Summary
In Green, the plaintiff acquired a sheriff's certificate of purchase at a foreclosure sale, the mortgagor failed to redeem, but the plaintiff failed to obtain a deed from the sheriff.
Summary of this case from Emerick v. GreeneOpinion
No. 15,687.
Decided August 12, 1946. Rehearing denied September 30, 1946.
An action to foreclose a lien on real property evidenced by a sheriff's certificate of purchase. Judgment of dismissal.
Affirmed.
1. REAL PROPERTY — Mortgages — Certificate of Purchase. It is the general rule that a sheriff's certificate of purchase of property sold under mortgage foreclosure is not a deed, and does not pass title to the land itself, nor does it divest the mortgagor of his title, so that if a deed is not executed and delivered to the holder of the certificate within the time limited by statute, or if the certificate is later assigned to the mortgagor and no deed is ever issued, or if the holder of the certificate neglects to secure a deed for so long a time after he is entitled to it as to constitute an estoppel, the mortgagor or those entitled under him are never divested of their title.
2. MORTGAGES — Foreclosure — Redemption — Limitation of Actions. While the holder of a certificate of purchase issued by the sheriff on a mortgage foreclosure sale of real property is entitled to a deed at any time during the nine months from the expiration of the last period of redemption, he becomes so entitled on the first day of that period, and if he makes no demand for a deed, brings no action to foreclose, and files no lis pendens within the time fixed by statute, it must conclusively be presumed that such lien had been paid and discharged, and any action thereafter to foreclose it would be barred by the statutory limitation.
Error to the District Court of the City and County of Denver, Hon. Robert W. Steele, Judge.
Mr. JOHN T. DUGAN, Mr. RICHARD PEETE, for plaintiff in error.
Messrs. IRWIN O'CONNELL, for defendants in error.
PLAINTIFF in error, who was plaintiff below, brought this action February 19, 1945, alleging that she was the owner and holder of sheriff's certificate of purchase to property therein described issued under date of April 5, 1943; that said certificate had originally been issued to one Mary Bolasny and thereafter by her assigned to Mabel L. Moore and Clarence O. Moore, who were then the owners of said property; that said Clarence O. Moore thereafter assigned said certificate to plaintiff in consideration of a loan of $6,000.00, no part of which had been paid, and that said certificate constituted a first and prior lien on said property. She prayed that the certificate be decreed to be superior to the rights of defendants and the property ordered sold to satisfy the lien thereof.
Defendants Hoefler, by their answer, set out, inter alia, that on or about February 1, 1945, they purchased the property described in said certificate from the grantees by warranty deed of said Clarence O. Moore and Mabel L. Moore for a valuable consideration and without knowledge of any claims or interest of plaintiff, and that there were no notices filed on behalf of junior lienors of intention to redeem from said certificate of purchase and that the time for redemption thereunder expired on October 5, 1943. They denied that the certificate of purchase held by plaintiff constituted any lien upon the property and alleged that it was barred and wholly void in that the action to enforce the lien thereof was not brought, and the lis pendens of such action was not filed, within the time required by statute. After the filing of admissions by plaintiff in response to written request therefor, defendants Hoefler moved for summary judgment on the ground that plaintiff's cause of action was barred by statutory limitation of chapter 122, Session Laws of 1937, and judgment of dismissal was thereon entered in favor of said defendants and against plaintiff. Other issues were raised, but whether they have merit and whether they were properly determinable on the motion for summary judgment, we need not inquire.
Plaintiff admitted that no lienor had filed notice of intention to redeem and that the time for redemption expired October 5, 1943, as alleged in the answer of defendants Hoefler. The statute, as amended in 1937, provides that if there is no application for deed and none is issued within nine months after the expiration of the last period of redemption, all rights under the certificate of purchase terminate; that the holder of the certificate has a lien which may be enforced only by an action of foreclosure and that, "Such lien shall continue in effect only for a period of fifteen months from the date that such person became entitled to a deed, and after the expiration of such fifteen month period if no action to foreclose such lien has been commenced and no lis pendens of such action has been filed as provided by law within such fifteen month period, then it shall conclusively be presumed that such lien has been paid and discharged and no release or other acquittance shall be necessary or required to discharge such lien." S.L. '37, c. 122, § 2. When does time begin to run under the limitation here created?
Plaintiff urges that the lien of the certificate sought to be foreclosed existed only after the expiration of the period during which deed could be demanded and, by implication, that limitation could not run against it before it existed. Whatever may have been the legal status of a certificate of purchase prior to the enactment of the amendment of 1937, under that statute the holder of a certificate of purchase does not have equitable title to the property, requiring only the ministerial act of the proper officer to become a legal title; instead, he has a lien thereon with right to receive the redemption money or, if no redemption is made, the right, upon demand, to receive official deed thereto. Under that act it is provided that it shall be deemed that such lien became due and payable on the date that the person became entitled to such deed, and that upon the issuance and delivery of the deed, and not until then, title should vest in the grantee. This seems to be the general rule. "While there are some cases influenced by the statutes of the particular jurisdiction to the effect that title passes, the general rule is that the issuance of the certificate, although it operates to extinguish the mortgage lien, and, in some jurisdictions, itself creates a statutory lien in favor of the purchaser, is not a deed and does not pass a title to the land itself, nor does it divest the mortgagor of his title, so that if a deed is not executed and delivered to the holder of the certificate within the time limited by statute, or if the certificate is later assigned to the mortgagor and no deed is ever issued, or if the holder of the certificate neglects to secure a deed for so long a time after he is entitled to it as to constitute an estoppel, the mortgagor or those entitled under him are never divested of their title." 42 C.J. 279, § 1948.
Plaintiff further urges that the holder of the certificate was entitled to a deed at any time during the period of nine months, and therefore the limitation period of fifteen months should run from the last date when the holder was entitled to a deed, rather than from the first date. The statute may not properly be so interpreted. While the holder of the certificate was entitled to a deed at any time during the nine months' period, he became so entitled on the first day of that period, and "the date that such person became entitled to a deed" was that first day only. Plaintiff in this case, as appears from her pleading and admission, became entitled to a deed on October 5, 1943. Having made no demand for a deed, and having brought no action to foreclose, and having filed no lis pendens, within fifteen months thereafter, under the statutory mandate it must conclusively be presumed that such lien had been paid and discharged. Her action thereafter was barred by the statutory limitation which was here interposed as a defense by defendants and the action was properly dismissed.
The judgment is affirmed.
MR. JUSTICE HILLIARD dissents.
On Petition for Rehearing.