Dawes v. Murphy ( 1963 )

Defendant-appellee, Inland Mortgage Corporation, has filed a motion to dismiss the appeal on questions of law and fact by the defendants-appellants, Robert L. Murphy and Gladys L. Murphy. The appeal is from a judgment of the Common Pleas Court of Franklin County, granted on a motion for summary judgment.

The original proceedings were commenced by Esther J. Dawes against the Murphys, Inland Mortgage Corporation and numerous others. Inland filed a counterclaim (referred to by the parties as a cross-petition but see Section 2309.16, Revised Code). This counterclaim purports to state two causes of action. In the first it alleges a promissory note, that the "entire amount" has not been paid and that the "conditions" of the note have been broken. No conditions are alleged, and the note is not attached. It further alleges that the sum of $13,500 is now due with interest. In the second "cause of action" appellee incorporated the first, and further alleged a mortgage from the Murphys and a default. The prayer goes to both causes of action, and is for judgment for $13,500 plus interest, that liens be marshalled, that the priority of the mortgage be declared, that the mortgage be foreclosed and the property sold.

While many parties were served, we are concerned here with the Murphys. Their answer admits execution of a mortgage. There is no reference made to the note. They denied delivery of the mortgage, alleged payment of all amounts due, and made a charge of misrepresentation of fact by Inland. Everything else in the counterclaim is denied.

Appellee contends that the counterclaim constitutes an action at law only and, therefore, that it is not appealable on questions of law and fact. Reliance is placed on Borton v.Earhart (1945), 144 Ohio St. 334. Since the amendment of Section 6, Article IV of the Constitution in 1945, the delimitation of jurisdiction in law and fact appeals is within the authority of the Legislature. Hebden v. Hebden (1957),107 Ohio App. 184. The categories of cases in which such an appeal may be had are defined in Section 2501.02, Revised Code. The court is of the opinion that the counterclaim here is not one at law, and that it does fall within Section 2501.02 (3), Revised Code. However, the majority of the court holds that sua sponte and on the court's own motion the appeal should be reduced to one on questions of law only.

With respect to the nature of the action here, it is theoretically conceivable that a person might wish to waive his mortgage security and sue the mortgagor on a note only. If so, the action would be for money only. A real estate mortgage foreclosure action arises from the historical refusal of equity to give effect to the forfeiture provisions of the mortgage instrument and the creation of the equitable right of redemption. Having created the right to redeem, it was also necessary to create its corollary, the right to foreclose redemption and enforce the security for the payment of the debt. Mortgage foreclosure necessarily rests on the existence of a debt and equity enforcement of that obligation by a decree of foreclosure and sale. Under the principle of plenary equitable jurisdiction, equity may also grant in the foreclosure proceedings the incidental law relief of a deficiency judgment.

We need not discuss here the legal consequences of obtaining a judgment at law upon the note for the entire balance due. It is sufficient to say that it ought to be apparent that a mortgagee cannot obtain a personal judgment at law for the entire balance while also foreclosing the mortgage in equity and taking the proceeds of the sale. The pleadings here show no intent to waive the security but rather that it is sought to obtain foreclosure, and the judgment entry decrees foreclosure.

In Borton v. Earhart, supra, the action was against the defendant-mortgagor who conceded the right to foreclose. The plaintiff also sought personal liability on the debt against four others who were not bound by the mortgage. The only issues presented went to personal liability for money. Under those circumstances, the Supreme Court held that the primary and paramount relief sought was a judgment for money and that the foreclosure was merely incidental. In the present case, the action is against a mortgagor who contests the right to foreclose and there are no other persons sought to be charged on the underlying debt. In our opinion, the paramount and primary relief sought is in equity for foreclosure and marshalling of liens. The money judgment aspect is incidental relief which falls within the plenary equity jurisdiction of the court.

However, in LeMaistre, Admr., v. Clark (1943), 142 Ohio St. 1, the Supreme Court held that law and fact jurisdiction does not authorize an appellate court to conduct a trial on issues of fact unless such a trial has been had in the court of first instance. See, also, the discussion in Skeel's Ohio Appellate Law, 108, Section 214. While LeMaistre was decided prior to 1945, the present constitutional provision does not affect the principle of that case, although it will permit the Legislature to do so. In the opinion of the majority of this court, the statutes contemplate and require a determination of fact by the trial court. See Sections 2501.02, 2505.01 (C), and, especially,2505.21, Revised Code. This court has followed the LeMaistrecase on several occasions since the enactment of these statutes. See, for example, Parklawn Manor, Inc., v. Jennings-LawrenceCo., 119 Ohio App. 151, which involved the dismissal of a counterclaim for reformation of a contract at the close of the plaintiff's case.

A summary judgment under Section 2311.041, Revised Code, involves only the determination of whether there is a genuine issue of material fact. Thereupon the question for the court is one of law as to whether reasonable minds can differ. Accordingly, a final judgment based upon a motion for summary judgment involves no fact determination on the merits of the case and is not appealable on law and fact.

Attention is also directed to the fact that the record here does not show any bond filed in accordance with the provisions of Section 2505.06, Revised Code. The failure to file the bond within the time required is also grounds to dismiss an appeal on questions of law and fact.

The motion to dismiss the appeal on questions of law and fact is sustained. The case will be reduced to an appeal on questions of law only. Appellant will be granted 30 days to comply with Rule V, D, of this court.

Motion sustained.

TROOP, J., concurs.