Opinion
Sac. No. 1026.
March 18, 1904.
APPEAL from a judgment of the Superior Court of San Joaquin County. Edward I. Jones, Judge.
The facts are stated in the opinion of the court.
C.H. Fairall, for J.T. Summerville, Appellant.
Joshua B. Webster, for R.J. Graf, Appellant.
J.F. Ramage, for C.D. Benjamin, Appellant.
Nicoll, Orr Nutter, for J.D. Stevinson et al., Respondents.
Alexander D. Keyes, for Humboldt Savings and Loan Society, Respondent.
Jacobs Flack, for Silas March et al., Respondents.
The plaintiff and the defendants Graf and Benjamin respectively and separately appeal from the judgment in favor of defendants Stevinson and Humboldt Savings and Loan Society, the appeal being based upon the judgment-roll alone. The complaint is in the ordinary form of an action to determine and quiet title to certain lands embracing about five hundred acres. The defendant Stevinson answered, claiming title in himself and asking a decree accordingly. The defendants Benjamin and Graf each separately filed a cross-complaint setting up certain interests in the land, and asking that their respective titles thereto be quieted. Numerous questions are discussed in the briefs, but in view of the conclusion we have reached upon the principal question, which is determinative of the case, we do not deem it necessary to discuss the others.
The court below gave judgment that defendant Stevinson was the owner of the land in fee simple, and that he and the defendant Humboldt Savings and Loan Society recover their costs of the appellants herein. Stevinson's claim is based on a sheriff's sale made on a decree of foreclosure in an action brought by the Humboldt Savings and Loan Society against Elizabeth Ann March and others in the superior court of San Joaquin County. That action was begun on October 7, 1893, against the mortgagors alone, and a notice of the pendency of the action was filed in the recorder's office of said county on the same day. On the 11th of October, 1893, the mortgagors, who were then the owners of the land, subject to the foreclosure proceeding, executed a deed conveying to one George B. Sperry, a defendant herein, a certain parcel of the mortgaged land containing about one hundred acres. This deed was recorded on October 12, 1893, and Sperry immediately took possession of the land so conveyed to him, and continued to occupy and possess the same until the time of the foreclosure sale. The appellants each claim rights in the land based on execution sales upon judgments rendered against one or more of the mortgagors subsequently to the execution of the deed to Sperry and prior to the foreclosure sale. The plaintiff in his complaint does not mention this foreclosure sale. The cross-complaints of the defendants Graf and Benjamin are bills in equity, seeking to set aside the sale upon the sole ground that the same was not conducted in the manner directed in the decree of foreclosure. The mortgage upon which the decree was based provided that, in the event of foreclosure, the premises, at the option of the mortgagee, might be sold in several parcels, or as a whole in one parcel. The decree of foreclosure, which was entered upon December 13, 1894, directed that the premises be sold "in one parcel as a whole and as one farm." The sale did not take place until November 27, 1899. The plaintiff in the foreclosure suit and several of the mortgagors, and also said Sperry, were present at the sale. Sperry and the mortgagors present requested the sheriff to offer the land in separate parcels, first offering the portion of the property not conveyed to Sperry by the deed above mentioned. The plaintiff consented to this, and thereupon, in pursuance of this agreement, the sheriff first offered the property remaining to the mortgagors after the conveyance to Sperry, whereupon Sperry bid therefor the sum of $16,722, which was $80.50 in excess of the amount necessary to pay the mortgage debt, interest, and costs. The court finds that the sum bid by Sperry was a fair and reasonable price for the premises sold to him, and that the premises so sold to him were not then of any greater value than the sum bid. Thereafter the sheriff's deed was made in pursuance of the sale to Sperry, and the defendant Stevinson has since acquired all the interest of Sperry under the foreclosure sale, and also his title to the one hundred acres previously purchased by him from the mortgagors. It is not claimed by the appellants that there was any fraudulent or unfair practices in connection with the foreclosure sale. The sole objection to the validity of the sale is, that the sheriff disobeyed the directions contained in the decree that the premises be sold as a whole and as one farm. It is contended that the appellants, having succeeded to the interests of some of the mortgagors, had a right to have the sale made in strict accordance with the directions in the decree, and that they were prejudiced by the sale as made, because, if the whole of the property had been sold, there would have been a larger surplus to divide among those interested therein, in which case they claim that they would have been entitled to a larger sum of money than they will receive under the sale as made.
This contention is based chiefly on the theory that they would have been entitled to some portion of the proceeds of the land sold to Sperry in case that tract had been included in the foreclosure sale. This, however, is a misconception of their rights in the premises. Under section 2899 of the Civil Code the rule is, that where a mortgagor has sold a portion of the mortgaged land, the mortgage must be enforced first against the unsold portion of the mortgaged premises before resort can be had to the portion sold. Sperry, it is true, did not appear in the foreclosure suit and ask that the decree preserve his rights in this respect. This right of the purchaser of a portion of the mortgaged premises is, however, not entirely lost to him by his failure to seek or obtain the relief in the action in which the mortgage is foreclosed. The only effect of such failure is, that the right is transferred to any surplus that may arise upon the foreclosure sale. Therefore, if the entire mortgaged premises had been sold at the foreclosure sale, in the division of the surplus Sperry would have been entitled to the whole of it if the same had been necessary to make up his proportion of the purchase price. Upon the coming in of the sheriff's return of the foreclosure sale he could have appeared and had his right determined. The appellants here would have no right whatever to such portion of the surplus as Sperry's land represented in the purchase price. The sale of the whole of the premises in one parcel would therefore not increase the amount of the surplus to which they would be entitled, and they are in no respect damaged by the failure to sell Sperry's land with the other tract.
The only ground upon which they could claim that they were prejudiced would be upon the theory that, if the whole tract had been sold together, it would have brought more as a whole than it did upon the parcels being sold separately, and that the surplus to which they would have been entitled would have been somewhat increased. It is well settled that inadequacy of price alone is not a sufficient ground for setting aside a foreclosure sale. (Central Pacific R.R. Co. v. Creed, 70 Cal. 501; Smith v. Randall, 6 Cal. 47; Connick v. Hill, 127 Cal. 165; Humboldt etc. Society v. March, 136 Cal. 321; Anglo-Californian Bank v. Cerf, ante, p. 303; Freeman on Executions, secs. 308, 309-315; Kleber on Void Judicial Sales, sec. 355, 356, 357.) But even this ground is taken away by the finding of the court that the property sold to Sperry by the sheriff was not worth, at the time, more than he bid therefor, and the further finding that the entire mortgaged premises were not at that time worth more than twenty-two thousand dollars. A court will not entertain proceedings to set aside a foreclosure sale, although irregular, upon the sole ground, not that the price is inadequate, but that possibly, if it had been sold in a different manner, it might by some fortuitous circumstance have brought more than its actual value. There is no claim made that there was any peculiarity in the situation of the two parcels, with respect to each other, of such character that their value, when taken together, would exceed the sum of the Values of each as a separate farm. The circumstances indicate the contrary, and the court finds that the manner of selling the premises in two parcels did not cause it to sell for less than it otherwise would have brought. If there was anything that would make the premises as a whole more valuable than when separated into two parcels, it was incumbent on the appellants to allege and prove it. An irregular sale will not be set aside unless it is shown either from the nature of the irregularity itself or from extrinsic facts that injury was caused thereby. (Humboldt etc. Society v. March, 136 Cal. 321.) If a sale had been made of the whole tract, and its full value, as found by the court, realized, the difference between the value of this tract, as found by the court, and the value of the whole tract would have belonged to Sperry, and not to these appellants. Sperry, having been the first purchaser, had the first right, and, if he had allowed his land to be sold with the other, he would have been entitled upon a division of the surplus to the entire amount which the court should find represented the proceeds of his part of the property. The court did not err in refusing to set aside the sale. The sale being valid, it is immaterial what rights the appellants may have acquired from the mortgagors. They were all subject to the decree of foreclosure and to the rights of Sperry, and were extinguished by the foreclosure sale and the deed subsequently executed thereunder.
65 Am. Dec. 475.
There was no error in rendering judgment in favor of Stevinson and Humboldt Savings and Loan Society against the appellants for costs. Humboldt Savings and Loan Society disclaimed any interest in the premises, and filed its disclaimer before the cross-complaints of the appealing defendants were filed. So far as the plaintiff is concerned, its disclaimer prevented the plaintiff from recovering costs against it. Its costs against the plaintiff could not exceed the amount necessary to enable it to file its disclaimer. Conceding this to be error, it would be for a sum too trifling to justify this court in modifying the judgment. As to the other appellants, by their cross-complaints they made it necessary for the corporation-defendant to continue its appearance in court, and, whatever costs it was thus compelled to incur, it is clearly entitled to recover against the parties who unjustly brought it into court. It will not be seriously contended that Stevinson was not entitled to his costs against all the parties.
The judgment is affirmed.
Angellotti, J., and Van Dyke, J., concurred.
Hearing in Bank denied.