Case Name: HIGGS v. McDUFFIE
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1916-05-23
Citations: 81 Or. 256
Docket Number: 
Parties: HIGGS v. McDUFFIE.
Judges: Mr. Justice Bakin did not sit.
Reporter: Oregon Reports
Volume: 81
Pages: 256–277

Head Matter:
Submitted on briefs May 1,
affirmed May 23,
rehearing denied July 25, 1916.
HIGGS v. McDUFFIE.
(157 Pac. 794; 158 Pac. 953.)
Mortgages—Foreclosure—Redemption.
1. Section 422, L. O. L., provides for personal judgment on mortgage foreclosure where a note or other personal obligation has been given, while Section 423 provides that any person having a lien subsequent to plaintiff, or who has given a note or other personal obligation for the payment of the debts secured by the mortgage, shall be made a party defendant. Plaintiff purchased land, giving a purchase money mortgage. Thereafter he resold the land, his grantees assuming payment of the purchase money mortgage, and delivering to plaintiff notes secured by a second mortgage; these, plaintiff negotiated. On foreclosure of the purchase money mortgage, plaintiff was made a party, as was the second mortgagee, and judgment of foreclosure was entered; personal judgment being rendered against plaintiff. Section 245 declares that redemption may be made, first by the judgment debtor or his successor in interest; second, by a creditor having a lien by judgment on any portion of the property. Held that, upon rendition of a personal judgment against him, plaintiff became a judgment debtor entitled to redeem.
Mortgages—Foreclosure—Redemption.
2. Under Section 427, L. O. L., declaring that a decree of foreclosure shall have the effect to bar the equity of redemption, grantees of the mortgagor, who assumed payment of the mortgage but defaulted, have no right of redemption after foreclosure; personal judgment being rendered only against the mortgagor.
Mortgages—Redemption—Estoppel.
3. Where mortgaged land was conveyed and the grantee assumed payment, the grantor is not estopped, the grantee having defaulted in payment of the mortgage, to assert his right of redemption; personal judgment against the mortgagor having been rendered on foreclosure.
Mortgages—“Equity of Redemption.”
4. In modern jurisprudence, the words “equity of redemption” designate the fee-simple estate of the mortgagor encumbered by the mortgage, and it is this that is conveyed by deed of the mortgagor, and by provision of Section 427, L. O. L., is barred by decree of foreclosure.
Mortgages—Foreclosure—Right to Redeem.
5. Under Section 427, L. O. L., providing that a decree of foreclosure shall bar the equity of redemption, there is, after the foreclosure, no right to redeem because of the prior ownership of the equity of redemption.
[As to right to redeem as incident of mortgage, see note in Ann. Cas. 1912D, 959.].
Mortgages — Foreclosure—Redemption—Judgment Debtor — Successor in Interest.
6. Where, in foreclosure after conveyance of the land by the mortgagor, there is personal judgment against him alone, he is the judgment debtor, and his grantee of the land is not his sueeessor, within Sections 245, 427, L. O. L., giving right to redeem to the judgment debtor or his sueeessor in interest; this referring to his successor in interest as judgment debtor.
From Morrow: Gilbert W. Phelps, Judge.
In Bane. Statement by Mr. Justice Burnett.
This is an action by A. K. Higgs against George Mc-Duffie, sheriff of Morrow County, Oregon, substituted as defendant in place of Marion Evans, former sheriff of Morrow County, Oregon.
On January 21, 1905, the plaintiff purchased 1,040 acres of land in Morrow County, which will be called “Lot A,” and as part of the purchase price gave his note to the grantor for $6,000, securing the same by a mortgage on the premises. He had acquired a quarter-section of land from another source, which we will call “Lot B,” and on April 12, 1906, conveyed both tracts to N. E. Winnard and H. P. Goodman. This deed was in the usual form of grant, bargain and sale, and contained this covenant:
“And the grantors above named, do covenant to and with the above-named grantees, their heirs and assigns, that the above granted premises are free from all incumbrances, except one certain mortgage securing the sum of $6,000.00, with interest, due C. M. Farnsworth, which is hereby assumed by the said grantees above named, and that they will and their heirs, executors, and administrators, shall warrant and forever defend the above granted premises, and every part and parcel thereof, against the lawful claims and demands of all persons whomsoever, except the said mortgage above mentioned.”
The excepted mortgage was the one given by Higgs in the first instance to secure the purchase price. When the latter sold to Winnard and Goodman he took from them their purchase money mortgage securing their two notes to him for $2,000 and $8,000, respectively, covering all the lands included in his deed to them. On October 4,1909, the $2,000 note having been paid, Higgs before its maturity indorsed the $8,000 note to F. H. Strong, together with the mortgage securing the same. By subsequent conveyances the title of Winnard and Goodman inured to James M. Phillips, trustee of the bankrupt estate of A. W. Lueders. On May 20, 1913, Mrs. Farnsworth brought suit to foreclose her $6,000 mortgage against Higgs and wife, making defendants of them, together with Strong, holder of the second mortgage, and Phillips, bankrupt trustee. In that suit Strong brought in the makers of the note which he held, and filed a cross-cómplaint against all the defendants demanding foreclosure of his junior mortgage. No other appearance was made by any defendant. On November 29, 1913, the court rendered a decree of foreclosure in which Mrs. Farnsworth recovered judgment against Higgs for $5,000, with interest from January 21, 1912, at 8 per cent per annum, for $400 attorneys’ fees, and for costs and disbursements taxed at $44.90. In the same decree Strong was awarded judgment against Winnard and Goodman, as makers, and Higgs, as indorser, for $8,000, with interest from April 12, 1912, at 8 per cent per annum, for $600 attorneys’ fees, and for costs and disbursements taxed at $42.90. The decree declared the mortgage held by Mrs. Farnsworth to be a first lien upon all of lot A and the one held by Strong to be second on lot A and first on lot B; directed that they both be foreclosed; that the two lots be sold separately, the proceeds of lot A to be applied to the payment of the Farnsworth mortgage, and the over-plus, if any, together with those of the sale of lot B devoted to the discharge of the Strong mortgage; and that all the defendants named, except Strong, be barred and foreclosed of all estate, claim, right, title, interest or equity in the mortgaged premises, save only tbe statutory right of redemption. On December 9, 1913, on the joint praecipe of Farnsworth and Strong, an execution was issued to enforce the decree, and at the sale T. J. Mahoney purchased lot A for the exact amount due on the decree in favor of Mrs. Farnsworth, and Strong bought lot B for $1,000. The sale was confirmed February. 14, 1914. On April 11, 1914, empowered by the order of the court in which the bankrupt proceeding was pending, Phillips, trustee, quit-claimed all his estate, right, title, interest and equity of redemption, and that of the estate of Lueders, bankrupt, to Mahoney, in and to a great part, but not all, of the property included in the decree of foreclosure, as disclosed by the record. On the same date Strong assigned, transferred and set over to Higgs the judgment and decree made in favor of Strong in the foreclosure suit, together with “all benefits and advantages of the said judgment and decree including costs and disbursements and any and all right which the said Fred Hiram Strong has or may have to redeem any of the property described in the pleadings in the above-entitled cause from the sale thereof under proceedings in said cause.” Under these circumstances, Higgs applied to the sheriff to redeem the property. Mahoney objecting, the sheriff refused to allow the redemption, and this proceeding in mandamus was instituted to compel the officer to permit redemption. On final hear ing the writ was made peremptory, and the defendant sheriff appeals.
Submitted on briefs under the proviso of Supreme Court Rule 18: 56 Or. 622 (117 Pac. xi).
Affirmed;
For appellant there was a brief submitted over the names of Mr. Clinton E. Woodson and Mr. J. Bower-man.
For respondent there was a brief over the names of Mr. Andrew O. Thompson, Messrs. Winter, Wilson & Johnson and Mr. Glenn Y. Wells.

Opinion:
Mr. Justice Burnett
delivered the opinion of the court.
It is conceded that the proper amount of money was tendered for redemption purposes within the statutory time. The only question presented is the right of Higgs to compel redemption. We quote the following sections from Lord's Oregon Laws:
"A lien upon real or personal property, other than that of a judgment or decree, whether created by mortgage or otherwise, shall be foreclosed, and the property adjudged to be sold to satisfy the debt secured thereby by a suit. In such suit,- in addition to the decree of foreclosure and sale, if it appear that a promissory note or other personal obligation for the payment of the debt has been given by the mortgagor or other lien debtor, or by any other person as principal or otherwise, the court shall also decree a recovery of the amount of such debt against such person or persons, as the case may be, as in the case of an ordinary decree for the recovery of money": Section 422.
"Any person having a lien subsequent to the plaintiff upon the same property or any part thereof, or who has given a promissory note or other personal obligation for tbe payment of the debt, or any part thereof, secured by the mortgage or other lien which is the subject of the suit, shall be made a defendant in the suit, and any person having a prior lien may be made defendant at the option of the plaintiff, or by order of the court when deemed necessary": Section 423.
"A decree of foreclosure shall have the effect to bar the equity of redemption, and property sold on execution issued upon a decree may be redeemed in like manner and with like effect as property sold on an execution issued on a judgment, and not otherwise": Section 427.
"Property sold subject to redemption, as provided in the last section, or any part thereof separately sold, may be redeemed by the following persons or their successors in interest: 1. The judgment debtor or his successor in interest, in the whole or any part of the property separately sold; 2. A creditor having a lien by judgment, decree, or mortgage on any portion of the property, or any portion of any part thereof, separately sold, subsequent in time to that on which the property was sold. The persons mentioned in subdivision 2 of this section, after having redeemed the property, are to be termed redemptioners": Section 245.
The right of redemption after decree, being statutory only, our sole task is to construe the Oregon legislation on the subject and apply it to the facts about which there is no substantial dispute.
Higgs claims a right to redeem in a dual character, first, as a judgment debtor, and, second, as a lien creditor; that is to say, as assignee of Strong. It is necessary to consider only his rights as a judgment debtor. He was made a defendant under that portion of Section 422, L. O. L., referring to a promissory note or personal obligation for the payment of the debt whether given by any person as principal, or other wise. In pursuance thereof the court foreclosed the mortgages, rendered a- personal decree against him for the amounts due, in the first case as the maker of the note there involved, and in the other as the indorser of the one originally given to himself. He was thus unquestionably a judgment debtor within the meaning of the statute. Although the mortgage he gave was for the purchase price of the land, he is none the less for the purposes of this case a judgment debtor under the decree, and the fact that no deficiency judgment could have been rendered against him in that proceeding does not alter the question. He comes clearly within the section of the Code allowing him to redeem.
It is argued that he lost this right by having previously conveyed the premises to "Winnard and Goodman. This is a misconception of the law, as well as the terms of the deed. The right to redeem had never yet arisen. It was not then in being. No such person as a judgment debtor or redemptioner had entered into the calculation. All he conveyed to Winnard and Goodman was the equity of redemption. The deed was made expressly subject to the mortgage encumbrance upon the land and the grantees therein covenanted to pay the same. In. taking the quitclaim deed from the trustee in bankruptcy after the sale Mahoney took nothing, for the estate of the bankrupt being subject to the mortgage was barred under the terms of Section 427, L. O. L. Neither the trustee nor his bankrupt was personally liable for the debt, and therefore were not judgment debtors within the meaning of the statute. .Neither the trustee nor any of his grantors were "successors in interest" of the "judgment debtor," because when they bought there Was no such personage to succeed. They acquired an estate containing within itself by the terms of the instrument creating it the elements which afterward worked out its dissolution. This was accomplished by the foreclosure, and all the interest they had was eliminated by that procedure under Section 427, L. O. L.
The rig'ht of redemption is a creature of the statute, and, as applied to the instant case, arises only after a sale upon a decree including a personal judgment against a defendant. When this right accrues, it may be transferred by the judgment debtor to anyone, and the latter thus becomes a successor in interest. Evidently it is to such a person purchasing from the judgment debtor after the sale that the redemption section refers in speaking of the "judgment debtor or his successor in interest." The foreclosure extinguished all titles junior to the mortgages. None of the previous holders having such estates could redeem, as none of them is in the category of redemptioners. That litigation stripped the land of all claims subsequent to the mortgages and offered the naked legal title for sale so as to create a fund to which alone they could look for payment. The land was subject to redemption by the judgment debtor who came into being at the rendition of the decree, and not before. This individual, having no existence prior to the decree with its feature of personal judgment, is the only one entitled to redeem. He is not estopped by reason of the covenant in his deed because, it was made subject to the mortgage. In other words, that encumbrance was a condition of the estáte conveyed. It was in effect a defeasance clause by means of which the title of the grantees might be defeated. They foresaw the possible result which might arise from foreclosure, to the effect that their holding would be extinguished, and a new statutory right of redemption would arise and be vested in him of whom they had bought and who would become a judgment debtor entitled in that character to rescue the land from the effect of the sale. It is not a ease of a covenanting grantor trying to enforce an after-acquired title in face of his deed. It is an instance where he is entitled to enjoy the results which the law deduces from the very instrument under_ which his grantees and their successors in interest would resist his claim. They cannot complain, because they have not kept the faith of their covenant to assume and pay the mortgage. They cannot escape the consequences which the statute visits upon them, to wit, elimination of their estate by foreclosure with the coincident creation of the right of redemption to be exercised by the judgment debtor. All these sequelae flow from the deed under which the grantees of Higgs combat his right to redeem. They were to be expected by them and cannot now be avoided. To hold otherwise would be to allow them and their successor in interest, the purchaser at the sale, to refuse to pay the mortgage, and at the same time to reap an advantage over the man primarily liable for the same, all by virtue of their having broken covenant with him. Higgs never has lost his character as a judgment debtor, and there was nothing in his deed preventing him from assuming it when it came into being. Indeed, it is the natural consequence of the very terms of the deed, unless the grantees had observed its conditions.
The judgment is affirmed. Affirmed.
Mr. Justice Bakin did not sit.
Mr. Clinton E. Woodson and Mr. J. Bowerman, for the petition.
Mr. Andrew G. Thompson, Messrs. Winter, Wilson <& Johnson, and Mr. Glenn Y. Wells, contra.
In Banc.