Court Opinion

ID: 6699150
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:04:19.971462+00
Date Added: 2024-06-11T16:01:21.408215
License: Public Domain

Trapp, Presiding Judge,
dissenting.
{¶ 28} I respectfully dissent. The majority determined that because a lien was not perfected by the recording of the quitclaim deed, there was no perfected interest reserved by the quitclaim deed. I disagree. I believe that the transactions here should not be determined by their labels, but by their substance. Sipka’s property interest predated the separation agreement. The separation agreement is not the source of her interest in the subject real estate, but a contract in which she agreed to transfer her interest in the property except for $25,000. She originally owned a half interest in the real property. She surrendered this interest, except for $25,000, by way of the quitclaim deed, which was properly recorded pursuant to R.C. 5301.25. A deed intended to secure performance of an obligation will be treated as an equitable mortgage whether or not *226such interest is disclosed by the instrument. See Swanbeck v. Sheaves (Mar. 7, 1986), 6th Dist. No. L-85-237,1986 WL 2957.
{¶ 29} Because of her retained interest in the real property, equity and due process required that she receive notice of the foreclosure. Persons having liens upon land, not being made parties to the proceeding, will not be affected by a decree subjecting such land to sale. Myers v. Hewitt (1847), 16 Ohio 449, 451. “When creditors desire to sell lands of their debtor, free from incumbrances, justice to him requires that the incumbrancers should be made parties to the proceedings, before the order of the sale.” Ketcham v. Fitch (1862), 13 Ohio St. 201, 209-210. Thus, the failure to join as a party one who has an interest in the property necessarily results in the purchaser at judicial sale taking title subject to that interest. Simply put, the claim or interest of the omitted party has not been foreclosed or cut off by the proceeding. See generally Hembree v. Mid-Am. Fed. S. & L. Assn. (1989), 64 Ohio App.3d 144, 580 N.E.2d 1103. Thus, Mrs. Sipka’s retained interest in the property survived the foreclosure sale, as she was not given notice of the foreclosure proceedings.
{¶ 30} The doctrine of caveat emptor is applicable to judicial sales of real property. Society Natl. Bank v. Wolff (Apr. 26, 1991), 6th Dist. No. S-90-13, 1991 WL 64865, *4, citing Mechanics Sav. & Bldg. Loan Assn. v. O’Conner (1876), 29 Ohio St. 651. The purchaser “buys with his eyes open, at his own risk, and is without [recourse] in case there is a defect in the title of the former owner of the property bought.” Kain v. Weitzel (1943), 72 Ohio App. 229, 234, 27 O.O.91, 50 N.E.2d 605, quoting 24 Ohio Jurisprudence, Section 130.
{¶ 31} Based on the foregoing, I would hold that Sipka’s interest remains an encumbrance against the subject property until it is properly extinguished.