Case Name: Archie C. McFall, Appellee, v. Walter Ford, as Sheriff, etc., and Katie E. Thomas, Appellants
Court: Kansas Supreme Court
Jurisdiction: Kansas
Decision Date: 1931-07-03
Citations: 133 Kan. 593
Docket Number: No. 29,752
Parties: Archie C. McFall, Appellee, v. Walter Ford, as Sheriff, etc., and Katie E. Thomas, Appellants.
Judges: I am authorized to say that Mr. Chief Justice Johnston and Mr. Justice Smith concur in this dissent.
Reporter: Kansas Reports
Volume: 133
Pages: 593–637

Head Matter:
No. 29,752.
Archie C. McFall, Appellee, v. Walter Ford, as Sheriff, etc., and Katie E. Thomas, Appellants.
(1 P. [2d] 273.)
Opinion filed July 3, 1931.
Mayo Thomas, of Los Angeles, Cal., for the appellants.
A. C. Malloy, Roy C. Davis and Wanen H. White, all of Hutchinson, for the appellee; Oscar F. Perkins, of Elkhart, of counsel.

Opinion:
The opinion of the court was delivered by
Burch, J.:
The action was one by a landowner who had redeemed from a sale made in a foreclosure suit, to enjoin sale of the same land on execution by a judgment creditor who was not a party to the foreclosure suit, and whose judgment became a lien on the day the foreclosure judgment was rendered. Plaintiff prevailed. The sheriff, nominally interested, and Katie E. Thomas, the judgment creditor and real party in interest, appeal.
The Federal Land Bank of Wichita commenced actions in the district court of Morton county, numbered, respectively, 2297, 2298 and 2299, to foreclose separate mortgages on separate tracts of land owned by the mortgagor, M. C. Combs. On September 3, 1928, judgment was rendered in each case in favor of the Land Bank and against Combs for the sum due and for foreclosure of mortgage. Mrs. Thomas held a second mortgage on the land involvéd in case 2297, and was made a party defendant in that suit. On September 3, 1928, when the Land Bank judgment was rendered in case 2297, Mrs. Thomas recovered a personal judgment against Combs, and judgment for foreclosure of mortgage. Afterwards the land in volved in case 2297 was sold, with the result that no part of the judgment of Mrs. Thomas against Combs was satisfied. At the time the suits in cases 2298 and 2299 were filed, Mrs. Thomas had no lien of any kind on the tracts involved in those suits. It was neither necessary nor proper to make her a party defendant in those suits, and she was not made a party. When, however, the personal judgment against Combs was rendered in her favor in case 2297, the judgment became a lien on the tracts involved in cases 2298 and 2299, by virtue of R. S. 60-3126. The tracts involved in cases 2298 and 2299 were sold pursuant to the foreclosure judgments in favor of the Land Bank. The bank purchased at the sales for the amount of its judgments, interest, and costs, and received certificates of purchase. Combs conveyed to McFall. The conveyance effected transfer to McFall of Combs' .right to redeem, and McFall redeemed within twelve months after the sale. After expiration of eighteen months from date of sale Mrs. Thomas caused execution to be issued on her judgment, and levied on the redeemed tracts. This action was commenced to enjoin further proceedings under the writ, with the result stated.
When the district court enjoined the second sale, the court applied the statute enacted in 1893, which reads as follows:
"Real estate once sold upon order of sale, special execution or general execution shall not again be liable for sale for any balance due upon the judgment or decree under which the same is sold, or any judgment or lien inferior thereto, and under which the holder of such lien had a right to redeem within the fifteen months hereinbefore provided for." (R. S. 60-3460.)
It will be observed the quoted section does not apply to liens superior to the lien under which the land is sold; as, for example, to the lien of a first mortgage when the sale is made under foreclosure of a second mortgage. In such cases the land may be sold again to satisfy the superior lien.
The first question which arises under the quoted statute is whether the judgment lien in favor of Mrs. Thomas in case 2297 was inferior to the lien of the judgments in favor of the Land Bank in cases 2298 and 2299. As indicated, all three judgments were rendered on the same day, and all of them became judgment liens on all lands of Combs from the first day of the term of court at which the judgments were rendered. The liens of the Land Bank did not, however, originate in its judgments. Its judgments merely enforced mortgage liens in existence before the foreclosure suits were com menced. Mrs. Thomas' lien originated in her judgment, and the Land Bank liens were necessarily superior to the lien which Mrs. Thomas acquired.
The next question is, Did Mrs. Thomas have a right to redeem? The question is answered by the following, among other provisions of the redemption law:
"For the first twelve months after such sale, the right of the defendant owner to redeem is exclusive; but if no redemption is made by the defendant owner at the end of that time, any creditor of the defendant and owner whose demand is a lien upon such real estate may redeem the same at any time within fifteen months from the date of sale. A mechanic's lien, before decree enforcing the same, shall not be deemed such a lien as to entitle the holder to redeem." (R. S. 60-3440.)
"Any creditor whose claim becomes a lien prior to the expiration of the time allowed by law for the redemption of creditors may redeem. A mortgagee may redeem upon the terms hereinafter prescribed before or after the debt secured by the mortgage falls due." (R. S. 60-3441.)
"A junior judgment creditor or lien holder may redeem from a senior judgment creditor or lien holder by paying to the party himself or to the clerk of the district court the full sum due said senior creditor or lien holder, with interest and costs, and shall become thereby vested with full title to the judgment so redeemed from and to all the liens of such judgment." (R. S. 60-3446.)
The language of R. S. 60-3440 is not "Any creditor of the defendant and owner whose demand has been adjudicated to be a lien" may redeem; the language is "Any creditor whose demand is a lien" may redeem. The fact that a creditor whose demand is a lien may redeem although it has not been adjudicated to be a lien, is made perfectly clear by the last sentence of the section, which requires an adjudicated lien in just one instance. A mechanic's lien, although a lien in fact, is not regarded as a lien entitling the holder to redeem until a decree enforcing the lien has been rendered. This provision shows the legislature had specifically in mind and specifically dealt with the distinction between adjudicated liens and liens existent in fact but not adjudicated to be such.
Having drawn the distinction between existing liens in fact and adjudicated liens in R. S. 60-3440, R. S. 60-3441 proceeds to say, without qualification, that any creditor whose claim becomes a lien before expiration of the time allowed for redemption by creditors may redeem. The section was interpreted in the case of In re Estate of Wood, 118 Kan. 548, 235 Pac. 864, as follows:
"A general unsecured creditor of the debtor whose land is sold on execution or order of sale under mortgage foreclosure is not permitted to subject the right of redemption to the payment of his claim. By putting the claim in judgment before the expiration of the period of redemption and thereby acquiring a lien on the debtor's nonexempt real estate, he becomes entitled, not to have the right of redemption sold and the proceeds applied to it, but to redeem for himself if the debtor does not do so within a year. _ (R. S. 60-3441.)" (p. 550.)
R. S. 60-3442 provides that creditors having a right to redeem, may redeem from each other. R. S. 60-3443 then prescribes the terms of redemption from a mortgage or other lien holder whose claim is not yet due. This section has been amended in important particulars (R. S. Supp. 60-3443). There is no room for interpolating into either the original or the amended section a proviso that, without ground for suit against the landowner not in default, the creditor must nevertheless have gotten a judgment, somewhere and somehow, establishing his unmatured claim as a lien, before he can redeem. R. S. 60-3446 prescribes the terms for redemption by a junior judgment creditor, and there is no hint that the junior judgment creditor must have two judgments to enable him to redeem, one the judgment which the law itself made a lien, and then a second judgment that his judgment lien is a lien.
In this instance, on September 3, 1928, Mrs. Thomas put her claim against Combs in judgment. Whether there was a dispute about her claim does not appear. Whether a dispute did or did not exist, the claim was adjudicated. It required no further judgment to make the personal judgment against Combs a lien on the land in cases 2298 and 2299, and it required no execution or seizure under execution to create the lien. The statute not only declared the judgment was a lien, but dated the lien back to the beginning of the term at which the judgment was rendered. When the tracts in cases 2298 and 2299 were sold to the Land Bank, Mrs. Thomas was a creditor of the landowner whose demand was a lien, and was a judgment creditor who had a right to redeem. By doing so Mrs. Thomas would not only have become entitled to an assignment of the certificate of sale issued to the Land Bank (R. S. 60-3452), but she would have become legal assignee of the Land Bank's judgments, including the lien of those judgments on any other land Combs might have.
The result of the foregoing is, the legislative intention is expressed with such definiteness and clarity that it is idle to debate existence of Mrs. Thomas' right to redeem from tire sales to the Land Bank in cases 2298 and 2299.
The owner redeemed within the preferential period of twelve months, and Mrs. Thomas had no opportunity to exercise her right to redeem. This fact did not exclude her from the class of lien holders having right to redeem within fifteen months. This subject was considered at length in the opinion in the case of Case v. Lanyon, 62 Kan. 69, 61 Pac. 406. The facts in the Lanyon case were that a lumber company obtained judgment against a smelting company, execution was issued on the judgment, the land was sold, and the sale was confirmed. The smelting company assigned its right of redemption, and the assignee redeemed within the exclusive twelve months' period. Soon after sale and confirmation, and within the twelve months' period, another creditor obtained judgment against the smelting company. After redemption by the landowner from the sale under the first judgment, execution was issued on the second judgment, and the land was again sold. The district court denied a motion to confirm the second sale, and allowed a motion to set aside the second sale. The judgment of the district court was affirmed by this court, on the ground the second sale was contrary to the provisions of R. S. 60-3460. It is not necessary to reprint the opinion here. The decision has stood for almost thirty-one years as a correct interpretation of the redemption law of this state, unqualified by judicial decision and unmodified by legislative enactment.
Mrs. Thomas cites the case of Stacey v. Tucker, 123 Kan. 137, 254 Pac. 339. In that case a mortgagee commenced an action to foreclose. There was on the record what appeared to be a second mortgage. The second mortgagee was not made a party. The syllabus reads:
"Where a senior mortgagee brought suit, foreclosed his mortgage and purchased the property at sheriff's sale, not having made a junior mortgagee a party: Held, (a) the junior mortgagee's rights were not affected by the proceedings; (b) the junior mortgagee was not barred for failure to redeem the land, and an action by the senior mortgagee afterwards to quiet title against the junior mortgagee was of no avail." (f 1.)
The opinion casually refers to but does not analyze or discuss R. S. 60-3440, 60-3441, 60-3442 and 60-3460, and casually refers to but does not analyze or discuss the opinion in Case v. Lanyon, 62 Kan. 69, 61 Pac. 406, or the opinion in Gille v. Enright, 73 Kan. 245, 84 Pac. 992, which applied the decision in the Lanyon case. The opinion then says:
"The statutes and cases cited above are not applicable here, because the rights of the junior mortgagee were not adjudicated. The junior mortgagees were not parties to the foreclosure proceedings. We are of opinion that the legislature in the enactment of the statutes above cited contemplated liens adjudicated as such, and this court, in construing such statutes, considered the rights of lien holders which had been determined — those about which there was no question. The question might very properly arise as to whether a junior mortgage was a lien, whether it had been paid, or whether barred by the statute of limitations, etc., therefore there is always a question to be determined whether an alleged lien is actually a lien." (Stacey v. Tucker, 123 Kan. 137, 138, 254 Pac. 339.)
So, we have in this Stacey case an admission that the liens in the Lanyon and Gille cases were liens which had been determined; that is, about which there was no question; that is, which had been adjudicated in a sense which satisfied the requirement of the Stacey decision. Of course, the junior judgment creditor in the Lanyon case was not a party and could not be a party to the action in which the senior judgment creditor obtained judgment, any more than Mrs. Thomas could have been a party in cases 2298 and 2299. But the claim of the junior creditor was put beyond question and made a lien — adjudicated-—just as the existence and validity of Mrs. Thomas' claim was put beyond question and made a lien — adjudicated — by the judgment in her favor which the statute instantly made a lien dating from the commencement of the term of court at which the judgment was rendered. To omit such liens would be to emasculate the statute, and there is not a word in any decision of this court previous to the decision in the Stacey case indicating such an intention.
The decision in the Stacey case involved merely an undetermined claim of second-mortgage lien, which might or might not be a valid claim. It did not involve a finally adjudicated claim which was indisputably a lien by virtue of court judgment and statute. The soundness of the decision in the Stacey case as a determination of the specific controversy in that case, is not a matter of present concern.
In the case of Sigler v. Phares, 105 Kan. 116, 181 Pac. 628, a second mortgagee was a party to an action to foreclose a first mortgage. The defense of payment was interposed, so that the second mortgagee did not obtain judgment until after sale under the judgment foreclosing- the first mortgage. The landowner redeemed within the exclusive period. Subsequently, and within fifteen months from date of sale, the second mortgagee attempted to redeem. This court held his attempt was unavailing. In the course of the opinion some seeming verbal difficulties in the statute were adverted to, and it was said:
"Yet a judgment obtained after the sale, which gives a lien upon the real estate of the debtor owner, is held by this court to confer a right to redeem. (Case v. Lanyon, 62 Kan. 69, 61 Pac. 406; Gille v. Enright, 73 Kan. 245, 84 Pac. 992.) And such is the practice elsewhere. (See Falbe v. Caves, 151 Wis. 54; Brown v. Markley, 58 Ia. 689.)" (p. 119.)
The disadvantage of the second mortgagee in protecting himself from loss of the fruits of his lien by bidding at the sale before his lien was established, was adverted to, and the court said:
"Except for the disadvantage referred to, which appears to be a necessary consequence of the statute, and to be in accordance with the general statutory purpose of protecting primarily the interests of the owner whose land is sold on execution or order of sale, the second mortgagee was left in just as favorable a situation as though his lien had been confirmed as a part of the original judgment foreclosing the first mortgage. By exercising his exclusive right to redeem within twelve months after the sale, the owner obtained a title freed from the claim of the second mortgagee, by virtue of the provision of the statute that, [quoting R. S. 60-3460]." (p. 120.)
In this instance Mrs. Thomas was not at any disadvantage in bidding at the sale, if she desired to do so. Her judgment giving her a lien was rendered the same day the judgments under which the land was sold were rendered.
The opinion in Sigler v. Phares concludes as follows:
"The sale was legally made, and the statute gives the owner of the fee the right to redeem by paying the amount of the bid. The exercise of- that right cut off the remedy of the second mortgagee against the land. His loss results from the property having brought at the sale no more than the amount of the first lien." (p. 121.)
Mrs. Thomas did not bid at the sale, and her loss results from the fact that the land did not sell for enough to satisfy her judgment as well as the Land Bank judgment.
The counter abstract shows that at the trial it was stipulated the files, records and proceedings in the Land Bank cases should be received in evidence. They are not abstracted, and the court sent for the journal entries of judgment and the orders of sale. The journal entry and order of sale in case 2298 and in case 2299 show that surplus was ordered brought into court to abide further decision of the court.
If the land had sold for more than the Land Bank's lien, Mrs. Thomas would have been entitled to the surplus, to the extent of her lien, on application to the court for disposition of surplus to her as a judgment lien holder. Questions frequently arise with respect to who is or has become entitled to surplus in the hands of the court,' and it has always been a feature of equity practice to determine such claims on applications in various forms for distribution of surplus. Normally, on foreclosure of a mortgage, all holders of inferior liens are made parties, and on foreclosure sale the proceeds of sale stand for the land, for distribution among lien holders, whose liens are cut off by the sale. Before the redemption law was enacted, if an inferior judgment lien holder was not made a party to the suit, his lien was not affected, and he could still enforce it. Under the redemption law, such liens are cut off the same as if the lien holders had been parties to the suit.
In the case of Johnston v. Wear, 110 Kan. 237, 204 Pac. 141, an action was commenced in the district court of Thomas county to foreclose a mortgage, and the action proceeded regularly to judgment and sale. About the time the foreclosure suit was commenced a creditor commenced an independent action in the United States district court for the district of Kansas, and attached the land. After the sale in the foreclosure suit judgment was rendered in the attachment suit, and the land was again sold. It was held the lien of the attachment was cut off by the foreclosure sale, and the federal court sale conveyed nothing. After noting that the attachment lien dated from the time the land was attached, the court said:
"Section 478 of the code of civil procedure [now R. S. 60-3441] in part reads:
" 'Any creditor whose claim becomes a lien prior to the expiration of the time allowed by law for the redemption of creditors may redeem.'
"F. E. Wear being a creditor and holding a lien inferior to the mortgage in the foreclosure action had the right to redeem the property from the sheriff's sale in that action. Section 497 of the code of civil procedure [now R. S. 60-3460] now becomes very material. That section reads:
" 'Real estate once sold upon order of sale, special execution or general execution shall not again be liable for sale for any balance due upon the judgment or decree under which the same is sold, or any judgment or lien inferior thereto, and under which the holder of such lien had a right to redeem within the fifteen months hereinbefore provided for.'
"The sale of the real property under the judgment in the federal court was made in violation of this statute. No right was given by that sale, nor was any title conveyed by the deed issued under it. In Case v. Lanyon, 62 Kan. 69, 61 Pac. 406, this court said: [Quotation.]
"To the same effect is Gille v. Enright, 73 Kan. 245, 84 Pac. 992." (Johnston v. Wear, 110 Kan. 237, 241, 242, 204 Pac. 141.)
Since inferior judgment liens are cut off by the sale, surplus takes the place of the land, and the lien holders may apply for distribution of proceeds of sale to them. Besides that, equity always had, and still has, power to do what ought to be done, and whenever surplus, standing for the land to which the lien attached, ought in equity to be distributed to lien holders, it may be distributed to them, on application to the court having control of the surplus. This is the very purpose and object of reserving, in judgment and order of sale, power to dispose of surplus.
In the case of Ellis v. Southwell, 29 Ill. 549 (1863), the syllabus reads:
"It is the practice in foreclosing a mortgage, to make all encumbrancers parties, and for the decree of foreclosure to ascertain and settle the rights of all the parties, to decree the payment of the mortgage debt, and on default the sale of the mortgaged premises, and the application of the proceeds to the payment of each encumbrancer, according to priority. But on such sale, the surplus remaining after payment of the mortgage debt, may be disposed of, on application, to an encumbrancer not a party to the suit, if it appears that he is entitled in equity to receive it."
In the case of Montague v. Marunda, 71 Neb. 805 (1904), the syllabus reads:
"Upon the foreclosure of a mortgage, and a sale and confirmation thereunder, if a surplus remains after the payment of the mortgage debt and costs, the district court, in its equitable jurisdiction, has full power, upon an application being made for a distribution of the surplus, to bring in all parties necessary to a determination of the ownership of the fund, and to try and determine that question." ( If 2.)
In the opinion it was said:
"To voluntarily relinquish its jurisdiction over the fund, which was in its possession, would be to surrender one of the most beneficial powers of a court of chancery." (p. 809.)
The jurisdiction was taken for granted in the case of In re Estate of Wood, 118 Kan. 548, 235 Pac. 864. In that case, after the death of a mortgagor owner the mortgage was foreclosed and the land was sold subject to redemption. In discussing the situation of unsecured creditors the court said:
"When the debtor dies owing a general creditor whose claim has not been placed in judgment a new situation is created. The creditor no longer has a personal demand against anyone, but he has acquired a right to look for payment to the property the decedent owned at his death, including the realty if necessary. This right is not technically a lien, but it is quite similar to a lien. It gives him who possesses it much the same means for his protection as though he had one. By seeing to it that the land when sold by the sheriff brings its full value, he can insure the application of the surplus over the mortgage debt to his own claim." (p. 550.)
In this instance Mrs. Thomas had no interest in or lien upon the land in cases 2298 and 2299 when those actions were commenced, and of course she was not a party to them. On the day judgments were rendered in those cases she acquired her judgment lien on the land involved in those cases. By virtue of the statute her right to enforce her lien after the sale, was cut off by the sale as effectively as if she had been a party to the foreclosure suits. In that respect she was in the same position she would have occupied if she had been a party, and the proceeds of sale stood for the land. Combs had no equitable right to surplus as against Mrs. Thomas' unsatisfied judgment lien, and had there been a surplus it could have been applied to satisfy the lien on motion of Mrs. Thomas for an order to that effect. The same principles and procedure would have applied if Mrs. Thomas had attended the sale and had bid a sum sufficient to satisfy the judgment of the Land Bank and her own judgment lien.
In the case of Pool v. Gates, 119 Kan. 621, 240 Pac. 580, Gates foreclosed second mortgages, and purchased the land at the sale. He bid the amount necessary to satisfy his judgments, plus a sum sufficient to cover advancements he had made to prevent foreclosure of superior mortgages. Gates proved these advancements, but it was held the surplus above the sum necessary to satisfy the judgments for which the land was sold should be paid to the landowner.
In the Pool case the writer concurred in the general proposition of law stated in the syllabus: foreclosure, sale, confirmation, debt satisfied, taxes and costs paid, surplus to debtor. This is the customary routine referred to in Blandin's Adm'r v. Wade, 20 Kan. 251, 255, and cited in the majority opinion. The writer dissented from what he regarded as the unconscionable refusal to allow Gates, on application, to be reimbursed out of surplus for his advancements to protect Pool against foreclosure of first mortgages, and to protect Gates' second lien. The abstract of record in the case shows that the judgment and order of sale required surplus to be paid into court, to be paid out as the court should direct. So the court by its own order had control over the surplus. The terms of the judgment and order of sale were not urged upon or considered by the court.
R. S. 60-3423 was cited as a basis for the Pool decision. It reads:
"If on any sale made as aforesaid there shall be in the hands of the sheriff or other officer more money than is sufficient to satisfy the writ or writs of execution, with interest and costs, the sheriff or other officer shall on demand pay the balance to the defendant in execution or his legal representatives."
This is section 457 of the civil code of 1859, and has been carried in all subsequent revisions of the statutes. It applies only to cases in which there is a seizure or levy, in which the sheriff is vendor, acting under statutory power, and in which, as a consequence, the execution debtor may demand surplus of him. It has no application to judicial sales, and particularly to judicial sales made under judgment and order of the court reserving to the court itself disposition of surplus. This is demonstrated by the context.
The section is now a part of the article, framed by the revisors and adopted by the legislature of 1923, relating to executions. The subdivision deals with executions against property. The subdivision begins with R. S. 60-3403, which reads:
"Lands, tenements, goods and chattels, not exempt by law, shall be subject to the payment of debts, and shall be liable to be taken on execution and sold, as hereinafter provided."
R. S. 60-3423, already quoted, applies to sales made "as aforesaid." Therefore, by every recognized rule of statutory construction, the meaning of the section, so far as it relates to sales of real estate, is to be determined by what is found between R. S. 60-3403 — "as hereinafter provided," and R. S. 60-3423 — "any sale made as aforesaid."
R. S. 60-3403 relates to lands, tenements, goods and chattels liable "to be taken"- — -that is, seized — on execution. R. S. 60-3404 relates to property bound from time of seizure. R. S. 60-3405 relates to dormancy of judgment. R. S. 60-3406 relates to the contents of a general execution on which the amount of debt, damages and costs for which judgment was entered shall be indorsed. R. S. 60-3407 relates to order of satisfaction when there is more than one writ. R. S. 60-3408 relates to levy, first on goods and chattels, and then levy on land. R. S. 60-3410 relates to levy on property claimed by third persons. R. S. 60-3411 relates to forthcoming bonds when property levied on is unsold. R. S. 60-3412 relates to notice of sale of personal property levied on. R. S. 60-3413 relates to levy on lands in certain cases, and appraisement. R. S. 60-3414 relates to limitation of lien on lands levied on.- R. S. 60-3415 relates to levies on property of certain public officers. R. S. 60-3416 relates to notice of sale of lands "taken on execution" — that is, seized. R. S. 60-3417 relates to prepayment of costs when the officer levies on goods, chattels, or land. R. S. 60-3418' relates to demand for fees referred to in R. S. 60-3417. R. S. 60-3419 relates to place of sale, and forbids bidding by certain persons. R. S. 60-3420 relates to alias executions for land levied on but not sold. R. S. 60-3421 relates to levy of several executions on separate parcels. R. S. 60-3422 relates to execution of deed. Then comes R. S. 60-3423, quoted above, relating to payment of surplus after "sale made as aforesaid," that is, by the sheriff pursuant to taking, levy, or seizure.
There is no taking of or levy on or seizure of land in a mortgage-foreclosure suit. The sale is a judicial sale, made by the court, by one who acts substantially as agent of the court, and not under naked statutory power. Proceeds of a mortgage-foreclosure sale are not in the hands of the sheriff as such officer. Surplus is not in his hands, subject to demand by and payable on demand to the defendant in execution. Proceeds are in the hands of the court. Surplus is distributable only by the court, and the statute under consideration is no bar to distribution of surplus to a judgment lien holder in the situation Mrs. Thomas occupied. Observations in the opinion in Pool v. Gates, 119 Kan. 621, 624, 240 Pac. 580, based merely on the name "special execution," are not apposite.
This is no new subject in this court. (Norton v. Reardon, 67 Kan. 302, 72 Pac. 861; Carter v. Hyatt, 76 Kan. 304, 307, 309, 91 Pac. 61; Wilden v. Duckworth, 83 Kan. 698, 702, 112 Pac. 606; Brewer v. Warner, 105 Kan. 168, 170, 182 Pac. 411; Moore v. McPherson, 106 Kan. 268, syl. ¶ 5, 187 Pac. 884; Bank v. Barons, 109 Kan. 493, 495, 200 Pac. 297.)
In the case of Norton v. Reardon it was necessary for the court to determine just what kind of sale a foreclosure sale is. To do so the court quoted, what is now R. S. 60-3401, defining executions as process; R. S. 60-3402, classifying executions into four kinds; R. S. 60-3406, specifying the command to the officer in executions against property; R. S. 60-3408, prescribing the duty of the sheriff under an execution against property; and R. S. 60-3416, requiring notice of sale of land taken on execution. These sections characterize the nature of the process under which sale of lands is made "as aforesaid." Other sections of the statute were considered, authorities were examined and quoted, and it is sufficient for present purposes to quote the following from the opinion of the court:
"Those sections of the statute which provide for a levy of an execution on real estate of the judgment debtor before its sale by the officer can have no application to judicial sales ordered by the court." (p. 306.)
For some purposes an order of sale may perform the function of a general execution. Thus, all that is necessary to keep a judgment alive is for the creditor to affirm vitality of the judgment by having process issued; levy and sale are not necessary. On this ground a majority of the court, including the writer, agreed that issuance of an order of sale would prevent a judgment from becoming dormant. (Watson v. Iron-works Co., 70 Kan. 61, syl. ¶ 2, opinion p. 66, 78 Pac. 156.) In all cases the reason for and the operation of the statute must be considered. Such considerations demonstrate the soundness of the decision in Norton v. Reardon. Within eighteen years next succeeding rendition of the decision in Norton v. Rear-don it was approved five times, and the decision has now stood for twenty-eight years, unmodified by statute or judicial decision.
The opinion in the Pool case quoted a part of R. S. 60-3107, as follows:
"In actions to enforce a mortgage, . no real estate shall be sold for the payment of any money . . . except in pursuance of a judgment of a court of competent jurisdiction ordering such sale." (Pool v. Gates, 119 Kan. 621, 625, 240 Pac. 580.)
The entire section reads as follows:
"In actions to enforce a mortgage, deed of trust, or other lien or charge, a personal judgment or judgments shall be rendered for the amount or amounts due, as well to the plaintiff as other parties to the action having liens upon the mortgaged premises by mortgage or otherwise, with interest thereon, and for the sale of the property charged and the application of the proceeds, or such application may be reserved for the further order of the court; and the court shall tax the costs and expenses which may accrue in the action, apportion the same among the parties according to their respective interests, to be collected on the order of sale or sales issued thereon. When the same mortgage embraces separate tracts of land situated in two or more counties, the sheriff of each county shall make sale of the lands situated in the county of which he is sheriff. No real estate shall be sold for the payment of any money, or the performance of any contract or agreement in writing, in security for which it may have been pledged or assigned, except in pursuance of a judgment of a court of competent jurisdiction ordering such sale." (R. S. 60-3107.)
This section had no relation whatever to the controversy, and the quotation in the Pool opinion does not correctly represent it. The concluding sentence is complete in itself, and relates solely to method of enforcing security for payment of money or performance of contract. Its sole purpose was to preclude any form of appropriation of land pledged or assigned in any way as security, to payment of the money or performance of the contract so secured, except appropriation by judicial sale. An illustration of application of the provision is found in the case of LeComte v. Pennock, 61 Kan. 330, 336, 59 Pac. 641.
In the case of Kueker v. Murphy, 86 Kan. 332, 120 Pac. 362 (1912), the court, speaking through the present chief justice, said:
"The purpose of the redemption law is to prevent the sacrifice of the debtor's land, make it discharge his debt to the extent of its value, and to give other creditors a chance to bid its full value so as to secure something on their claims." (p. 334.)
In the case of Sigler v. Phares, 105 Kan. 116, 181 Pac. 628, the court said:
"In order fully to protect himself against the loss of the fruits of his lien he was required to make a bid at the sheriff's sale (or see that one was made) larger than the amount of the first-mortgage debt, . . ." (p. 120.)
In the opinion in the case of Moore v. McPherson, 106 Kan. 268, 187 Pac. 884, the court said:
"The only way the bank could protect itself was by seeing to it that the property sold for some figure approximating what it was worth, or for enough to satisfy its second lien." (p. 273.)
If Mrs. Thomas had exercised her privilege, and had bid at the sale an amount above the superior lien for which she was willing to hold the land, she would have received the amount of her bid, with interest and costs, in case of redemption. If there were no redemption, she would have received a sheriff's deed.
In the brief for Mrs. Thomas it is said:
"Neither the decree nor the statute made it necessary for Thomas to bid at the foreclosure sale as her last recourse in order to preserve her rights against the property."
Of course, neither the decree in the Land Bank cases nor the statute prescribed what Mrs. Thomas should do. She was privileged to do nothing. But she was also privileged to bid at the sale, and so protect her lien, if the land were worth more than the superior lien. If she did nothing, her lien was discharged by the sale.
In support of her contention, Mrs. Thomas cites the cases of Shrigley v. Black, 66 Kan. 213, 71 Pac. 301, and State Bank v. Marty, 121 Kan. 753, 250 Pac. 321.
In the case of Shrigley v. Black there was a mortgage on land owned by life tenants and remainderman. Taxes became delinquent, a tax deed was issued, and the tax-deed holder brought ejectment against the life tenants and remainderman. The mortgagee was not made a party. The tax deed was set aside, the tax-deed holder was given a lien for taxes, and the land was sold to satisfy the lien. The remainderman purchased the interests of the life tenants. Afterwards, and a few days before expiration of eighteen months from date of sale, the then owner in fee redeemed. Meanwhile the mortgagee ha'd commenced an action to foreclose, and the owner in fee claimed the mortgage was cut off by redemption. While the opinion discussed the redemption law, all that was said on the subject was unadulterated dictum, and the case was fully disposed of by the first paragraph of the syllabus:
"A mortgagor of real estate, being under duty to his mortgagee to pay taxes on the mortgaged property, cannot defeat the mortgage by any form of a lien growing out of taxes which he has suffered to become delinquent; nor will his grantee be permitted to accomplish a like result by means of delinquent taxes, or a lien for the same, existing at the time the property was conveyed to him." (Shrigley w. Black, 66 Kan. 213, syl. ¶ 1, 71 Pac. 301.)
The case of State Bank v. Marty has no application to the present controversy. In the latter case the landowner made a mortgage of land, his only mortgageable interest in which consisted of right to redeem from a foreclosure sale. Then he redeemed, and tried to defeat the mortgage. In the opinion the cases of Case v. Lanyon, Gille v. Enright, Sigler v. Phares, Moore v. McPherson and Johnston v. Wear were distinguished. Right of redemption is a mortgageable interest. It was distinctly held right of redemption was mortgaged, and the owner was privileged to mortgage his right of redemption by virtue of R. S. 60-3455, providing for assignment or transfer of right of redemption; consequently it was held redemption inured to benefit of the mortgagee.
It is not necessary to review other decisions of this court.
In the foregoing it has been said that inferior liens are cut off by .foreclosure sale. The statement was made, of course, with respect to right to sell again. If Mrs. Thomas had become purchaser at the sale, or if she had been permitted to redeem from the sale which was made, her interest would have been perserved and protected. As it was, her lien was discharged when the landowner redeemed within the twelve months' period from the sale made under the superior lien.
Mrs. Thomas contends her lien could be cut off by deed only. This is simply to deny that an act of the legislature has any force. A multitude of cases from other states are cited. Neither R. S. 60-3460 nor anything equivalent to it is contained in the redemption law of any state whose decisions are cited, and the great bulk of the brief is devoted to discussion of matter rendered obsolete in this state by the statute.
Mrs. Thomas speaks of vested rights under her judgment. The redemption statute was enacted in 1893. Her judgment was obtained in 1928, and her rights were such as accrued to her under the law as it stood when her judgment was obtained. The law gave her a lien. She was bound to know her lien was an inferior lien, subject to discharge by a sale under the superior lien, and she was required to be diligent in watching the proceedings to enforce the superior lien if she desired to protect her own. She had the right to issue execution on her own judgment. The foreclosure sale was made after public notice, which she was obliged to anticipate would be given. She had the right to bid at the sale, and so protect her lien. She had the right to participate in distribution of surplus on application if the land sold for more than the first lien. She had the right to redeem, subject to the landowner's preemptive right. These were her "vested rights." She took no step to protect her interest, and she was forbidden by a statute thirty-eight years old, enforced in repeated decisions of this court, and the policy of which is and always has been well understood, to sell the land again.
The judgment of the district court is affirmed.