Geo. B. Clifford & Co. v. Henry

Birdzell, J. This is an appeal from a judgment entered in the district court of Nelson county in an action brought to recover the value of the use and occupation of certain lands. The plaintiff had judgment for $960 damages and for costs. The case arose upon the following facts: ' On August 6, 1912, the defendant and appellant purchased from T. O. and W. W. Smith, of Springfield, Illinois, the east half of section 20 and the west half of section 21, township 153 N., range 59 W., of the P. M., Nelson county. The agreed price was $22,400, $5,000 of which was paid in cash and the remainder was to be paid in instalments of $1,000 a year, commencing December 1, 1913, and terminating December 1, 1929. Notes drawing 6 per cent interest were given for the deferred payments, and were secured by a first mortgage on the land. On November 25, 1916, Smith Brothers, the vendors, assigned the notes and mortgages to the plaintiff and respondent, George B. Clifford & Company, and on March 7, 1917, foreclosure proceedings were started in an attempt to realize the sum of $18,855.80, this representing the principal and interest due to the date of sale. On April 23, 1917, the land was sold at a sheriff’s sale for $19,297.28 and a certificate of sale issued to George B. Clifford & Company. In 1917 the defendant and appellant planted a crop upon the land embraced in the foreclosure proceedings, consisting of 380 acres of wheat, 100 acres of barley, 80 acres of oats, and 10 acres of flax. While the crop was being threshed, the plaintiff and respondent made a demand for it, which demand was refused. This action was then brought, and, to support the recovery, reliance is had upon § 7762 of the Compiled Laws of 1913. In fact, the action is based on the statute. The section referred to provides that the “purchaser from the time of the sale until a redemption ... is entitled to receive from the tenant in possession the rents of the property sold, or the value of the use and occupation thereof.” The principal questions raised npon this appeal arise upon the interpretation of that portion of the statute quoted above. Two main propositions are advanced by the appellant. It is contended: First, that the statute does not apply in favor of a purchaser at a sheriff’s sale held in pursuance of a foreclosure by advertisement; and, second, that if the statute is held applicable to such a purchaser, a recovery there [612] under cannot be had against a mortgagor who remains in possession during the period of redemption. It is conceded by the appellant that the exact proposition first contended for was decided contrary to his contention in the early history of this court in the case of Clement v. Shipley, 2 N. D. 430, 51 N. W. 414. But it is urged that this decision should be overruled, and that the rule adopted in Rudolph v. Herman, 4 S. D. 283, 56 N. W. 901, should be accepted as a correct interpretation of the statute in question. The case of Clement v. Shipley, supra, was well considered, and the interpretation adopted therein has both reason and authority to commend it. Furthermore, the rule therein laid down has so long been settled in this state, with the apparent sanction of the legislature, that we are in no wise disposed to disturb it at this date. If the judicial interpretation of the statute made thus.early in the history of the court did not conform to the true intention of the legislature, it would seem that the statute would have been amended. The next contention is predicated upon the wording of the statute. It is argued that where the mortgagor remains in possession after the sale, he'is entitled to all the benefits accruing from such possession; that, in fact, these benefits are secured to him by § 6740 of the Compiled Laws of 1913; also that in no event can he be considered as the “tenant in possession” within the statute quoted. It is conceded that the purchaser or a redemptioner would be entitled to receive the rents or the value of the use and occupation accruing during the period of redemption, if the premises, during such time, were in the possession of a tenant of the mortgagor; and the correctness of the previous decisions of this court to that effect is admitted. But it is claimed that the statute does not warrant an action in favor of a purchaser or redemptioner against the mortgagor in possession. The effect of the sale is merely to continue the lien of the mortgage and to cut off the equity of redemption at the expiration of the statutory period allowed for redemption. See State ex rel. Forest Lake State Bank v. Herman, 36 N. D. 177, 161 N. W. 1017. Also Jones, llortg. § 1661. As the holder of a lien evidenced both by the mortgage and by the sheriff’s certificate of sale, the purchaser or redemptioner is not entitled to rents and profits save as such right is given by statute. Jones, Mortg. § 1659. Since such a right is clearly given in this state [613] under § 7762 of the Compiled Laws of 1913, where the premises are in possession of someone other than the mortgagor, there is no apparent reason why any distinction should he made based upon the circumstance as to whether or not the premises are leased. Neither is there any satisfactory evidence that such a distinction was in the mind of the legislature. Had it been intended to give to the purchaser the benefit of the rents and profits or the value of the use and occupation only in case the premises were leased, it would seem that the legislature would have clearly manifested its intention to that effect. To use the language of the supreme court of California, in the case of Harris v. Reynolds, 13 Cal. 514, 515, 73 Am. Dec. 601, in interpreting a statute identical with ours: “It is not very easy to see the reason for such a distinction as that contended for. It would give but little help to the purchaser, since the debtor, on the eve of judgment, might change a possession by tenancy . . . so as to make of little or no value the purchaser’s right; and why should a debtor be any more inhibited from getting profit from rent than getting profit from use ?” The appellant’s counsel severely criticizes the above expression of the supreme court of California, and particularly the last clause thereof, but the expression seems to us logically correct. We are not concerned with the reasons why a debtor should be “inhibited from getting profit” either from rent or from use. That is not a judicial question, but a legislative one. But it would seem that if the legislature determines that a purchaser or a redemptioner is entitled, during the year of redemption, to the rents and profits or to the value of the use and occupation which ordinarily accrues to the owner, it would not be concerned in making a distinction based upon the- consideration as to whether or not the premises are in the actual physical possession of the mortgagor or of his tenant. The only basis for a contention that such a distinction was intended is in the statutory designation of the one from whom the purchaser is entitled to receive the rents, etc., the language of the statute being “from the tenant in possession.” It seems to us that it would require a strained and highly technical construction of the statute to find therein evidence that the legislature intended to make the distinction contended for. This statute, like all others which are designed to confer rights, should be so construed as to make the rights effective, and distinctions based upon artificial considerations [614] should he avoided. The term “tenant” here was clearly used in its generic sense, and in this sense it embraces any or all persons who stand in such a relation to the premises as to render them subject to the right conferred. See Harris v. Reynolds, supra; Knight v. Truett, 18 Cal. 113. The clear meaning of the statute is that the purchaser or redemptioner is entitled to the rents and profits or the value of the use and occupation of the premises during the year for redemption, and that the amount received from this source is to be credited to the debtor in case of a redemption. As to the policy of a statute that makes the right of the purchaser or a redemptioner to retain the rents, etc., to depend upon the contingency of a redemption, it is not, as above indicated, a judicial question. It is true that, under § 6740 of the Compiled Laws of 1913, the mortgagor is entitled to continue in the possession of the premises during the year for redemption, and that he has the right to control the possession during that' period, but that section does not fix the terms of occupancy. Nor is there any provision of law whereby a mortgagor could be ousted of his possession at the suit of a certificate holder during the period of redemption. The foi’egoing opinion covers all of the assignments of error which go to the merits of the appeal, but there are some minor questions argued by the appellant which require brief mention. At the beginning of the trial, plaintiff’s counsel moved to strike out all allegations in the answer relating to the foreclosure proceedings on the ground that the facts alleged were not sufficient to constitute a defense, and that, if matters of defense were alleged, they were such matters as were cognizable only in equity. In presenting the motion, counsel insisted that if the answer was regarded as alleging an equitable attack upon the foreclosure proceeding, the issues' presented should be tried to the court. The trial court reserved a ruling, but indicated that the admissibility of testimony in support of the allegations would be determined as the same was presented. No evidence was offered in support of the allegations in the answer, so it must be assumed that the attack upon the foreclosure proceedings was abandoned. Futhermore, the answer admits that the defendant was in default, and no circumstances warranting equitable relief from the fore [615] closure are alleged, so it must be assumed that the foreclosure was iu all ways legal. It is also urged that, as the plaintiff’s action must be considered as one for the .value of the use and occupation, it cannot be maintained without alleging and proving that the relation of landlord and tenant existed between the plaintiff and defendant, and that error was committed in allowing testimony to go before the jury going to establish the reasonable rental value of the land for the entire farming season. In reply to this contention, it need only be said that the statute, § 77 G2 of the Compiled Laws of 1913, is the source of the plaintiff’s right, and it need only allege and prove such facts as bring it within the statute. This was done. The testimony of the various witnesses went further than to establish the' reasonable rental value for the entire farming season. It was to the effect that the value that the owner got out of the land is in the crop, and that he would ordinarily prefer to have the land and buildings occupied for the remainder of the season than to have them vacant. In this view of the testimony, considering that the right to the value of the use and occupation arose in April and that the action was begun after the crop had matured, the testimony objected to went to establish the proper measure of damages. Objection is made to two items allowed by the court in the retaxation of costs. The.se items embrace the fees and expenses of a referee and the mileage allowed the witnesses. It appears that the reference was for the purpose of examining one of the parties before the trial and was made under the provisions of § 7864 of the Compiled Laws of 1913, and that the costs which are objected to were taxed under the provisions of § 7793 of the Compiled Laws of 1913. It is clear that the latter section authorizes the taxation of the costs that were taxed in this action, and that the provisions of § 7646 of the Compiled Laws of 1913, relied upon by the appellant, apply only to eases referred to a referee, either by consent of the parties or by the court when the issues are triable by the court. Finding no error in the record, the judgment is affirmed.