Kerr v. McCreary

120 N.W. 1117, 84 Neb. 315, 1909 Neb. LEXIS 197
CourtNebraska Supreme Court
DecidedApril 24, 1909
DocketNo. 15,466
StatusPublished
Cited by13 cases

This text of 120 N.W. 1117 (Kerr v. McCreary) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kerr v. McCreary, 120 N.W. 1117, 84 Neb. 315, 1909 Neb. LEXIS 197 (Neb. 1909).

Opinions

Calkins, C.

In the year 1888 William Kerr, since deceased, being the owner of the land in controversy, two lots in the city of Hastings, conveyed thé same to the defendant Willis P. McCueary, receiving therefor $1,500 of the purchase price in cash, and a mortgage signed by McCreary alone upon the same property to secure the remainder, $2,500. McCreary conveyed the property to one Stevens, and he conveyed to McCreary’s wife, the defendant Mary B. McCreary. Her deed was recorded September 27, 1890. Default having been made in the payment of a part of the debt, the mortgagee on October 16, 1891, instituted an action in foreclosure against McCreary, prosecuting the same to judicial sale, at which the mortgagee was the purchaser. He secured an order of confirmation in which the sheriff was directed to execute to him a deed .of the premises. A deficiency judgment was also obtained against the mortgagor, which was afterwards satisfied and released of record. In the petition for foreclosure, Mary B. McCreary was named in the title of the case as a defendant. Throughout the proceeding no other reference was made to her, and no relief was asked as against her. She was not served with summons, nor did she enter her appearance. This action was instituted by the plaintiffs, who are William Kerr’s grantees, in which they allege that the sheriff’s deed was duly executed and delivered, and that it was never recorded and has been lost. The plaintiffs further allege that they and their grantor entered into the possession of the property in March, 1893, the date of the confirmation, and that they have continuously thereafter remained in the open, notorious and adverse possession of the same under a claim of title. Plaintiffs prayed that the court decree them to be the owners of said property, and that the claim of defendants and each of them shall be removed, canceled and held for naught. The defendants filed separate answers, but we need to consider only that of Mary B. McCreary, who [317]*317alleged the facts above set forth regarding the foreclosure proceedings, and the obtaining by the plaintiffs of the title which was obtained by their grantor in the foreclosure proceedings.

Plaintiffs contend that the purchaser at a judicial sale receives whatever title the mortgagor possessed at the time the mortgage was given; that the purchaser upon confirmation was entitled to possession even as against the mortgagor’s grantee, who was not made a party; and, further, by her deed from the mortgagor, Mary B. Mc-Creary obtained only the equity of redemption, that is, the interest remaining after the incumbrance has been paid, and that her only right now, or at any time, has been to redeem from the mortgage; that, notwithstanding the fact that she was not made a party in the foreclosure proceeding, that proceeding is not void as to her; and that the title passed to the purchaser and to his grantees subject only to the rights of Mary B. McCreary to redeem. The contention has support in the decisions of many courts in jurisdictions presumably where a mortgage is held to convey the iegal title. Such a rule is probably applicable also where one interested in the title and having the right to possession is properly made a defendant in the foreclosure proceedings, whereby upon foreclosure the purchaser acquires the right to possession. In such cases a subsequent lienor or perhaps the mortgagor’s grantee has only a right to redeem.

Section 853 of the code provides that the sheriff’s deed, conveying property upon foreclosure, “shall vest in the purchaser the same estate that would have vested in the mortgagee if the equity of redemption had been foreclosed, and no other or greater; and such deeds shall be as valid as if executed by the mortgagor and mortgagee and shall be an entire bar against each of them, and all parties to the suit in which the decree for such sale was made, and against their heirs respectively, and all persons claiming under such heirs.” The decisions of this court firmly establish that in foreclosure proceedings the pur[318]*318chaser at a judicial sale upon foreclosure of a mortgage acquires the title of all parties to the action, and nothing more. In Dodge v. Omaha & S. W. R. Co., 20 Neb. 276, it is said: “And we take it to be equally well settled that the rights of all persons not parties are wholly unaffected thereby (meaning by the judicial sale). Therefore the foreclosure of the mortgage, terminating in the sale, could Only affect the rights of the parties to the action. The purchase of the property by plaintiff was only the purchase of the title of the mortgagor at the time of the execution of the mortgage, and his right to redeem, leaving unaffected the after-acquired rights of the defendant.” The defendant had not been made a party to the foreclosure. It seems to the author that the phrase “at the time of the execution of the mortgage,” appearing above, as explanatory to the title acquired by the purchaser, was inadvisedly used. Such language is proper when used with reference to title superior to that of the mortgagor at the time of the execution of the mortgage, or where the mortgagor did not own all the title to the land mortgaged. It is apparent from the decision in Dodge v. Omaha & S. W. R. Co., supra, that the purchaser did not acquire all the title owned by the mortgagor at the execution of the mortgage, as the after-acquired rights of the railroad company remained unaffected.

In Monroe v. Hanson, 47 Neb.30, it is said: “It is the general rule that no person can be affected by any judicial proceedings to which he is not a party, and a judgment takes effect only between the parties and gives no rights to or against third persons. * * * So a foreclosure is only effectual against those interested in the title who were parties.” The case last cited was a foreclosure of a mechanic’s lien, but under our statute the rights of interested parties and the necessity of making all interested parties defendants are the same in the foreclosure of mortgages. See, also, Green v. Sanford, 34 Neb. 363. In Eayrs v. Nason, 54 Neb. 143, it was said: “Appellant’s father was the owner of the legal title to the land upon [319]*319•which the mortgage foreclosed in that suit was a lien, and was therefore a proper and a necessary party to that suit.” The appellant as her father’s heir was entitled to redeem and have the title quieted in her, because her father was not made a party to the foreclosure proceeding, which was held void as to him. We have recently held that a decree affecting the title to real estate is absolutely void as to an interested party not served with process. Payne v. Anderson, 80 Neb. 216; Wagner v. Lincoln County, 80 Neb. 473. In Hayes County v. Wileman, 82 Neb. 662, we said: “The owner of the equity of redemption is an indispensable party to the foreclosure of a tax or other lien. Alexander v. Thacker, 30 Neb. 614.”

We quite agree with the plaintiffs that by her deed, so far as the mortgagee was concerned, Mrs. McCreary acquired only an equity of redemption. In other words, she obtained the title which her grantor possessed. But this carried with it all rights incident to such title. She therefore had the right to pay the mortgage, and that right continues until it is either exercised or barred. The only way to bar that right, except by her voluntary act, is a foreclosure of the mortgage by proceedings wherein she is a party. At the time she received her deed and continuously thereafter she had the right to possession. The foreclosure proceedings did not deprive her of this right.

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Cite This Page — Counsel Stack

Bluebook (online)
120 N.W. 1117, 84 Neb. 315, 1909 Neb. LEXIS 197, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kerr-v-mccreary-neb-1909.