Sooner Federal Savings & Loan Ass'n v. Oklahoma Central Credit Union

ALMA WILSON, Justice,

dissenting:

On September 2, 1980, Oklahoma Central Credit Union (hereinafter “the Credit Union”) filed suit to foreclose against Charles and Doris Bailey. Also named as defendant was Sooner Federal Savings & Loan Association (hereinafter “Sooner”). The petition averred that Sooner was the owner of a first and prior mortgage and that the Credit Union sought foreclosure of its mortgage indebtedness subject to the mortgage of Sooner. The Credit Union received a judgment against the Baileys and became record holder of title to the property at issue by purchase at sheriffs sale.

On February 15, 1985, Sooner filed its foreclosure action against the Baileys, pri- or mortgagors from whom the Baileys had assumed, the Credit Union, Board of County Commissioners, and the Treasurer of Tulsa County. The action proceeded to a judgment in favor of Sooner. That June 10, 1985, judgment stated:

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED by the Court that the Plaintiff, Sooner Federal Savings and Loan Association, a corporation, have and recover judgment in rem against the Defendants, Charles E. Bailey, Doris R. Bailey, Hoshall E. Thomas, Oleta I. Thomas, and Oklahoma Central Credit Union for the sum of $43,127.24, with interest thereon at 9% per annum from September 1, 1984, until paid, $4,312.00 attorney fees, $405.00 abstracting, $40.00 for maintenance, $60.99 for mortgage cancellation insurance, $58.00 for hazard insurance, and $460.00 for 1984 ad valorem taxes, together with all costs of this action, for all of which let execution issue.

At the subsequent sheriffs sale, a third party, Mickey Leslie, purchased the property for $10,000. The Credit Union filed a motion on the same day to set aside the sheriffs sale. In the trial court’s order of December 19, 1985, the court refused to confirm the sale and found:

that the parties have stipulated that the subject foreclosure sale of July 23, 1985, was regular and proper in all respects and complied with Oklahoma law with respect to such foreclosure sales. Further, the Court finds that the parties have stipulated that the proposed redemption by Oklahoma Central Credit Union (hereinafter “Union”) is in accordance with an oral agreement between Union and Sooner Federal Savings and Loan Association (hereinafter “Sooner”) that upon the setting aside of the subject Sheriffs Sale, that Union will convey by Quit-Claim Deed to Sooner, any and all of Union’s right, title and interest in and to the subject real estate and that in consideration thereof, Sooner has agreed to accept such conveyance as full satisfaction of the debt owed to it by Union and to release the judgment of Sooner against Union.

The third party, Mickey Leslie, appealed that order.

I.

A successful bidder at a sheriff’s sale acquires equitable title and certain other inchoate rights of ownership in the property put to bid. Atlantic Richfield Co. v. State, 659 P.2d 930, 933 (Okla.1983). That purchaser, or his assignee, acquires such an interest in the property as to entitle him to “make a motion” for judicial confirmation of the sale. Payne v. Long-Bell Lumber Co., 9 Okl. 683, 60 P. 235, 236 (1900). The sale must be confirmed by a court of competent jurisdiction to perfect the inchoate and equitable title acquired by the purchaser. Harris v. Stevens, 84 Okl. 196, 202 P. 1024, 1026 (1921). Until this is accomplished, the imperfect title of the purchaser remains conditional. Payne, 60 P. at 237. Filing a motion to confirm does not perfect the title. The ratification of the sale by the court accomplishes that result.

The appellant proposes that a trial court is without any authority to deny a motion to confirm a sale unless statutory or technical error is' involved in the sale. He cites Payne and Harris to support his proposition. Those cases do not limit a trial court’s authority to verifying that the correct procedural steps were taken. Although a judgment debtor has no absolute right to redeem after a sheriff’s sale of *533mortgaged property, the trial court may consider extrinsic circumstances of equity and refuse to confirm the sale. Payne, 60 P. at 239. The statutes governing the sheriffs sale are applicable to the procedure followed by the officer conducting the sale. They do not limit the power of the court in refusing to confirm or in setting aside a sale where equitable circumstances so direct. Hays v. Burton, 321 P.2d 701 (Okla.1958). Insofar as Payne and Harris may be misconstrued to impermissibly limit the equity power of a trial court in refusing to confirm or in setting aside a sale, those decisions have been implicitly overruled in the majority opinion. I would explicitly overrule these two cases.

II.

One who holds a lien inferior to another on the same property has a right to redeem the property in the same manner as its owner might from the superior lien. 42 O.S.1981, § 19. Clearly the Credit Union had the right to redeem the property. The appellant contends that the trial court erred in permitting the Credit Union to exercise this right of redemption because the Credit Union had previously attempted to disclaim interest in the property. The basis of the appellant’s contention of error is without merit because the trial court did not effectuate the disclaimer. Subsequent to the filing of the disclaimer, and in the absence of the Credit Union, the trial court entered judgment on the mortgage against the Credit Union, along with the Baileys and the Thomases, in the amount of $43,-127.24, plus interest, attorneys’ fees and costs. The interest of the Credit Union was thereby judicially determined to be that of a judgment debtor as to the mortgaged property securing the lien, contrary to the Credit Union’s unsuccessful attempt to disclaim any interest in the property. In effect, the trial court rendered the Credit Union’s attempted disclaimer a nullity.

III.

Finally, the appellant contends that the Credit Union did not redeem as required by statute. With this allegation the majority agrees. It holds that the transfer from the Credit Union to Sooner was without consideration and therefore was an ineffective attempt at redemption of the property. It holds that an ineffective attempt at redemption does not defeat the rights of a purchaser at a sheriff’s sale. However, the very document from which this appeal is based states that the parties stipulated that the transfer was made with consideration. Stipulations bind parties at the appellate level. Elliott v. Hunt, 197 Okl. 464, 172 P.2d 804 (1946); Grand River Dam Authority v. Thompson, 187 Okl. 129, 101 P.2d 843 (1940); St. George State Bank of St. George, Kansas v. Marshall, 186 Okl. 500, 100 P.2d 432 (1940); State ex rel. Oklahoma Tax Commission v. Fugatt, 184 Okl. 162, 86 P.2d 338 (1939); Morton v. Central Nat’l Bank of Okmulgee, 171 Okl. 494, 43 P.2d 394 (1935); and Brooks v. Tyner, 38 Okl. 271, 132 P. 683 (1913).

The order of December 19, 1985, as quoted above states twice that the parties stipulate that the proposed redemption by the Credit Union was to convey all of its right, title and interest in the subject real estate “and that in consideration thereof,” Sooner would accept the conveyance as full satisfaction of the debt owed it by the Credit Union and release the judgment against the Credit Union. That stipulation is ignored by the majority.

Pursuant to 42 O.S.1981 § 18 “[ejvery person having an interest in property subject to a lien, has a right to redeem it from the lien, at any time after the claim is due, and before his right of redemption is foreclosed.” Section 19, cited above, provides that an inferior lien holder has the right to redeem the property “in the same manner as its owner might” from the superior lien. Redemption is made “by performing, or offering to perform, the act for the performance of which it is a security, and paying, or offering to pay, the damages, if any, to which the holder of the lien is entitled for delay.” 42 O.S.1981 § 20. Not only did the Credit Union have an inferior lien on the subject property, it became the record holder of title in the property at a previous sheriff’s sale. Redemption was *534performed by the offer of Credit Union to convey to Sooner title to the realty and Sooner’s agreement to accept the conveyance in full satisfaction and release of judgment against the Credit Union. Thus, the Credit Union, the judgment debtor, made an offer to perform the act of satisfaction of the mortgage and judgment by its tender of a deed to the property and Sooner, the judgment creditor, agreed to accept the deed in full satisfaction of the judgment and mortgage. The fact that Sooner’s judgment against the Credit Union was in rem is not determinative. The legislated right of redemption is not contingent upon adequacy of consideration. •

Though the trial court may not arbitrarily refuse to confirm a valid sheriff’s sale, it does have the discretionary power to set aside a sale in proper pleadings on equitable grounds. Hays v. Burton, 321 P.2d 701 (Okla.1958). I would hold that the confirming or setting aside of a judicial sale falls squarely within the equitable and discretionary powers of the trial court. Absent an affirmative showing of abuse of discretion this Court must affirm.

If the majority opinion stands for the rule that a record owner and judgment debtor having right of redemption cannot transfer such right for consideration (even to the mortgagee) it is in error.

If the majority opinion stands for the rule that a judgment debtor and record owner’s right of redemption was transferred without consideration, it is not supported by the record, and the appealed order. Having decided that Lincoln Mortg. Investors v. Cook, 659 P.2d 925 (Okla.1982), not Payne v. Long-Bell Lumber Co., 9 Okl. 683, 60 P. 235 (1900), is the rule in Oklahoma, this Court may not ignore nor misapply the special facts of this case. The ultimate issue is whether the trial court abused its discretion. It is clear it did not under these peculiar facts.

The irony under these facts is that both the judgment debtor and the judgment creditor desire and agree to allow the judgment debtor to redeem. The law allows such a redemption. But this Court is proceeding to hold in favor of a third party. Is the purpose of a sheriff’s sale to benefit some third party? Clearly not. A sheriff’s sale gives some recovery to the judgment creditor and some mitigation of the’breach of contract for the benefit of the judgment debtor. The sale is not for the benefit of the third party who, generally speaking, receives a property at a fraction of its value.

As this Court has decided that redemption can occur up until confirmation, what legal wrong can the third party claim? He may only urge disappointment at losing a good value at someone else’s expense. Accordingly, I must dissent to this Court’s reversal of the trial court judgment.