Ogle v. Koerner

Mr. Justice Bailey delivered the opinion of the Courtr If it be assumed that the cross-bill in this case was properly dismissed, the court committed no error in allowing the complainants in the original bill to dismiss their bill on their own motion and at their own costs. It is true the statute, provides that no complainant shall be allowed to dismiss his hill after a cross-bill has been filed, without the consent of the defendant, but after a final decree dismissing the cross-bill,' the case, so far as the original bill is concerned, stands pre-, •cisely as though no cross-bill had been filed. The complain-, ants are then at liberty to dismiss their bill, and it would be error for the court to deny their motion to dismiss. Reilly v. Reilly, 139 Ill. 180. It may be, if this court should be of the opinion that the cross-bill in this ease was improperly dismissed, and should reverse the decree in that respect, so as to re-instate the cross-bill, that the complainants in that bill; would have a right to insist upon the vacation of the order •dismissing the original bill, so as to restore the ease upon both bills to the position in which it stood before the commission -of the error. But until it is found that the cross-bill is improperly dismissed, the order dismissing the original bill can not be disturbed. The only substantial question presented by the assignment •of errors then is, as to the propriety of the decision of the court sustaining the demurrer to the cross-bill. The theory •of that bill seems to be, that the redemption by McCarthy, the assignee of the junior mortgage, of the 488 acres of land in ■question from the sale under the decree foreclosing the senior mortgage, had the effect, not only of cancelling the sale, but of wiping out all its legal consequences, so as to subject saict land again to the lien of the senior mortgage, and thus enable-the holders of that mortgage to satisfy the unpaid balance of their incumbrance in preference to the junior mortgage. In support of their contention, the complainants in the-cross-bill seek to invoke those principles which apply to equitable redemptions, and which require the party seeking to redeem to pay the entire incumbrance from which redemption is sought. Doubtless- if McCarthy were in a court of equity praying to be permitted to redeem from a prior incumbrance, relief -would be granted him only upon payment of the entire incumbrance. Thus, if neither he nor any person to whom he sustains the relation of privity had been made a party to-the foreclosure suit, and he, after the statutory period of redemption from the foreclosure sale had expired, had filed his bill to redeem, he would have been required to redeem from the mortgage and not merely from the sale. Pie would in that case have been required to pay not merely the amount bid for the land and interest but the balance which the sale left unsatisfied. That the principles applicable to equitable redemptions do not apply is obvious from a variety of reasons. In the first place, McCarthy, so far as his relation to the cross-bill is concerned at least, is not a suitor in a court of equity asking relief of any kind, but is only a defendant seeking to contest the equities attempted to be enforced by the complainants in that bill. Again, McCarthy is not asking to be allowed to redeem, even by the original bill. The redemption is a fact already accomplished, and he is only seeking to enforce equities to which he became entitled by having redeemed. Thirdly, McCarthy’s redemption of said land not only professed to be but in fact was a statutory redemption from the foreclosure sale, and entitled him to all those rights, both legal and equitable,, which the statute gives in case of such redemption. In all eases of sales of land under foreclosure decrees, the statute gives to any defendant, Ms heirs, administrators or assigns, or any person interested in the premises through or under the defendant, the right to redeem the land sold, at anytime within twelve months from the date of the sale, by paying the purchaser or the master the sum of money for which the land was bid off, and interest thereon from the date of sale at the rate of eight per cent per annum. E. S. 1874, chap. 77,-sec. 18. -Needles, the junior mortgagee, was made a defendant to the foreclosure suit, and McCarthy afterwards became interested in the mortgaged premises under Needles, by assignment to him of the junior mortgage and the indebtedness thereby secured. He therefore was a party who, under the ' statute, was entitled to redeem from the sale, and the admission of the cross-bill is that he did so redeem, by paying to the master the sum for which the land in question was sold with interest. The redemption therefore was unquestionably statutory, and whatever may be the rules applicable to equitable redemptions, the only question here is, as to the rights, as against the senior mortgagee, which a junior mortgagee acquires by a statutory redemption from a sale under the senior mortgage. A mortgage, or as in this case, a deed of trust in the nature • of a mortgage, vests in the party secured a lien upon the mortgaged premises. By virtue of that.lien the mortgagee is entitled to have the mortgaged property sold under a decree of. foreclosure and the proceeds of the sale applied to the payment of the debt secured. TMs is the mode provided by law • for the enforcement of the lien, and when the lien has been, once enforced by the sale of the property, it has, as to such property, expended its force and accomplished its purpose, and the property is no longer subject to it. > - When the redemption is made by a party primarily liable; on the mortgage debt, it may be that the same property may; he resorted to again for the purpose of subjecting it to the ■payment of an unpaid balance due on the mortgage, but that is not because of any right to enforce the mortgage lien against "the same property a second time, but because of the rule of law which subjects all the property of a debtor to the payment of his debts until they are satisfied in full. But where the redemption is made by a party not liable upon the mortgage ■debt, the mortgage lien having been exhausted, the property •■can not be subjected a second time to the satisfaction of the same lien. The party redeeming does so for his own benefit, and the holders of the senior mortgage having, by the sale, become entire strangers to the property, are in no position to ■derive any advantage from the redemption. The sale having .been made at public auction, and in the manner prescribed by the statute, the presumption, as between the senior and junior incumbrancers, is a conclusive one, that the property has produced its entire value, and that value having been once applied to the senior mortgage, the lien has accomplished its full purpose and is thereafter functus officio. It is idle for the senior mortgagee to urge that the property redeemed is in fact worth much more than the price for which it was sold at the foreclosure sale. He was a competent bidder at such sale, and therefore had it in his power to bid the property up to its fair cash value, and if he failed to do so, a presumption arises from which he can not escape, that the property sold for,what it was reasonably worth. At any rate, the mortgagee under whose decree the mortgaged property is sold, in the absence of all irregularity and unfairness in the sale, must be conclusively held to the price bid, as a* full' equivalent for and satisfaction of his lien, and having received the proceeds of the sale, he becomes a mere stranger to the property. It follows from what we have said, that McCarthy redeemed the land in question free from the lien of the senior deed of trust. By the redemption, the sale and certificate, as the statute declares, became null and void, but upon familiar principles of equity, McCarthy became subrogated to the rights of the purchaser to the extent of having a first lien on the land redeemed for reimbursement of the redemption money. The prior deed of trust being out of the way, the junior deed of trust became subject only to McCarthy’s lien for the redemption money. The view we have taken is supported by the case of Seligman v. Laubheimer, 58 Ill. 124. In that case the land .in controversy was subject to a senior and a junior mortgage, and a decree of foreclosure was rendered finding the amounts due on both mortgages, and declaring one to be a first and the other a second lien. Under the decree the land was sold for a sum less than sufficient to pay the amount of the first mortgage. Before the expiration of twelve months from the sale, the junior mortgagee redeemed. On application of the senior mortgagee to have the balance due him ascertained and declared to be a still subsisting lien on the mortgaged property and for a resale of the property, it was held that the lien of the first mortgage was extinguished, and that the junior mortgagee redeeming under the statute, took the land free from the lien of the first mortgage. The following was a portion of the reasoning upon which the decision was based: “What was the effect of the redemption ? The second mortgagee, who redeemed from the sale, was the grantee of the mortgagors. By the express provision of the statute, he had the right to redeem the lands, by the payment of the amount bid by the plaintiff in error. If he had filed a bill in chancery to redeem, he would then be compelled to do equity, by the payment of the prior mortgage debt, before he could obtain relief. But this redemption was a statutory right. Upon the payment of the amount bid, with interest, the original certificate of purchase was null and void. The equity of redemption established by the courts, is entirely different from the statutory right. The one is governed by the principles of equity jurisprudence; the other is controlled, in its operation and effect, entirely by the statute. In the enforcement of the one right, the party must pay all that is equitably due; in the other he need only comply with the statute.” Some decisions are cited from other States in relation to redemptions from foreclosure sales, but the statutes of the States where those decisions were made were essentially different from ours, and the cases cited are therefore of little weight as authority here. We are of the opinion that the rule laid down in Seligman v. Laubheimer, supra, is entirely sound, and that it must control in the present case. No other question is presented which is not substantially _ disposed of by what has already been said. The cross-bill showed no equity, and the demurrer thereto was properly sustained. The judgment of the Appellate Court affirming the decree of the Circuit Court will be affirmed. Judgment affirmed.