Murphy v. Teutsch

Orawkord, Special Judge.

The complaint in this case in substance alleges: That at all times mentioned therein plaintiff was the owner in fee of certain lots in the city of Minot of the value of $16,000. That defendants Teutscb and Swenson held mechanics’ liens against said premises, and an action was brought by Teutscb to foreclose tbe same on or about April 16, 1908. Thereafter, and on tbe 27th day of August, 1908, judgment was entered in favor of Teutscb for $190.10, and in favor of Swenson in tbe sum of $838.38; and said defendants were adjudged to have a lien on tbe lots described, and a direction that said premises be sold to satisfy said liens. That thereafter tbe sheriff levied upon said property under special execution, and advertised tbe same for sale, and sold tbe same on October 24, 1908, to Teutscb and Swenson for tbe sum of $1,067.08, and, on tbe 9th day of November following, tbe sheriff executed and delivered a certificate of sale to Teutscb and Swenson jointly, with the usual recitations. That plaintiff bad, at various times prior to tbe expiration of tbe period of redemption, paid to Swenson several sums of money, amounting in tbe aggregate to $350, and subsequent to tbe payment of tbe said money, and •on tbe 20th day of October, 1909, tbe plaintiff, through her agent, interviewed said Swenson relative to effecting a redemption of tbe said premises from said foreclosure sale, and stated to said Swenson that said plaintiff would pay the full amount necessary to redeem said premises on tbe 30th day of October, 1909, to which Swenson agreed, and further informed tbe plaintiff that, if said sum was paid on said date, it would be satisfactory, and at tbe same time stating that tbe period •of redemption did not expire until tbe 9th day of November, 1909, .all of which was communicated to tbe plaintiff by her agent, and the plaintiff relied upon tbe statements, and believed that she bad full legal right to redeem said premises any time prior to November 9, 1909, ■further alleging that, during all tbe times mentioned, Swenson bad tbe custody of tbe certificate of sale, and was at all times fully authorized by tbe said defendant Teutscb to accept and receive money paid by tbe plaintiff for tbe purpose of redeeming tbe premises from tbe ■foreclosure sale. That on tbe 30th day of October, 1909, tbe plaintiff, through her agent, tendered to tbe sheriff of Ward county tbe full amount necessary to redeem said premises, which tender was refused, and thereafter, on tbe same day, deposited tbe amount necessary to redeem in a bank in Minot to tbe credit of said sheriff, and gave notice to the sheriff of the deposit of the money to his credit for the purpose of redeeming the premises from said sale. Two days later the defendant paid defendant Swenson $579, the balance due him, and he executed a certificate of redemption as to his interest in said foreclosure sale. ■

To this statement of facts the plaintiff adds, among other things, her prayer for relief that she be adjudged and decreed to be entitled to redeem said premises from said foreclosure sale within such time as may be fixed by the court. The complaint shows upon its face that the proceedings were regular for the foreclosure of the mechanics’ liens up to and including the issuance of the sheriff’s certificate; that plaintiff had a legal right to redeem from that foreclosure up to October 24, 1909. That right she failed to exercise. For the loss of the right which followed as a consequence of her failure to do so, she seeks redress in this action, and asks the court to permit her to redeem after the year of redemption has expired.

The power of courts of equity give relief in certain class of cases, and permit a redemption of real estate sold under execution after the statutory period of redemption has expired, has been generally recognized, and such power has been exercised when a proper state of facts required it. See Prondzinski v. Garbutt, 8 N. D. 191, 77 N. W. 1012; Laing v. McKee, 13 Mich. 124, 87 Am. Dec. 738; Wilson v. Eggleston, 27 Mich. 257; Graffam v. Burgess, 117 U. S. 180, 29 L. ed. 839, 6 Sup. Ct. Pep. 686; Schroeder v. Young, 161 U. S. 334, 40 L. ed. 721, 16 Sup. Ct. Rep. 512; Hart v. Seymour, 147 Ill. 598, 35 N. E. 246. Such power has been exercised by courts of equity most frequently upon a sufficient showing of either fraud, accident, or justifiable mistake.

The defendant Teutsch relies mainly upon two propositions: (1) That the plaintiff allowed the statutory period of redemption to expire, and has not brought herself within any of the rules in which courts of equity will afford relief. (2) If the acts of Swenson were sufficient, such acts are not chargeable to nor binding upon him.

All the transactions had concerning the redemption from said sale prior to the expiration of the period of redemption were with Swenson, who accepted $350 prior to the expiration of the period and the balanee due him on October 30, 1910, in accordance with his agreement to extend the time for redemption to that date.

The acceptance of a part payment by the purchaser at an execution sale during the statutory period of redemption operates as a waiver to the right to a sheriff’s deed, and such purchaser can only look to the land as security for the payment of the balance. Neither equity nor good conscience would permit such purchaser to accept payments during the period of redemption, and then exact a full forfeiture upon a failure to pay the balance within said period. Southard v. Pope, 9 B. Mon. 261; Ott v. Rape, 24 Wis. 336, 1 Am. Rep. 186; Whiting v. Butler, 29 Mich. 133; Spath v. Hankins, 55 Ind. 155; Felton v. Smith, 84 Ind. 485. Southard v. Pope, supra, holds that a “redemption, having been commenced, must progress until it be complete. The purchaser is under no obligation to return the money which he has received. . . . Inasmuch as he cannot retain both the land and the money, his reception of the latter operates as a legal waiver of his right to enforce a forfeiture and make his purchase absolute under the statute, and gives to the owner of the land a right to redeem after the expiration of the year. The purchaser is under no obligations to receive less than the whole amount of the purchase money. But, if he receive a part, he thereby changes the character of his title, surrenders his right to enforce a forfeiture under the statute, and, by enabling the owner to redeem after the year, converts his purchase into a mere lien to secure the payment of the balance of the purchase money. It is necessary to give this effect to the act of the parties to do justice between them.” In addition to receiving a portion of the money prior to the expiration of the statutory period of redemption, Swenson agreed orally with plaintiff to extend the time for redemption to the 30th of October, 1910, on which date the plaintiff made a tender of the full amount necessary to redeem from such sale. On such an oral agreement the plaintiff had a right to rely, and violation of such agreement would amount to a fraud upon the plaintiff. This court has held in the case of Prondzinski v. Garbutt, 8 N. D. 191, 77 N. W. 1012, that where a purchaser at an execution sale, during the period of redemption, makes an oral promise to the owner to extend the period of redemption, and the same is relied upon, such promise is binding, and for violation of such oral agreement a court of equity will afford relief. See also Schroeder v. Young, 161 U. S. 334, 40 L. ed. 721, 16 Sup. Ct. Rep. 512.

It is very strenuously contended by defendant Teutsch tbat tbe acts of Swenson were not binding upon him, and he is entitled to a deed for bis proportional interest in tbe lots in question. By an agreement between Teutscb and Swenson tbeir respective interests in the land purchased were to be in proportion to tbe relative amount of tbeir debts at tbe time of sale. Sucb a purchase is essentially a joint one in its character and effect, and combined tbe sums due on both executions into one consolidated debt. Swenson bad tbe custody of tbe sheriff’s certificate of sale, and tbe plaintiff bad a right to redeem by tbe payment of tbe whole purchase money to him, and bad a right to rely on tbe oral agreement of one of tbe joint owners of tbe sheriff’s certificate of sale to extend tbe time for redemption, and tbe other joint owner cannot take advantage of tbe fact tbat be was not personally consulted concerning sucb extension of time, and cannot claim a forfeiture as to bis interest in tbe sheriff’s certificate of sale. He is bound by tbe acts and agreement of tbe joint owner of tbe certificate of sale. Southard v. Pope, 9 B. Mon. 261.

When Teutscb and Swenson made a joint bid at tbe sale, they became joint creditors during tbe year of redemption, having a lien upon tbe premises, by virtue of tbe judgment, as security for tbeir joint claim, and, this being true, tbe debtor could pay either one. Tbe case is analogous to that of joint mortgagees, and it is well settled in sucb a case tbat tbe mortgagor may pay either one of tbe joint mortgagees. 20 Am. & Eng. Enc. Law, 2d ed. 1059, and numerous cases cited. Also 1 Jones, Mortg. 6th ed. § 958, and cases cited. The fact tbat Teutscb and Swenson each held a mechanics’ lien for different amounts cuts no figure. Tbeir rights are exactly tbe same under tbe purchase at tbe sale as though they were total strangers who purchased at tbe sale, and from tbe time of tbeir purchase, as before stated, they were joint creditors, having a joint lien upon tbe premises as security during tbe year of redemption. In Donnelly v. Simonton, 7 Minn. 167, Gil. 118, it was held tbat tbe same relation exists between the purchasers at a sale and tbe party having tbe right to redeem, as existed between joint mortgagees and tbe mortgagor before tbe sale, and tbat payment to one discharges tbe lien. The case of Maddox v. Bramlett, 84 Ga. 84, 11 S. E. 128, is not in point. In that case the two brothers held the title to the land jointly, with an outstanding right •of redemption from both; but in the case at bar Teutsch and Swenson had no interest in the land, but were merely joint creditors.

The order overruling the demurrer is affirmed. Plaintiff and respondent will recover costs upon this appeal.

Goss, J., being disqualified, Crawkord, District Judge; acted in his place by request. Morgan, Ch. J., did not participate.