Court Opinion

ID: 9699151
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:11:39.150359+00
Date Added: 2024-06-11T18:20:46.992666
License: Public Domain

SABERS, Justice
(concurring in part and dissenting in part).
The trial court was correct in determining that the mortgaged premises should be sold in a single tract or unit under SDCL 21-47-13. However, the mortgage holder is not entitled to a deficiency judgment under SDCL 21-47-16 unless the court finds the fair and reasonable value of the premises is less than the sum due on the mortgage.
The only evidence of value in this record is an appraisal by Carlson’s appraiser at $484,000. By bidding less than that sum without compliance with SDCL 21-47-16, the mortgage holder destroyed its right to a deficiency judgment against Melford and Kay Carlson. As between the mortgage holder, FLB, and the subordinated contract for deed seller, Agnes, the mortgage holder was entitled to bid whatever it pleased without jeopardizing its prior secured position. Agnes was equally free to bid whatever she pleased.
Although the deficiency judgment was clear error, Melford and Kay Carlson have no right to challenge it here because they did not appeal. Likewise, Agnes has no standing to challenge the deficiency judgment against Melford and Kay Carlson. Although she has standing to challenge the court’s judgment with respect to her, it should be useless to do so in view of her failure to bid on the property at the sale or redeem it from the sale.
The majority opinion holds that the requirement to bid fair and reasonable value “works to the protection of inferior lien-holders as well as mortgagors.” No authority is cited for this statement. This is simply incredible in view of the fact that the inferior lienholder subordinated her position to FLB and not vice versa. The majority opinion is reversing the intended and obvious purpose and effect of the subordination agreement.
If the majority holding is extended to its logical conclusion, it would provide unprecedented protection to all inferior lienhold-ers, including all judgment creditors, mechanic and materialman lienholders, and other subsequent lienholders. These statutes were never intended to do that.
SDCL 21-47-15 and -16 are designed to prevent a mortgage holder (or an inferior lienholder) from obtaining a deficiency judgment against the debtor without regard to the fair value of the mortgaged property. Miners & Merchants Bank v. Braden Forestry Services, Inc., 374 N.W.2d 123 (S.D.1985). These statutes should likewise prevent a noncomplying mortgage holder from obtaining a deficiency judgment against an inferior lienholder who has also signed on the mortgage debt.
However, these statutes should not be extended to protect the inferior lienholder against herself when no one is even attempting to get a deficiency judgment against her. If she thinks the property has a fair and reasonable value above the bid of $267,000, she must bid it or redeem it. Miners, supra.