Schwartz v. Oakland County Sheriff

T. Gr. Kavanagh, J. Allegheny Engineering, Inc., owned certain lots in the city of Southfield, Michigan, when on February 18,1959, it gave a first mortgage thereon to James Y. Rine. On June 30, 1959, Allegheny deeded the property to Dorchester Homes, Inc., subject to the mortgage which the grantee assumed and agreed to pay. Thereafter on October 31,1960, Dorchester Homes, Inc., gave a second mortgage on the premises to the plaintiffs. This second mortgage came in default and was foreclosed by the plaintiffs by advertisement and the sheriff held a mortgage sale on September 14, 1962, at which the plaintiffs purchased the property. The deed to plaintiffs was recorded the same day. On October 3, 1962, the first mortgage being in default, foreclosure by advertisement was had and a sheriff’s sale was held on that date. Rine (first mortgagee) bid in the property for the full amount of the indebtedness due him including the sheriff’s fees and recording expenses and in addition paid over to the deputy sheriff $5,000 surplus. It is undisputed that on November 7, 1962, on demand of Robert C. Newkirk, resident agent of Allegheny Engineering, Inc., the original mortgagor, the sheriff paid over the surplus to Newkirk. Dorchester Homes, Inc., did not redeem from either foreclosure sale. On October 2, 1963 (their deed having become absolute on September 14, 1963), the plaintiffs re *631 deemed the property from the foreclosure sale of the first mortgage. They paid the register of deeds the sum of $41,298.69 which included the $5,000 surplus referred to above. The instant suit was brought to recover the surplus sum of $5,000 on the theory that the deputy sheriff should not have paid it to Newkirk or his corporation for they were not entitled to it. The plaintiffs’ motion for summary judgment was granted as to defendants Allegheny Engineering, Inc., and Robert C. Newkirk, jointly and severally, and the motion of defendants Prank W. Irons, Herbert R. Randunz and Wolverine Insurance Company for summary .judgment of no cause of action was also granted. Plaintiff appeals the summary judgment of no cause of action. The defendants, Allegheny Engineering, Inc., and Robert C. Newkirk have not appealed. The sole issue in this case is whether or not the surplus statute, then CL 1948, § 692.14 (Stat Ann § 27.1234) (see now CLS 1961, § 600.3252 [Stat Ann 1962 Rev §27A.3252]), protects the sheriff upon his payment of the surplus to one named in the statute and against the claim of one not named. The surplus statute, supra, admittedly requires a lien claimant or subsequent mortgagee to give notice and abide the determination of the validity of his claim by the court in the procedure therein established. The appellant states that he is not a lien claimant or a subsequent mortgagee but rather an equitable titleholder and hence is not covered by the statute. We agree. The title acquired by a purchaser at a foreclosure sale is all the right, title, and interest in and to the mortgaged premises the mortgagor possessed at the time the mortgage was executed. Stolte v. Krentel (1935), 271 Mich 98, 105. *632 The surplus statute, supra, was intended to apply for the protection of subsequent mortgage claimants or lien holders. Allen v. Wayne Circuit Judges (1885), 57 Mich 198. The statute spells out the duties of the sheriff; we will not impose any greater duty on the sheriff than the statute does. He is obliged to pay the surplus on demand to the mortgagor, his legal-, representatives or assigns unless some other claimant makes a claim of some subsequent mortgage or lien encumbering the real estate. The plaintiff has a legitimate claim for the surplus as owner of the equitable title at the time of the foreclosure of the first mortgage. Union Trust Co. v. Electric Park Amusement Co. (1912), 168 Mich 574. However, under the surplus statute, supra, the sheriff is obligated on demand to pay the surplus to the mortgagor, his representatives or assigns unless some other claimant makes a claim. The sheriff, having received no other claims, correctly paid over the surplus to the mortgagor of the first mortgage in conformity with the surplus statute, supra. Plaintiff is therefore left to his remedy against the mortgagor under the first mortgage for the enforcement of his claim. Judgment affirmed. Costs to appellees. Lesinski, C. J. and Quinn, J., concurred.