Atwater v. Manchester Savings Bank

12 L.R.A. 741, 48 N.W. 187, 45 Minn. 341, 1891 Minn. LEXIS 164
Supreme Court of Minnesota·Decided February 13, 1891·Published·Cited by 19 cases

Opinion

Mitchell, J.

In each of these cases the question involved is the right of the plaintiffs to redeem from a mortgage sale; and as both grow out of the same general state of facts, and are more or less connected with and dependent upon each other, they can be better considered'together. So far as material to explain the legal questions involved, the facts are these: A Mrs. Nell, who owned a 40-acre tract of land, but the title of which was then in litigation, (Nell v. Dayton, 43 Minn. 242, 45 N. W. Rep. 229,) in March, 1886, executed two mortgages, — one on the west half and the other on the east half of the tract. Default having been made in the conditions of these mortgages, they were both foreclosed, and the premises sold on December 14,1888. The time for redemption would of course expire December 14, 1889. On August 1, 1889, Mrs. Nell executed to Seagrave Smith the trust-deed, Exhibit A, upon the entire tract. On December 12, 1889, Atwater & Hill commenced an action against Mrs. Nell to recover a debt which they alleged she owed them for services as attorneys, and on the same day caused an attachment to be issued in the action, and levied on the whole tract. On December 14, 1889, Mrs. Nell confessed judgment in favor of plaintiff Reed for a debt due him for services performed and money expended for her as attorney. This judgment was docketed on the same day. On December 14, 1889, Atwater & Hill and Reed each filed notices of intention to redeem from both foreclosure sales, — Atwater & Hill under their attachment lien, and Reed under his judgment lien. Smith had never done anything with the land under the trust-deed, Exhibit A, nor did either he [343] or Mrs. Nell make any redemption. Within five days after the expiration of one year from the date of the sales, and on December 19th, Atwater & Hall did everything necessary to effect a redemption of the west half of the tract, but made no attempt to redeem the east half. Within five days thereafter, and on December 21st, Eeed did everything necessary to effect a redemption of the east half. But in both cases the sheriff who made the sales, and the defendant bank, which held the certificates of sale, refused to accept the money or to execute certificates of redemption. Hence these Suits to compel them to do so.

1. The first question that arises is whether, after the execution to Smith of Exhibit A, Mrs. Nell had remaining any interest or estate in the land upon which plaintiffs’ attachment and judgment were liens; for if not, then plaintiffs were not “creditors having a lien,” and had no right to redeem. Counsel have discussed at great length the questions whether Exhibit A was a trust or merely a power in trust, and, if the former, whether it was valid under the statute of uses and trusts. Under the view we have taken of the case, it becomes unnecessary to consider these questions. We shall assume that the instrument is all that defendants claim it to be, viz., a valid trust, — a conveyance of the land to Smith in trust' to pay certain charges upon it and to pay certain specified debts of the grantor. Defendants’ contention is that, as thus construed, it vested in Smith the whole estate in the land, so that'no title or interest remained in Mrs. Nell to which a lien could attach. That she had a residuary interest in the land cannot be questioned. The deed itself expressly provides that, “if there be more than sufficient to pay all of said claims in the manner as aforesaid, then the said trustee shall grant, convey, and set over to said Nell, her heirs, ” etc., “all of the rest and remainder of said property.” This is nothing more than the law would imply, for such a residuary interest necessarily arises in every case where property is assigned in trust to pay debts or to satisfy other specified objects. Had Mrs. Nell herself paid all the charges and debts specified in the deed of trust, the entire beneficial interest in the land would have been in her. Or if the trustee had accomplished all the purposes of the trust by executing mortgages, the land subject to the [344] mortgages would have been, hers. So if he had accomplished these purposes by selling only a part of the land, the residue would have been hers. In speaking of th e similar residuary interest of a bankrupt in real estate assigned to an assignee in bankruptcy, this court said that it may be classified under our statute (Gen. St. 1878, c. 45, §§ 12, 33) as a reversion, subject to be defeated by a sale by the assignee; that after the purposes of the trust are accomplished the residuum of the property would revert by operation of law without any reconveyance. King v. Remington, 36 Minn. 15, 32, (29 N. W. Rep. 352.) If this be so, then Mrs. Nell’s interest in the land was subject to the lien of an attachment or judgment, and to sale on execution, for, of course, a reversion in land is a legal estate.

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Atwater v. Manchester Savings Bank, 12 L.R.A. 741, 48 N.W. 187, 45 Minn. 341, 1891 Minn. LEXIS 164 (Mich. 1891).

12 L.R.A. 741 (Atwater v. Manchester Savings Bank) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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