Brockman v. Caviness

The implication from the majority holding is that where a party holds both real and chattel mortgages as security for a debt and forecloses the real estate mortgage prior to the foreclosure of the chattel mortgage, thus not following the order of procedure prescribed in section 44-1101, I. C. A., and the real estate does not sell for enough to pay the debt, the mortgagee loses the right to recover such balance by foreclosure of the chattel mortgage.

This conclusion is based on the premises that as the provisions with regard to the foreclosure of a chattel mortgage must be strictly followed, so must the order in which real and chattel mortgages are to be foreclosed as provided by section44-1101, I. C. A., and that there can be but one action for the recovery of a debt secured by mortgage. (Sec. 9-101, I. C. A.)

With regard to the latter premise, section 44-1101, I. C. A., expressly provides that foreclosure of chattel mortgage by notice and sale (the form of foreclosure involved herein) is not an "action" within the meaning of said section 9-101, I. C. A.

Conceding the order prescribed by section 44-1101, I. C. A., should be followed, is the penalty for non-observance forfeiture by the mortgagee of the debt and remaining security? The statute does not so provide. Forfeitures are not favored but abhorred. (Abercrombie v. Stoddard, 39 Idaho 146,228 P. 232; Zezi v. Lightfoot, 57 Idaho 707, 68 P.2d 50.)

Respondent acquiesced in the foreclosure of the real estate mortgage. He knew of the chattel mortgage since he was mortgagor therein, but interposed no objection to the inverted foreclosure and thereby in effect waived any objection thereto. (Johnson v. Kaeser, 196 Cal. 686, 239 P. 324, 329; 67 C.J. 289 et seq.)

On the identical point herein, i. e., incorrect order of foreclosure and necessity of adherence to the requirement of but one action, the courts have granted the right to enforce full payment of the debt by a second or further foreclosure. (Gerig v. Loveland, 130 Cal. 512, 62 P. 830; Hagan v. Cowan,35 Ariz. 334, 278 P. 68.)

The judgment should be reversed and the cause remanded with directions to permit the foreclosure of the chattel mortgage by notice and sale to proceed.

Morgan, J., concurs in this dissent.

Petition for rehearing denied.