| Minn. | Jun 16, 1882
The plaintiff was formerly the owner of lands in Hennepin county, consisting of two separate tracts. He is still in the occupancy of one of such tracts; the other tract is yacant and unoccupied. In 1878 plaintiff and his wife mortgaged these lands to one Olmstead, to secure a debt. Default having been 'made in the conditions of payment, the mortgage was foreclosed by advertisement, the mortgagee, Olmstead, bidding off the property at foreclosure sale, and receiving the sheriff’s certificate of sale. Before the expiration of tiie year given by law to the mortgagor to make redemption, there was paid to Olmstead, in behalf of the wife of the plaintiff, Mrs. Sprague, the sum for which the property had been sold on foreclosure, with interest from the day of sale. Thereupon Olmstead executed to Mrs. Sprague an assignment of his sheriff’s certificate of sale, which assignment she placed on record. Prior to the foreclosure sale one Littler recovered a judgment against Sprague, the plaintiff, for the sum of $122.24, which was docketed in the district court. This judgment was assigned to defendant, and he, having complied with the requirements of the statute respecting redemptions by judgment creditors, within five days after the expiration of the year from the day of sale, paid to the sheriff the sum necessary to make redemption therefrom, and received from that officer a certificate of redemption. Through this proceeding he claims to have acquired title to the land. The defendant had previously, by virtue of the same judgment, redeemed other real property of the judgment debtor from foreclosure sale, the value of which property exceeded the
The interest acquired by Olmstead, by the sale to him, was one’ which would ripen into an absolute title, vesting in him the original title of the mortgagors, unless redemption should be made from such sale. By the assignment this right of the purchaser was transferred to Mrs. Sprague, and she thenceforth held it as her assignor would have done had the assignment not been made, subject to the right of redemption by the mortgagors or their assigns within a year from the time of sale, and after that by creditors, as pirescribed by statute. No redemption was made unless by Martin, the defendant, as a judgment creditor of Sprague; and if Martin did not effect a legal redemption, the title has become absolute in Mrs. Sprague. Whether he has made such redemption depends upon his right to redeem, for no question is made as to the regularity of his proceedings. That Mrs. Sprague must be deemed to have purchased the rights of Olm-stead, and to hold them as assignee, cannot be a matter of doubt, although it is claimed in her behalf that the transaction should be considered as a redemption by her as a mortgagor rather than an assignment. Upon its face the transaction was an assignment, and not only is no proof offered, if that were possible, to change the apparent character of the transaction, but the parties have agreed, as a part of the statement of facts upon which the case was submitted to the court below for judgment, that Olmstead, “by an instrument in writing, regular in form, sold and assigned said certificate of sale, and all the rights and title thereby acquired to said premises, to said Angeline M. Sprague.” But, assuming Mrs. Sprague to have held by assignment from the purchaser the right in respect to thé property acquired by him by the sale, subject to redemption by creditors, the principal question in the case is as to whether Martin had the right to make redemption from.her; whether his previous redemption of property of the judgment debtor, of value sufficient to satisfy his judgment, together with the sum paid by him to effect
The statute provides that if no redemption shall be made from foreclosure sale by the mortgagor, his representatives or assigns, within one year, “the senior creditor having a lien, legal or equitable, on the • real estate, or some part thereof, subsequent to the mortgage, may redeem within five days after the expiration of the said twelve months; and each subsequent creditor, having such lien, within five days after the time allowed all prior lien-holders, as aforesaid, may redeem by paying the amount aforesaid, [the sum of money for which the land was sold with interest,] and all liens prior to his own held by the party from whom the redemption is made.” Gen. St. 1878, c. 81, § 16. It further gives to the sale under foreclosure the effect of a conveyance to the purchaser or his assigns of all the right, title, and interest of the mortgagor in the property at the date of the mortgage, and invests redeeming creditors, as by assignment, with the rights acquired by the purchaser.
Not using the words for the purpose of accurate definition, we may say that by a mortgage of real estate the mortgaged property is pledged as security for the payment of a debt, or the performance of some other obligation. Foreclosure proceedings, in whatever manner conducted, have for their object and end the enforcement of the security; the application of the property to the satisfaction of the debt or obligation secured. Thus by a strict foreclosure the conditional title acquired by the mortgage is made absolute in the mortgagee, the property being thus applied directly to the satisfaction of the debt. So a foreclosure by entry and possession, existing under some juris.dictibns, is only another mode of enforcing the security. The same is true of sales under powers or by decrees of courts. All these are remedies given by the law, or by agreement or grant, by means of which the property pledged as security is actually applied to the satisfaction of the debt secured. It has never been doubted that as to the mortgage debt such remedy, when pursued to completion, operated as payment in toto or pro tanto. Lovell v. Leland, 3 Vt. 581; Hatch v. White, 2 Gall. C. C. 152; Amory v. Fairbanks, 3
But not only has the mortgagee a right to have the mortgaged property applied in satisfaction of his debt by a foreclosure of the equity of redemption remaining in the mortgagor, but creditors of the mortgagor, having liens upon the property subsequent to the mortgage, have also the- right, subject to the equities of the mortgagee, to resort to the same property for payment, and to enforce their liens upon it. These rights of both mortgagee and creditor, always recognized in chancery and subjects of equitable jurisdiction, are regulated by statute, and may ordinarily be adjusted by the acts of the parties without the intervention of the court. The equitable right of the creditor to redeem from a prior encumbrance, in order that the property may be made , available to the satisfaction of his own debt, which right was formerly enforceable by a bill in chancery to redeem, may now be ordinarily legally enforced by the statutory redemption. For obvious reasons, however, the exercise of that right is postponed until the lapse of the time given to the mortgagor to redeem; for, if redemption shall be made by the mortgagor, such redemption annuls the foreclosure sale, and thus renders unnecessary, for the protection of subsequent encumbrancers, the payment by them of the first mortgagee. If redemption is not made by the mortgagor within' a year from the time of foreclosure sale, the right to redeem, so far as he is concerned, is extinguished. But the foreclosure proceeding instituted by the mortgagee is not yet complete, (if there are creditors who have filed notice of their intention to redeem as required by statute,) nor has the purchaser acquired an indefeasible title to the property.
Nor is it true, as has been sometimes asserted, that it no longer concerns the mortgagor what becomes of the property. The property may still be made to pay his other creditors. The title has passed from the mortgagor to the purchaser at the foreclosure sale, but sub
As the foreclosure proceeding by the mortgagee is a process by which the mortgaged property is applied to the payment of his debt secured thereby, so the successive redemptions by creditors are a proceeding for the enforcement of their respective liens, and applying the property to the satisfaction of debts thus secured. This is unquestionably the result of redemptions by creditors intermediate the purchaser at foreclosure sale and the last redemptioner. Suppose, for instance, that a mortgagee, A., becomes a purchaser at his foreclosure sale, not paying money, but, as is generally the case — and as was done in the case now before us — buying with his mortgage debt. Suppose B. and C. to be creditors of the mortgagor, having liens upon the property and having the right to redeem in the order named. B. redeems from A., paying the purchase price, with interest. C. redeems from B., paying the sum which B. had paid to make redemption and also the amount of B.’s lien, and, no other creditors redeeming, acquires an absolute title to the property in fee. As to A., the price for which he purchased is the sum which he consents to apply on his debt, in consideration of the title which the sale vests in him. To that extent his debt is satisfied. vB., who, by redemption from A., acquired the property subject to the right of redemption by creditors subsequent to himself, is divested of that property by the subsequent redemption only by the payment of his prior lien, and thus
But why should the principle upon which all the proceedings in respect to foreclosure and redemption up to this point have been founded, end here or cease to be operative ? As to prior creditors, including the mortgagee, the property has been made to apply in sat-faetion, in whole or in part, of the debts by virtue of which successive interests in the property were acquired. Should the last redemp-tioner alone, who acquires an absolute title to the property in fee by virtue of his debt and lien, just as preceding creditors had acquired a conditional fee, hold it, and still the debt by virtue of which he acquired it remain in no way affected? It cannot be that it was. intended that, as to the last redeeming creditor, the right of redemption should be in effect a mere gratuity. In his case, as in that of creditors prior to himself, the right of redemption depends upon the existence of a debt and a lien already acquired upon the property. Only as he is a creditor, having a vested right to have the property applied to the satisfaction of his debt, is he given this statutory right of redemption. It is to him a legal remedy, by pursuing which he voluntarily appropriates to himself in fee that specific property upon which rests the lien securing his debt. It is thus, in legal effect, a statutory strict foreclosure of his lien. It cannot affect the result that in the statute and in common speech we call the proceeding a re- • demption. The proceeding itself is the legal appropriation directly to himself, by the creditor and lienholder, of the property by virtue of his debt and lien, the equities and title of others' being extinguished. Such an appropriation of mortgaged property by a mortgagee we term a strict foreclosure; and, as the authorities already cited show, it operates as payment pro tanto of the mortgage debt, although there has been no sale of the property, and no determination by any means of the extent to which the debt is thus satisfied.
The same principle is applicable in the case of a junior mortgagee . making a redemption under the statute, whereby he is invested, without
The statute not indicating the result, as respects the debt, of re-demptions made according to its provisions, the court must determine it upon legal principles, whenever' the question is presented for adjudication. So, too, the extent of the satisfaction of the debt
We are aware that a different éonclusion has been expressed in New York, (Van Horne v. McLaren, 8 Paige Ch., 285" court="None" date_filed="1840-04-21" href="https://app.midpage.ai/document/van-horne-v-mclaren-5548475?utm_source=webapp" opinion_id="5548475">8 Paige, 285; Emmet's Adm’rs v. Bradstreet, 20 Wend. 50" court="N.Y. Sup. Ct." date_filed="1838-07-15" href="https://app.midpage.ai/document/emmet-v-bradstreet-5515144?utm_source=webapp" opinion_id="5515144">20 Wend. 50;) but these eases are of less value to us as authority in thip case than they would otherwise have been, because of the difference in the statutes of the two states. The statute of New York respecting redemptions (from execution sales) prescribes no order in which, as among creditors, the right of redemption shall be exercised; and, as was considered in the case first above cited, a senior creditor may redeem from a junior creditor (who has made redemption from a purchaser) by simply refunding the amount paid by the latter to effect redemption, and without paying the lien of such junior creditor. Stress was therefore laid upon the fact that to give to the redemption by the junior creditor the force of a satisfaction of his judgment, and to then allow the senior creditor by redemption te divest him of his interest in the property, simply reimbursing the sum paid by the junior creditor to redeem, would be to deprive him of his judgment and give him nothing in return. Such could noi be' the result of the operation of our statutes relating to redemptions.
This case has been presented upon an agreed statement of facts, and a decision evidently sought upon the merits as to the questions which we have considered. No question has been raised as to the right of this plaintiff to invoke in this action an adjudication respecting defendant’s right of redemption, and the validity of the title thereby assumed to have been acquired. Mrs. Sprague, the assignee of the purchaser at foreclosure sale, would have been entitled to-an adjudication respecting such rights asserted by the defendant, and.
The judgment is reversed, and the cause remanded to the district court of Hennepin county, with directions to enter a judgment as here indicated.