Court Opinion

ID: 6902206
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:56:05.442896+00
Date Added: 2024-06-11T16:06:12.754558
License: Public Domain

Mr. Justice Burnett
delivered the following dissenting opinion.
On November 7, 1887, Robert McCullough and Carrie A. Talbott were the owners of certain lands in Linn County, and at that time mortgaged the same to Jacob Kees to secure the payment of $900. On August 25, 1891, they gave Kees a further mortgage on the same premises for $700. In July, 1892, they sold about 20 acres of the land to Mary Cady. Subsequent to the mortgages, McCullough and Talbott made a contract with M. L. Zigler for the sale to Zigler of still another tract of said land. McCullough, on the 8th of December, 1892, executed a will in which he provided for the payment of his debts and funeral expenses and the erection of a monument over his grave and then gave, devised and bequeathed the use of all the residue of his property, both real and personal, to his wife, Lavina H. McCullough, during her natural lifetime, and directed that at the death of his wife all that remained of his property should go to the “Congregational Seminary at Forest Grove in Washington County, State of Oregon.” McCullough died December 13, 1892, seised of an undivided half of the lands mentioned, except what had been sold as stated, and subject to the mortgages given to Kees. The will was admitted to probate and recorded in Linn County, Oregon, December 17, 1892. Kees afterwards began suit in the circuit court of Linn County to foreclose the two mortgages, making parties defendant of all persons having an interest in the land, including Zigler and excepting the plaintiff herein, either in its name as the President and Trustees of Tualatin Academy and Pacific University, or as designated in the will, “Congregational Seminary at Forest Grove.” That suit went to decree of foreclosure; Zigler withdrawing his answer before decree. At the sale of the premises, the mortgagee, Jacob Kees, bought the property and afterwards received *511a sheriff’s deed which, in pursuance of the decree and sale, purported to convey to him the entire fee-simple estate in the whole tract. He subsequently sold to various persons, in separate parcels, all the land in question, having entered into possession of the whole under the sheriff’s deed. Among others, he quitclaimed to' Mary Zigler and Ellen Zigler for $350 the tract bargained by McCullough and Talbott to M. L. Zigler and another parcel for $100.
On the 9th of March, 1907, the plaintiff commenced this suit, alleging in its complaint, in detail, all the transactions above alluded to, except that it states that it is advised and believes, and therefore alleges the fact to be, that Robert McCullough never made nor executed the second mortgage mentioned above. However, the plaintiff offered no testimony in support of this attack upon that mortgage. It made defendants of all the parties claiming interest in the land subsequent to and as grantees of Kees, whether by deed, mortgage, or judgment. It states further:
“That each and all of the defendants herein claim that said foreclosure proceedings hereinbefore referred to and the sheriff’s deed made thereon to said Jacob Kees, in effect, conveyed the entire title in the said premises to the said Jacob Kees, and that the subsequent deeds and mortgages hereinbefore referred to have the effect of transferring the entire title to the premises herein described; whereas, in truth and in fact said foreclosure proceedings and said sheriff’s deed conveyed unto said Jacob Kees only the undivided half interest in said premises formerly owned by Carrie A. Talbott and the life estate of the said Lavina H. McCullough.”
The plaintiff also avers:
“That it is ready, willing, and able to pay such sum, if any, as may be equitably due and chargeable against the undivided half interest of said premises described in this complaint owned by the plaintiff; but plaintiff has been unable to learn or ascertain what amount, if any, is chargeable against plaintiff’s said interest in said premises, or to which of the defendants such payment *512should be made; that a discovery and accounting is necessary in order to determine what amount, if any, is chargeable against plaintiff’s said interest in said premises on account of any taxes paid thereon by said defendants or either of them since the death of the said Lavina H. McCullough, and to determine what portion of said premises defendants, or any thereof, have been in possession of and what they have received from the rents, issues, use, occupation, or profits of such portions subsequent to the death of the said Lavina H. McCullough.”
And prays that its title to the undivided half interest formerly owned by the said Kobert McCullough be declared established; that an accounting. may be had between the plaintiffs and the defendants herein to determine what amount, if any, plaintiff should pay to defendants, and to which of the defendants such amount, or any portion thereof, is payable; that upon payment of such amount, if any be found due to the defendants, each and all defendants may be adjudged to have no right, title, interest, lien, or claim, or estate whatsoever against plaintiff’s undivided one-half interest in said premises; that they be enjoined and restrained from claiming, or attempting to claim, any estate, right, title, lien, or interest in the premises; that the morgage first above referred to be canceled; and that the defendants who failed to appear shall be adjudged to have no estate in the lands. The plaintiff claims that it is the residuary devisee under the will of McCullough, and that he intended the designation of “Congregational Seminary of Forest Grove” to apply to the plaintiff herein.
The widow of the testator had beén dead nearly six years when this suit was commenced. The defendants answered giving the history of their title, deraigning the same from Jacob Kees under his sheriff’s deed, and alleged that they had been in possession, claiming to own the property under color of title adversely to all persons, for more than 10 years. The cause being at issue, the circuit court rendered a decree in favor of the plaintiff *513in substance that it is the owner in fee and entitled to the possession, use, and enjoyment of an undivided half interest in the premises free of all incumbrance and barred the defendants from claiming any interest in the same. From this decree, the defendants have appealed.
The bill has some of the aspects of a complaint to determine an adverse interest in lands, under Section 516, Lord’s Oregon Laws, as indicated by the extract quoted above; but it cannot be entertained as such because it fails to allege that the land is not in actual possession of another. It is contended in the argument on the part of the plaintiff that it is a suit against the defendants as co-tenants with the plaintiff for an accounting for the rents and profits; but it nowhere alleges that any of the defendants ever received any of the rents or profits, or were even in possession of the lands in dispute. So far as that is concerned, it is, from the complaint, just as apparent that the plaintiff should make such an accounting as that the defendant should. The bill is manifestly, in substance, one exhibited for the purpose of redeeming the land from the effect of the foreclosure sale in question. If it were not so, why should it go to such extreme particularity in relating the history of the title and setting out the claims of the defendants, and then pray for a decree enjoining the defendants from claiming any right or title in the premises ?
For the purposes of this opinion, it is not necessary to determine whether the “Congregational Seminary at Forest Grove” is a sufficient designation of the plaintiff. The first question which presents itself is: What was the effect of the foreclosure of Kees’ mortgage without making the plaintiff here a party to that suit?
We are told in De Lashmutt v. Sellwood, 10 Or. 326, that the true doctrine in this State is that a junior lien-holder is not in any way affected by the proceedings to foreclose to which he is not a party; that his right to sell *514on execution and convey the title remains unimpaired; and that, as to the purchaser at the sale under his judgment, the purchaser at the prior sale under the decree of foreclosure must be considered as an assignee of the mortgage and successor in interest to the mortgagor simply and as in the same position he would have occupied had he taken a simple assignment of the mortgage from the owner, and a conveyance of title from the mortgagor, and made no attempt to foreclose. In that case the purchaser at a sale under an execution issued upon a junior judgment, the owner of which had not been made a party to the foreclosure, was sustained in his possession of the land as against the purchaser at the foreclosure sale, although the mortgage foreclosed was prior in effect to the judgment.
This learning is further exemplified in Sellwood v. Gray, 11 Or. 539 (5 Pac. 196). This case grew out of the same proceeding in question in De Lashmutt v. Sell-wood, 10 Or. 326, and it was held in the latter case that, when the plaintiff in the foreclosure suit obtained a decree for the sale of property without making the defendant Gray a party, the proceeding as to him was a nullity; but that the sale effected some important results, in this, that as to the defendant Gray it stood as if no such sale had been made. He had a right to redeem by paying the amount of the incumbrance. The plaintiff as purchaser at the foreclosure and sale took all the rights of his senior mortgagee, and so much of the mortgagor’s equity of redemption as was not bound by the subsequent lien of the defendant Gray.
Still further, in Osborn v. Logus, 28 Or. 310 (37 Pac. 456: 38 Pac. 190: 42 Pac. 997), this court says that the owner of the equity of redemption is an indispensable party, and without him the suit cannot proceed. Subsequent lienors are considered necessary parties, but their absence from the record does not perforce of that fact render the proceedings a nullity.
*515In Wilson v. Tarter, 22 Or. 504 (30 Pac. 499), a purchaser at a foreclosure sale, in which the owner of an integral part of the land included in the mortgage was not made a party to the foreclosure, was given the option of compelling the owner of the parcel to redeem by paying the full debt or of conveying to the subsequent owner the parcel in question.
In Sellwood v. Gray, 10 Or. 326, Judge Lord says, referring to the mortgagor: “His equity of redemption is the right to redeem from the mortgage — to pay off the mortgage debt — until this right is barred by decree of foreclosure; but, until this right is barred, his estate in law or equity is just the same after as it was before default. It is a right, though, of which the law takes no cognizance, and is enforceable only in equity, and has nothing to do with our statute of redemptions. This is a valuable right, and exists not only in the mortgagor himself, but in every other person who has an interest in, or legal or equitable lien upon, the mortgaged premises, and includes judgment creditors, all of whom may insist upon a redemption of the mortgage.”
Conceding, as we must, for the purposes of this opinion, that the plaintiff was the residuary devisee, under the McCullough will, within the meaning of the excerpt just quoted, it had an interest in the mortgaged premises. Indeed, it stood in the shoes of one of the mortgagors, to wit, its testator. As such, it had a right to sue for the redemption of the premises; that right not having been barred by the foreclosure suit. Considering it even as a tenant in common it still had a right to sue for redemption under the authority of Merritty v. Hosmer, 11 Gray (Mass.) 276 (71 Am. Dec. 713).
An analysis of the cases quoted will show that the right of the purchaser at the sale to compel a redemption, on the one hand, and of a person interested in the premises to sue for redemption, on the other, do not depend on the *516decree of the foreclosure being wholly void as to all claimants. In all the cases mentioned, the decree was valid as to some of the defendants in the suit, but, of course, ineffectual as to parties in interest who were not made defendants.
The right of a purchaser at such a sale to compel a redemption by strict foreclosure is a right which is the complement of the right on the part of one claiming a subsequent interest in the land to bring a suit to redeem. The situation is this: The tenant in common, not being made a party to the suit to foreclose, finds some one in possession of the whole of the land with whom he has no privity, who is not a tenant in common under the original holding, and his suit to redeem is an effort to rid the land of the one who has thus intruded. The result of his effort, if successful, is to terminate the effect of the sale and restore the estate to its former owners, for his redemption inures to their benefit. Dray v. Dray, 21 Or. 59 (27 Pac. 223). What must he do to effect that purpose? He must do equity by redeeming the land, and to do so, in the language of Williams v. Wilson, 42 Or. 307 (70 Pac. 1033: 95 Am. St. Rep. 745), “he must pay the entire mortgage debt and interest under the equitable rule, and not under the statute, as from a sale under the decree.”
All the decisions of this court above noted, so far as the sum to be paid is concerned, contemplate nothing less than the full amount of the mortgage debt. It must be so, for the object of redemption is not to establish co-tenancy with the purchaser, but rather to terminate the effect of the sale and exclude him from participation in the title. He must therefore have his full debt with interest without deducting the amount bid at the sale or any part thereof. Neither should the amount required for redemption, if allowed in this case, be diminished by the $350 forming the consideration paid to Kees to induce *517him to quitclaim the tract to Mary and Ellen Zigler. If those two grantees were claiming under the bond for deed from McCullough and Talbott to M. L. Zigler, their interest was subsequent and subordinate to both the Kees mortgages, the latest of which bore date August 25, 1891, while the Zigler bond was executed August 1, 1892. Moreover, although Zigler was made a party to the Kees foreclosure suit as a junior incumbrancer under his bond, he withdrew his answer, and the decree barred and foreclosed him from any further interest in the premises. By his purchase at the foreclosure sale, Kees took the land free from any claim on the part of Zigler. In paraphrase upon the language of Williams v. Wilson, 42 Or. 308 (70 Pac. 1031: 95 Am. St. Rep. 745), there must have been some purpose in making Zigler a party to the foreclosure suit, and what purpose can be subserved thereby if the decree denied or curtailed none of his rights under his junior bond for a deed? The title he contracted for having been extinguished by the foreclosure, not only because of the juniority of his bond for a deed, but also because he did not set it up as his defense in that suit, he might have had recourse upon his obligors to recover what he had paid them,. but he had no claim upon the purchaser at the sale, for the latter took by a title paramount to Zigler’s bond. Kees had the right to sell whatever he had acquired by the sale to Zigler or Keene or any one else; but the deal would not inure to the benefit of the plaintiff, a stranger to the transaction.
To charge the $350 against the present defendants, if a redemption is permitted here, would be in effect to declare that, notwithstanding the Zigler bond was subsequent to the Kees mortgage and was foreclosed and its effect terminated by the decree, yet it survives the grave of foreclosure and is resurrected into a position paramount to that of the purchaser at the sale. Of course, if the plaintiff in this suit had alleged that Kees or his *518grantees had received anything from the land in excess of maintenance and taxes, it might by that much reduce the amount to be paid for redemption, within the principle laid down in Cartwright v. Savage, 5 Or. 397; but nothing of that kind appears in the complaint.
Manifestly, in this case, the plaintiff is not trying to redeem its own undivided half separately, for, as we have seen, its title is not affected by the foreclosure suit to which it was not a party; but, in order to do equity, it must redeem the whole property by paying the whole mortgage debt. The property was pledged as a whole, the plaintiff’s testator was liable for the whole debt, and the redemption should be equally broad. The important question, however, is whether plaintiff should be allowed to redeem at all.
The defendants here urge the plaintiff is seeking to enforce a stale claim, and that, as such, its former right to redeem should be barred. The plaintiff contends that it is merely asking for an accounting between it and the defendants, whom it styles “its tenants in common,” for the rents and profits of the lands accruing since the death of Mrs. McCullough and the extinguishment, by that event, of her life estate; but, as we have seen, the bill cannot be entertained for such a purpose. The plaintiff’s interest in the real property in question arose at least when the will of McCullough was probated. At that time the plaintiff had such an estate in the land as residuary devisee that it might have paid to Kees the amount due upon the mortgages even before suit to foreclose and thus extinguish them. Nothing, so far as appears by this record, ever arose to prevent such action on the part of the plaintiff. The life estate of Mrs. McCullough was no obstacle to prevent plaintiff’s redemption, for, being a tenant in common with her, it could have charged her with her proportional part of the redemption fund. It was more than 14 years after it thus became entitled to *519redeem from the effect of the Kees mortgages until the plaintiff instituted this suit.
In the settlement of the McCullough estate, the plaintiff was served with citation on the 6th day of December, 1894, to show cause in the county court of Linn County why these very premises should not be sold for the satisfaction of claims against the McCullough estate. Prior to the Kees foreclosure it was notified, by correspondence with J. M. Somers, an attorney, of the situation and was importuned to make some provision for the payment of the mortgage, but declined to do so. So far as the records appear, it made no answer to the citation to show cause why the land should not be sold at administrator’s sale. It was certainly by these facts put upon its inquiry as to its interest in the lands as early as December 6, 1894, the date the citation was served upon it.
The general statute of limitations for the recovery of real property is 10 years. Section 3, L. O. L. While courts of equity are not bound strictly, like courts of law, by the statutes of limitations, yet equity will act by analogy under their restrictions, and the rule is that, when suit is brought after the statutory time, the plaintiff must plead and prove that laches on its part do not exist, and the facts must be specifically and precisely pleaded. Wills v. Nehalem Coal Co., 52 Or. 91 (96 Pac. 528); Wilson v. Wilson, 41 Or. 459 (69 Pac. 923).
There is no reason assigned in the complaint why the plaintiff did not act promptly in asserting its claims to the land in question. Meanwhile, the land has passed through several hands to the present defendants. Some of the parties connected with the transaction are dead. The testimony shows that Kees, the mortgagee under whom the defendants claim, is also dead and his estate finally settled. The delay of plaintiff has certainly worked to the prejudice of the present holders of the lands, if its contention is to prevail here. Long after their grantor’s *520death they are assailed by a claim which could have been urged over 14 years earlier. The plaintiff now claims under the alias “Congregational Seminary at Forest Grove,” which it would not recognize when cited in the county court, and, while its conduct in that proceeding does not operate as an estoppel, not having been pleaded as such, still it is a circumstance which strongly imputes laches to the plaintiff. The testimony shows that the land brought as near what it was worth as could be expected at a forced sale. It has advanced in value, not only on account of the development of the country in general, but also by reason of the improvements made upon it by the present holders in establishing their homes upon it. If the plaintiff would reap where it has not sown, it should have begun sooner. Its laches render it inequitable now to allow the present defendants to be ousted by a claim so stale.
The decree of the circuit court should be reversed, and the suit dismissed.