86 N.W. 694 | N.D. | 1901
This action was brought by the plaintiff to foreclose a mortgage on real estate given by the defendant John E. Tingstad to the Huber Manufacturing Company on November 21, 1889, and by it assigned to the plaintiff before the commencement of this suit. The complaint states the following facts, in substance: That on October 31, 1889, the said John E. Tingstad.was a single person, and the owner of the land described in the mortgage attempted to be foreclosed in this action; that on said October 31, 1889, he executed and delivered to the Farmers’ Trust Company his mortgage on said lands to secure the payment of $1,035, which said mortgage contained a power of sale duly authorizing said mortgagee to foreclose
No question is raised in this court as to the regularity of the foreclosure under the Farmers’ Trust Company mortgage, but it is conceded by the plaintiff that such foreclosure was regular in all respects. It will be seen that the mortgage in suit and the Farmers’ Trust Company mortgage were executed and delivered while the Comp. Laws of 1887 were in force, and that the foreclosure of the Farmers’ Trust Company mortgage was made while such Compiled Laws were in force. The question to be determined on this appeal must be determined from a construction of the provisions of such Compiled Laws relating to the rights of mortgagees under their mortgages, both before and after deeds have been issued upon foreclosures thereof. The precise -question involved in the issue raised bv the demurrer of the defendants is whether, under Comp. Laws of 1887, a junior mortgagee has the right to redeem from a foreclosure of a prior mortgage made under a power of sale contained
In foreclosures by action none are affected by the decree except such persons as are made parties, and are served with process. But in foreclosures under powers of sale pursuant to published notice all persons acquiring- interest in the land subsequently to the giving of the mortgage foreclosed are deemed in law parties to the foreclosure proceedings, and are bound thereby to the same extent as those persons who are made parties to a foreclosure action are bound by the decree. ’ “When a regular sale is made under a power contained in the instrument, not only the mortgagor, but all persons claiming any interest in the equity of redemption by privity of estate with him, are considered as parties to the proceeding, and are precluded by it as fully as if they had been made parties defendant by regular subpoena in an ordinary foreclosure suit.” Powers v. Andrews, (Ala.) 4 South. 263. As bearing somewhat on the question involved, this language of the Supreme Court of Minnesota in Hokanson v. Gunderson, 56 N. W. 172, is here quoted. “The purchaser succeeds to the equitable interest of the mortgagee, and, when no redemption is made, this interest draws to it the subordinate legal title of the mortgagor, and his title then stands under the mortgagee precisely as if the mortgage had been an absolute conveyance at its date; in other words, the mortgage ripens into a perfect title through the process of foreclosure. The purchaser is then only concerned with the state of the title at the date of the mortgage and the existence of liens affecting the rights of the mortgagee.”
It is claimed that a foreclosure by advertisement under a power of sale contained in a mortgage, not followed by a redemption within the year allowed for a redemption, is effectual as a foreclosure of the senior mortgagee’s lien only, and does not bar the rights of subsequent mortgagees, for the reason that § 5424 provides for the payment of any .surplus remaining in the hands of the officer or person making the sale, after satisfying the mortgage, to the “tnort
It is further contended by the appellant that § 5411, Comp. Laws, conclusively shows that a junior mortgagee has the right to redeem from a foreclosure sale under a prior mortgage after the lapse of one year from the date of sale. This section gives to the mortgagor, upon a proper showing by affidavit, a speedy remedy to restrain the sale in case he has any defense or counterclaim to the mortgage then being foreclosed, and transfer all proceedings under such foreclosure to the District Court, where such alleged defense or counterclaim may be litigated the same as though an action had been commenced for the foreclosure of the mortgage. This section does not in any way affect or change any rights which a subsequent mortgagee may have had prior to the enactment of this section. It leaves his rights just as they were before its enactment. A junior mortgagee may still resort to a court of equity for any redress to which he was entitled before the enactment of this section in case of fraudulent conduct on the part of the prior mortgagee and the mortgagor detrimental to his interests under his mortgage, and may apply to the court for relief upon any other equitable grounds. And, in case judgment of foreclosure is rendered on the prior mortgage, his rights are again protected by his right to redeem from such judgment or sale. The provisions of § 5421, Comp. Laws, in our judgment, conclusively negative the right of subsequent mortgagees to redeem from a sale under a power contained in a mortgage after one year has elapsed from such sale. That section gives a creditor having a lien by judgment or mortgage the right to redeem from a
The District Court ordered that the action be dismissed as to all the defendants. This should not have been done so far as the defendant John E. Tingstad is concerned, as a personal judgment may be obtainable against him for the debt set forth in the complaint. No judgment has been entered, however, and, as such order dismissing the action as to said defendant was undoubtedly a clerical inadvertence, it does not require a reversal of the order, as the main question involved and decided in this court and -in the court below arose upon the demurrer. The mistake in the order can be hereafter corrected without any prejudice to any of the parties.
The District Court also ordered the plaintiff to pay $10 as costs of hearing on the argument of the demurrer, payment of the same to abide the final disposition of the case. If this was erroneous, and this item of costs is insisted on hereafter, it can be corrected when the costs are finally adjusted. The order sustaining the demurrer is affirmed.