Opinion ID: 1190838
Heading Depth: 1
Heading Rank: 1

Heading: Validity of the Junior Mortgages

Text: Appellants argue that the junior mortgagees forfeited any right under their mortgages by not pursuing the statutory scheme of redemption, i.e., by not having certified the redemption and by not recording it. [3] Appellants fail to give proper consideration to the fact that a certificate of redemption and assignment of the certificate of sale was issued to the mortgagor, appellant Newman, within the statutory time period for doing so. The consideration therefor was exactly that directed by statute to accomplish a redemption. As statutorily mandated, such payment renders void the sale and certificate. [4] Additionally, since the certificate was only a lien on the property ( Powers v. Pense, 20 Wyo. 327, 123 P. 925 (1912)), with the legal title still being in appellant  mortgagor Newman, the acquisition by Newman of the certificate (an equitable interest) merged the two interests and the equitable interest was discharged. Arnold v. Nichols, 25 Wyo. 458, 172 P. 335 (1918). Joinder of the ownership in land and of the lien thereon in one person creates a merger and terminates the lien. A merger may arise under three circumstances: (a) Where mortgagee acquires the fee; (b) Where the mortgagor acquires the mortgage; and (c) Where a third party acquires both the mortgage and the fee. Thompson on Real Property, § 4798 at 46 (1981 Supp.) (footnotes omitted). W.S. 1-18-108 providing for recordation of an assignment of a certificate of purchase does not have pertinency to this matter. Its purpose is to give constructive notice to anyone concerning the status of ownership or other interest in lands. Each and every deed, mortgage, instrument or conveyance touching any interest in lands, made and recorded, according to the provisions of this chapter, shall be notice to and take precedence of any subsequent purchaser or purchasers from the time of the delivery of any instrument at the office of the register of deeds (county clerk), for record. W.S. 34-1-121(a). In this instance, appellants had actual notice concerning such status as it pertained to the mortgages. Appellant Newman was a party to all three mortgages. He was aware of the foreclosure, of the sale of the certificate of sale to Joe and Gloria Gemelli and of the subsequent sale of it to him. Appellant Rasmussen in her counterclaim recited full knowledge of the status of the mortgages and of the certificate of sale. Where there is actual notice, constructive notice becomes unnecessary. Globe Mineral Co. v. Anderson, 78 Wyo. 17, 318 P.2d 373 (1957); Western Standard Uranium Co. v. Thurston, 355 P.2d 377 (Wyo. 1960). Since the payment made by mortgagor-appellant Newman for the assignment of the certificate of sale and certificate of redemption made void the sale and certificate, [5] the rights and obligations of junior mortgagees should be as they were before the sale. Additionally, public policy requires such validation or revival of junior mortgagees. The potential for a mortgagor to eliminate junior mortgagees by allowing a foreclosure by the senior mortgagee and then purchasing the certificate of sale issued to the senior mortgagee is a solid basis for such public policy. In summary, when a mortgagor acquires the equitable interest of the senior mortgagee before it ripens into legal ownership of the property, such interest merges with the mortgagor's legal title, and the senior mortgage ceases to exist. Such is equivalent to a redemption under W.S. 1-18-103(a) and liens of junior mortgagees are validated. Accordingly, the following provisions of the summary judgment properly reflect the rights and relationship of the parties: 1. That Sheriff's Deed to Defendant Jane L. Rasmussen should be, and is hereby, declared null, void and of no effect. 2. Title to the subject property lies in Defendant Jane Rasmussen, subject to the second mortgage of Plaintiffs Joe and Gloria Gemelli and the first mortgage of Plaintiff American National Bank. 3. That mortgage from Defendant Thomas D. Newman to Plaintiffs Joe and Gloria Gemelli should be, and is hereby, judicially foreclosed. That mortgage from Defendant Thomas D. Newman to Plaintiff American National Bank should be, and is hereby, judicially foreclosed. 4. Judgment is entered against Defendant Thomas D. Newman and in favor of Plaintiffs Joe and Gloria Gemelli in the amount of Nineteen Thousand Six Hundred Fifty-Nine Dollars and Seven Cents ($19,659.07), plus interest thereon from and after December 19, 1988 at the rate of Four Dollars and Ninety-Six Cents ($4.96) per day, plus Three Thousand Two Hundred Ninety-Eight Dollars ($3,298.00) for said Plaintiffs' costs and attorney's fees in collecting those amounts due and owing under the terms of that promissory note and mortgage from Defendant Thomas D. Newman. Judgment is entered against Defendant Thomas D. Newman and in favor of Plaintiff American National Bank in the amount of Twelve Thousand Six Hundred Fifty-Four Dollars and Ninety-Nine Cents ($12,654.99) plus interest thereon accruing thereon at the rate of Two Dollars and Ninety-Six Cents ($2.96) per day from and after April 17, 1989. 5. Upon entry of this Order, the subject property is to be advertised and sold pursuant to W.S. 1-18-101 et seq.