Verdon State Bank v. Smyth

The opinion of the court was delivered by

Dawson, J.:

This appeal presents the question whether a judgment debtor should have six months or eighteen months in which to redeem a farm which was sold in foreclosure.

The facts were stipulated. In 1924 one Brown owned the farm. He mortgaged it to the plaintiff bank to secure an indebtedness of $7,000. This was not a purchase-money mortgage. In 1926 Brown *2sold the farm to defendant Smyth, the consideration being $8,000, of which sum Smyth paid $500 in cash and assumed and agreed to pay the $7,000 mortgage. Shortly afterwards Smyth paid $1,000 on the mortgage, and paid nothing more.

In time the mortgage was foreclosed, the mortgaged premises were sold, the sale confirmed, and the period of redemption fixed at eighteen months.

The one error assigned is predicated on the redemption period. Appellant contends that since Smyth never paid as much as one-third of the agreed purchase price he is only entitled to a period of six months in which to redeem.

The pertinent statute, in part, reads:

“The defendant owner may redeem any real property sold under execution, special execution, or order of sale, at the amount sold for, together with interest, costs, and. taxes, as provided for in this act, at any time within eighteen months from the day of sale as herein provided, and shall, in the meantime, be entitled to the possession of the property; but where the court or judge shall find that the lands and tenements have been abandoned, or are not occupied in good faith, the period of redemption for defendant owner shall be six months from the date of sale. . . (R. S. 60-3439; R. S. 1931 Supp. 60-3439.)

“Whenever a lien shall be given for the purchase price of any real estate, and default shall be made in the conditions of the mortgage or instrument giving such lien before one-third of the purchase price of such real estate shall have been paid by the purchaser thereof, such purchase-money lien may be foreclosed by the legal holder thereof in the manner now provided by law for the foreclosure of other mortgages, and such real estate may be sold under a judgment of foreclosure, as now provided by law: Provided, That whenever any such real estate shall be so sold, and the same shall not be redeemed from the judgment by the payment of all principal and interest due upon such lien and costs of such foreclosure within six months from the date of such sale, such sale shall become absolute, and the purchaser at such foreclosure sale shall be immediately entitled to a deed to the real estate purchased. . . .” (R. S. 60-3466.)

While it is agreed that when the $7,000 lien was given by Brown it was not a purchase-money mortgage, appellant contends that it became such by the contract of sale and conveyance of the mortgaged property to Smyth. As to Smyth, appellant argues, it became a purchase-money mortgage; his assumption of the mortgage indebtedness was by far the largest part of the purchase price; and since he has never paid as much as one-third of it, six months is all he is entitled to as a period of redemption.

*3A majority of this court does not approve this reasoning. It holds that appellant’s contention is not warranted by the plain text of the statute. The mortgage when given was not a purchase-money mortgage; its character then became fixed; and nothing the parties or their privies could thereafter do could alter or modify its legal significance. The judgment was therefore correct, and it is affirmed.