Case Title: Ulery-Williams, Inc. v. First Wyoming Bank, N.A. Laramie

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1988-01-22T00:00:00Z

Document:
Ulery-Williams, Inc. v. First Wyoming Bank, N.A. Laramie1988 WY 7748 P.2d 740Case Number: 87-142Decided: 01/22/1988Supreme Court of Wyoming
ULERY-WILLIAMS, INC., A 
WYOMING CORPORATION, APPELLANT (PLAINTIFF),

v.

FIRST WYOMING BANK, N.A. 
- LARAMIE, 
APPELLEE (DEFENDANT).

Appeal from the District 
Court, AlbanyCounty, Robert A. Hill, 
J.

Kennard F. 
Nelson, Kirkwood, Copenhaver & Nelson, 
Laramie, for appellant.

Becky N. Klemt, 
Pence & MacMillan, Laramie, for appellee.

Before BROWN, C.J., and THOMAS, CARDINE, URBIGKIT 
and MACY, JJ.

THOMAS, 
Justice.

[¶1.]     The question to be 
resolved in this case is whether a statutory notice furnished to individuals who 
were officers (one of whom also was a director and counsel) of a corporation 
satisfies the statutory requirement of notice to the corporation set forth in § 
34-4-103, W.S. 1977, relating to foreclosure of a real estate mortgage by 
advertisement pursuant to a power of sale. The district court concluded that the 
notice was sufficient and, in an action to quiet title brought by the 
corporation, it entered summary judgment in favor of the mortgagee who had 
purchased at the advertised sale. We disagree with the decision of the district 
court; hold that the notice did not satisfy the statutory requirement; and 
reverse the summary judgment in favor of the mortgagee.

[¶2.]     In its brief, the 
appellant states the issue to be:

"Was the notice provided 
by appellee sufficient to support a valid mortgage foreclosure against 
appellant, a corporate record owner of the property?"

First Wyoming 
Bank, N.A. - Laramie, as appellee, presents this argument on 
the issue:

"The district court did 
not err in finding any irregularity in service of the notice of foreclosure on 
Ulery-Williams, Inc. did not invalidate the proceedings in question. 
Specifically, the district court did not err in finding that notice to Earl L. 
Williams, Jr. was notice to Ulery-Williams, Inc. of appellee's intent to 
foreclose."

[¶3.]     Earl L. Williams, Jr. 
and Edith M. Williams mortgaged certain real property in Laramie to First Wyoming Bank, N.A. - Laramie (Bank). The 
mortgage was recorded on November 18, 1982. In two warranty deeds, one dated 
August 27, 1985 and the other dated September 4, 1985, the Williams conveyed the 
mortgaged property to Ulery-Williams, Inc., a Wyoming corporation, the appellant in this 
case. These deeds were recorded promptly. On March 21, 1986, the Bank obtained a 
title insurance policy which showed that record title to a portion of the 
property was vested in the appellant.

[¶4.]     Default occurred on the 
obligations secured by the mortgage. The Bank proceeded to invoke the remedy of 
foreclosure by advertisement and sale. Following the publication of notice, 
pursuant to § 34-4-105, W.S. 1977, the Bank purchased the property which is the 
subject matter of this action at the statutory sale by bidding the amount of the 
indebtedness. A sheriff's deed was delivered to the Bank on October 20, 1986, 
after the statutory redemption period had passed.

[¶5.]     The material facts with 
respect to the issue posed are undisputed and disclose that, on April 2, 1986, 
the Bank sent a notice of default and intent to foreclose by certified mail to 
Mr. and Mrs. Williams at their home address. Mr. Williams signed the return 
receipt for the letter. No reference is made in the letter to Ulery-Williams, 
Inc. Mrs. Williams was president of the corporation, and Mr. Williams was the 
secretary, a director, the agent for service of process and attorney for the 
corporation. In addition to the failure to mention the appellant, the letter did 
not disclose in any manner that it was directed to Mr. Williams or Mrs. Williams 
in any representative capacity. The last-known mailing address of 
Ulery-Williams, Inc., as reflected in the recorded warranty deeds, was different 
from the Williams' home address. The address of the registered office set forth 
in the articles of incorporation was different from the Williams' home address. 
The notice of sale which was published in the Laramie newspaper made no reference to 
Ulery-Williams, Inc. The statute provides:

"Section 34-4-103. 
Prerequisites to foreclosure.

"(a) To entitle any party 
to give a notice as hereinafter prescribed and to make such foreclosure, it is 
requisite:

* * * * * 
*

"(iv) That written notice 
of intent to foreclose the mortgage by advertisement and sale has been served 
upon the record owner, and the person in possession of the mortgaged premises if 
different than the record owner, by certified mail with return receipt, mailed 
to the last known address of the record owner and the person in possession at 
least ten (10) days before commencement of publication of notice of sale. Proof 
of compliance with this subsection shall be by affidavit."

The file in this 
case is clear with respect to the fact that the appellant was the record owner 
and that the statutory notice was not mailed to the last known address of the 
record owner. The letter which was sent to the Williams was sent to them in 
their individual capacities.

[¶6.]     The appellant brought 
this action in the district court seeking to quiet its title to the mortgaged 
property. The appellee defended by asserting that even though the statutory 
requirements were not met, the appellant had actual notice which is sufficient 
under the statute to justify foreclosure of the appellant's title. Upon a motion 
for summary judgment filed by the appellee, the district court ruled that the 
irregularity in service of the notice did not invalidate the proceedings; that 
the appellant properly was notified of the intent to foreclose; that the 
appellee was entitled to judgment as a matter of law; and it entered an order 
granting summary judgment in this matter.1

[¶7.]     It is the rule in 
Wyoming that 
"[m]andatory statutes must be obeyed, and courts have no right to make law 
contrary to that prescribed by the legislature. In re Hartt's Estate, 75 
Wyo. 305, 295 P.2d 985 (1956)." Thomson v. Wyoming In-Stream 
Flow Committee, Wyo., 651 P.2d 778, 787 (1982). On their face, 
the provisions of § 34-4-103, W.S. 1977, are mandatory. The nature of a 
mandatory statute is described appropriately by one text writer in this 
way:

"* * * [B]ut where [the 
statute] directs acts or proceedings to be done in a certain way and indicates 
that a compliance with such provisions is essential to the validity of the act 
or proceeding, or requires some antecedent and prerequisite conditions to exist 
prior to the exercise of the power, or be performed before certain other powers 
can be exercised, the statute may be regarded as mandatory." E. Crawford, The 
Construction of Statutes § 261 at 515 (1940).

In an 
encyclopedia and in another text, the necessity of strict compliance with a 
notice requirement is emphasized.

"Whenever notice is 
necessary, it must appear that it was served on the proper person, and there 
must be strict compliance with a statute requiring service on a particular 
person, so that service on another person is not sufficient." 66 C.J.S. Notice § 
18 at 658 (1950).

"It is clear, of course, 
that there must be strict compliance with a statutory provision designating 
persons to whom notification is to be given." 1 M. Merrill, Merrill on Notice § 
554 at 582 (1952).

[¶8.]     The Idaho Court of 
Appeals has decided a very similar question. In Security Finance Corporation v. 
Bishop, Idaho App., 704 P.2d 357 (1985), the mortgagor furnished a deed of trust 
with power of sale to the lender as security for a loan. Upon default, it was 
clear that notice of the intended foreclosure was not received by the mortgagor 
as required by the statute, but the mortgagor did admit prior actual knowledge 
of this foreclosure sale. The Idaho court held that the defective notice 
invalidated the foreclosure sale. In so doing, the court noted the relative ease 
with which a lender could foreclose by power of sale, as opposed to a judicial 
foreclosure, and it held that this justified a requirement of strict compliance 
with the deed of trust statutes. See also Patton v. First Federal Savings and 
Loan Association of Phoenix, 118 Ariz. 473, 578 P.2d 152 
(1978).

[¶9.]     Appellee has furnished 
citations to authorities which are distinguishable because, in those instances, 
actual notice was acquired by agents of the corporation acting in that capacity. 
There is nothing in this record which demonstrates that the notice, for which 
Earl Williams signed the return receipt, was furnished to either Mr. Williams or 
Mrs. Williams as an agent of the corporation. We hold that the clear 
requirements of § 34-4-103, W.S. 1977, must be met in order to foreclose the 
interest of the appellant by the advertisement and sale procedure. The actual 
notice to the Williams, which was not furnished to them as representatives of 
the corporate appellant, does not suffice to satisfy the statutory requirement. 
We are cognizant of the potential perception of inequity in this result, but we 
remind the members of our bench and bar and their clients that this rule also 
applies in situations in which there would be no perception of 
inequity.

[¶10.]  We note that the product of the 
foreclosure process in this instance left a title of record in the appellant 
which was not foreclosed by the proceeding instituted by the appellee. That 
title defect held potential for future problems and would require, in any event, 
some further action to protect the record title to the appellee. Under the 
circumstances, we conclude that the best rule is to require compliance with the 
statutory procedure for foreclosure by advertisement and sale. The district 
court, by its decision, did not do that.

[¶11.]  The summary judgment entered in favor of 
the appellee is reversed and the case remanded for further proceedings in 
accordance with this opinion.

FOOTNOTES

1 We are concerned about 
the lack of finality of this order because, on its face, it does not dispose of 
the appellee's counterclaim in the district court. The record would not justify 
the relief sought; and, under the circumstances, we conclude that the appellee 
perceived the "Order on Motion for Summary Judgment" as denying its 
counterclaim, thus providing the requisite finality. We address the issues on 
the merits based upon our conclusion that the order did have the effect of 
denying the appellee's counterclaim.