Senft v. Vanek

Mr. Justice Magruder delivered the opinion of the •court: Upon reading the statement of facts, which precedes this opinion, no other conclusion can be reached than that the appellant, Senft, by trickery, if not by fraud, has been deprived of his statutory right of redemption. The Greenebaum mortgage, or trust deed, was an encum- ' brance, which rested both upon lot 1 (except the east twenty-one feet and five inches thereof), and lot 2, the former belonging to Senft, and the latter to Vanek. In other words, the two properties of appellant and appellee were subj ect to the Greenebaum mortgage for §4500.00. Appellant and appellee acquired title to their respective lots at the same time, that is to say, each obtained a master’s deed to his property in pursuance of a sale, foreclosing trust deeds, which were second mortgages, subject to the Greenebaum mortgage. When they bought their respective lots, the Greenebaum mortgage rested upon them as an encumbrance, and they were both subject thereto. In Carpenter v. Koons, 20 Pa. St. 227, it was said by the Supreme Court of Pennsylvania, speaking through Chief Justice Black: “Two purchasers at a sheriff’s sale, subject to a mortgage which is a common encumbrance on the land of both, stand on a level. Neither of them has done or suffered anything, which entitles him to preference over the other. Equality is equity. They must pay the mortg-ag-e in proportion to the value of their respective lots.” In 19 Am. & Eng. Ency. of Law, (2d ed.) p. 1280, it is said: “Where lands subject to an encumbrance are sold in parcels to different purchasers at the same time, all the purchasers must contribute ratably toward the discharge of the common encumbrance,”—citing Chase v. Woodbury, 6 Cush. 143; Brown v. Simons, 44 N. H. 475; Ex parte Merriam, 4 Denio, 254; Alley v. Rogers, 19 Gratt. 366; Rodgers v. McCluer, 4 id. 81; 47 Am. Dec. 715. In Sawder v. Lyon, 10 Johns. 32, it was held that “where two persons purchase separate parcels of a lot of land previously mortgaged, and one of them afterwards pays more than his share of the mortgage money, in proportion to the part of the lot owned by him, he may call on the other for contribution of his aliquot share, or such part of it as has been so paid.” The proofs show, in the case at bar, that the portion of lot 1 owned by Senft, which was a strip of land only three feet and seven inches in width, was worth §400.00, and that lot 2, owned by Vanek, with the buildings thereon, was worth $10,000.00. Upon the principle that equality is equity, appellant and appellee were under obligations to pay the Greenebaum mortgage, resting upon their respective lots, in proportion to the value of such lots. As between themselves they were under obligation to contribute ratably towards the discharge of the Greenebaum trust deed, which was a common encumbrance. The record shows that the proportion of the encumbrance, which was justly payable by the appellant, was $237.64, and the proportion thereof, which was justly payable by the appellee, was $5940.92. When the sale under the foreclosure of the Greenebaum trust deed was made on August 16, 1900, Vanek, one of the defendants with Senft in thht foreclosure proceeding, and being under obligation to pay his proportion of the mortgage, bid for the part of lot 1, owned by Senft, thg whole amount of principal and interest, due by the terms of the decree, to-wit,o$6178.56. Inasmuch as, by this bid, the whole debt, found due by the decree, was paid off, it was unnecessary for the master to sell lot 2, belonging to Vanek, and that lot was freed from the lien of the decree, and was saved to Vanek without sale. As appellant’s lot was only worth $400.00, there could be no object in his paying $6178.56, together with statutory interest, for the purpose of redeeming the same. Ho man would consent to pay $6178.56 in order to redeem a lot, which was worth only $400.00. The whole matter was so ingeniously managed by Vanek, that appellant’s right of redemption was substantially cut off, because made worthless. It is said that the appellant should have presented his objections to the sale when the master made his report of sale, and when such repqrt of sale came up for confirmation. The report of sale was approved on October 1; 1900. It is true, as a general rule, that a complaint as to the character of a master’s sale, or as to the mode of bidding thereat, should be made upon the coming in of the master’s report of sale for confirmation. But the present bill was filed October 4, 1900, only three days after the order approving the sale, and it was filed in the superior court of Cook county, the same court in which the foreclosure proceeding, wherein the sale was made, was pending. Both the foreclosure proceeding, begun by the Greenebaums, and the present bill to redeem from the sale, were pending in the same court, and the application, embodied in the present proceeding, was filed in the court only three days after the report of sale was confirmed. Under these circumstances we are of the opinion that appellant was not too late in calling the attention of the court to the character of the sale, as to the manner in which the property was struck off. The appellee, Vanek, has assigned cross-errors, alleging that the court below erred in permitting the appellant to amend his original bill, and to file an amended bill. It has always been held in this State, that the question of amendments in chancery proceedings is one, which is very largely in the discretion of the court. We are not prepared to say that the discretion was abused in this case. The decree of sale under the Greenebaum foreclosure was entered on July 19, 1900. A little more than a week thereafter, to-wit, on July 27, 1900, Vanek executed a trust deed to one Draper to secure $2000.00 upon lot 1 (except the east twenty-one feet and five inches thereof), and all of lot 2. This trust deed was executed some twenty days before August 16, 1900, when the foreclosure sale took place. It is admitted in the answers that the execution of the trust deed to Draper was for the purpose of borrowing $2000.00 to be paid upon the bid to be made on August 16,1900, by Vanek for said part of lot 1. Lot 2 was thus made to furnish at least $2000.00 towards the coming bid of $6178.56. Lot 2 was thus made to furnish a portion of the money, necessary to pay the amount due by the decree, not by offering the same at the sale under the decree as the decree of foreclosure provided, but by the execution of a mortgage by the defendant, Vanek, in advance of the sale. If, when the sale came off, and the part of lot 1 owned by appellant was first offered for sale, $4178.56 only had been bid, it would have been necessary to offer lot 2 for sale, in order to raise the remaining $2000.00, necessary to pay the whole amount due upon the decree. By mortgaging lot 2 in advance of the sale, it was made to pay the $2000.00 in a different way and by a different process, but so as to seriously impair appellant’s right of redemption, and seriously increase the burden resting upon his property. It is admitted in the answers that this $2000.00 was retained by the owner of the money between July 27, when the trust deed securing it was executed, and August 16, 1900, when the sale was made, and was only handed over to be paid upon the bid upon the day of sale itself. When Vanek executed the trust deed to secure the $2000.00 to Draper, Draper or Strauss, owning the note for $2000.00, secured by the trust deed, stood in the attitude of a purchaser pendente lite. Draper, the trustee, or Strauss, the holder of the note, took whatever interest they obtained in lot 2, subject to the lien of the decree of sale, owned by the mortgagees, the Greenebaums; and if lot 2 had been sold to a third party at the master’s sale, the purchaser of lot 2 would have taken the property freed from the lien of the trust deed to Draper. The decree of sale ordered that lot 2 be sold, not that lot 2, subject to a trust deed for $2000.00, should be sold. Strauss and Draper were thus interested in having the whole amount due upon the trust deed bid upon the part of lot 1 owned by Senft, because thereby the lien of the trust deed for $2000.00 was kept intact and prevented from being annihilated by the sale. The parties, interested in the encumbrance for $2000.00, were interested in preventing lot 2 from being offered for sale at all. Thus, in advance of the sale, the scheme, concocted by these parties, interfered with the proper conduct of the sale, and prevented competition at the sale. No third party would bid more than $6178.56 for-the part of lot 1, owned by Senft, because it was only worth $400.00. When, therefore, Vanek bid that amount there was an end of the sale. Vanek, co-defendant with Senft, was the only person, who could be benefited by bidding for the fractional lot 1 so much more than it was worth. It is a singular fact that the encumbrance to Draper, securing the $2000.00, was executed not only upon lot 2, but also upon lot 1 (except the east twenty-one feet and five inches thereof). After the sale was made, and the answers were filed, it was alleged that the insertion of the description of said portion of lot 1 in the trust deed to Draper was a mistake, and that there was no intention of creating a lien upon said part of lot 1. We pause not to discuss the question whether the doctrine of contribution, or the doctrine of subrogation, has any application to the present case. A court of equity will not permit a- fraud or a trick to deprive a party of his right under the statute to redeem his property at a reasonable figure, and at a figure somewhere in the neighborhood of the real value of the property. It never could have been the intention of the statute that one defendant should pay so much for the property of his co-defendant, when both of their properties were subject to the same encumbrance, that such co-defendant would be virtually deprived of the power to redeem his property. We think that the decree, entered by the court on October 28, 1901, fixing upon $237.64 as the proper amount of the encumbrance to be paid0 by appellant, was correct. If, before the sale, Vanek, owning lot 2 worth $10,-000.00, had gone into court and paid off the whole amount due upon the decree, to-wit, $6178.56, so as to prevent a sale, he would have had a right to demand of Senft that he should pay to him $237.64, being the proportion of the indebtedness, which it would be the duty of the appellant to pay according to the value of his lot, as compared with the value of the appellee’s lot and with the amount due upon the decree. In view of the manner, in which the sale was conducted, and in view of the bid made by Vanek, co-defendant with Senft, the sale here was nothing more than a payment of the whole amount of the mortgage by Vanek, but a payment made in such a way as to take away from the appellant his property, and prevent the exercise of the right of redemption. For the reasons above stated, we are of the opinion that the court below erred in dismissing the bill for want of equity. Accordingly, the decree of the superior court of Cook county, and the judgment of the Appellate Court affirming that decree, are reversed, and the cause is remanded to the superior court with directions to proceed in accordance with the views herein expressed. Reversed and remanded.