Hathorn v. Butler

COLLINS, J.1 When the mortgage in question was foreclosed under the power therein contained in the name of defendant Butler, as assignee, he had no interest pecuniary or otherwise in the same, although his title of record appeared perfect, there having been placed, upon record an assignment of the mortgage from the original mortgagee to him. And this assignment and the record of the same were stated and specified in the notice of foreclosure printed and published by Butler under the provisions of G. S. 1894, § 6033. In fact, the defendant Mann had paid, of her own money, the amount required to procure the assignment from the mortgagee, and such assignment [19] had been made to Butler at Mrs. Mann’s request, and with his consent. Then Butler (requested so to do by defendant Mann) executed, acknowledged and delivered to her an assignment of the mortgage in due form, but this assignment was not put upon record. It was in Mrs. Mann’s possession when the foreclosure proceedings were commenced, and was by her counsel produced at the trial. At the foreclosure sale the premises were bid in by Butler, and the certificate of sale, executed and delivered by the sheriff, contained his name as the purchaser. The plaintiff, who was the owner of the premises a.t the time of the sale, subject to the mortgage, learned during the year of redemption that Butler had assigned the mortgage prior to the foreclosure, and at once and before the year expired, brought this action to cancel such sale and set aside the sheriff’s certificate and the record thereof, and to have herself adjudged to be the owner of the estate free and clear of all claims and demands arising out of said foreclosure proceedings. The court below made findings of fact in part in accordance with the foregoing statement, and then held the foreclosure to be legal and valid, ordering judgment for defendants. It also found as facts that when Butler made the assignment to Mrs. Mann it was agreed that such assignment should not be recorded; that of record the title should remain in Butler, and, if necessary that a foreclosure should be made, it was to be in the latter’s name as trustee for the real owner; that in pursuance of this agreement the foreclosure was actually made by Mrs. Mann, and in good faith on the part of both Butler and herself. The statute upon this subject seems to be plain and unambiguous. It is capable of but one construction, unless we are to hold that unrecorded assignments are not included in that part of section 6029 which provides that, to entitle any party to give a notice of foreclosure under the power or to make such foreclosure, it is required: “Third. That the mortgage containing such power of sale has been duly recorded, and if it has been assigned, that all the assignments thereof have been recorded,” ■ — and also, unless we disregard that part of section 6033 which provides that the notice of foreclosure shall specify the name of the as [20] signee, if there be an assignee. The language used in section 6029 absolutely makes the recording of assignments, if there be any, a prerequisite to a foreclosure under the power, and section 6033 is not susceptible of the construction urged that the only assignees whose names need be specified are those whose assignments have been placed upon record. Again, the legal title to the mortgage passed from Butler to Mrs. Mann when he executed and delivered the assignment, and with it the power of sale. The power could not be severed from the legal ownership of the mortgage itself, and it is to be exercised by the holder of such legal title, provided this title has been made a matter of record. Dunning v. McDonald, 54 Minn. 1, 55 N. W. 864. While the fact that the assignment to Mrs.- Mann was not recorded might suspend her right to foreclose by advertisement, it did not in any way affect her legal title or ownership of the mortgage itself. And for the purposes of foreclosure under the power the notice of sale must be, and it must show that it is, the act of the person in whom the power to foreclose is vested. This was said in substance in the case last cited. See also Bausman v. Kelley, 38 Minn. 197, 36 N. W. 333. From the undisputed facts in this case it must be held that the foreclosure proceedings were invalid as to the plaintiff, and that defendant Butler acquired no interest in the mortgaged property by reason of the pretended foreclosure. It will be kept in mind, however, that such a foreclosure might not be held invalid in case an innocent party purchased at a sale, or where the owner, or a, creditor, or a junior mortgagee redeems without knowledge of an unrecorded assignment. We can readily see that under some circumstances a foreclosure made as this was might be upheld as to one who, holding an unrecorded assignment, has caused a mortgage to be foreclosed in the name of another who, of record, appeared to be. fully authorized so to foreclose. ’ Order reversed, and on remittitur the court below will cause judgment to be entered for plaintiff in accordance with the views herein expressed. Footnotes [1] BUCK, J., took no part.