Largey v. Chapman , 18 Mont. 563 ( 1896 )

De Witt, J.

After the filing of the complaint, answer and replication the defendants moved to dismiss the action. This motion was granted and judgment entered in favor of defendants. This action of the court was in effect giving judgment upon the pleadings.

The action was commenced against the defendants John Astle and J. W. Chapman. The complaint stated that plaintiff had signed two notes with the defendants and that he, plaintiff, was in fact only surety for the defendants, and as such has been obliged to pay the notes. He sought in this action to recover the money so paid.

Without reciting the pleadings at any length, we are satisfied to say that defendant Astle’s answer sufficiently set forth that the indebtedness of defendants to plaintiff was secured by a chattel mortgage which had never been foreclosed. This is-not denied. Plaintiff’s conten ion is that, notwithstanding the debt was secured by a chattel mortgage, he could bring the present action upon the debt and procure an attachment against the property of defendant Astel, as he did, without bringing any action to foreclose the chattel mortgage. Respondent relies upon the provisions of Section 358, Code of Civil Procedure, 1887, which provides as follows:

‘ ‘ There shall be but one action for the recovery of any debt, or the enforcement of any rights, secured by mortgage upon real estate or personal property, which action shall be in accordance with the provisions of this chapter. ’ ’

The chapter, to-wit: Chapter 1, title X, in which this section is found relates solely to actions for foreclosure of mortgages. Respondent contends that under these provisions the plaintiff could not sue or attach without bringing an action to foreclose. The district court adopted this view, and in this, we think, was correct.

We are of opinion that the plaintiff cannot by simply suing on the debt and attaching the property, and in the course of such proceedings making an affidavit that his debt is not secured by mortgage, lien or pledge upon real or personal property, thus waive the mortgage and consider it as naught. Our statute is the same as that of California and was evidently taken from that state. The supreme court of California in Barbieri v. Ramelli, 84 Cal. 154, says:

‘1 It is contended here on the part of the defendants (appellants) that the action cannot be maintained, for the reason that it is prohibited by section 726 of the Code of Civil Procedure. That section, so far as it bears on this case, reads as follows : ‘ There can be but one action for the recovery of any debt, or the enforcement of any right secured by mortgage upon real estate or personal property. ’ ’ ’

We are of opinion that the point is well taken. The statute is imperative. The word 1 ‘ secured, ’ ’ in the section, does not mean that the security shall be adequate, or that in case prior liens upon it would exhaust the money derived from the land conveyed as security on a sale of it, that then the plaintiff is relieved from bringing the action to foreclose. The proper construction of the language of the statute is, that if the mortgage on its face purports to be a security to the plaintiff, then he must bring his action for foreclosure. This word has reference only to the purport of the mortgage as it appears oh its face. The interpretation of it is not proper when its meaning is sought in something outside of the mortgage instrument. The plaintiff is not authorized to waive the security and bring an action on the indebtedness, and the court erred in so holding, as it did in effect, and rendering judgment for plaintiff.” (See, also, Biddell v. Brizzolari, 64 Cal. 362; Porter v. Muller, 65 Cal. 512; Brown v. Willis, 67 Cal. 236; Porter v. Brooks, 35 Cal. 199.)

The plaintiff relies for his right to waive the mortgage upon several cases which he cites in his brief. We have examined these cases, and we find that they are decided without regard to a statute such as ours and that of California. In the states whence plaintiff’s cases come, it is not provided directly by statute that there shall be but one action for the recovery of a debt secured by mortgage, which action shall1 be by foreclosure of the mortgage. We notice, however, in his list of cases, that of Ould v. Stoddart, 54 Cal. 613. But the tacts in that case were exceptional and do not disturb the doctrines held by the California court in the other cases. In that case the mortgagee had gone to the state of Ohio and sued upon the debt and obtained a judgment. The court held that he could not afterwards maintain an action for foreclosure in the state of California. There is in the case language in support of the view of the plaintiff in this case. But even then the later cases in 64, 65, 67 and 84 Cal., which we have cited, sustain the ruling of tfie court below in the case at bar.

We find the following in Shinn on Attachment, Section 24:

‘ ‘ The policy of the law, in most states, is that a creditor holding a security by way of ‘ mortgage, lien or pledge upon real or personal property ’ shall not resort to the summary process of attachment until he has exhausted his security, consequently if a creditor have such lien for his demand he can not have attachment.”

On the other hand we find the following remarks in Drake on Attachment, section 35:

‘ ‘ The right of a creditor to sue his debtor- by attachment is not impaired by his holding collateral security for the debt. The supreme court of Massachusetts once held that a creditor who had received personal property in pledge for the payment of a debt could not attach other property for that debt, without first returning the pledge; but this position was afterwards repeatedly overruled by that court. And a mortgagee of personal property may waive his right under the mortgage, and attach the mortgaged property to satisfy the mortgage debt, even after he has taken possession of it under the mortgage. ’ ’

Again, in Shinn on Attachment, section 28, we have these remarks :

‘ ‘ There is such contrariety in the laws of the different states relating to the attachment of personal property on which some third party holds a lien, that it is difficult to lay down any rule that will be universal. Generally, chattels subject to a lien cannot, unless by virtue of a special statute, be attached. But this is for the protection of the party having the lien, and if he waive his objection to the attachment, it does not lie in the mouth of the general owner to complain. Such an attachment is not void, but only voidable at the election of the possessor of the lien. ’ ’

But we are of opinion that the case depends upon the statute. The statute was clearly construed in 84 Cal. above cited, and there seems to be no reason in this case to depart from the rule, that in adopting the statute we have adopted the construction. (First National Bank v. Bell S. & C. M. Co., 8 Mont. 32; Stackpole v. Hallahan, 16 Mont. 40; Murray v. Heinze, 17 Mont. 353; State v. O’Brien, 18 Mont. 1; State ex rel. Milsted v. Butte City Water Co., 18 Mont. 199.)

Again, it is to be observed that the case before us is distinguished from Parberry v. Woodson Sheep Co., 18 Mont. 317, which plaintiff cites in favor of his contention. In that case the court found that the debt was not secured by mortgage, lien or pledge upon real or personal property at the time of the commencement of the action. We held that this finding of the court was supported by the evidence. It appeared by that evidence that whatever pledge, (if any,) had been given to secure the debt had been returned to the pledgor and accepted by him. Thus the pledge was terminated, if it ever existed, by the express acts and agreements of the parties.

Whatever we here hold in reference to a debt secured by mortgage being enforced by foreclosure of the mortgage does not in any way affect the question of the enforcing the debt by exercising a power of sale contained in the mortgage. (First National Bank v. Bell S. & C. M. Co., supra, same case 156 U. S. 470.)

Before the decision of the motion to dismiss the case was made the plaintiff himself moved to dismiss as to Chapman, and to pursue the action against Astle alone. This motion was denied. We do not think that the plaintiff in this case was in any way prejudiced, for even if he had dismissed as to Chapman, the fact still remained that the debt which he then sought to enforce against Astle alone was secured by at least one chattel mortgage. Our attachment law provides that before the writ is issued, the plaintiff shall "make an affidavit stating, among other things, that the debt is not secured by a mortgage, lien or pledge upon real or personal property or, if so secured, that the same has become insufficient by the act of the defendants, or by any means has become nugatory. Therefore, if a mortgage, lien or pledge had existed the attachment could not be had, unless the same had become insufficient by the act of the defendants, or by any means had become nugatory. Neither in the original replication, nor in the second one which was offered and which the court did not allow to be filed, did the plaintiff allege either that the security had become nugatory, or that it had become insufficient by the acts of the defendants.

We are of opinion that the order of the court dismissing the case, and the judgment entered in consequence of that order are correct.

The judgment will, therefore, be affirmed.

Affirmed.

Pemberton, C. J., and Hunt, J., concur.