Garrett v. Soucie

• Decision Date: 17 May 1928
• Docket Number: 4895
• Parties: ARTHUR W. GARRETT, Appellant, v. RALPH SOUCIE, Respondent
• Court: Idaho Supreme Court

267 P. 1078

46 Idaho 289

ARTHUR W. GARRETT, Appellant, v. RALPH SOUCIE, Respondent

No. 4895

Supreme Court of Idaho

May 17, 1928

CHATTEL MORTGAGES-METHODS OF FORECLOSURE-SALE BY MORTGAGEE UNAUTHORIZED.

Mortgagee after it hauled away mortgaged chattels and sold them without mortgagor's consent, applying proceeds on note, was not entitled subsequently to recover deficiency in suit on the note, since the statutory methods provided by C. S., secs 6379, 6949, for foreclosure of chattel mortgages were not followed, and deviation from statutory provisions precludes mortgagor's maintenance of action to recover deficiency.

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Dana E. Brinck, Judge.

Action on promissory note. Judgment of dismissal. Affirmed.

Judgment affirmed. Costs to respondent.

W. H. Davison and Barber & Barber, for Appellant.

Where there is an absolute promise to pay, the debt is personal in its nature. The obligation is absolute, and in nowise depends for its existence upon the instrument which affords additional security to the personal obligation. (Fabrique v. Cherokee & P. Coal Co., 69 Kan. 733, 77 P. 584; Rushton v. McIllvene, 88 Ark. 299, 114 S.W. 709; Miller v. Smith, 20 N.D. 96, 126 N.W. 499; 11 C. J. 746.)

That court thereupon proceeded to hold that the liability was so far personal that the statute of limitations could not run against the mortgage where the debtor was out of the state, although the mortgaged lands had been transferred to another and the foreclosure was against him. And that doctrine is laid down by this court in Dighton v. First Exchange Nat. Bank, 33 Idaho 273, 192 P. 832.

In some states a chattel mortgage is a conditional sale, to be defeated by a condition subsequent, and passing title, but in Idaho it only affords security by way of lien upon the property. (11 C. J. 399, notes 2, 3; Marnella v. Froman, 35 Idaho 24, 26, 204 P. 202; First Nat. Bank of St. Anthony v. Steers, 9 Idaho 519, 108 Am. St. 174, 75 P. 225; 5 R. C. L. 384.)

The relationship is one of debtor and creditor secured by lien. (First Nat. Bank of St. Anthony v. Steers, supra; Marnella v. Froman, supra; 5 R. C. L., p. 384, sec. 2; Hannah & Hogg v. Richter Brewing Co., 149 Mich. 220, 119 Am. St. 674, 12 Ann. Cas. 344, 112 N.W. 712, 12 L. R. A., N. S., 178.)

A deficiency is merely an unpaid balance, which exists without the provisions of C. S., sec. 6949. (Advance Thresher Co. v. Whiteside, 3 Idaho 64, 26 P. 660; Toby v. Oregon P. R. R. Co., 98 Cal. 490, 33 P. 550; 11 C. J. 746.)

The judgment provided for does not create the debt but merely avoids the necessity of another suit to put it in judgment and provide a judgment lien. (C. S., sec. 6949.)

We are therefore of the opinion that, in a case like the one at bar, the amount realized by sale under the power may properly be treated as a payment on the note, and that the creditor may, by action at law, enforce payment of the balance remaining unpaid and unsecured. (Jones on Mortgages, sec. 950; 4 Kent's Commentaries, 183; Blumberg v. Birch, 99 Cal. 416, 37 Am. St. 67, 34 P. 102; Merced etc. Bank v. Casaccia, 103 Cal. 641, 37 P. 648; Vandewater v. McRae, 27 Cal. 596; Shepherd v. May, 115 U.S. 505, 6 S.Ct. 119, 29 L.Ed. 456; Mallory v. Kessler, 18 Utah 11, 72 Am. St. 765, 54 P. 892; Herbert Kraft Co. v. Bryan, 140 Cal. 73, 73 P. 745; Sacramento Bank v. Copsey, 133 Cal. 663, 85 Am. St. 242, 66 P. 8, 205; 41 C. J., Mortgages, p. 1022.)

J. B. Eldridge, for Respondent.

The statutory law as well as the decision of this court in this state has become so firmly fixed that a mortgagee cannot sue upon a note secured by a mortgage except through the process of foreclosure; that it is wholly unnecessary to go outside of the statute and of this state for citation of cases, and this case falls squarely within the decisions of this court heretofore made. (C. S., sec. 6949.)

In Rein v. Callaway, 7 Idaho 634, 65 P. 63, this court said: "A mortgagee cannot waive his security and sue upon the debt. (First Nat. Bank v. Williams, 2 Idaho 670, 23 P. 552; Barbiere v. Ramelli, 84 Cal. 154, 23 P. 1086.) . . . he cannot maintain his action upon the debt; for that reason the complaint fails to state a cause of action, and the demurrer should have been sustained. Evidently the legislature intended, by the enactment of provisions of law above cited, to protect the debtor from the summary sale of mortgaged property by the creditor, and has provided two methods for the foreclosure of chattel mortgages, and those methods are exclusive. Under the statutes of this state, the mortgagor is only liable for any balance that remains due on the mortgage debt after the foreclosure of the mortgage and sale of the mortgaged property as provided by law, and the application of the proceeds of such sale thereon."

Again, in Berg v. Carey, 40 Idaho 278, at page 281 (232 P. 904), this court reaffirmed the doctrine of Rein v. Callaway, and said:

"Since respondent had a chattel mortgage he could not sue on the debt but was forced to foreclose his mortgage. 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 is an action for foreclosure. (C. S., sec. 6949; Rein v. Callaway, 7 Idaho 634, 65 P. 63.)"

In the case of Portland Cattle Co. v. Biehl, 42 Idaho 39, at pages 44, 45 (245 P. 88), this court again reaffirmed the doctrine in Rein v. Callaway, and again in the case of First Nat. Bank of Pocatello v. Poling, 42 Idaho 636, 248 P. 19.

T. BAILEY LEE, J. Wm. E. Lee, C. J., and Budge, Givens and Taylor, JJ., concur.

OPINION

T. BAILEY LEE, J.

On December 20, 1922, defendant, Soucie, executed his promissory note in the sum of $ 1,330, due ten months thereafter with interest at ten per cent, to the First National Bank of Meridian. The note was secured by a chattel mortgage covering defendant's interest in certain crops of hay and grain. In September, 1923, and January, 1924, without the consent of the mortgagor, the mortgagee bank, through its representatives, hauled away the mortgaged property and sold it, receiving fair...