Agricultural Credit Corporation, a Corp. v. Land Investment Company, a Corp.

• Decision Date: 21 February 1936
• Docket Number: 6383
• Court: North Dakota Supreme Court

265 N.W. 410

66 N.D. 343

AGRICULTURAL CREDIT CORPORATION, a Corporation, Respondent, v. LAND INVESTMENT COMPANY, a Corporation, Sheyenne Agricultural Credit Corporation, a Corporation, Lars M. Walhus, L. B. Garnaas, and P. A. Peterson, Appellants

No. 6383

Supreme Court of North Dakota

February 21, 1936

Appeal from District Court, Benson County; C. W. Buttz, Judge.

Action by the Agricultural Credit Corporation against the Land Investment Company and others. From an order overruling a demurrer to the complaint, defendants appeal.

Affirmed.

Syllabus by the Court.

1. Following the case of Territory ex rel. Travelers' Ins. Co. v. Judge of District Court of Cass County, 5 Dak. 275, 38 N.W. 439, it is held that under section 7415, Comp.Laws 1913, as amended by Laws 1919, c. 3, § 1, if an action to foreclose a mortgage is not brought in the proper county, the action may notwithstanding be tried therein, unless the defendant, before the time for answering expires, demands in writing that the trial be had in the proper county.

2. If an action to foreclose a mortgage is not brought in the proper county, the remedy is by demand in writing for a change of place of trial, and a motion for change of venue and not by demurrer, and this applies to defendants who are not necessary parties, but are proper parties in the foreclosure proceeding.

3. Where stockholders of a corporation secure the renewal of a mortgage indebtedness of such corporation by guaranteeing the payment of the said mortgage indebtedness at maturity, after default of the principal the guarantors are proper parties in an action to foreclose. The cause of action against them arises out of the transaction between the plaintiff and the defendant corporation.

4. Under section 8102, Comp.Laws Supp. 1925, " If a mortgage debt is secured by the obligation, or other evidence of debt, of any other person than the mortgagor, the plaintiff may make such other person a party to the action" to foreclose.

5. Under section 6662, Comp.Laws 1913, " A guarantor of payment or performance is liable to the guarantee immediately upon the default of the principal and without demand or notice."

N J. Bothne and Edwin E. Bothne, for appellants.

Causes of action requiring different places of trial cannot be joined. Hackett v. Carter, 38 Wis. 394; 23 Cyc. p. 406; Martin v. Robinson, 67 Tex. 382, 3 S.W. 550; Emerson v. Nash (Wis.) 102 N.W. 921.

The fact that several mortgages may be considered in connection with the same note will not affect their identity as separate instruments. McDonald v. Second Nat. Bank, 76 N.W. 1011; Benson v. Battey (Kan.) 78 P. 844.

An action in which the complaint upon its face constitutes a cause of action for the foreclosure of a mortgage against real property must, on timely and proper demand of the defendant, be tried in the county in which the property is situated. Viets v. Silver, 19 N.D. 445, 126 N.W. 239.

Sinness & Duffy, for respondent.

Several mortgages securing an entire debt are in effect one and may be foreclosed in any county in which part of the land lies. 42 C.J. 31; Benn v. Trobert, 76 Okla. 184, 184 P. 595; Commercial Nat. Bank v. Johnson, 16 Wash. 536, 48 P. 267; Lomax v. Smyth, 50 Iowa 223; Stevens v. Ferry, 48 F. 7; Wagener v. Swygert, 30 S.C. 296, 9 S.E. 107; 42 C.J. p. 31, note 86.

The test of whether more than one cause of action is stated in a complaint is whether there is more than one distinct primary right or subject of controversy presented for enforcement or adjudication and not whether there are different kinds of relief prayed for or objects sought. 1 C.J. pp. 1055, 1059, 1061.

Under our statute the primary obligor and the guarantor may be joined in the same action. Senn v. Connolly, 23 S.D. 158, 120 N.W. 1097; Stark County v. Mischel, 33 N.D. 432, 156 N.W. 931.

A demurrer should be overruled as to all defendants joining therein when it alleges a good cause of action as to one of the defendants. Rochford v. School Dist. 17 S.D. 542, 97 N.W. 747.

Burke, Ch. J. Burr, Nuessle, Morris and Christianson, JJ., concur.

OPINION

BURKE

This is an appeal from an order overruling a demurrer to the complaint.

This action is brought in Benson county to foreclose two real estate mortgages. The mortgages were executed the same day to secure the same indebtedness, but one covers land located entirely within Benson county, and the other covers land located entirely within Eddy county. L. B. Garnaas and P. A. Peterson are made defendants on a written instrument, guaranteeing the payment at maturity of the indebtedness, secured by the said mortgage. The defendants are all residents of Eddy county.

The demurrer to the complaint is

"1. That the above named Court has no jurisdiction of the subject of this action.

"2. That several causes of action have been improperly united.

"3. That the complaint herein does not state facts sufficient to constitute a cause of action.

"4. That this action is not brought in the proper county, in so far as the mortgage on the Eddy County land is concerned."

It is the contention of appellants that the court has no jurisdiction of the subject of this action. The question of jurisdiction was raised in the case of Territory ex rel. Travelers' Ins. Co. v. Third Judicial Dist. Judge, 5 Dak. 275, 38 N.W. 439, an action to foreclose a mortgage brought in the wrong county. In that case the court said: "Under Code of Civil Proc. Dak. § 92 (§ 7415, 1925 Supp. Comp. Laws 1913), providing that an action for the foreclosure of a mortgage on real property must be brought in the county wherein the land is, and § 95, which provides that, 'if the county designated for that purpose in the complaint be not the proper county, the action may notwithstanding be tried therein, unless the defendant, before the time for answering expire, demand in writing that the trial be had in the proper county,' an action brought in one county and judicial district to foreclose a mortgage on land in another county and district, defendant being in default, is within the jurisdiction of the court to try." The court further said: "We think that the latter section is a qualification of the former, and that the court had jurisdiction; that the statute is merely directory with respect to the place of trial; and that the defendant simply has a personal right to insist upon those actions which are denominated as local, being tried in the county in which the subject-matter is situated, and which right the defendant to the action may waive, and in this case has waived, by his default. The statutes of New York, California, Minnesota, and Wisconsin are very similar, if not precisely similar, to ours." March v. Lowry, 16 How. Pr. 42; Lane v. Burdick, 17 Wis. 93; Gill v. Bradley, 21 Minn. 15; O'Neil v. O'Neil, 54 Cal. 187.

Section 7415, Compiled Laws 1913, provides: "Actions for the following causes must be tried in the county in which the subject of the action or some part thereof is situated, subject to the power of the court to change the place of trial in cases provided by statute: . . . 3. For the foreclosure of a mortgage of real property." If the action is not brought in the proper county the remedy, under § 7418, Compiled Laws 1913, is to demand in writing a change of place of trial within the statutory time for answering the complaint, and not by demurrer. "When a demand in writing is required by the statute it is of course necessary that such a demand be made in order to entitle the moving party to a change." 2 Bancroft, Code Pr. & Rem. § 1020, p. 1464; Byrne v. Byrne, 57 Cal. 348; Estrada v. Orena, 54 Cal. 407; McCarty v. Herrick, 41 Idaho 529, 240 P. 192; State ex rel. Davis v. District Ct. 72 Mont. 56, 231 P. 395; Connolly v. Salsberry, 43 Nev. 182, 183 P. 391; Elam v. Griffin, 19 Nev. 442, 14 P. 582; Gotthelf v. Merchants' Bank, 33 S.D. 259, 145 N.W. 542; Barbour v. Fidler, 31 S.D. 351, 141 N.W. 88.

In the case of Pereles v. Albert, 12 Wis. 666 the Wisconsin court said: "If the plaintiff designates in his complaint the wrong county as the place of trial, the defendant's remedy is to demand that the trial be had in the proper county. And when he fails to do so, we think there is no error in the judgment on account of the trial taking place or judgment being rendered in a wrong county. This is the construction placed upon the corresponding provisions of the New York Code by the courts of that State in the following cases: Miller v. Hull, 3 How. Pr. 325; Beardsley v. Dickinson, 4 How. Pr. 81; Chubbuck v. Morrison, 6 How. Pr. 367; Bangs v. Selden, 13 How. Pr. 163; and we see no valid objection to it." This case was followed in the case of Lane v. Burdick, 17 Wis. 93, supra; but the rule was changed in Wisconsin by chapter 243, Laws of 1862. See Beach v. Sumner, 20 Wis. 275. The same construction was put upon this statute by Gill v. Bradley, 21 Minn. 15, supra and in the California court in O'Neil v. O'Neil, 54 Cal. 187, supra. In the case of Viets v. Silver, 19 N.D. 445, 126 N.W. 239, this court held, in substance, that an action to foreclose a mortgage brought in the wrong county would upon proper and timely demand be transferred or changed to the proper county. It does not define the meaning of "proper and timely demand" but the statute does this. The statute provides that the demand shall be made in writing before the time for answering expires.

2 Bancroft's Code Pr. & Rem. § 1024, p. 1470 states "In Nevada, North Dakota and South Dakota, the statutes provide that if the county designated for that purpose in the complaint is not the proper county, the action may notwithstanding be tried therein unless the defendant makes a demand for a change before the time for answering expires. Under such a provision the time within which...