Seelye v. North Pacific Mortgage Co.

65 P.2d 218, 189 Wash. 297, 1937 Wash. LEXIS 483

• Court: Washington Supreme Court
• Decided: February 18, 1937
• Docket: No. 26276. En Banc.
• Status: Published

Opinions

Tolman, J.

Tonasket-Okanogan Orchards, Inc., a corporation (hereinafter called the orchards company), the owner of certain improved orchard land in Okanogan county, executed and delivered a mortgage on it to the North Pacific Mortgage Company, a corporation. Thereafter, the orchards company became insolvent, and, in an action brought by one of its creditors, a general receiver was appointed for it by the superior court for Okanogan county. The receivership continued for several years, during which time the receiver had charge of, and operated, the orchard. A number of creditors presented claims, which were allowed and approved by the receiver and the superior court and filed in the cause. One of such creditor’s claims was in favor of the Hans Lund estate, of which Arthur Lund, Hugo Lund, and Soren Petersen were executors.

After the receiver took charge of the property, the North Pacific Mortgage Company foreclosed its mortgage, making the receiver and others parties defendant in the action. A decree of foreclosure was entered and the property sold, in May, 1934, at sheriff’s sale, to the mortgage company, to whom the sheriff delivered a certificate of sale. Thereupon, about the first of March, 1935, the mortgage company, purchaser at the sheriff’s sale, entered into, an executory real estate contract with Morton O. Seelye, the plaintiff in the present action, by which it agreed to sell, and he agreed to buy, the real property. Seelye, without objection on the part of anyone, entered into possession of the property, purchased the greater portion of the personal property and equipment that the receiver had used on the prem ises, and spent a very considerable amount of money in caring for, and improving, the orchard property.

It may be here mentioned that, during the year 1935, the receivership was closed, including the sale of a small amount yet remaining of the assets of the estate, the proceeds of which were applied pro rata in partial payment of a large number of creditor’s claims, including the claim of the Lund estate. No attempt was made in the receivership to inventory or sell any right of redemption from the sheriff’s sale of the real property.

Whether important here or not, it may be also mentioned that, two or three days before the expiration of the statutory period for redemption, the mortgage company, purchaser at the sheriff’s sale, assigned the sheriff’s certificate of sale to Henry. Petersen, and assigned to him at the same time its rights under the Seelye executory real estate contract; the existence of which contract and the fact that Seelye under the contract had taken actual possession of the premises were well known to Henry Petersen and the executors of the Hans Lund estate.

The executors of the Lund estate gave the sheriff written notice of intention to redeem the property from the foreclosure sale. Thereupon, Seelye instituted the present action, naming the North Pacific Mortgage Company, a corporation, Arthur Lund, Hugo Lund, and' Soren Petersen, executors of the Hans Lund estate, Henry Peterson, and E. B. Hilderbrand, sheriff of Okanogan county, as defendants, objecting to the proposed redemption.

All of the defendants appeared in the action, the trial of which resulted in a judgment that the executors of the Hans Lund estate were entitled to redeem and were entitled to a sheriff’s deed accordingly.

Plaintiff Seelye has appealed.

The' ultimate and controlling question is a narrow one, and must be determined by tbe terms of tbe statute upon the subject of redemption from sale.

Bern. Bev. Stab, §594 [P. O. §7909], provides tbat property subject to redemption may be redeemed by tbe following persons or their successors in interest:

“1. Tbe judgment debtor or bis successors in interest, . . .

“2. A creditor having a lien by judgment, decree or mortgage, on any portion of tbe property, or any portion of any part thereof, separately sold, subsequent in time to tbat on which tbe property was sold. Tbe persons mentioned in subdivision two of this section are termed redemptioners. ’ ’

Subdivision (1) of tbe section clearly is not applicable. Tbe executors of tbe Lund estate were not judgment debtors, nor successors in interest of tbe judgment debtor.

Nor are tbe executors entitled to tbe right of redemption under subd. (2) of tbe section. Here, tbe executors or the estate they represent bad no lien by judgment, decree or mortgage upon tbe property or any of it sought to be redeemed. Tbe only thing they bad was tbe allowance and approval of an unsecured creditor’s claim in tbe receivership proceedings. Tbe order allowing tbe claim did not declare or adjudge tbat tbe amount should be a lien upon any or all of tbe property of tbe insolvent estate; nor tbat tbe amount of tbe claim thus allowed should be a judgment at all so tbat, by tbe filing of it, the same would become a lien upon real property of tbe debtor in tbat county. Tbe order bad no other or further effect than to make tbe claim an approved one, to be paid in tbe due course of tbe settlement of tbe insolvent estate.

Judgment reversed, and tbe cause remanded with directions to enter judgment for tbe appellant.

Steinert, C. J., Main, Beals, Millard, Blake, Geraghty, and Bobinson, JJ., concur.