Abbildungen der Seite

this kind of procedure provides ample means for redemption by the owner or mortgagor before sale; recognizing, however, and permitting the right of legislation upon the time in which a deed shall be given, and providing that during such time redemption may be made.

The rules of equity are so broad and ample, so extensive and far-reaching in their application, so complete in furnishing proper solutions of questions involving right and good conscience, that it is questionable whether the extension or enlargement of these rules is not more harmful than beneficial, whether the extension of the equity of redemption by statute does not work a hardship rather than a relief; and to this particular point it is my intention to devote the rest of this article.

The statutes of Washington, upon the subject of sale under foreclosure proceedings and redemption of real estate sold under special execution, appear to me to be radically wrong, inequitable and unjust. As has been already said, the purpose of such laws is to preserve as far as possible the equities of the mortgagor, and at the same time to provide a proper means for the collection of the debt secured. But the results of some years' experience show that neither of these purposes is satisfactorily accomplished.

It is the experience of almost every practicing attorney that in foreclosure cases he is compelled to purchase the mortgaged premises for his client. I have no recollection of a single instance coming under my own observation where property sold at sheriff's sale, under special execution, has been bought by others than the judgment creditor. This result proves that the object to be obtained by the equity rule, that the property shall be sold at a fair open sale, for its true value, has not been accomplished, but, on the other hand, is defeated. And why is it so? In my opinion it is because of the provisions of the statute of redemption. For illustration: a purchaser at sheriff's sale of real estate gets no title at the time of the confirmation of the sale nor until the statutory time for redemption

has expired. It is not, then, a purchase. He is not a purchaser. It is not a real sale. It is no more, in fact, than that the so-called purchaser agrees to pay the mortgagor's debt, or a part of it, and holds the land for one year in pledge, or rather, upon conditional sale, for the re-payment to him of the sum so loaned or advanced; the very thing that equity of old so fiercely objected to, as unfair and inequitable to the debtor. Few people want to invest money in this way. It is not considered a good loan, as no time is fixed for re-payment. The defendant, or someone else, having the right to redeem, may do so in a week or a month or at any time before the expiration of the year. People who have money to loan do not want to loan it unless for a time certain; so there are no bidders, and the property is struck off at perhaps one-half, or less than onehalf, its actual value. And under the further provisions of our laws perhaps a deficiency judgment is entered, and the judgment debtor, often forced into bankruptcy, is disheartened and discouraged. How many instances of this kind can you recall? I venture to say there is not a person within the sound of my voice to-day who has not seen a number of them. Again: the purchaser at sheriff's sale is entitled to the possession of the property, but the law is silent as to whether, in case of redemption, the party redeeming shall be entitled to credit for rent of the premises. The party redeeming must pay the purchase money, with interest, and whether he shall be allowed to offset any part of it by the rental value of the premises remains to be determined by the courts. Ihave, at this time, a case pending where a mortgage for $850.00 was made upon certain vacant lots upon which the mortgagor afterward erected a Twelve Thousand Dollar saw-mill, executing other mortgages on the property. The holder of the first mortgage foreclosed and bought in the property for his mortgage debt, about $1,200.00, including costs, etc. He immediately took possession of the mill and continued to run and operate it. The creditor, after the purchaser had run the mill about ten months, demanded its possession, claiming

that the rental value of the mill had fully paid the purchase and that the property had thereby been redeemed. The demand was refused and the purchaser is still in possession of the mill. I have brought suit for its recovery, claiming that the reasonable value of the rent has fully redeemed it. Can any one present tell me what the result will be? No, we can only guess. We may say the equity of the case is so and so, but that is all we can do. Ought this to be so? Is not the law faulty and wrong that compels one to guess upon a question of so great importance as this? In the states of Pennsylvania, Ohio, New York, New Jersey and many others there is no redemption after sale. No sale can be had until the debt if a mortgage, is one year past due, in the most of them. The result in those states is that a sheriff's sale of real estate is usually attended by a large number of people and many bids are made, and the property is usually sold for its fair cash value. In our own state, personal property, sold under execution or foreclosure of chattel mortgages, is without redemption; and our experience is that a sheriff's sale of this kind is usually attended by a number of bidders and the property is sold for its fair value. I have foreclosed a great many mortgages on real property and have, without a single exception, been compelled to purchase the property, or bid it in, as we say, for my clients I have foreclosed a great many chattel mortgages and I have no recollection of a single instance in which I have been compelled to buy in the property, and but few instances in which the property did not sell for at least a fair price. These experiences lead me to believe that the right of redemption, after sale, does not benefit any one, and fails to accomplish its purpose.

I am not willing to return to the old common law doctrine, that a mortgage is a dead pledge, the title passing upon failure to pay at the time stipulated with foreclosure by ejectment proceedings. I want to enlarge rather than to decrease the right of redemption; to broaden the equity, not to curtail it.

The statutory right to a deficiency judgment is another inequitable right that should be removed from our statutes, or, if it is to remain at all, there should be thrown around it some safeguard, in the approval or confirmation of sales, that would insure some protection. I have not the time now to point out the many evils of this law. They are well understood by the practicing attorney. I will, however, refer to one case that occurred in Pierce County. In 1889, a person living in Puyallup was the owner of real estate valued at about Fifty Thousand Dollars. Twentyfive years before that time he had settled on this land and the town had built up around him. He purchased, in 1889, a lot for Five Thousand Dollars, paying down One Thousand Dollars, and securing the balance by mortgage on the lot. This mortgage has since been foreclosed, the lot sold at sheriff's sale for Five Hundred Dollars, a deficiency judgment entered for the balance upon which general execution was issued and all of the defendant's other real estate sold. Pending certain motions and hearings to set aside the sale, the one year expired, and no injunction having been sued out, a sheriff's deed has been given, and today the debtor appears to be without remedy. Here we have an instance of one man with a town lot, aided by the law, becoming not only the owner of the lot, but of Fifty Thousand Dollars of other property and One Thousand Dollars in cash. You may say it is not the fault of the law so much as the negligence of the debtor and his attorney. You may point out where he could have protected himself, but the fact still remains that it has been done; and I say a law that will permit or make it possible to do so great a wrong as this is inequitable, unjust and radically wrong. I would then propose,

FIRST: Retaining the present law. providing that a judgment shall be a lien on real estate, subject to the statute of exemptions and limitations.

SECOND: That a judgment and decree of foreclosure of mortgage shall be a special and preferred lien upon the

real estate described in the decree; the property to be sold under a special execution.

THIRD: That no sale of real estate under execution, special or general, shall be had until one year shall have elapsed from the date of the entry of the judgment or de


FOURTH: That the mortgagee shall have the right to take judgment on his note or to foreclose his mortgage, as he may elect.

FIFTH: That there be no deficiency judgment, but that the mortgagee, if he shall resort to his mortgage, shall be concluded from any other property.

SIXTH: That there shall be no redemption after sale under execution.

SEVENTH: That the purchaser shall, at the time of confirmation of sale, be entitled to the sheriff's deed, vesting in him title free from any claim of defendant, and shall be entitled to the actual possession of the property within sixty days thereafter.

I believe these suggested changes would be beneficial to all parties concerned. The result would be to make less costs, provide for redemption without the added costs of sale, provide for competition at sale and cause property to sell at its fair value, be more equitable in its application, lessen the work of the Court, the Clerk and the lawyer, simplify proceedings, and be more satisfactory in every way.

« ZurückWeiter »