Dover Lumber Co. v. Case

• Decision Date: 10 January 1918
• Citation: 170 P. 108,31 Idaho 276
• Parties: DOVER LUMBER CO., a Corporation, Respondent, v. WM. B. CASE and ROSE H. CASE, His Wife, J. B. CAMPBELL, NORMAN ARTHURS and JOHN B. WHITCOMB, Appellants
• Court: Idaho Supreme Court

170 P. 108

31 Idaho 276

DOVER LUMBER CO., a Corporation, Respondent, v. WM. B. CASE and ROSE H. CASE, His Wife, J. B. CAMPBELL, NORMAN ARTHURS and JOHN B. WHITCOMB, Appellants

Supreme Court of Idaho

January 10, 1918

APPEAL from the District Court of the Eighth Judicial District, for Bonner County. Hon. John M. Flynn, Judge.

Action to foreclose mortgages. Judgment for plaintiff. Modified.

Judgment and decree affirmed. Costs upon appeal awarded to appellants.

E. W Wheelan and Allen P. Asher, for Appellants.

The court erred in finding that the plaintiff was damaged in the sum of $ 8,000, and holding that said sum was secured by the mortgage, because the contract itself provides the procedure to be followed by the plaintiff in case the defendant Case should not prosecute the work diligently, or fail in any manner to perform the contract. (Sutherland on Damages, 3d ed., sec. 699; Dow v. Humbert, 91 U.S. 294, 23 L.Ed 370; Hunt v. Oregon P. R. Co., 36 F. 481, 1 L. R. A. 842, 13 Saw. 516.)

"Where the work is done under a contract fixing the price to be paid therefor, the contract price will generally be taken to furnish the measure of damages, though the contract has been only partially performed and the party sues on a quantum meruit." (Elliott on Contracts, sec. 2150; American Surety Co. v. Woods, 105 F. 741, 45 C. C. A. 282; Id. 106 F. 263, 45 C. C. A. 282; Robinson v. Chinese Charitable & Benev. Assn., 35 A.D. 439, 54 N.Y.S. 858; McGrath v. Horgan, 72 A.D. 152, 76 N.Y.S. 412.)

The action was brought only for the foreclosure of the mortgages. (Rein v. Callaway, 7 Idaho 634, 65 P. 63.)

The mortgagor should not obtain a personal judgment on indebtedness secured by a mortgage, in addition to the right to a foreclosure and a deficiency judgment after foreclosure. (Dudley v. Congregation of Third Order of St. Francis, 138 N.Y. 451, 34 N.E. 281.)

The matter was understood by the trial court as being a question of damages for breach of contract, and under sec. 7 of art. 1 of the constitution, the defendants were entitled to a jury trial on these issues. (Robinson v. Moore, 10 Idaho 115, 77 P. 218; Lindstrom v. Hope Lbr. Co., 12 Idaho 714, 88 P. 92.)

A description, in order to be sufficient to hold after-acquired property under a mortgage, must be definite and clearly point out the nature and kind of after-acquired property. A mortgage on after-acquired property does not give the mortgage priority in this state as to such after-acquired property as against subsequent purchases or encumbrances in good faith, unless the mortgagee shall have taken said after-acquired property into possession prior to the attaching of the rights of the encumbrancer or purchaser in good faith. (Cobbey on Chattel Mortgages, secs. 349, 357-359, 363; 5 Am. & Eng. Ency. 979; Blanchard v. Cooke, 144 Mass. 207, 11 N.E. 83; Steel v. Ashenfelter, 40 Neb. 770, 42 Am. St. 694, 59 N.W. 361; Long v. Hines, 40 Kan. 220, 10 Am. St. 192, 19 P. 796.)

Hamblen & Gilbert and Herman H. Taylor, for Respondent.

A judgment may be entered for a debt upon the foreclosure of a mortgage upon failure to establish the mortgage security. (Jaeckel v. Pease, 6 Idaho 131, 53 P. 399.)

"When an answer is filed, the court may grant any relief consistent with the case made by the complaint and embraced within the issues made, whether such relief be prayed for or not." (Burke Land & Livestock Co. v. Wells, Fargo & Co., 7 Idaho 42, 60 P. 87; Louisville Banking Co. v. Blake, 70 Minn. 252, 73 N.W. 155; Linn v. Collins, 77 W.Va. 592, 87 S.E. 934; Simons v. McDonnell, 120 Mich. 621, 79 N.W. 916; Continental Trust Co. v. Patterson, 26 Colo. App. 186, 142 P. 422; Rollins v. Forbes, 10 Cal. 299; Block v. Allen, 99 Ga. 417, 27 S.E. 733.)

In establishing damages for failure to perform a contract of this kind, the correct measure of damages is the difference between the contract price agreed to be paid and the cost of completing the contract, either actual or estimated, according to whether the party seeking damages has performed the contract or not. (Sutherland on Damages, 3d ed., p. 699; 13 Cyc. 162; Sedgwick on Damages, 9th ed., sec. 643; American Surety Co. v. Lyons, 44 Tex. Civ. 150, 97 S.W. 1080; Taylor v. North Pacific Coast R. Co., 56 Cal. 317; Logansport etc. Ry. Co. v. Wray, 52 Ind. 578; King v. Nichols, 53 Minn. 453, 55 N.W. 604; McGrath v. Hogan, 72 A.D. 152, 76 N.Y.S. 412; Newton v. Consolidated Const. Co., 184 Mich. 63, 150 N.W. 348; Sandy Valley etc. Ry. Co. v. Hughes, 172 Ky. 65, 188 S.W. 894.)

A mortgage given to secure an unliquidated indebtedness is good. (Pingrey on Mortgages, secs. 466, 486, 496; Harlan County v. Whiting, 65 Neb. 105, 101 Am. St. 610, 90 N.W. 993.)

A chattel mortgage may be executed so as to cover after-acquired property, which will be valid against third parties. (Murray Co. v. Satterfield, 125 Ark. 85, 187 S.W. 927; Hill v. Morris, 124 Ark. 132, 186 S.W. 609; Morton v. Williamson Bros. , 72 Ark. 390, 81 S.W. 235; Hickson Lumber Co. v. Gay Lbr. Co., 150 N.C. 282, 63 S.E. 1045, 21 L. R. A., N. S., 843; Collerd v. Tully, 77 N.J. Eq. 439, 77 A. 1079; Westinghouse Elect. Mfg. Co. v. Citizens' St. R. Co., 24 Ky. Law, 334, 68 S.W. 463; Louden v. Vinton, 108 Mich. 313, 66 N.W. 222; Eddy v. McCall, 71 Mich. 497, 39 N.W. 734; Stoll v. Sibson, 65 N.J. Eq. 552, 56 A. 710; Williams v. Noyes & Nutter Mfg. Co., 112 Me. 408, Ann. Cas. 1916D, 1224, 92 A. 482; Electric Lighting Co. v. Rust, 117 Ala. 680, 23 So. 751; Fidelity Deposit Co. v. Sturtevant, 86 Miss. 509, 109 Am. St. 716, 38 So. 783.)

In equity actions in this state neither party is entitled to a jury as a matter of right. (Burke Land etc. Co. v. Wells, Fargo & Co., 7 Idaho 42, 60 P. 87; Christensen v. Hollingsworth, 6 Idaho 87, 96 Am. St. 256, 53 P. 211; Brady v. Yost, 6 Idaho 273, 55 P. 542.)

MORGAN, J. Budge, C. J., and Rice, J., concur.

OPINION

MORGAN, J.

Respondent and appellant, Wm. B. Case, entered into two contracts, which, for the purpose of this opinion, will be treated as one, by the terms whereof Case agreed to cut and deliver timber to respondent, and was to be paid $ 5.25 per thousand feet, board measure, for a portion of it, being logs to be cut from certain described lands. Respondent was to advance money to Case, not exceeding $ 40,000, to be used in preparing for and paying expenses of logging, which was to be repaid by retaining one dollar earned by Case on each one thousand feet of such logs delivered. A real estate mortgage was given to respondent by Case and his wife, to secure the sums advanced and to be advanced up to $ 40,000, and to secure the faithful performance of the contract. A chattel mortgage was also given, upon certain property therein described and upon property thereafter to be acquired by Case and to be used in performing the work, to secure the payment of the indebtedness above mentioned.

It is alleged in the complaint that Case had failed and refused to complete the work and had abandoned it; that he was indebted to respondent for money advanced and that, in order to settle and adjust certain differences which had arisen between them, an arbitration was had which resulted in an award in favor of respondent for advances made, over and above all offsets and counterclaims, in the sum of $ 21,868.10, which, together with interest thereon at the rate of 8% per annum from June 8, 1914, was due to respondent from Case; also that there remained to be logged, under the terms of the contract, not less than eight million feet of timber, together with much cedar products, and that respondent was damaged by reason of the failure of Case to perform the contract, according to its terms, in the sum of $ 12,000. Rose H. Case, wife of Wm. B. Case, was made a party defendant, as were appellants, Campbell, Arthurs and Whitcomb, who were alleged to have liens upon the mortgaged property subsequent to that of respondent. Judgment was demanded against Case in the sums of money above set forth, together with attorneys' fees and cost of suit, and foreclosure of the mortgages was prayed for.

Appellants answered separately denying that any part of the money alleged to be due was secured by either mortgage; alleging that the sums advanced to Case, under the contract, had been paid by him; that he had not breached the contract; attacking the legality of the award of the arbitrators, and alleging that respondent's cause of action was barred by the arbitration agreement. The appellants who held mortgages upon Case's property set forth the nature of their claims and prayed for foreclosure. Case filed a counterclaim asking damages by reason of respondent's breach of an alleged agreement modifying the original contract.

It appears that after respondent offered evidence of the arbitration and award the court ruled that it was not binding, and thereupon, by leave of court and pursuant to notice theretofore given of its intention so to do, respondent amended its complaint and alleged, in lieu of the allegation of an arbitration and award, that it advanced to Case, pursuant to the terms of the contract, over and above all credits due on account of logs delivered, the sum of $ 31,673.17. Appellants demurred to the amended complaint upon the ground, among others, that it was ambiguous and uncertain in that it did not show what amount of money was advanced to Case and what the credits for delivery of logs amounted to. It is insisted that this was essential because, by the terms of the mortgages, there was no security given for money advanced in excess of $ 40,000 and that there was nothing in the complaint to indicate the advances up to that sum had not been paid.

Before the demurrers were argued a bill of particulars was served by respondent showing all the sums advanced by it and the...