Harth v. St. Paul Cattle Loan Co.

Biedzell, Ch. J. This is an appeal from a judgment in favor of the defendant in an action to recover damages for conversion. One C. P. Burnstad, in January 1920, executed a chattel mortgage to the defendant to secure the payment of an indebtedness of $50,000, payable July 15, 1920. This mortgage was foreclosed and the property sold ■on March 31, 1921. On the day of the sale and about an hour thereafter, the mortgagor served upon “John Anderson, agent for the Stock Yards National Bank of South St. Paul, Minnesota, and H. B. Scott, St. Paul, Minnesota, agent,” a notice that he would redeem thirty-four steers and two other small items of personal property from the sale. By written assignment, dated April 4, 1921, Burnstad, the mortgagor, assigned to Emil Harth, plaintiff in this action, his equity of redemption from the foreclosure sale. The thirty-four steers had been sold for $918. On April 4th, the plaintiff tendered to Andersen $988, and demanded immediate possession of the cattle. He also served notice that he had deposited in the E'irst National Bank of Napoleon the sum [470] of $988, payable to Anderson’s order or to the order of bis principal, on delivery to the bank of a certificate of redemption. On April 9th, Anderson made a report of sale, showing the sale of the thirty-four steers at $27 each, total $918, and containing- a statement of the amount due, costs and fees, showing the amount due on the mortgage to bo $53,351.84; sheriff’s fees $204, and other small items, making the total of costs and fees, $233.75 and leaving a net balance to apply on indebtedness, $675.25. Later this action was brought, predicating a conversion on the plaintiff’s redemption from the sale and the defendant’s refusal to surrender possession. The trial resulted in a verdict for the plaintiff for $525 with interest from April 4th. Thereafter the trial court granted the defendant’s motion for judgment notwithstanding the verdict., and directed the entry of the judgment appealed from in favor of the defendant and against the plaintiff for costs. In order for the plaintiff to sustain a recovery as for conversion in this action, it is incumbent upon him to establish the sufficiency of the notice of intention to redeem and that a proper tender was made. The defendant and respondent argues that the notice is insufficient in that it refers to a mortgage executed to the Stock Yards National Bank while the mortgage on these cattle that was in fact foreclosed was that of the St. Paul Cattle Loan Company, which company had made the sale through one Anderson, its agent; and further in that it was addressed to and served upon Anderson as agent for the bank instead of to and upon him as agent for the mortgagee in this particular mortgage. The statute, § 8134, provides: “The mortgagor or his assignee desiring to redeem such property shall at the time of sale give written notice to the person malting the sale of his desire to make such redemption; otherwise he shall be deemed to have waived his right to do so.” This statute, in so far as it provides for redemption, is remedial in character and designed to serve the purpose of enabling a mortgagor who is in default to regain his property after sale by discharging the indebtedness to the extent that it has been realized out of the property. If he has any equity in the property, the statute permits him to realize on it, but, as a condition of so doing, he is required to apprise the person making the sale of his intention to that effect. We think the statute is one that should be liberally construed to effect the legislative inten [471] tion and purpose. There is no requirement as to what the notice shall eoiitain. The only requirements are that it shall be written and shall be given to the person making the sale. The notice given in the instant case is addressed to John Anderson, agent for the Stock Yards National Bank of South St. Paul, Minnesota, and II. B. Scott, St. Paul, Minnesota, agent, and it purports to notify him or them that the mortgagor will redeem the “following described personal property from chattel mortgage foreclosure'made by you this 31st day of March, 1921; three wagons, one manure loader, and thirty-four head of steers. The above-described property is. given in two mortgages which mortgages were this day foreclosed by said mortgagee. Said mortgagor, C. P. Burnstad, does hereby redeem the above-described personal property. Three wagons $ 71.00 One manure loader $ 10.00 Thirty-four steers $918.00 “This property was sold by you this day under two mortgage foreclosures, both mortgages were made by the undersigned payable to the Stock Yards National Bank.” The fact is that Anderson acted as agent for the Stock Yards National Bank in foreclosing its mortgage, the sales being noticed and held at the same time. It will be seen, then, that the notice is addressed to the person who acted as agent in the foreclosure of the mortgage in question, but the wrong principal or mortgagee was named. It described the steers and referred to them as having been sold under mortgage foreclosure, and they were not sold under any other mortgage. In so far as this property is concerned, therefore, it is identified as property which the agent who received the notice must have known had been sold under the defendant’s mortgage and not under that of the Stock Yards National Bank. We think that under a fair construction the notice apprised Anderson, agent of the defendant herein, that the mortgagor intended and desired to redeem the thirty-four steers from the mortgage that was actually foreclosed on them, and that his knowledge to this effect is attributable to his principal, the defendant. We are of the opinion that the notice was sufficient. It is said that the tender was insufficient in amount in that only $70 above the sale bid was allowed to cover the costs of sale and the reasonable expenses of caring for the property redeemed and interest. A report of this sale, filed on April gth, shows total sheriff’s fees on [472] account of the foreclosure of ‡204, and other costs and expenses which bring the total up to $232.75. It will be seen that § 8131, which provides for the completion of the redemption by payment or tender, gives to the mortgagor or his assignee five days within which to redeem, and § 8128 gives the person making the sale ten days in which to file a report of the sale, showing, among other things, the costs and expenses. It is thus apparent that the legislature has deliberately subjected the redemptioner to the peril of having to guess at the amount of costs which ho will include in his tender of redemption money. We cannot cure this defect in the statute by judicial fiat. It is suggested, however, that a distinction was intended to be observed between “costs of sale” to be included.in the redemption money, and some other expenses that might have been incurred prior to the sale; such, for instance, as the expenses incidental to obtaining possession of the property, and that if such expenses be excluded, the amount tendered Avas sufficient. We are iinable to glean from the statute any satisfactory basis for the distinction claimed. In fact, the statute appears to us to have been framed upon no consistent principle whatever in reference to the costs of sale. The owner of the mortgage is, of course, made whole, so far as the foreclosure is concerned, if he receive the amount of the hid, plus interest and subsequent expenses. Similarly, if the property is purchased by any third party, he is made whole Avhen the amount of his bid, interest and subsequent expenses may be tendered to him, or refunded' by the agent who made the sale. Then too-, § 8129 requires the one who conducts the sale to pay the costs and expenses of foreclosure from the proceeds of the sale, that is, out of the amount bid, and directs the bal,ance only, to be credited on the mortgage indebtedness. Hence, in the absence of a redemption, the costs come out of and are represented in the amount bid, and we can perceive of no reason for imposing, as a condition of redemption, the payment of an additional amount as representing costs or expenses prior to. the sale. Whatever reason was sufficiently potent to cause the legislature to require a redemptioner to tender anterior costs in addition to the amount bid, Ave can see none at all, would apparently operate with -the same force upon chargeable items of every character anterior to the sale. This statute Avas long ago characterized by this court as a “very crude piece of legislation,” Brown v. Smith, 13 N. D. 580, 583, 102 N. W. 171, and its crudeness [473] becomes more apparent as attempts are made to take advantage of its pretended beneficent provisions. We cannot, however, remedy its glaring defects. We are at a loss to supply a definition of “costs of sale”' that will exclude sheriff’s fees and include other legitimate items. It is admitted that the amount tendered was not adequate to cover these fees, and, this being an action for damages for conversion, we cannot hold that a redemption was effected under the statute. It follows that the judgment appealed from must be affirmed. It is so ordered. CiieistiaNSON, J., concurs.