Opinion ID: 1247375
Heading Depth: 1
Heading Rank: 2

Heading: redemption by a successor in interest

Text: Redemption signifies the process of canceling and annulling a defeasible title, such as is created by a mortgage, by paying the debt or fulfilling other conditions. Tacoma v. Perkins, 42 Wn.2d 80, 85, 253 P.2d 957 (1953). There are two types of redemption. The equity of redemption describes the mortgagor's right in equity, after default in the performance of the mortgage, to redeem the estate within a reasonable time upon payment of the debt. The right of redemption describes the mortgagor's statutory right to redeem after a judicial foreclosure and sale. The mortgagor has an equity of redemption before foreclosure, and the right of redemption, if provided by statute, after the foreclosure and sale. 9 G. Thompson, Real Property § 4822 (1958); 3 C. Wiltsie, Real Property Mortgage Foreclosure § 1060 (5th rev. ed. 1939). In Washington, the judgment debtor and certain lien creditors are granted the statutory right to redeem property sold at a foreclosure sale. Those with the right to redeem foreclosed property include [t]he judgment debtor or his successor in interest, in the whole or any part of the property separately sold. (Italics ours.) Laws of 1899, ch. 53, § 7, p. 89 (former RCW 6.24.130). [1] Here, the Marks acquired the status of the judgment debtor because they were adjudged to owe and pay the sum found due in the judgment under which the execution sale was made. Hackman, Statutory Redemption Rights, 3 Wash. L. Rev. 177, 178 (1928). At issue is whether Marks' Westside, by operation of the July 12, 1984 assignment of interest, is a successor in interest to the Marks' right of redemption. The Marks and Marks' Westside concede that the assignment was not acknowledged or recorded in compliance with Washington's real property transfer statutes. They argue, however, that the statutory right of redemption is personal property that can be assigned without complying with the deed statutes. We agree that the right of redemption is not an interest in land, but a mere personal privilege given by statute to the mortgagor. 2 L. Jones, Mortgages of Real Property § 1335, at 798 (8th ed. 1928); 3 C. Wiltsie, Real Property Mortgage Foreclosure §§ 1067-1068 (5th rev. ed. 1939); see In re Faber, 11 F. Supp. 555, 558 (W.D. Wash. 1935). [1] The California Supreme Court has defined a successor in interest to the judgment debtor as one who has acquired (or succeeded to) the interest of the judgment debtor in the property, subject, of course, to the effect of the judgment and sale ... [2] Call v. Thunderbird Mortgage Co., 58 Cal.2d 542, 550, 375 P.2d 169, 25 Cal. Rptr. 265 (1962); see 2 Washington State Bar Ass'n, Real Property Deskbook § 48.79, at 48-43 (2d ed. 1986). Under this definition, the status of a successor in interest for the purpose of former RCW 6.24.130 arises in relation to the property sold at the foreclosure sale. Although the right of redemption is not an interest in real property, the Legislature has linked the exercise of the right to the judgment debtor's ownership interest in the property. Thus, former RCW 6.24.130 requires that a successor in interest succeed to the judgment debtor's interest in the property. A judgment debtor-mortgagor retains legal title to the property during the redemption period. As observed in W.T. Watts, Inc. v. Sherrer, 89 Wn.2d 245, 248, 571 P.2d 203 (1977), a sheriff's certificate of purchase does not pass title but is only evidence of an inchoate interest which may or may not ripen into title. Accord, Gray v. C.A. Harris & Son, 200 Wash. 181, 186, 93 P.2d 385 (1939). Title to real property can only be conveyed by a valid, acknowledged deed and the conveyance must be recorded in the county where the property is situated. RCW 64.04.010, .020. Here, Marks' Westside is not a successor in interest to the Marks' right of redemption because the unacknowledged and unrecorded July 12, 1984 assignment of interest was insufficient to convey the Marks' interest in the property. Our cases have consistently recognized that a valid conveyance is necessary to transfer the right of redemption. See, e.g., Gray, at 187; Ford v. Nokomis State Bank, 135 Wash. 37, 45-46, 237 P. 314 (1925); DeRoberts v. Stiles, 24 Wash. 611, 618-20, 64 P. 795 (1901); accord, Perry v. Safety Fed. Sav. & Loan Ass'n, 25 Ariz. App. 443, 445, 544 P.2d 267 (1976). To hold otherwise would permit a judgment debtor to convey the naked right to redeem without also conveying the debtor's reversionary interest in the property. This would create great uncertainty in dealing with real property as a judgment debtor could sell the right of redemption to any number of people, none of whom would be in a position to verify if they were the sole holders of this valuable right. Moreover, permitting an assignee to exercise the right of redemption without having any other interest in the property is inconsistent with the legal effect of a redemption. The effect of redemption is to set aside the sale and restore the judgment debtor to the estate. Laws of 1961, ch. 196, § 2, p. 1896 (former RCW 6.24.160). To allow an assignee without an interest in the property's title to redeem would accomplish nothing since any redemption would inure to the benefit of the holder of legal title  the judgment debtor-mortgagor. Marks' Westside had not succeeded to the Marks' statutory right of redemption when it attempted to redeem on July 12, 1984 and therefore its attempted redemption was invalid. The statutory redemption period has now passed without a valid redemption by the Marks or Marks' Westside.