Title: Hancock Mutual Life Ins. Co. v. Hetzel
Citation: 185 Kan. 274, 341 P.2d 1002
Docket Number: 41,429
State: Kansas
Issuer: Kansas Supreme Court
Date: July 10, 1959

185 Kan. 274 (1959)
341 P.2d 1002
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Appellee,
v.
GEORGE HETZEL, GRACE MARIE HETZEL, et al., Appellees, and THE UNITED STATES OF AMERICA, Appellant.
No. 41,429

Supreme Court of Kansas.
Opinion filed July 10, 1959.
Morton Hollander, of Washington, D.C., argued the cause, and George Cochran Doub, assistant attorney general, Wilbur G. Leonard, United States attorney, E. Edward Johnson, assistant United States attorney, and William A. Montgomery, of Washington, D.C., were with him on the briefs for the appellant.
John A. Etling, of Kinsley, and Barton E. Griffith, of Topeka, argued the cause, and W.N. Beezley, of Kinsley, was with them on the briefs for the appellees, George Hetzel and Grace Marie Hetzel.
*276 The opinion of the court was delivered by
ROBB, J.:
The John Hancock Mutual Life Insurance Company, hereafter referred to as the insurance company, on September 3, 1957, filed the original suit herein to recover judgment on its note and foreclose its first mortgage lien on real property in Edwards county belonging to George Hetzel and Grace Marie Hetzel, hereafter referred to as mortgagors, who had executed a note and mortgage as security therefor. Another defendant and the appellant here, the United States of America, hereafter referred to as the government, is also holder of notes and a second mortgage, as security for one of the notes, executed by the same mortgagors on the same real property. In this appeal we are not concerned with other defendants of record or their claims. No dispute exists as to the priority of the mortgages nor as to the pleadings and we shall therefore refer only to the pertinent parts thereof as we proceed with our discussion of the points at issue.
On December 4, 1957, the trial court entered judgment on the respective notes and foreclosed the first mortgage in favor of the insurance company and the second mortgage in favor of the government. The decree further provided that if the mortgagors failed to pay the judgments within ten days, the sheriff of Edwards county was directed to advertise and sell the real property according to law subject to redemption for a period of eighteen months after the date of sale. The proceeds were to be applied on costs, taxes, on the first lien of the insurance company and then on the government's second lien.
The mortgagors failed to pay within ten days and on January 22, 1958, the sheriff's sale was held. The only bidder was the insurance company which bid the property in for the full amount of its judgment, interest, taxes and costs. The government did not bid at the sheriff's sale. The insurance company was the only party who appeared to move for the court's confirmation order of the sheriff's sale. On February 5, 1958, the trial court confirmed the sale and directed the sheriff to issue to the purchaser a certificate of sale for the real property, fixing the period of redemption at eighteen months from the date of sale. If redemption were not made within time, the sheriff was directed to make, execute and deliver to the holder of said certificate his sheriff's deed to the real property and put the holder thereof in possession.
*277 On June 5, 1958, the government requested the district court clerk to issue a certificate of redemption to it pursuant to its tender under G.S. 1949, 60-3451. The amount thereof was to be measured by the lex rei sitae (normal state-law rule) to effectuate its right to redeem the property under 28 U.S.C. 2410 (c), which section is appended hereto. This request was declined by the clerk and in a letter dated July 8, 1958, the district court, in brief, informed the government that the holder of the certificate of purchase and the mortgagors questioned the government's right to redeem the real property at that time and consequently the clerk would not issue the redemption certificate until the court so ordered. The letter further stated the court would be on vacation until September but it presumed the government would want to file a motion raising the question and would serve opposing counsel and have the motion set for hearing.
On July 23, 1958, the government filed its motion seeking an order of the district court directing the clerk to issue a certificate of redemption to it, alleging that:
Another portion of the motion contained the affidavit referred to in (a) above.
On September 3, 1958, during a hearing on the government's motion, the mortgagors contended the trial court was without jurisdiction to grant the relief sought in the government's motion. The trial court so found and in its order overruling the motion on the same day stated:
The government timely perfected the instant appeal from the above order and raises two questions.
*278 On January 14, 1959, the mortgagors redeemed the property and were issued a certificate of redemption by the clerk of the court.
As is customary, we will proceed to the determination of the jurisdictional question, if one there be, before reaching the first question raised by the government.
The foreclosure decree entered on December 4, 1957, and the order of confirmation of sheriff's sale on February 5, 1958, occurred during the term of court beginning on the fourth Monday of October, 1957, the next term began on the second Monday of February, 1958, and the government's request of the court clerk for a redemption certificate made on June 5, 1958, was in the term of that court which began on the first Monday of May, 1958. The motion, as above stated, was filed on July 23, 1958, which means that two terms of court in the thirty-third judicial district including Edwards county (G.S. 1949, 20-1029a) had expired from the time of the trial court's decree and order on December 4, 1957, and the government's demand on the court clerk and motion addressed to the trial court on July 23, 1958.
The mortgagors contend that a trial court loses jurisdiction over its judgment after the expiration of the term in which a judgment is rendered absent the exceptions provided for in G.S. 1949, 60-3007, which are not present here. The contention is too far-reaching. The controlling rule of law as to jurisdiction after term was stated in Keys v. Smallwood, 152 Kan. 115, 102 P.2d 1001.
However, the Keys case was a garnishment proceeding and is not applicable in our present case.
Other authorities cited by the mortgagors are somewhat similar to the overall picture presented by our present case but they are distinguishable as to the question under consideration and, therefore, are not determinative thereof.
The government calls our attention to Johnson v. Wear, 110 Kan. 237, 204 Pac. 141, wherein (p. 243) Mitchell v. Insley, 33 Kan. 654, 657, 7 Pac. 201, was cited. The Mitchell case involved an original ejectment action where a deed was determined to constitute a mortgage to secure a payment of $2,000 and the mortgagee had a lien upon the land but it was further determined his remedy was not by ejectment. Subsequently the mortgagee filed a mortgage foreclosure *279 suit wherein the amount due under the mortgage was in issue. (p. 658.) The court stated that the amount due on the mortgage in the ejectment action was wholly immaterial, that the adjudication the deed was a mortgage was conclusive, and perhaps that something was due, but not the amount. The question of the amount due, therefore, remained undetermined. Justice Marshall in the Johnson case (p. 243) quoted the following language from page 657 of the Mitchell case:
The Mitchell case was also cited in Landon v. Clark, 221 Fed. 841, 845.
The only provision of the decree of foreclosure pertaining to redemption reads:
By reason of the foregoing, the trial court obviously did not fully determine the redemption rights of the mortgagors as against the government, or vice versa, except by the general language of the phrase, "... as is by law in such cases made and provided." The redemption rights of the mortgagors under our state statutes (G.S. 1949, 60-3440, et seq.) were therefore covered as were also the government's redemption rights under 28 U.S.C. § 2410. Expressed in another way, the trial court, by using the language quoted above, of necessity ruled that all questions regarding the redemption of the real property here involved would be governed by both state and federal law.
We believe the trial court intended to subject the redemption questions to both state and federal law and that it made clear such intention when ruling on the government's motion by use of the following language:
What other possible construction can be given this order? The motion was neither dismissed nor stricken, but was ruled upon, and in view of what has herein been said and the authorities relied on by the government in support of its contention that the trial court *280 did have jurisdiction of the subject matter, we can only conclude the trial court had, and exercised, authority to determine the rights of redemption "as is by law in such cases made and provided," as well as the power to grant or deny the relief prayed for in the motion by the government.
Determination of the second question requires that we set out a part of the mortgage executed by the mortgagors to the government. The form contained the following heading:
Section 21 of the mortgage contained these provisions:
Section 22 in part provided:
Section 23 in pertinent part reads:
The mortgagors base their contentions primarily on G.S. 1949, 60-3440 as follows:
The government places its reliance on 28 U.S.C. § 2410, which is hereto appended in full, but more particularly it relies on subsection (c) thereof, as follows:
Mortgagors referred to other statutes involving redemption. Some of them are of little, if any, help in the determination of this appeal. Briefly stated, those that are pertinent here provide that after the issuance of the certificate to the purchaser at the sheriff's sale (G.S. 1949, 60-3438), the mortgagors could redeem the real property at any time within eighteen months from the day of sale (60-3439); for the first twelve months after the day of sale the mortgagors had the exclusive right to redeem but if at the end of that time they had not done so, any lien creditor could redeem within fifteen months from the date of sale (60-3440); after the expiration of the fifteen months, the mortgagors could still redeem at any time before the end of the eighteen months, but the creditors could not. (60-3447.) The mortgagors could assign or transfer their rights of redemption whereby those same rights would pass to an assignee or transferee. (60-3455.) See Union Central Life Ins. Co. v. Reser, 134 Kan. 876, 8 P.2d 366, for further discussion of some of our redemption statutes.
The sovereign immunity of the government from suit without the express mandate of the Congress to the contrary, by waiver or granting permission for such suit or suits, is of sufficient general knowledge that a full legal discussion thereof would be surplusage.
Neither can there be any argument with the government's contention that federal laws are supreme over state laws where a conflict exists between them such as occurred in an action in a state court to recover statutory penalties for violation of the emergency price control act. (Testa v. Katt, 330 U.S. 386, 67 S. Ct. 810, 91 L. Ed. 967.) The same is true where there were labor disputes involving interstate or foreign commerce. (Myers v. Bethlehem Corp., 303 U.S. 41, 58 S. Ct. 459, 82 L. Ed. 638.)
The Supreme Court of the United States has not been hesitant in cases involving diversity of citizenship to remand them for determination *282 by the federal circuit court under state laws. For example, Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1189, was an action concerning tort liability and involved application of state laws by the federal circuit court.
In United States v. Ryan, 124 F. Supp. 1, the Minnesota Torrens system as it related to the filing of federal tax liens was comprehensibly explained and it was held that the government failed to comply with the procedural requirements of the state law whereby its lien for taxes was lost. We cannot repeat all that was said in the Ryan case, as to do so would unduly extend this opinion, but the following statements therefrom are of significant consequence herein:
A case more analogous to our present one is United States v. Cless, 150 F. Supp. 687, where a first mortgagee had obtained a writ of fieri facias and later bid in and purchased the mortgaged property at the sheriff's sale. He then sold the property to another but title had not yet passed. The government was seeking *283 foreclosure of its second mortgage and the question was whether the second mortgage lien was divested by the sheriff's sale in the light of 28 U.S.C. § 2410. In rendering summary judgment against the government, the district court there said:
The court therein further stated:
The Cless case was appealed by the government and appears as United States v. Cless, 254 F.2d 590, where the circuit court affirmed the lower court and stated:
In the same opinion it is further stated:
In view of the language in the above federal court decisions to the effect that there is nothing in 28 U.S.C., § 2410 giving the government rights that are superior or preferential to the rights enjoyed by private citizens, we are unable to see that the government in this appeal has made it affirmatively appear that its substantial rights have been prejudiced. In its answer in the original foreclosure proceedings, the government, under 28 U.S.C., § 2410, could have asked for preferential or superior rights of redemption over those of the mortgagors, or at the time the trial court entered its judgment of foreclosures the government could have sought to have its redemption rights determined, and finally, had the trial court, in view of the decisions of the federal courts, refused to grant such preferential or superior rights, the government still had the authority and power to bid at the sheriff's sale, which would have fully protected it. The government admits that it had the authority and power to bid at the sheriff's sale the same as any private citizen in its position. The federal farm mortgage corporation was holder of a second mortgage under circumstances identicle with those in our present case in Federal Land Bank v. Ludwig, 157 Kan. 657, 143 P.2d 784. The mortgage corporation appealed from an adverse decision of the court below. This court set out the pertinent statutes (pp. 659-660) and in reversing the trial court, substantially stated what has just been said above in respect to the government's right to redeem. (pp. 660-661.)
In United States v. Jungels, 167 Kan. 482, 207 P.2d 402, the government filed a claim on notes which had been barred by the five year statute of limitation for a long time  but less than twenty years. The evidence showed that during his lifetime the deceased maker had been solvent so far as non-exempt personal, real, and mixed property was concerned. The trial court's instructions were that the jury could consider all this in determining "that it is more likely that these notes have been paid than that they have not," (p. 484) and in affirming the verdict and judgment against the government, this court set out the controlling rules of evidence and concluded:
*285 Considering the terms of the government's mortgage which bound both it and the mortgagors, all the provisions of 28 U.S.C., § 2410, the appropriate Kansas statutes and the cases decided thereunder, and the points emphasized in the foregoing discussion, we are compelled to hold the trial court was correct in its final decree overruling the motion of the government for a certificate of redemption irrespective of the reasons given or those that may be inferred from the journal entry of judgment.
Affirmed.