Court Opinion

ID: 9844225
Source: CourtListenerOpinion
Date Created: 2023-09-24 02:59:09.894206+00
Date Added: 2024-06-11T09:15:30.161701
License: Public Domain

SHEPARD, Justice,
specially concurring.
I agree with the majority opinion, excepting only that portion relating to the effect of a junior lienor’s redemptions and purchases upon the unpaid indebtedness.
My first difficulty with the majority opinion is its analysis of the case law and statutes regarding “foreclosure” and its applicability to EIPCA. While EIPCA initially sought foreclosure, the actual trial was held and the matter litigated upon EIPCA’s theory of action on the debt and Placerton’s various defenses thereto and its counterclaim.
The trial court held that since EIPCA had acquired all title to the property the matter of foreclosure was moot. In my view, the trial court was eminently correct in so ruling. Inferentially at least, the majority reverses that holding of the trial court by stating that there must be determined “the fair market value of the mortgaged property before a deficiency judgment can be awarded.” That statement is of no assistance. A deficiency judgment can only result where there has been a foreclosure and sale and the proceeds are not sufficient to satisfy the underlying debt. Hence, the majority has suddenly converted this action on the debt into one for a deficiency and has required the trial court to enter a “deficiency judgment.”
It is axiomatic, to me at least, that when various estates in real property, either equitable or legal, come into the hands of one person they merge in that person and all the lesser estates are extinguished. When EIPCA redeemed and purchased at sale and Placerton and Beeler failed to redeem (all of which is admitted), EIPCA, in my opinion, acquired all of Placerton’s interest and title to the property. If that be so, then EIPCA held complete title, there was no estate or interest remaining in Placerton to be foreclosed and the trial court was correct in its ruling of mootness. Assuming the above analysis is correct, the debt was not then at least within the purview of I.C. § 6-101 as an action “for the recovery of any debt secured by a mortgage on real property.”
Further, I find it difficult to ascertain any applicability of I.C. § 6-108 which prohibits the entry of a deficiency judgment absent a showing of “the reasonable value of the mortgaged property * * * in any case involving a foreclosure of a mortgage.” Here, except for the assertion of the majority, there was no deficiency sought by EIP-CA. There could be no “foreclosure” of a non-existent estate or interest in Placerton and absent a foreclosure there could be no “deficiency.”
The majority opinion in a case of first impression in Idaho cites cases of ancient vintage from other jurisdictions. For its rationale, the majority states: “The reason underlying this rule is that the mortgagee, having appropriated the security in satisfaction of the debt, must fully exhaust such security before proceeding against the debt- or for a deficiency judgment.” I submit that such rationale is mere bootstrapping. There is no indication in the record here that EIPCA “appropriated the security in satisfaction of the debt.” Rather, the record is. clear that EIPCA acquired the remnants of any title or estate Placerton may have had by Sheriff’s certificates of sale for which EIPCA paid almost $3,000,000.00.
The Idaho cases cited by the majority simply do not support its position. Jeppesen v. Rexburg State Bank, 57 Idaho 94, 62 P.2d 1369 (1936), involved the “indorser” of notes asserting that since the maker of the notes secured them by a mortgage, the creditor was required to foreclose the mortgages before proceeding against the endorser. The court there held against the endorser and for the creditor. If anything, the case would support the action of EIPCA *877against defendant Beeler on his guarantee of the indebtedness to the amount of $7,000,000.00.
As to Barnes v. Buffalo Pitts Co., 6 Idaho 519, 57 P. 267 (1899), the court stated: “The only matter before us for review on this appeal is the action of the district court in overruling defendant’s motion for judgment against the sureties on the undertaking on appeal.” Id. at 520-21, 57 P. at 267. There a judgment of foreclosure had been entered.
Appellants assert and the majority opinion agrees “that it would be totally inequitable for EIPCA to have the property [for which they paid the Sheriff], title to which they acquired by reason of their status as a junior encumbrancer, and still obtain a judgment against appellants for the full amount of the indebtedness without any credit against the indebtedness.” In support thereof the majority cites Boesiger v. Freer, 85 Idaho 551, 381 P.2d 802 (1963), and Fogelstrom v. Murphy, 70 Idaho 488, 222 P.2d 1080 (1959). I find nothing in Fogelstrom of any assistance to our present conceptual difficulties other than there plaintiff sought and obtained foreclosure of mortgages, which was affirmed on appeal. Boesiger involved the enforcement of an oral contract to convey real property because equitable estoppel operated against the vendor.
Rather than the approach of the majority, I would consider the instant case based on the assertions of the parties at trial. As I understand the position of appellants in their supplemental counterclaim, it was alleged that EIPCA had been unjustly enriched by reason of the entire transaction and at the expense of the appellants, or in the alternative, as a defense to EIPCA’s suit on the debt appellants sought credit on the debt as determined by a computation of the fair market value of the property less the amounts expended by EIPCA to acquire its title.
If, as I presume, appellants had the burden of proof on such counterclaim and if they successfully carried that burden by proof of the value of the property, then I would reverse with directions to the trial court to enter findings thereon and thereafter a judgment reflecting the inherent equitable authority of the court to relieve a party who has suffered at the hands of another party who has been unjustly enriched. If appellant did not successfully carry that burden of proof and the trial court so concludes, then I would affirm.