owner -o-f the Showalter mortgage. The written evidence of this -assignment having been properly received was sufficient to sustain the finding of the trial court, and the assignment of insufficiency of evidence -cannot be sustained.
The right of redemption can never be -deemed to- have been “foreclosed” except where (the party possessing the right to redera has been made a party to- foreclosure proceedings. It is only in this sense that the word “foreclosed” is used in section 2034 of the Civil Code. It is evident, therefore, that the right to. redeem cann-cit be deemed lost or barred by the foreclosure proceeding itself, but is lost by the failure to redeem from the foreclosure sale within- the -one-year 'limitation prescribed by the statutes - relating to- redemption. When the year -has- expired without redemption, the right to- redeem may be said to 'be “foreclosed';” but the exact fact is that the right 'of redemption is' barred by the one year limitation. As is apparent from the decisions above -cited, the junior lienholder not made a party to the foreclosure-proceedings Cannot redeem' from' the foreclosure salfe, and therefore is not barred by the one-year limitation in the redemption-statute. In California, prior to the enactment of section 2903 of-their Civil Code, -identical with- 2034 -of ou-r Civil Code, and -prior to the enactment of section 346 ’of the -California Civil Code, which bars the right of redemption -after five years’ adverse possession as' therein defined, it was held that the right of redemption was a pure equitable right, the creation of courts of chancery,
The right of redemption rests upon the junior mortgage only to the extent, an-d -in the sense, that the lien of the junior mortgage must be an existing lien, and that the amo-unt necessary to redeem is fixed by th-e amount due on the prior .mortgage, -or by the amount of the sale where the junior lienholder'is made a party to foreclosure proceedings. In all other respects the right to- redeem is entirely independent of the right to fore'c-loise the mortgage. The right to- foreclose the mortgage arises -by reason of -default in payment of the sum secured thereby, or in some other condition therein contained. The right to redeem rests up-o-n the statute, or upon -principles of equity where there is no statute. One is of no higher character than the other. Each right is -clearly defined — the -one by the prior mortgage; the -other .by the statute itself, -or by the rules of equity. It is also- held that, where the junior mortgagee is not made a party, to the proceeding's for foreclosure of the prior mortgage, and the right -of redemption -still remains, the junior mortgagee may maintain a suit to foreclose, and may sell the mortgaged premises to -pay both' mortgage debts, without first redeeming or offering to redeem- froth the senior mortgage. Catterlin v. Armstrong, 101 Ind. 258; McK-ennan v. Neff, 43 Ind. 503; Coleman v. Witherspoon, 76 Ind. 285; De La-shmutt v. Sellwood, 10 Or. 326; Memphis R. Co. v. State, 37 Ark. 632; Anson v. Anson, 20 Iowa, 55, 89 Am. Dec., 514; Atwater v West, 28 N. J. Eq. 361; Chilver v. Weston, 27 N. J. Eq. 435; Turner v. Phelps, 46 Tex. 251; Murphy v. Farwell, 9 Wis. 102; McDonald v. Miller, 90 Tex. 309, 39 S. W. 89. These decisions broadly illustrate the distinction between the rigid of redemption as it exists in a junior mortgagee who has been made party in prior foreclosure proceeding's and in one not made a party to such proceedings.
There are many cases which hold that, when the junior lien-holder . has not -been made a party to the foreclosure action, the al-d equity right -of redemption remains entirely independent of the statute which prescribes a shorter .period of redemption after foreclosure. This line of -decisions, -may perhaps furnish ground for appellant’s contention that the same limitation applies- to b-oth the foreclosure and the -redemption- action. The case of Hall v. Ar
Section 343, California Code of 'Civil Procedure, provides that: “An action -for relief not -hereinbefore provided for must be commenced within four years after the -cause of action shall -have -accrued.” This section is- identical with section 66 of our Code of 'Civil Procedure, except that the limitation in our Code is ten instead of -four years. In Lux v. Haggan, 69 Cal. 269, 4 Pac. 919, 10 Pac. 674, the court held that section 343, Code Civ. Proc. Cal., above quoted -applied to- suits in equity as well as- at law, and this bolding was affirmed by that court in Dore v. Thornburg, 90 Cal. 64, 27 Pac. 30, 25 Am. St. Rep. 100. Why this period -o-f limitation was not applied- in Hall v. Arnott, supra, we are unable to understand', unless it be -that section 346 of the California Code of Civil Procedure was construed as a s-peddl statute of limitations in redemption- actions, and -removed -the redemption action from the -operation of the 4-year limitation statute. In this state, however, we have no statute corresponding to section 346 of the California Co-de of Civil Procedure', and it would seem- plain,, therefore, under -the California -decisions- which, -hold the 4-year statute o-f limitation- applicable to equity actions, that the 10-year period of limitation should alp-ply in thi-s state to all action-s, legal as well as equitable, -where no other period--of limitation- is prescribed, and that the exception implied -by the 'California court in Hall v. Arnott as to redemption actions does not exist in this state. It .would seem- .perfectly plain, afeo, that, where the Legislature has enacted a io-yea-r -statute o-f limitations applicable to redemption actions, the statute must be deemed to---have abolished the old -equity rule which by analogy applied- the same limitation to- the redemption- action th-at -was -applicable in the action for foreclosure o-f the junior lien; We 'are constrained, therefore, to hold that sections 2034, 2035, our Civil -Code, so far as the same
Appellant further contends,- however, that, even if the 10-3'ear statute of limitation is applicable -to the redemption ' relief asked in this action, its bar had not fallen when this suit was commenced.
Appellant’s second contention, is that the defendant Ruth A. Parks and her1 successors in interest, excepting thje defendant Swafford, were non-residents o,f the state'during some portion of the 10-year period of limitation, and that the statute therefore was tolled as to this plaintiff’s right of action. This contention is founded upon the assumption that an action -to foreclose a mortgage or to redeem from a prior mortgage, or both, is .an action in personam.
The trial court .found -that on the fifteenth day of April, 1904, the defendant C. G. Swafford, through a chain- of conveyances, became the owner of all the right, title, interest, and estate of Ruth’ A. Parks vested in her by her foreclosure proceedings. This is not 'Controverted by appellant. Parks, the grantee under th& foreclosure proceedings, and every subsequent grantee of the in
We therefore have only to further consider the rights- of Swafford 'as -affected by the io-year statute of limitations and estoppel by laches.
Appellant requested the trial court -to find as facts that Ferneding and Parks, during the time they held title, were non-residents of the state, and the refusal of the trial court is assigned as error. Such findings, we think, were vital to ¡appellant’s- case, and the evidence was sufficient to sustain the findings asked for.
Assuming, therefore, that Ferneding and Parks ¡were nonresidents of the state and necessary parties to an action of redemption within the 10-year period, we are called upon to determine whether their -absence from the state tolled' the io-y-ear statute of limitations as against Swafford, their successor in interest.
'Considerable conflict is apparent in the decisions of the courts of different states as to the application of the statute- of limitations in redemption actions. A majority o-f -the decisions holding that the absence of a necessary party from th-e state tolls the statute o>f limitations appear to rest upon- the doctrine that a redemption action is in pers-onam, and not in rem. -Other decisions hold that the right of -redemption is analogous to a mortgage lie-n; that an action thereon can be maintained at any -time within the period of limitation, regardless of the residence of necessary parties defendant, and, because such action -can be maintained, th-eir absence does not toll the statute. A -review of conflicting and- inconsistent -decisions, -we think, would serve no- useful purpose, and would u-nduly extend the discussion of thi-s appeal.
Section. 69 -of -the Co-de o-f Civil Procedure of this state, one of the sections -o-f the statutes governing the tim-e o-f -commencing aotio-ns, provides as follows: “If, when the -cause -of action shall accrue, against any person, he -shall be out of the -state, such action may be commenced within- the terms herein respectively limited, after the return of such person into- the state.”
It is generally held that a statute such as this is applicable ■to nonresidents o-f the state. As w-e have -observed under the
It follows that Froelich’s right of action against Ferneding accrued on May 13, 1901, against Sullivan on the 5th day of April, 1904, and against Swafford on the 15th day of April; 1904, the dates of their respective deeds. When plaintiff’s- right of action accrued against Ferneding -on May 13, 1901, Ferneding was a non-resident of the state.
We think it clear that the running of the -statute was suspended as against Ferneding and Parks by reason of nonresidence, it may be observed that the provision tolling the- statute refers only .to the accruing of the cause of action, and does- not purport to make any distinction as to the different form-s or remedy which may be pursued- in an -action. The statute does nothing further than to declare that the right to pursue any remedy appropriate to the particular caus-e of action shall not he 'barred -so- long a-s- the person against whom the right of action exists shall remain a nonresident of the state. We think, therefore, there -can be no warrant for saying that the right of action is suspended as to one class of remedies, but not as to another, or that the running of the statute is suspended as to- actions iru personam, 'but not as to .actions quasi in rem, as a few courts seem to have held. There are no parties to actions strictly in rem, and therefore the statute can have no application in- that class of actions.
ff this view is correct, the running of the io-year-period .of limitations in-favor of Swafford -was tolled by the nonresidence- of Ferne-ding and Parks during .a -considerable part of that period, .and plaintiff’s right to redeem is not barred by the .statute. . .
The -trial -court- held that. Froelich was estopped by laches: from foreclosing his mortgage, -as -well, as from asserting, the right of redemption. The, court -erred in so ¡holding.
With fu-1-1 knoiwledge -of thes-e facts, Swafford -placed all his improvements upon the land- at -h-is o-wn .peril, so< far as t-he same -might be affected by t-he Froelidh lien. Cram v. Cotrell, 48 Neb. 648. The great increase in market value o-f these lands during the existence- of Froelich’-s lien is -wholly immaterial. It would be absurd to hold that the natural increase in value of the security -could in- a-ny manner jeopardize or affect the validity of the mortgage -lien. Swafford -had succeeded- to the legal title of Calkins, and- -was in possession under it. So- far as- Froelich’s rights -are concerned, the case stands, exactly as though Calkins, during all this time, had retained the legal- title, and ha-d placed the improvements upon the- -land himself. Under the evidence in the record, we can s-ee no- possible -ground for -holding that Froelich should he estopped by laches or conduct from- asserting his rights under his mortgage. We are impelled, therefore, to the conclusion that appellant has lost neither his- right of foreclosure or redemption.
AVe have considered the other- assignments of error, but do not ■think it-necessary, in view of -the conclusions already announced, to further- examine them, as they-would'-in no- manner affect the rights of either .party as settled and -determined by the views herein expressed. •• -
The findings of f-act, conclusions of law, and decree entered by the trial court must -therefore -be reversed, and a new trial granted.