Donnelly v. Simonton

By the Gourt Atwater, J. This was an action brought by Appellant to remove a cloud upon title to real estate. The complaint discloses substantially these facts, viz : that in May, 1857, Plaintiff executed a mortgage upon certain lands in Ramsey county, to Robert Smith, to secure the payment of the sum of §1500 ; that Smith assigned the mortgage to Peter Berkey; that Berkey foreclosed the mortgage in October, 1858, and purchased the premises himself; that affidavit of salo was made by the deputy sheriff, who acted as auctioneer, which with the affidavit of publication of notice of sale were filed and recorded in the proper office, and also a certificate of sale from the same officer; that in February, 1858, Berkey and wife assigned the certificate of sale to Defendants, which was also recorded ; that in September of the same year, the Plaintiff paid Simonton the amount for which said premises were sold, with interest; that Plaintiff is owner in fee of the premises; that the mortgage, assignments, affidavits, and certificate still remain of record in the office o± register of deeds of Ramsey county, and are a cloud and incumbrance upon the title to said premises; that in October, 1859, Plaintiff caused to be drawn a certificate in writing, acknowledging the payment of said money on said redemption, and satisfaction of said mortgage, and caused the same to be presented to Defendant Simonton, to be by him executed and acknowledged, and tendered at the same time his reasonable charges therefer, but that said Defendant refused to execute and' acknowledge the same, &c. The Defendants demurred to the complaint, and the demurrer was sustained, and from the order entered thereon, Plaintiff appeals. The first objection here raised to the complaint, is that the — 172 — Plaintiff cannot maintain this action, as be does not allege that be is in possession of the premises, from which the cloud is sought to be removed, I think this objection is not tenable. The Plaintiff alleges that he is owner in fee simple of the lands mortgaged, and it does not appear that any other one has any interest therein. This is not an action under the statute to determine an adverse claim, the title of the Plaintiff standing undisputed. The jurisdiction of a court of equity to entertain an action of this kind, has long been recognized, and we do not find any cases which hold that actual jjossession is necessary in order to maintain the action. Story, in his Equity Juris., 705, states the doctrine, that a court of equity will interpose its aid, “where-a deed, or other instrument, originally valid, has, by subsequent events, such as by a satisfaction, or payment, or other extinguishment of it, legal or equitable, become functus officio; and yet, its existence may be either a cloud upon the title of the other party, or subject him to the danger of some future litigation, when the facts are no longer capable of complete proof, or have become involved in the obscurities of time.” See also, Mad. Ch. Pr., 178; Willard's Eq., 303-4; 1 J. C. R., 517; 5 Paige, 501; 2 Paige, 482. In Bromley vs. Holland, 7 Ves., 3, Lord Eldon states the principle that “it was not unwholsome that an instrument should be delivered up upon which a demand may be vexatiously made as often as the purpose of vexation may urge the party to make it.” The principle upon which these authorities are based, and the reason given for the interference of a court of equity, precludes the idea that actual possession is a necessary pre-requisite to maintaining the action. "Wherever the instrument may be used to the injury oí another, whether it be of record or otherwise, Courts will, in the exercise o^ a sound discretion, interfere to prevent the impending injury, or one which may even by possibility accrue. It is further objected that by the sale, the legal title of the property passed to the assignee of the mortgage, and was conveyed by him to the Defendants, who hold the real estate as tenants in common; and that a demand upon one, for a release of the interest of "both, was not good in law. That inas — 173 — much as one tenant in common in real estate, cannot release tbe interest of botb, such a demand would not be available for any purpose. In view of this objection, and the facts presented by the case, it becomes necessary to determine what interest the purchaser of premises sold under foreclosure by advertisement takes in the property. In this case, the assignee of the mortgagee purchases the mortgaged premises, and then assigns his interest to the Defendants. Their title is therefore that of purchasers at the sale, and its nature must be determined, and become subject to the provisions of the statute in relation thereto. I think it is true as claimed by Despondent, that upon the sale of mortgaged premises by advertisement, the legal title vests in the purchaser, and he becomes the owner of the land. The principal difficulty in the matter is to determine what constitutes a sale, or when the sale becomes an act fully completed. Is it when the sheriff or other proper person, offers the premises at public auction, and knocks them down to the highest bidder? Or not until the time for redemption expires, and the purchaser obtains his deed in pursuance of the provisions of the statute ? It is somewhat difficult to determine from the language of the statute {chap. 15, Comp. Stat.,) what the intention of the legislature was in this regard, since sometimes the one, and sometimes the other, are spoken of as the sale. From a careful examination of the whole chapter however, and subsequent 'enactments, it becomes, I think, apparent that the intention was not to vest the title, (certainly not the absolute title,) in the purchaser, until the expiration of the time for redemption. Seo. 12 of chap. 15, above cited, provides for the completion of the sale, by the execution of a deed after the expiration of the time for redemption. And sec. 11 provides thativj, record of the affidavits aforesaid, and of the deed executed on the sale of the premises, shall be sufficient to pass the title-.thereto. And upon redemption being made in accordance with sec. 11, “ the said sale, and the certificate granted thereon as aforesaid shall be null and void.” By our statute a' mortgage of real property is not to be deemed a conveyance, so as to enable the owner of the mortgage to recover possession of the real — 174 — property without a foreclosure. Seo. 11, Comp. Stats., p. 596. Under this statute, it is admitted by Respondent that the mortgagee has no “ estate ” or interest in the land mortgaged, that he has before sale neither possession nor right of possession, and only has a chattel interest. It is difficult to see what greater interest the purchaser has after sale, (before the time for redemption has expired,) save that»the interest of the purchaser in the land, is to secure the amount paid, rather than the original debt. The purchaser-is bound to accept this amount when tendered to him, and when paid the interest of the purchaser in the land ceases. Ve think this view is strengthened by reference to an “act to' regulate judicial sales of real property and. redemption thereon.” Sess. Laws 1862,p. 72. Seo. 4 of said act provides that “such certificate being so proved or acknowledged and recorded, shall, upon the expiration of the time for the owner of the real property sold, or his assigns, to redeem, operate as a conveyance to the purchaser, &c., of all the right, title and interest in the property sold,” &c. Seo. 7 of the same act provides that the interest acquired upon any sale mentioned in Seo. 3 of this act, shall be subject to the lien of any attachment or judgment duly made or docketed against the person holding the same as in case of real property; and may be attached or sold upon execution, in the same manner as real property is attached or sold.” These provisions make the intention of the legislature more manifest, as to the title held by the purchaser in these cases. The certificate is to “operate as a conveyance” after the time for redemption has expired. And the “interest” of the purchaser by special provision, is made subject to execution, a provision which could hardly have been necessary, if by the purchase, the purchasers in this case became tenants in common in the land itself, as claimed by Respondent. In Daniels vs. Smith, 4 Minn., 172, we held that, strictly speaking, no title passes by the sale itself, (that is, by the actual bidding off the property at public auction.) It was there stated that the sale, payment of the amount bid, and giving of the certificate provided for by the statute, has about the same effect as an escrow, which is a deed executed and deliv — 175 — ered to some third person to keep until some act is done or condition performed, and then is to be delivered to the grantee and to become of full effect. But until this second delivery the title to the premises remains in the grantor. Until this time, the mortgagee, (or in this case the purchaser) holds the real estate, whatever may be the nature of his title, only for the purpose of securing the amount bid upon the premises: that is, ’his interest is liable to be divested at any time, whenever such amount is paid, before the expiration of the time for redemption. If this view be correct, the legal title to the land does not vest in the purchaser until after the expiration of the time for redemption; and in this case, the assignees of the purchaser do not become tenants in common, of the land. We think a tender to one of two joint mortgagees before sale would be a good payment, and a satisfaction of the mortgage by him would discharge the lien ; the mortgagees standing in the relation of joint creditors of the mortgagor for the debt secured by the mortgage. Practically the same relations would seem to exist between the purchasers at a sale, and a party having the right of redemption, in regard to the amount bid. They have no right of possession, (when interest is paid,) until the expiration of the time for redemption, and hold the land only as security for the amount bid. We think therefore that the payment of the money to one of the Defendants, and the demand from him of a release or satisfaction, was sufficient to entitle the Plaintiff to maintain the action. By the provisions of the statute in force at the time this sale was mad¿, when the mortgagee became the purchaser, the affidavits of the publication and affixing notice of sale, and of the circumstances of such sale, became evidence of the sale, and of the foreclosure of the equity of redemption, without any conveyance being executéd. The Defendants therefore would appear by the records to be the legal owners of the premises, although in fact having no interest in the same after a redemption. The statute has provided that a mortgagee shall execute the proper satisfaction of a mortgage upon payment of the same, and has affixed a penalty for a — 176 — refusal, after request and tender of the necessary fee or ex-píense. The statute has omitted to provide the means whereby the mortgagor, or party in interest, may have the records clear, upon redemption after sale, although it is manifestly as necessary and important, as in case of payment before sale. The mortgagor is therefore obliged to resort to a court of equity to obtain the relief sought, and to which he has shown himself entitled. The order sustaining the demurrer is reversed, and the cause remanded to the District Court for such further proceedings as may be proper.