Alexander v. Otis.Greenwood

California Supreme Court Jul 1, 1864Published

Before: Rhodes

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Holding. A judgment creditor who was not made a party to a foreclosure suit is not bound by the decree and retains the right to sell the debtor's equity of redemption under execution. Consequently, a court cannot perpetually enjoin such a creditor from selling the debtor's interest in the property.

Issues

Whether a judgment creditor who was not a party to a foreclosure suit is bound by the resulting decree.
Whether a judgment creditor may be enjoined from selling a debtor's interest in property subject to a prior mortgage foreclosure.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“He was not a party to the foreclosure suit, and his rights are not affected by the decree in that case, for a decree of foreclosure is conclusive only upon the rights of the parties who are before the Court.”

“Greenwood’s right of sale of the equity of redemption of Daubenspeck still subsisted, notwithstanding the decree of foreclosure, and the sale and conveyance under it.”

Synopsis

Mortgagee—Subsequent Lienholders.—The mortgagee of real estate cannot, by virtue of the lien of his mortgage alone, cut off the judgment creditors of the mortgagor who have, by virtue of their judgments, acquired a lien on the mortgaged property subsequent to the mortgage, from all recourse upon the mortgaged property.

Foreclosure of Mortgage—Parties to.—A judgment creditor whose judgment lien is subject to the lien of a prior mortgage is not concluded nor are his rights affected by a decree of foreclosure of the mortgage unless he was a party thereto.

Sale of Mortgaged Property by Judgment Creditor—Effect of.—After the execution of a mortgage upon real estate, a judgment was rendered against the mortgagor, which became a lien upon the mortgaged property; the mortgagee then foreclosed the mortgage, making the mortgagor alone a party defendant, had the mortgaged property sold under the decree, became the purchaser, and obtained a Sheriff's deed; afterwards, the judgment creditor procured an execution upon his judgment, and had the property advertised for sale; the holder of the title under the Sheriff's deed filed a bill in equity to enjoin the sale; held, that he was not entitled to an injunction, and that the judgment creditor had a right to sell any interest in the land held by the judgment debtor at the rendition of the judgment or levy of the execution. Held, further, that the judgment creditor’s equitable right of redemption not having been cut off by the foreclosure, he might, during the two years that his judgment was a lien upon the premises, sell under an execution, and purchase the legal title of the mortgagor, not only that he might assert his right of redemption at any time within the period allowed by the Statute of Limitations, but, also, that he might realize any other benefit or advantage that might accrue to him from the sale.

By the Court, Rhodes, J. This action was brought to restrain the defendants—the one being a judgment plaintiff and the other the Sheriff—from selling certain real estate under an execution issued upon the judgment. A decree was entered perpetually enjoining the sale of the premises under the execution already issued, or any that might be issued upon that j udgment. • The appeal is taken from the final decree alone. The record does not contain the evidence in the cause nor the findings of the Court. The question presented for consideration is, whether the facts stated in the complaint are sufficient to entitle the plaintiffs to the decree as rendered by the Court below.

The plaintiffs allege that Daubenspeck, Sturman, and Fulton, being the owners of a certain ranch, on the 19th day of November, 1859, mortgaged it to Winne for two thousand five hundred dollars, with interest at two per cent per month, payable in six months after said date, and that on that day the mortgage was recorded, etc.; “ That said amount not being paid according to contract, said Winne commenced suit for the recovery thereof and foreclosure of said mortgage against said parties in this Court, and on the 23d day of November, I860, recovered judgment therein for the sum of three thousand one hundred and seventeen dollars and thirty-three cents,” and interest and costs, with a decree for the sale of the mortgaged premises; that under an order of sale issued upon said decree, the premises were sold by the Sheriff to Winne on the 29th day of December, 1860; that on the 11th of July, 1861, the [510]premises, not having been redeemed, were conveyed by the Sheriff to Winne; and that by mesne conveyance the title so conveyed to Winne vested in the plaintiffs. They also allege that on the 19th of November, I860, defendant Greenwood recovered judgment in said Court against Daubenspeck for four hundred and eighty-three dollars and ninety-five cents, upon which an execution was issued, and the Sheriff levied the same upon the premises, and under it advertised the premises for sale on the 8th of November, 1862. Other facts are alleged respecting certain contracts and conveyances not necessary to be noticed here.

The complaint does not state when the action was commenced by Winne to foreclose the mortgage, and it will be presumed that it was commenced some time before the rendition of the decree of foreclosure, but not ten days, nor any other certain time, for the decree could, under certain circumstances, have been properly rendered immediately after the filing of the complaint. It is not directly nor inferentially stated in the complaint that Greenwood’s judgment was rendered after the commencement of the action of foreclosure. The averments ujoon this point are entirely consistent with the existence of the Greenwood judgment before and at the commencement of the suit by Winne. The plaintiffs have not negatived this state of facts, but as their allegations are to be most strongly construed against them, they will be considered as having averred that the Greenwood judgment was, in fact, entered before the commencement of the foreclosure suit.

Alexander v. Otis.Greenwood

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