April 3, 1934.
MORTGAGES: Redemption — Unallowable Extension of Period. A junior mortgagee who has foreclosed and received a sheriff's deed is not entitled to an order extending the time in which redemption may be made from a foreclosure sale under the senior mortgage (45 G.A., ch. 179), it appearing that both mortgagees were before the court, primarily, as creditors and lienholders, and not as debtors or owners.
Appeal from Chickasaw District Court. — T.H. GOHEEN, Judge.
This is a controversy between two mortgagees of the same property, — one mortgage being junior to the other. The plaintiff holds the senior mortgage, and the defendant the junior mortgage. The defendant first instituted foreclosure proceedings and first obtained a decree and an execution sale. He obtained a sheriff's deed on June 13, 1933. The plaintiff trailed the defendant in foreclosure proceeding and in obtaining decree and execution sale. Under its execution sale the plaintiff became entitled to a sheriff's deed on June 28, 1933. Each mortgagee bid at his own execution sale less than the amount of his judgment and thereby reserved a deficiency judgment. The judgment in favor of the second mortgagee was approximately $1,200 and that for the first mortgagee, was approximately $13,700. After obtaining his sheriff's deed on June 13, 1933, the defendant Collins Mortgage Company filed an application in the district court for an extension of the time of redemption from the sale under the senior mortgage. The application purported to be made under the terms of Chapter 179 of the laws of the 45th General Assembly. The district court denied the application. From such adverse ruling the applicant, the Collins Mortgage Company appealed. — Affirmed.
Penningroth Holmes, for appellant.
Don Barnes, E.H. Wadsworth, and Donald P. Barnes, for appellee.
The district court held that the applicant, Collins Mortgage Company, was not an owner of the land within the meaning of the cited legislation. Such is the sole question presented in the case. These two foreclosure proceedings have been pending in court in some form from November, 1931, up to the filing of this application on or about June 13, 1933. During all that period the mortgagors, William Kramer and Anna Kramer, were the owners of the property and in possession thereof. The legislation here invoked conferred a measure of discretion upon a court of equity in granting the relief therein provided. The undoubted objective of the legislation is to extend grace to the owner or debtor as between him and his creditor and to protect as far as possible the status quo between the parties and to defer for a brief time the debtor's ejection from the premises. The question of constitutionality of the legislation is not pressed upon us. We take the legislation therefore according to its terms. Prior to April 4, 1929, the defendant was the owner of both of these mortgages. It obtained them from the mortgagors. It transferred the senior mortgage to this plaintiff under representation that the security was worth double the face of the mortgage. This does not imply that the representation was knowingly false. On the contrary we deem it to have been made in good faith. The fact that neither mortgagee bid the full amount of his judgment at either sale and that each of them reserved a deficiency judgment, satisfies us that there is no margin of value left in the property and that the only possible function or purpose of an extension would be to enable the junior-mortgagee to increase his own security at the expense of a corresponding loss of security to the senior-mortgagee. The question of the right of a receiver to take possession during the year of redemption was pending without disposition thereof throughout the period of redemption. The two parties are before us primarily as creditors and lienholders and not as debtors or owners. Clearly there is less reason for granting the application of the defendant than there would have been for the granting of such an application to the debtor as against the defendant under the first execution sale. The debtors did not apply for an extension. They thereby waived whatever right they had. The defendant's theory is that it has succeeded to such right as an assignee. We think not. There was no assignment of it in fact by the debtors. They simply waived it. Whether a valid assignment could have been made, we need not now decide.
We think the district court properly denied the application. — Affirmed.
CLAUSSEN, C.J., and ALBERT, KINDIG, and DONEGAN, JJ., concur.