Fogelstrom v. Murphy

• Decision Date: 03 October 1950
• Docket Number: No. 7587,7587
• Citation: 70 Idaho 488,222 P.2d 1080
• Parties: FOGELSTROM v. MURPHY et al.
• Court: Idaho Supreme Court

Page 1080

222 P.2d 1080

70 Idaho 488

FOGELSTROM v. MURPHY et al.

No. 7587.

Supreme Court of Idaho.

Oct. 3, 1950.

Whitla & Knudson, Coeur d'Alene, for appellants.

J. H. Felton and William J. Jones, Lewiston, for respondent.

PORTER, Justice.

On and prior to June 3, 1948, appellants were engaged in sawmill and woods work business in Latah County. Their heavy indebtedness was affecting their ability to operate. On the mentioned date, they entered into a 'loan agreement' with respondent. By the terms of such agreement, respondent agreed to immediately advance to appellants the approximate sum of $29,000.00 to apply on their indebtedness and to make further advances for the use of appellants in their business and in carrying out the terms of the loan agreement. The loan agreement also contained numerous provisions governing the handling of the products of the business and purchase of same by respondent. To secure these advances and the performance of the other terms of the loan agreement, appellants executed a chattel mortgage covering all their personal property including their sawmill and machinery and equipment used in the operation of their business. Also, as like security, appellants executed a real estate mortgage on a considerable body of land situated in Latah County.

On October 22, 1948, respondent commenced this action for the foreclosure of such real and chattel mortgages. By his complaint, respondent alleged that appellants were in default under a number of provisions of the loan agreement and that there was a balance due and owing respondent of $27,744.71 with accumulated interest. At the time of filing the complaint, respondent moved for and secured the appointment of a receiver on the ground of the insufficiency of the security and as provided for in the chattel mortgage. Questions concerning the appointment of the receiver have been heretofore before this court. See Murphy v. McCarty, 69 Idaho 193, 204 P.2d 1014.

Appellants filed their answer denying that they were in default in the particulars set out in the complaint or at all under the terms of the loan agreement, and affirmatively alleged that respondent was in default. Appellants, at the same time, filed their cross complaint wherein they alleged they had been damaged in the sum of $70,000.00 by reason of the alleged wrongful appointment of the receiver.

The cause was tried to the court sitting without a jury. The court found on the issues in favor of respondent; found that there was due and owing respondent the sum of $27,413.57 with accumulated interest and attorneys' fees; and entered a judgment of foreclosure. From such judgment, appellants have duly appealed to this court.

In their points and authorities and in the statement of the case in their brief, appellants complain of the action of the attorneys for respondent in representing respondent in this litigation for the reason that such attorneys represented appellants in the preparation of the loan agreement. However, the record does not disclose that any motion or objection was made to the trial court objecting to the appearance of such attorneys in behalf of respondent. There was no ruling by the trial court on such question and there is no assignment of error pointing out where any error was committed by the trial court in this respect. There is nothing before this court for consideration in such matter.

Appellants have set out 17 assignments of error. By assignments of error Nos. I and II, appellants contend that the court erred in denying the motion of appellants for a trial of the issues of fact under the cross complaint before a jury; which motion was made at the opening of the trial and repeated at the conclusion of plaintiff's case. The complaint in this case sets out an equitable action in foreclosure. The cross complaint sets out a counterclaim for damages. In Dover Lumber Co. v. Case, 31 Idaho 276, at page 284, 170 P. 108, at page 110, this court quoted with approval from 24 Cyc. pp. 126, 127 as follows: 'The fact that defendant sets up a legal defense to an equitable cause of action does not change the character of the proceedings or entitle him to demand a jury trial. * * * In the absence of a statute a defendant who pleads a counterclaim in an equitable action is not entitled to a jury trial of the issues arising thereon, notwithstanding the cross-demand constitutes an independent cause of action upon which a separate action might have been brought and a jury trial demanded.'

This court then expressly overruled Robertson v. Moore, 10 Idaho 115, 77 P. 218, and Sandistrom v. Smith, 12 Idaho 446, 86 P. 416, in so far as they seem to announce a contrary doctrine.

In Johnson v. Niichels, 48 Idaho 654, at page 659, 284 P. 840, at page 842, it was held that, 'It is the settled rule of this court that a defendant, who pleads a counterclaim in an equitable action, is not entitled, as a matter of right, to a jury trial of the issues arising thereon.'

The constitutional guarantee that 'the right to trial by jury shall remain inviolate' has no reference to equitable cases. Johnson v. Niichels, supra; Portneuf Irrigating Co., Ltd., v. Budge, 16 Idaho 116, 100 P. 1046, 18 Ann.Cas. 674; Christensen v. Hollingsworth, 6 Idaho 87, 53 P. 211, 96 Am.St.Rep. 256.

Equity having obtained jurisdiction of subject matter of a dispute, will retain it for settlement of all controversies between the parties with respect thereto. Finlayson v. Waller, 64 Idaho 618, 134 P.2d 1069; Johnson v. Niichels, supra; Gillette v. Oberholtzer, 45 Idaho 571, 264 P. 229; Burke Land etc., Co., v. Wells Fargo & Co., 7 Idaho 42, 60 P. 87.

We find nothing supporting appellants' contention in Hudson v. Kootenai Fox Farms Co., 47 Idaho 58, 272 P. 704, cited and relied...