Howe v. Sears , 30 Utah 344 ( 1906 )

STRAUP, J.

This is an action on a judgment. The court found that it was barred by the statute of limitations. The judgment on which this action is founded was entered September 12, 1895, decreeing the foreclosure of a mortgage in favor of this plaintiff and against these defendants, ordering a sale of the mortgaged premises, and providing for a deficiency judgment to be docketed and entered against the defendants, if the sale of the mortgaged premises be insufficient, as shown by the officer’s return, to satisfy the judgment. The order of sale of the mortgaged premises was issued the following day. The property was sold October, 9, 1895. On the officer’s return, showing a deficiency, a judgment therefor was docketed and entered against the defendants on the 14th day of October, 1895. This action on the judgment for the unpaid deficiency was commenced September 15, 1903. The period prescribed by the statute for the commencement of an action on a judgment is eight years. Section 2874, Revised Statutes 1898. If the statute began to run from the entering of the judgment, this action is barred by three days. If it did not begin to run until the deficiency was ascertained, it is not barred. This presents the decisive question.

Section 2855, Revised Statutes 1898, provides’ that civil actions may be commenced only within the periods prescribed “after the cause of action shall have accrued.” Section 3460, Comp. Laws Utah 188.8, in force at the time the judgment of foreclosure was. had, provides that there can be but one action for the recovery of any debt or the enforcement of any right secured by mortgage' upon real estate, and it must be in accordance with the chapter providing for the foreclosure of mortgages. Provision is made for the sale of the mortgaged property to be applied on the amount found due.

“And if it appear from the return of the officer making the sale that the proceeds are insufficient, and a balance still remains due, judgment can then he docketed for such balance against the defendant or defendants, personally liable for the debt, and it becomes a lien on the real estate of such judgment debtor, as in other eases, on which execution may be issued.”

It is only by virtue of the statute that a money judgment can be rendered by a court of equity in a foreclosure proceeding, and the statute only provides for a deficiency judgment, for the balance remaining due, after a sale of the mortgaged property has failed to produce the full amount found to be due. (Bouton v. Cameron, 205 Ill. 50, 68 N. E. 800.) Independently of some statute the mortgagee was required to bring a separate action for a recovery of any deficiency, after, exhausting the mortgaged property. (2 Jones, Mortgages [6 Ed.], sec. 1571.) While under the statute full relief is given in one action, where theretofore two actions were required, yet' the mortgagee cannot recover a personal judgment, and is not entitled to have one entered or docketed against the debtor, until he has exhausted the mortgaged property and the deficiency is ascertained. (Donaldson v. Grant, 15 Utah 231, 49 Pac. 779; Russell v. Hank, 9 Utah, 309, 34 Pac. 345; Crim v. Kessing, 89 Cal. 481, 26 Pac. 1074, 23 Am. St. Rep. 491; Bank v. Cassaccia, 103 Cal. 641, 37 Pac. 648; Hopkins v. Warner, 109 Cal. 133, 41 Pac. 868; Barbieri v. Ramelli, 84 Cal. 154, 23 Pac. 1086.)

The foregoing authorities also hold, that, under a statute such as we have, the mortgagee may not waive his security and sue on the debt alone. He is first required to exhaust the mortgaged property. The mortgagor cannot personally be called upon or compelled to pay any part of the debt secured by mortgage, until sale of the mortgaged premises; and the liability which shall then accrue against him, is a liability to pay only the deficiency which shall appear on the officer’s return. His liability is contingent on the fact that .a sale of the property shall fail to satisfy the debt and costs. It is, however, ar'gued that the statute authorizes only a single decree which determines the amount due, provides for the sale of the mortgaged premises, and a deficiency judgment over against the persons personally liable for the debt, and, therefore, the judgment is but one judgment, and the statute of limitations must be held to run from the time of its entry. But

“There was no personal judgment for this amount, nor was there anything, in the nature of a personal judgment, beyond the mere direction for the issuance of an execution in the event of the insufficiency of the mortgaged property to pay the debt. The whole matter was contingent, indefinite, and uncertain, and, so long as this continued to be the ease, no effect whatever could be given to it.” (Chapin v. Broder, 16 Cal. 403.)

It is the officer’s return which makes absolute the personal liability that was before conditional, and liquidates and renders certain the amount for which the mortgagor is personally liable. (Biddel v. Brizzolara, 64 Cal. 354, 30 Pac. 609.)

Until such deficiency is ascertained, and the judgment therefor docketed, no execution can properly issue on the judgment, nor is the judgment a general lien on the real property of the defendants, nor can it be enforced, so far as any personal liability or money judgment against them is concerned. (Russell v. Hank, supra; Hibberd v. Smith, 50 Cal. 511.) “A judgment without the right of execution to enforce it is really no judgment.” (Thompson v. Dale, 58 Minn. 365, 59 N. W. 1086; Englund v. Lewis, 25 Cal. 358.)

The statute of limitations

“Begins to run from the time when the creditor acquires a full and perfect right to prosecute his demand. In other words, the period of limitation is to be computed from the time at which the right of entry accrues, or at which the creditor may, legally, commence his action. If the contract is to pay money at a future time, the statute is inoperative until the specified period has elapsed, or the particular event has happened; or, if the contract is conditional, until the condition has been performed.” (Buswell, Limitations, sec. 27.)

Here the contingency upon which a personal judgment could have been had, and was authorized against the defendants, being only that there is a deficiency after sale of the mortgaged property; until such event has happened, and such fact is ascertained, no liability exists against the defendants personally on the judgment, and no light accrued to plaintiff to prosecute any such demand against them. Had, therefore, an action been brought by the plaintiff against the defendants, on the judgment, seeking a personal liability and a money judgment thereon against them, four days after the entering of the decree of foreclosure, and a plea in abatement had been interposed thereto setting forth the fact that the mortgaged premises had not been sold, and from the very nature of things could not have been sold, within such time, and that it had not been ascertained that any deficiency existed, and hence no personal liability had accrued against the defendants on the judgment, we see no reason why such plea would not be good. As the authorities, under statutes like ours, hold, that the mortgagee may not waive his security and sue on the debt alone, but that he is required to first to exhaust his security before he is in position to make and enforce any demand against the mortgagor personally for the debt, on what principle may it be said that the mortgagee, after he has changed the evidence of his indebtedness from a note to a judgment, may then enforce his demand against the mortgagor for a personal liability, before the security has been exhausted? We are of the opinion that the trial court erred in holding that the action was barred.

Tbe judgment of the court below is reversed, with costs, and a new trial granted.

BAB.TCH, C. J., and MeCABTY, J., concur.