116 N.W. 345 | N.D. | 1908
This is an action to set aside a sheriff’s deed issued pursuant to a foreclosure of a real estate mortgage by advertisement under a power of sale.
The complaint states the following facts: The plaintiff Grove was the owner of the land involved in said mortgage from September, 1903, until May, 1904, and in the latter month conveyed the same by a. warranty deed to Fultz, his co-plaintiff in this case. In September, 1903, and while said land was owned by Grove, he en
The appellant’s contention is that the foreclosure sale, as well as the deed issued pursuant thereto, was absolutely void for the reason that it was wholly usurious. Conceding that the transaction was usurious, it nevertheless appears that the foreclosed mortgage did not represent interest wholly in excess of 12 per cent per annum on $500 for five years. It was usurious, however, and, being a mortgage for interest only, the interest would be subject to forfeiture in a proper case. The question is therefore presented', whether a foreclosure of a mortgage representing in part a usurious transaction is void, and, if void, whether the plaintiffs are permitted to set up that fact as a ground for affirmative relief against a foreclosure sale after the redemption period has expired. Conceding that the $60 mortgage represented some interest in excess, of 12 per cent, the highest legal rate allowed, we are agreed that the plaintiff Grove is clearly not entitled to the relief demanded. There is no allegation or claim that lie did not have actual, notice of the foreclosure and permitted it to go on until the deed was issued without asserting his defense. If he has a right to 'be heard now-in defense of his covenant of warranty, he had the same right while the foreclosure was pending. Conceding that he had a legal right to prevent the foreclosure jointly with Fultz, he did not invoke that right, and now demands equitable relief without attempting to excuse this default. He has lost all right to- equitable relief. He-should have made his defense seasonably.
The plaintiff Fultz seeks equitable relief upon different grounds. Fie alleges that he had no knowledge of the $60 mortgage, and no-actual notice of the foreclosure thereof. The regular notice prescribed by statute for a foreclosure of mortgages by advertisement was givén by publication. This notice was conclusively binding-on Fultz, and had the same legal effect- on -him as if a personal notice had been served on him. He cannot now be heard to assert
The case, therefore, comes within the principle that the borrower and those in privity of estate with him are permitted to defend as against usury in proper cases. Webb on Usury, section 350; Union National Bank et al. v. International Bank et al., 123 Ill. 510, 14 N. E. 859; Merchants’ Exch. Nat. Bank v. Commercial Warehouse Co., 49 N. Y. 635; National Mutual Bldg. & Loan Ass’n v. Retzman, 69 Neb. 667, 96 N. W. 204. If the borrower waives the usury and pays it, or makes a deduction of the purchase price to that extent on a sale of the premises subject to the mortgage, the purchaser cannot raise the question of usury, even in an action on the usurious note or mortgage. The right to raise the question of usury is personal to the borrower, and, if he ratifies the usurious transactions, others cannot assume a contrary attitude. If these plaintiffs had appeared and resisted the foreclosure by advertisement, as they might have done under section 7454, Revised Codes 1905, no legal objection could have been interposed to allowing them to raise the question of usury.
It is further claimed that the defendant did not notify plaintiffs that the mortgage was to be foreclosed. No such notice is provided for by the statute. Hence the defendant was not required to give such notice, and the foreclosure cannot be invalidated on that ground. Reilly v. Phillips, 4 S. D. 604, 57 N. W. 783.
It is claimed that the foreclosure was void by reason of the usurious character thereof. Whether this is so or not depends upon the statute in force when the mortgage was given. Unless the statute declares that usury vitiates and renders void the notes and mortgages given therefor, then the proceedings are not void. There are no penalties or forfeitures for usurious transactions, except such as are prescribed by statute. The statute in force when the loan was made was the same as the usury law now is, and it is as follows : “The taking, receiving, reserving, or charging a rate of interest greater than is allowed by section 5510 (5511), when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill or other evidence of debt carries with it or which has
The foreclosure by advertisement, followed by the issuing of a deed, is not subject to attack on these grounds any more than if the deed were based on a decree of foreclosure in court. A sale under decree is no more efficacious as a basis of title than a sale by advertisement when all statutory requirements have been complied with.
There is no allegation of fraud or undue influence on the part of the defendant in foreclosing the mortgage. Under such circumstances, we are satisfied that the foreclosure sale is not subject to an attack by an equitable action, based solely on the ground that the mortgage was usurious. If the statute rendered the mortgage void, a different question would be presented. To allow him or parties similarly situated in other cases to come in merely on the ground of want of actual notice would render this method of foreclosure subject to grave abuse, though the foreclosure was attended by strict compliance with the statute. Relief under such circumstances should not be granted in the absence of some distinct ground for equitable relief.
The fact that the publisher’s affidavit of the notice of sale was dated as of a later day than the sheriff’s certificate does not invalidate the sale. The statute providing for such filing within 30 days from the day of -sale does not provide that the failure to do so shall invalidate the sale. The jurisdictional requirement is that the notice shall be published. In the absence of some statutory provision invalidating the sale for failure to file the proof within the prescribed time, we think that the reasonable construction to be given to the provision is that it was intended to be merely directory. Johnson v. Day, 2 N. D. 295, 50 N. W. 701. The notice of sale stated the amount due on the mortgage to be $81.96, when it should have been only $67.50 according to the terms of the notes. There is no allegation of fraud or bad faith in inserting a wrong amount, and there is no allegation that any one was mislead thereby, and there could not well be ground for such allegation of actual prejudice. Jones
The judgment is affirmed.