Mayer v. Farmers' Bank , 44 Iowa 212 ( 1876 )

Seevers, Ch. J.

I. It is regarded as elementary and indisputable, in the absence of a statute to the contrary, that junior lienholders have the right of redemption, where there has been a foreclosure of a mortgage on real estate to which they have not been made parties. It is unnecessary, in order to sustain this proposition, to cite authoi’ities. Rut there has not been a foreclosure of any mortgage in this case, in the strict acceptation of the term. The proceeding under which the plaintiff claims was a statutory action at law, and what are the respective rights of the parties must and can only be determined by a proper construction of the statute.

j. bedempto tie made*: note. II. Rev., Sec. 3663, contemplates an action on the note or bond, or on the mortgage, at plaintiff’s election; and Sec. 3664 provides: “When a judgment is obtained in an action on the bond, the'property mortgaged may be sold on execution issued thereon, and the judgment shall be a lien thereon from-the date of the recording of the mortgage. The mortgagor, or any other person having a lien on the mortgaged premises, or any part thereof, may redeem the same after sale within the same time and on the same terms as are provided in Chap. 125, in cases of real estate, sold on ordinary or general execution.”

This action on the note is independent of the foreclosure of the mortgage, and is a remedy provided by statute in addition thereto. It was entirely competent for the General Assembly to take away the right of redemption entirely or prescribe terms and limitations as to the manner such right should be exercised. Kramer v. Rebman, 9 Iowa, 114.

Admitting for the present that the action brought by Keck was in strict accord with the statute, and the lien duly and properly declared by the court, and the sale properly made, then the statute expressly declares that any person having a junior lien on the premises may redeem the same after the sale, within the same time and on the same terms as are provided in cases of real estate sold on ordinary or general execution. This, we think, implies very clearly that the redemption can only be in the mode pointed out by statute.

In other words, the action or proceeding is at law, with power given the court to declare the judgment a lien on the premises from -the date of the mortgage. Ordinarily, judgments at law become liens from the date of their rendition only. When a sale of real estate takes place under them, junior lienholders may redeem. So, in the other ease, the whole proceeding is identical 'with the case where the judgment becomes a lien only when it is rendered, including the right of redemption. The fact that the junior lienholder is not made a party has equal significance in both cases.

The argument of hardship or absolute right applies with equal force to both. The statute, it seems to xxs, is too plain to admit of any other construction than we have indicated; that is, the redemption must be made within the statutory period, and not afterward. Heimstreet v. Winnie, 10 Iowa, 431; White v. Watts, 18 Id., 76, and Newcomb v. Dewey, 27 Id., 381, cited by counsel, have no bearing on the question involved, for the reason they were all cases of foreclosure of mortgages by equitable proceedings. Previous to the Code, a mechanic’s lien was declaimed and enfoi’ced by an action at law. In The State v. Eads, 15 Iowa, 114, it was held that a mortgagee who had a lien on premises against which a mechanic’s lien was established in sxxch action, and who was not made a party thereto, had no right of redemption after the statutory period had expired; the reason being that the enforcement of the mechanic’s lien being at law, there did not exist an equity of redemption other than that provided by statute.

It must be true, under section 3664 of the Eevision, that the mortgagor can only redeem as therein provided; and we believe it will be conceded that the same rule will apply as to all lienholders who are made parties. But, as the action under such section is at law, lienholders cannot be made parties. A petition, in which they should be made defendants, and which should contain the appropriate averments and prayer, would be a petition in equity. No distinction is made by the statute between lienholders who are made parties and those who are not; all are placed on the same footing, and must redeem within the statutory period.

Why should lienholders have any greater time than the statutory period to redeem, if that is all that is wanted? If time is desii’ed to contest the mortgage and set aside the sale, that is quite another thing. From this they would not be precluded by the sale any more than they would be precluded by a foreclosure sale when they were not made parties to the foreclosure suit. Where there are lienholders a good title can only be made by foreclosure suit to which lienholders are made parties. Whoever purchases at a sale made under Rev., section 3664, purchases subject to the right on the part of the lienholders, if there are any, to contest the mortgage at any time before they are barred by the statute of limitations.

The equity of redemption must not be confounded with a right of redemption. A mortgagor has an equity of redemption until the sale, and not afterward, and this is true whether the sale is made upon foreclosure-or under Rev., section 3664. After sale, he has a right of redemption if the statute gives it, and so has the lienholder.

A sale made under section 3664 cuts off the mortgagor’s equity, because he has had his day in court; whatever equities the lienholder has are not affected. He has not had his day in court; he may still be heard. But if he desires simply to redeem from the judgment he has no equitable right to enforce, and must exercise his right to redeem within such time as is allowed by law.

2 _: judgment: lien. III. The petition referred to the mortgage, described the real estate, and ashed that the judgment be made “a lien on blie lands conveyed in the mortgage.” This was jn strjct and literal accord with the statute, and the court rendered judgment and made it'a lien, as ashed in the petition. We thinh so far the proceedings are clearly right and entitled the plaintiffs to the relief ashed, unless for some other reason it cannot be had.

IY. Defendant’s abstract shows that the judgment was made a lien as follows:

3___. : • “It is further ordered and adjudged by the court that this judgment shall operate, and be a lien upon the real estate of defendant, from the 23d day of May, 1868.” The plaintiffs deny the correctness of this portion of the abstract, but conceding it to be correct, we thinh it clearly sufficient. The point urged is, that the judgment is made a lien on the real estate of defendant, instead of being confined to that described in the mortgage. This clearly did not make the judgment or lien void, it was voidable only; and even in a direct proceeding instituted for that purpose, could only have been avoided as to the excess, over and above the lands described in the mortgage. Being a junior lienholder the law presumes defendants had notice of the proceeding, and whether this is so or not as we have seen there could be no redemption, except in the manner prescribed by law. It was, therefore, incumbent on defendants to take notice of the judgment and lien, in case they desired to exercise their right of redemption. Certainly the judgment and lien were sufficient to put them on inquiry. There is no pretense they ever offered or sought to redeem, and were misled by the judgment and lien.

____ execution. Y. The sale was made under a general execution, and it is insisted this is such an irregularity as will let the defendants in to redeem. In this view we do not concur, because; 1. The statute makes no provision for a special exection, and the action being at law it will be presumed, in the absence of any such provision, the ordinary and general execution was intended by the use of the term execution only; 2. It is the lien and sale that constitutes the right and not the particular form of the execution; 3. Tn foreclosure cases a special execution is directed to issue. Rev. Sec. 3661. This clearly indicates that the execution mentioned in Sec. 3664 is general, and not special, and 4. The fact that the lien of the judgment related back to a period anterior to the judgment no more required a special execution to enforce it, than if the lieu bore even date with the judgment. It is exceedingly doubtful whether Redfield v. Hart, 12 Iowa, 355, applies to a person- seeking to redeem, but if it does so much of that decision as refers to the form of the execution is mere dictum, and has no force as a precedent.

Affirmed.