98 Cal. 490, 14225, Toby v. Oregon P. R. Co.

Docket Nº:14225, 14979
Citation:98 Cal. 490, 33 P. 550
Opinion Judge:SEARLS, Judge
Party Name:SIMEON B. TOBY, Respondent, v. THE OREGON PACIFIC RAILROAD COMPANY et al., Appellants
Attorney:Milton Andros, and James L. Crittenden, for Appellants. Page & Eells, for Respondent.
Judge Panel:JUDGES: Searls, C. Haynes, C., and Vanclief, C., concurred. McFarland, J., Fitzgerald, J., De Haven, J.
Case Date:June 09, 1893
Court:Supreme Court of California

Page 490

98 Cal. 490

33 P. 550

SIMEON B. TOBY, Respondent,



Nos. 14225, 14979

Supreme Court of California

June 9, 1893

Department Two

Separate appeals from a judgment of the Superior Court of the City and County of San Francisco, and from an order denying a new trial.


Milton Andros, and James L. Crittenden, for Appellants.

Page & Eells, for Respondent.

JUDGES: Searls, C. Haynes, C., and Vanclief, C., concurred. McFarland, J., Fitzgerald, J., De Haven, J.



Page 491

There are two separate appeals in this cause by the defendants, one from the final judgment, and the other

Page 492

from an order denying a motion for a new trial. As they depend to some extent upon the same statement they will be considered together.

The action was brought to foreclose a mortgage upon the steamer Eastern Oregon, executed at the city of New York, by the Oregon Pacific Railroad Company, a corporation, on the tenth day of February, 1887, to the Florida Steamship Company, to secure the sum of $ 115,000, with interest at six per cent per annum, evidenced by twelve promissory notes of even date with the mortgage, eleven of which were for $ 10,000 each, and one for $ 5,000, and all payable twelve months after date. The Oregon Development Company, a corporation, was made a party defendant, upon the averment that it had or claimed to have some interest in the steamship, etc. Both the defendants are corporations organized and existing under the laws of the state of Oregon. The steamship in question was purchased for the trade between San Francisco and Southern Oregon, was brought from New York to this coast, and was within the jurisdiction of the courts of this state. The complaint averred the mortgagor defendant to be insolvent, and a receiver was appointed February 17, 1888, who took possession of the steamship and continued in charge of her until sold, as hereinafter stated, on the twenty-sixth day of April, 1890, for the sum of $ 80,030. [33 P. 551] The cause was tried by the court without the intervention of a jury, and written findings filed April 11, 1890, in which, upon the facts as found, the court ordered judgment in favor of plaintiff for $ 115,000 and interest, and a decree of foreclosure and a sale of said steamship as prayed in the complaint. On the fourteenth day of April, 1890, plaintiff filed a petition and affidavit showing that the steamship was deteriorating in value; that the expense of her maintenance, repairs, taxes, etc., amounted to about $ 300 per month, etc., and asked that the receiver be authorized to sell her. Such proceedings were thereupon had that the steamship was by order of the court sold at public auction on the twenty-sixth day of April, 1890, subject to the confirmation of the court. The sale was confirmed by the court April 29, 1890. Thereafter, and on the twenty-second day of May, 1890, the court entered a decree in the cause in which, after reciting the filing of its findings and decision, recites that the

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court had ordered the receiver to sell the mortgaged property at public auction, pendente lite, to prevent further deterioration in its value (the same being perishable), and to pay the expenses and disbursements of said receiver, etc. The decree further recites the sale for $ 80,030; the confirmation thereof, the settlement of the receiver's accounts, leaving a balance of $ 70,224.62 in his hands. The decree then proceeds to award judgment in favor of plaintiff and against the mortgagor defendant for $ 137,655 (being the amount of the principal of said promissory notes, $ 115,000, and interest due thereon) and costs of suit. The decree requires the receiver to pay the plaintiff the amount in his hands ($ 70,224.62) and awards execution in favor of plaintiff and against the defendant, the Oregon Pacific Railroad Company, for the balance remaining unpaid, after crediting the judgment as aforesaid.

The first point by appellant in the appeal from the judgment is that the court had no jurisdiction or authority to enter a personal judgment for a deficiency, until after a sale of the mortgaged property by the sheriff, and a sheriff's return showing a deficiency. This theory proceeds upon the basis that the mode of procedure, provided by section 726 of the Code of Civil Procedure is exclusive. That section is 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, which action must be in accordance with the provisions of this chapter. In such action the court may, by its judgment, direct a sale of the encumbered property. .. . and the application of the proceeds of the sale to the payment of the costs of the court and the expenses of the sale, and the amount due to the plaintiff; and if it appears from the sheriff's return that the proceeds are insufficient, and a balance still remains due, judgment can then be docketed for such balance against the defendant," etc.

The contention is that a foreclosure and order of sale are essential to authorize the sheriff to sell, and a sale by him and a return showing a deficiency are prerequisite to a personal judgment; that it is the return of the sheriff showing a deficiency which operates to crystallize the personal liability of the mortgagor and to assess the amount for which the court is

Page 494

authorized to decree that a personal judgment may be docketed. A glance at the law as it existed prior to the adoption of our statutes in relation to mortgages will tend to make manifest the evils sought to be obviated by those enactments. At common law a mortgage was regarded as a conveyance upon condition to become absolute upon...

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