Davis v. Holmes

Nafton, Judge,

delivered the opinion of the court.

This proceeding was instituted by the heirs of Fleming Davis to have certain sales and deeds of land mortgaged by said Davis, which had been made by the mortgagee Elliott, set aside as void, and to allow a redemption of the land by the plaintiff. The purchaser at these sales — Holmes—was also made a defendant. A great number of fraudulent practices and conspiracies are charged in the petition without the slight *351 est evidence to’sustain them. The result was, however, that the deeds to Holmes, the purchaser at the mortgagee’s sale, were declared void; one of them, because sufficient notice of the sale was not given, and the other, because the sale was made in the absence of the mortgagee, by an agent or attorney in fact; and a decree was made fixing a time for the plaintiff to redeem, on the payment of a certain amount of money. This amount was ascertained by the court, on a calculation of the money paid by Holmes in his purchase from the mortgagee, and the rents and profits made by him on the land, after he took possession under his purchase, and the value of the improvements made by him. There is no objection to the propriety of the decree in this respect, but the decree then decided that if the plaintiffs did not redeem on the day named, the equity of redemption should be sold, and after- deducting expenses of sale and costs, and the payment of the sum found to be due defendants, Holmes and Elliott, the remainder of the proceeds should be paid to plaintiffs. And this decree for a sale, on the contingency provided for, is the only point presented for our consideration. It is insisted, that the decree should have been for a strict foreclosure, if the money was not paid on the day named, and that the further decree for a sale of the land, or the equity of redemption, was wrong, no such decree having been asked by the defendant Elliott, the mortgagee. After some hesitation, we have concluded that the decree was right, except in ordering the equity of redemption to be sold, instead of the title.

A strict foreclosure, though common in some States, is a novelty in proceedings on mortgages here. The plaintiff may be unable to redeem, perhaps in consequence of the improvements, put by the mortgagee or the purchaser from him, oil the land, and for which they have been allowed by the court in this case; yet if the land and hnprovements will overpay the debt of the mortgagor and the' value of the improvements after deducting the rents and profits, the mortgagor or his heirs, are entitled to whatever surplus may result from a sale. If Elliott, the mortgagee, *352 had alone been interested, the decree might have properly ordered a foreclosure of plaintiff’s equity, on failure to pay the sum of money found to be due, since Elliott, the mortgagee, though a party defendant, and having still a claim against the land for a small part of the debt of plaintiffs, which the proceeds of the sale did not extinguish, did not in his answer ask to be secured by a sale of the land. But if the property is not redeemed, the mortgagee still holds his claim or debt against the mortgagor, and if the land will pay it he is entitled to be released from his personal liability. The improvements which the court allowed, and we think properly, were a mere lien on the land, and as the plaintiffs in order to redeem, had to pay for them, minus the rents and profits, their inability to do so, would not authorize a strict foreclosure of this equity of redemption. A sale would be necessary to ascertain whether the land would not, with its improvements, pay off the mortgage debt and the cost of improvements, and leave a surplus for the mortgagor. As the decree ordered a sale of the equity of redemption alone, it will be reversed, and the cause remanded.

The judgment should have been for a sale of the entire title. As the terms for redemption specified in the judgment have passed, the judgment may have to be altered iii other particulars, and therefore we remand the case.

Judgment reversed and cause remanded.

The other judges concur. Judge Vories not sitting; Judge Wagner absent.