Case Name: T. E. MILLER and Julia Miller v. JAMES LITTLE
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1917-07-21
Citations: 37 N.D. 612
Docket Number: 
Parties: T. E. MILLER and Julia Miller v. JAMES LITTLE.
Judges: 
Reporter: North Dakota Reports
Volume: 37
Pages: 612–618

Head Matter:
T. E. MILLER and Julia Miller v. JAMES LITTLE.
(164 N. W. 19.)
Land mortgaged for much less than its value — second or third mortgage — foreclosure of — obtaining title under — merger of prior mortgages — discharge of mortgage debts — suit by owner to recover — cannot maintain.
When land is mortgaged for much less than its value, and a party obtains title under the foreclosure of a second or third mortgage, there is a merger of prior mortgages and a discharge of the mortgage debts. In such a case the owner of the title.may not bring a suit and recover judgment for the mortgage debt.
Opinion filed July 21, 1917.
Appeal from the District Court of Stark County, Honorable IF. C. Crawford, Judge.
Affirmed.
Thos. H. Pugh, for appellant.
There was an obligation resting upon plaintiffs to have protected their property and the security given to the defendant thereon. There was no duty devolving upon defendant to make redemption from the foreclosure sale, of any prior mortgage, nor by reason of not redeeming would defendant be deemed guilty of laches in his duty to plaintiffs. If defendant had not purchased the sheriff’s certificate it would have run to deed in name of purchaser, and the deed would have stood as a bar to the enforcement by defendant of his mortgage against the land. Bailey v. Hendrickson, 25 N. D. 500, 143 N. W. 136, Ann. Cas. 1915C, 739.
The purchaser at foreclosure by advertisement ordinarily acquires an equitable interest in the land which he may, during the period of redemption, transfer in full to another. His assignee, if there is no redemption, will take the legal title when it matures exactly as the original bidder himself would have done. Gage v. Sanborn, 106 Mich. 269, 64 N. W. 32; Hoff v. Miller, 189 Mich. 558, 155 N. W. 518; Lieblien v. Hansen, 178 Mich. 11, 144 N. W. 496; Frisbee v. Frisbee, 86 Me. 444, 29 Atl. 1115; 27 Cyc. 1866.
Purchasing and obtaining an assignment of a certificate of sale is a transaction wholly different in its nature and legal consequence from a redemption. Shroeder v. Bauer, 140 111. 135, 29 N. E. 560.
A junior mortgagee may become a purchaser at the sale under the foreclosure of a prior mortgage.
He can also purchase the certificate issued to another at such sale. Whether or not there was a redemption must depend upon what was done, and not upon the intention of the party doing the act. Any act which amounts to either a purchase or a redemption cannot be aided or prejudiced by the intention of the party doing the act. Streeter v. First Nat. Bank, 53 Iowa, 177, 4 N. W. 915; Sprague v. Martin, 29 Minn. 226, 13 N. W. 34.
A junior mortgagee’s claim is not merged by Ms purchase of land at a sale by a prior mortgagee. Union Bank v. Bates, 24 Manitoba L. R. 619; Cornell v. Woodruff, 77 N. Y. 203; Ten Eyck v. Craig, 62 N. Y. 406.
The mortgage lien transfers no title to the land. Comp. Laws 1913, § 6709; Joyce, Defenses to Commercial Paper, § 682.
“If from all the circumstances a merger would be disadvantageous to the party, then his intention that it should not result will be presumed and maintained.” 2 Pom. Eq. Jur. ¶¶ 788, 792; May v. Cummings, 21 N. D. 281, 130 N. W. 826; Davis v. Randall, 117 Cal. 12, 48 Pac. 906; Scrivner v. Dietz, 84 Cal. 295, 24 Pac. 172; Carpentier v. Brennan, 40 Cal. 221; Kilmer v. Ilannifan, 113 Iowa, 281, 85 N. W. 16; Gilman v. Stock Exch. Bank, 64 Kan. 87, 67 Pac. 551; Wettlaufer v. Ames, 133 Mich. 201, 103 Am. St. Rep. 449, 94 N. W. 950; Jones, Mortg. §§ 848, 856, 857, 870, 872 and 873.
A merger only comes into existence where the junior lien holder purchases direct from the mortgagor. 27 Cyc. 1378, 1379 and cases cited; Eouche v. Delk, 83 Iowa, 297, 48 N. W. 1078; Milner v. Home Sav. & L. Asso. 64 Minn. 500, 67 N. W. 346; National Invest. Co. v.- Nordin, 50 Minn. 336, 52 N. W. 899; Burnet v. Denniston, 5 Johns. Oh. 35; Weston v. Livezey, 45 Colo. 142, 100 Pac. 404.
J. P. Cain, for respondents.
The obtaining of the sheriff’s certificate of sale and subsequent deed by the defendant merged in him both the legal and equitable title to the land in question, and that prior mortgage indebtedness was discharged. Such mortgage debts being discharged, they cannot be set up as counterclaims by defendant against plaintiffs in this action. Nor can defendant plead the same as a set-off against plaintiff’s valid claim for wages, and at the same time retain as fee-title owner the property he took as security for the debt which he now attempts to collect. Pom. Eq. Jur. ¶ 778; Tiffany, Real Prop. ¶¶ 101, 547, pp. 246, 1251, 1252 and cases cited in notes; 27 Cyc. 1329, § 2, 1378, ¶ C; McDonald v. Magirl, 97 Iowa, 677, 66 N. W. 904; Belleville Sav. Bank v. Reis, 136 111. 242, 26 N. E. 646; Agnew v. Charlotte, C. & A. R.. Co. 24 S. C. 18, 58 Am. Rep. 237; National Invest. Co. v. Nordin, 50 Minn. 336, 52 N. W. 899; Waters v. Waters, 20 Iowa, 363, 89 Am. Dec. 540; First Nat. Bank v. Kreig, 21 Nev. 404, 32 Pac. 641; Mathews v. •Jones, 47 Neb. 616, 66 N. W. 622; Clark v. Clark, 76 Wis. 306, 45 N. W. 121; Byington v. Fountain, 61 Iowa, 512, 14 N. W. 220, 16 N. W. 534; Crowley v. Harader, 69 Iowa, 83, 28 N. W. 446; Moore v. Olive, 114 Iowa, 650, 87 N. W. 720.
Where the mortgagor purchases the equity of redemption the whole •estate is vested in him. Jackson v. Tift, 15 Ga. 557; Lyman v. Gedney, 114 111. 388, 55 Am. Rep. 871, 29 N. E. 282; Clarke v. Peak, 15 La. Ann. 407; Marston v. Marston, 54 Me. 476; Eldridge v. Eldridge, 14 N. J. Eq. 195; 35 Century Dig. title Mortgages, ¶¶ 815 and 823.

Opinion:
Robinson, J.
The plaintiffs aver that from October 5, 1914, to December 1, 1915, the plaintiffs did farm work and labor for and at the request of the defendant, for which he promised to pay $544.67; and that he paid only $228.01; and the balance due is $316.66. In September, 1916, the plaintiff recovered a judgment, and the defendant .appeals.
The answer is a counterclaim. It avers that on September 13, 1911, the plaintiff made to the defendant a promissory note to pay $325 on September 13, 1916, with interest, and that to secure the same they gave defendant a mortgage on a certain 80 acres of land in Adams county, subject to a prior mortgage for $150. That under the power in the mortgage the defendant declared the note to be due. The reply admits the making of the note and the mortgages, and that the prior mortgage was foreclosed by a sale of the premises. That defendant redeemed and obtained a sheriff's deed to the land; that the total debt against the land did not exceed $600, and that it was worth $2,000.
It also appears that on March 24, 1911, the plaintiffs made to P. D. Norton a mortgage on the same land to secure $22.50, which mortgage was foreclosed for the sum of $67.63 and the sheriff's certificate assigned to the defendant, and under the assignment defendant obtained a sheriff's deed to the land.
On the value of the land the plaintiffs both testified that it was worth $20 an acre; and the defendant testified that he contracted to sell the land at $10 an acre.' The court found that the value of the land was from $800 to $1,000, and that the total mortgages against it did not exceed $650, and that by the merger of the title the mortgage for $325 was paid. The decision of the district court is manifestly fair and just, and it could not be otherwise. National Invest. Co. v. Nordin, 50 Minn. 336, 52 N. W. 899; McDonald v. Magirl, 97 Iowa, 677, 66 N. W. 904; Crowley v. Harader, 69 Iowa, 83, 28 N. W. 446; Moore v. Olive, 114 Iowa, 650, 87 N. W. 720.
The judgment of the District Court is affirmed.