Court Opinion

ID: 9714084
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:30:08.787644+00
Date Added: 2024-06-11T18:23:23.206249
License: Public Domain

On Petition for Rehearing.
MORRIS, Chief Justice.
The respondent has filed a petition for rehearing in which it is asserted that after the foreclosure of mortgage A, which was the foreclosure from which Mehlhoff redeemed and the Bank later redeemed from Mehlhoff, mortgage O was void because of the foreclosure of the prior mortgage held by the Bank and that mortgage O at the time of the redemption from Mehlhoff afforded no support for that redemption. 37 Am.Jur., Mortgages, Section 537, is cited, which states the general rule to be that foreclosure of a senior mortgage by one holding a junior mortgage on the same premises by a suit in which no attempt is made to foreclose or preserve the junior *407lien extinguishes that lien. Assuming that such a rule would be applicable in North Dakota, and that it would affect the right ■of redemption under our redemption statutes, the facts in this case are such that the rule would not apply in any event.
Mortgage O was assigned by Sam Lako-duk to the Bank as a pledge of collateral security. The same debt was also secured by a real estate mortgage given by Sam and his wife to the Bank. That mortgage was foreclosed in 1958. Sheriff’s deed was issued conveying the Sam Lakoduk land to the Bank in 1959. The debt of Sam Lako-duk to the Bank was satisfied by the foreclosure and Sam was entitled to a return of his pledge security, mortgage O. The foreclosure on the Ed Lakoduk land involved in this action and from which Mehlhoff redeemed took place in 1960. Sam Lakoduk was not a party to that foreclosure. At that time the Bank had no interest in mortgage O, because Sam’s debt to the Bank for which the pledge was made had been satisfied. After the foreclosure of mortgage A, and before the expiration of the period of redemption, Sam again pledged' mortgage O to the Bank as collateral security for a new debt. The Bank, as pledgee under the new pledge, having an interest in its collateral security, and having a duty to protect the interest of the pledgor which is in the nature of a trust, made the redemption of which the respondent complains. 72 C.J.S. Pledges § 78; Jones on Collateral Securities and Pledges, Third Edition, Section 393. It is clear to us that under the facts in this case the rule for which the respondent contends has no application.
We would further point out that our redemption statutes are remedial in nature and are intended not only for the benefit of creditors holding liens subsequent to the lien being foreclosed, but are also for the purpose of making the property of the debtor pay as many of his debts as it can be made to pay and to prevent its sacrifice. To that end redemptions are to be encouraged. North Dakota Horse & Cattle Company v. Serumgard, 17 N.D. 466, 117 N.W. 453, 29 L.R.A.,N.S., 508, 138 Am.St.Rep. 717; Fox v. Nelson, 30 N.D. 589, 153 N.W. 395; McGee v. Marshall, 54 N.D. 584, 210 N.W. 521. Rehearing denied.
STRUTZ, TEIGEN, BURKE and ERICKSTAD, JJ., concur.