Great American Indemnity Company v. Bisbee

• Decision Date: 23 May 1938
• Docket Number: 6556
• Citation: 79 P.2d 1037,59 Idaho 18
• Parties: GREAT AMERICAN INDEMNITY COMPANY, a Corporation. Respondent, v. CLARENCE E. BISBEE, Appellant
• Court: Idaho Supreme Court

79 P.2d 1037

59 Idaho 18

GREAT AMERICAN INDEMNITY COMPANY, a Corporation. Respondent, v. CLARENCE E. BISBEE, Appellant

No. 6556

Supreme Court of Idaho

May 23, 1938

MORTGAGES-REAL ESTATE FORECLOSURE-APPEAL-STAY OF PROCEEDINGS-SUPERSEDEAS BOND-DEFICIENCY JUDGMENT-SUBROGATION OF SURETY-STATUTE OF LIMITATIONS.

1. The statute governing stay of execution on appeal, on judgment or order directing sale or delivery of possession of realty contemplates a full and complete stay of all proceedings on a real estate foreclosure, where the supersedeas required by court order is given. (I. C. A., sec. 11-207.)

2. A deficiency judgment entered in realty foreclosure at once becomes a "money judgment" within statute subrogating surety on supersedeas bond to rights of judgment creditor, and its payment is secured by previously given supersedeas bond (I. C. A., secs. 11-207, 12-616.)

3. A mortgage foreclosure decree is in rem and is not a personal judgment until after foreclosure sale.

4. Where deficiency judgment was entered after affirmance of mortgage foreclosure decree and subsequent foreclosure sale it became a "money judgment" within statute governing subrogation of surety on supersedeas bond, and hence surety's action against mortgagor to recover amount paid in satisfaction of deficiency judgment was subject to six-year statute of limitations on judgments and not to four-year statute applicable to implied contracts. (I. C. A secs. 5-215, 5-217, 11-207, 11-211, 12-616.)

APPEAL from the District Court of the Eleventh Judicial District for Twin Falls County. Hon. T. Bailey Lee, Judge.

Action by surety to recover money paid in satisfaction of a deficiency judgment against defendant. Judgment for plaintiff. Affirmed.

Judgment affirmed with costs in favor of respondent.

J. H. Barnes, for Appellant.

Where a surety brings an action on an undertaking of indemnity under the equitable doctrine of subrogation, or in law on assumpsit, his action must be brought within four years of the date of payment. (Sec. 4-217, I. C. A.; Tritthart v. Tritthart, 24 Idaho 186, 133 P. 121.)

A decree for the foreclosure of a real property mortgage is not a money judgment within the meaning of secs. 11-204 and 12-616, I. C. A., but is a judgment in ejectment under sec. 11-207, I. C. A. (Agren v. Staker, 46 Idaho 36, 267 P. 460; Clayton v. Barnes, 52 Idaho 418, 16 P.2d 1056; Barnes v. Buffalo Pitts Co., 6 Idaho 519, 57 P. 267; Naylor & Nordin v. Lewiston etc. Elec. Ry. Co., 14 Idaho 722, 95 P. 827; Perkins v. Bundy, 42 Idaho 560, 247 P. 751.)

Walters, Parry & Thoman and J. R. Keenan, for Respondent.

Surety on supersedeas bond paying deficiency judgment, subrogated to judgment and entitled to have an assignment of the judgment and enforce the judgment and its liens with all the remedies and rights of the original judgment creditor. (Wilson v. Wilson, 6 Idaho 597, 57 P. 708; Scott v. Smith, 35 Idaho 388, 206 P. 812; Houghtelin v. Diehl, 47 Idaho 636, 277 P. 699; 25 R. C. L., sec. 8, p. 1320, sec. 61, p. 1378, sec. 63, p. 1381; 60 C. J., p. 740, sec. 49, p. 755, sec. 67; Crippen v. Chappel, 35 Kan. 495, 11 P. 453, 57 Am. St. 187; In re Stinger's Estate, 61 Mont. 173, 201 P. 693; Kramer v. Bankers Surety Co., 90 Neb. 301, 133 N.W. 427; Maryland Casualty Co. v. Repass, 253 F. 328, 165 C. C. A. 110.)

In action on assigned judgment where surety has paid judgment and taken assignment thereof the statute of limitations is that applicable to action on judgments, not that applicable to action on implied contract. Suit to enforce judgment assigned to surety is not action on implied contract for indemnity. (21 R. C. L., p. 1106, sec. 144; Tritthart v. Tritthart, 24 Idaho 186, 133 P. 121; 25 R. C. L., p. 1394, sec. 77; 60 C. J., p. 828, and note 30; Smith v. Davis, 71 W.Va. 316, 76 S.E. 670, 43 L. R. A., N. S., 614.)

Surety on supersedeas bond which includes obligation to pay any deficiency on foreclosure sale, upon payment of deficiency judgment entitled to enforce judgment against debtor within purpose and provisions of sec. 12-616, I. C. A., which should be liberally construed to effect its objects. (Secs. 12-616, 70-102, I. C. A.; Agren v. Staker, 46 Idaho 36, 267 P. 460.)

AILSHIE, J. Budge and Givens, JJ., concur. MORGAN, J., Dissenting.

OPINION

AILSHIE, J.

In 1931 David Patrick obtained a decree of foreclosure of a real estate mortgage executed by Clarence E. Bisbee and wife. Bisbee and wife were dissatisfied with the judgment and appealed to this court. In order to stay foreclosure sale pending the appeal, the Bisbees procured respondent to execute a supersedeas bond under the provisions of sec. 11-207, I. C. A. The judgment appealed from was affirmed. (Patrick v. Bisbee, 52 Idaho 369, 15 P.2d 730.) Thereafter execution issued and the lands covered by the decree were sold and execution was returned, showing a deficiency of $ 1,633.25 which was duly entered against defendant, Clarence E. Bisbee, who is appellant herein, by the clerk as a deficiency judgment on December 13, 1932. Bisbee neglected to pay the judgment and the surety (respondent herein) paid the judgment on February 20, 1933, to the executor of the estate of David Patrick, deceased and took what purported to be an assignment of the judgment. Thereafter this present action was instituted by the surety, Great American Indemnity Company, a corporation, respondent herein, against the principal, Clarence E. Bisbee, appellant herein.

The complaint in this case sets forth the foregoing facts and alleges that the deficiency judgment has not been paid by the appellant and that it became, and is, a lien upon all the right, title and interest of appellant in and to certain tracts of real property described in the complaint; and prays for a judgment against appellant for the amount paid by respondent on such judgment; and that the same be declared a lien on the same premises in favor of respondent. The answer admits the allegations of the complaint except it denies that the deficiency judgment was "duly assigned" to respondent and that respondent is the owner thereof. It also denies that appellant made a payment of $ 150.98 which respondent has credited on the deficiency of judgment. Appellant also alleged that the purported assignment was illegal and void and plead the bar of the statute of limitations as embraced within the provisions of sec. 5-217, I. C. A. Respondent moved for judgment on the pleadings which was granted and judgment was entered in respondent's favor, from which this appeal has been prosecuted.

The questions, which arose on the pleadings in this case and on which judgment was entered, are purely issues of law and, in the final analysis, involve only an inquiry as to the nature of the liability of a principal to his surety on a supersedeas bond in a real estate foreclosure action.

At the very outset of our inquiry we are confronted with the contention made by appellant, that the purported assignment of the judgment by the executor to the surety (respondent herein) was void, for the reason that an executor or administrator has no power or authority to sell or assign personal property or a chose in action belonging to the estate of a deceased person, without reporting the sale and having it confirmed by the probate court. (Cummings v. Lowe, 52 Idaho 1, 10 P.2d 1059.) On the other hand, respondent contends that there was no sale of the judgment and that the purported assignment is merely a receipt for the money due from a debtor and an acknowledgment of satisfaction on behalf of the estate; and that it was the duty of the executor to collect the debts due the estate and receipt therefor (sec. 15-802, I. C. A.; 11 Cal. Jur., sec. 633); that, so far as the estate was concerned, plaintiff and defendant were jointly and severally liable on the judgment and that the surety company was merely paying its own debt when it paid this obligation; and that by operation of law, the surety was entitled to subrogation to all the rights of the estate of Patrick in and to the judgment. In view of the conclusion we have reached on the major issue involved herein, we deem it unnecessary for us to express any opinion on these divergent contentions.

The statute (sec. 11-207, I. C. A.), under which this supersedeas bond was given, provides as follows:

"If the judgment or order appealed from direct the sale or delivery of possession of real property the execution of the same can not be stayed unless a written undertaking be executed on the part of the appellant with two or more sureties, to the effect that during the possession of such property by the appellant he will not commit, or suffer to be committed, any waste thereon, and that if the judgment be affirmed, or the appeal dismissed, he will pay the value of the use and occupation of the property from the time of the appeal until the delivery of possession thereof, pursuant to the judgment or order, not exceeding a sum to be fixed by the judge of the court by which the judgment was rendered or order made, and which must be specified in the undertaking. When the judgment is for the sale of mortgaged premises, and the payment of a deficiency arising upon the sale, the undertaking must also provide for the payment of such deficiency."

The bond here in question has served all its purposes, except as to the "deficiency arising upon the sale." That part of the obligation is dealt with by the last sentence of the section just quoted. Appellant contends that when the surety paid the deficiency judgment, its action against the principal, appellant, was one in assumpsit; that the obligation of the principal to reimburse his surety was an implied contract "not founded upon an instrument in writing" (sec. 5-217), and that it became barred by the...