Moore v. Capital Gas Corp. (State Report Title: Moore v. Capitol Gas Corp.)

• Decision Date: 27 March 1945
• Docket Number: 8459,8506.
• Citation: 158 P.2d 302,117 Mont. 148
• Parties: MOORE v. CAPITAL GAS CORPORATION (MUND, Intervener). [*]
• Court: Montana Supreme Court

158 P.2d 302

117 Mont. 148

MOORE v. CAPITAL GAS CORPORATION (MUND, Intervener). ^[*]

Nos. 8459, 8506.

Supreme Court of Montana

March 27, 1945

Rehearing Denied May 3, 1945.

Appeal from District Court, Thirteenth District, Fallon County Rudolph Nelstead, Judge.

Suit in equity by Chrlotte A. Moore against Capital Gas Corporation and another for judgment upon a note and to foreclose a mortgage given as security for the note, within Philomena S Mund filed a petition to intervene. From a judgment granting recovery on the note, but refusing foreclosure of the mortgage, the defendants appeal; and, from order refusing to permit filing of the complaint in intervention, the intervener appeals.

Judgment and order affirmed.

Fred G. Huntington, of Billings, for appellant Capital Gas Corporation.

W. B Leavitt, of Miles City, for appellant Mund.

J. J. McIntosh, of Forsyth, and Al Hansen, of Baker, for respondent.

JOHNSON Chief Justice.

Both of these consolidated appeals arise from a single equity suit in Fallon county. Cause No. 8459 is defendant corporation's appeal from a judgment granting plaintiff recovery upon a promissory note, but refusing the foreclosure of a mortgage given as security. Cause No. 8506 is the appeal of a stockholder of defendant corporation from an order after judgment refusing jurisdiction over her motion to set aside the judgment and permit her to file a complaint in intervention on behalf of herself and others similarly situated.

The defendant's answer to the complaint alleged that its only interest in the mortgaged property was by reason of United States oil and gas prospecting permits issued by the Secretary of the Interior to various persons, operating agreements executed by them to the Atlantic Pacific Oil Company of Montana, and the latter's contract to convey to defendant the operating rights to the land in consideration of certain payments and defendant's agreement to drill fifteen gas wells on the land; that defendant defaulted by drilling fewer than fifteen wells, and the Atlantic Pacific Oil Company of Montana obtained judgment requiring defendant to quit claim all right, title and interest in the land. Other defenses were raised relative to the note and mortgage which are not here material. Defendant prayed judgment of dismissal and for the award to it of costs, attorney's fees, and 'such other and further relief as may be just and equitable.' The reply traversed the allegations as to the loss of the security.

Trial was had to the court without objection and it was stipulated at the close of the trial that findings, conclusions and judgment might be rendered by the trial judge in chambers in his own county. The judge found and concluded that the plaintiff was entitled to judgment on the note and to $2500 attorney's fees, but not to the foreclosure of the mortgage lien. Judgment was rendered accordingly.

Thereafter defendant moved the court to amend the judgment by awarding defendant judgment for its attorney's fees for the successful defense of the foreclosure issue. Sec. 9798, Revised Codes; Graham v. Superior Mines, 100 Mont. 427, 49 P.2d 443.

This motion was granted by the award to defendant of $2500 attorney's fees. At the same time defendant moved that a paragraph be stricken from the judgment which awarded plaintiff recovery on the note and for attorney's fees and costs totalling $38,385, 'for the reason that the court was without power to include within its judgment denying foreclosure of the said mortgage a judgment for money based on the note and/or obligation which said mortgage was given to secure.' This motion was denied and defendant has appealed from the judgment as modified by the other motion.

No appeal was taken from the order refusing to grant the second motion to amend the judgment. Therefore we are unable to consider whether the court erred in that respect. The only error as assigned against the judgment itself is 'the failure of the court to refer the issues raised by the denial of defendant of liability on the note to a jury upon having found that foreclosure must be denied as the property mortgaged had been lost to defendant long prior to the commencement of this action.'

In other words, defendant seeks to place the trial court in error upon a point not brought to its attention until after judgment and then only by a motion, from the order denying which no appeal has been taken. However we shall consider the defendant's contentions which are that defendant, without its request, and in spite of its prayer for equitable relief and its acquiescence in the proceedings, should have been accorded a jury trial on the debt issue because of the provisions of section 23 of Article III of the Constitution of Montana that 'the right of trial by jury shall be secured to all, and remain inviolate, but in all civil cases * * * upon default of appearance, or by consent of the parties expressed in such manner as the law may prescribe, a trial by jury may be waived'; and because the right was not waived in one of the modes provided by section 9365, Revised Codes, and held exclusive by this court in Chessman v. Hale, 31 Mont. 577, 79 P. 254, 68 L.R.A. 410, 3 Ann.Cas. 1038.

But it is also well settled that the constitutional provision did not grant or enlarge the right of jury trial but merely preserved it as it existed at the time the Constitution was adopted. State ex rel. Jackson v. Kennie, 24 Mont. 45, 60 P. 589; Davidson v. Davidson, 52 Mont. 441, 158 P. 680; Butler Bros. Development Co. v. Butler, 111 Mont. 329, 108 P.2d 1041, 1048. In the latter decision this court said: 'It is also well established that a court of equity once having jurisdiction of a suit will retain jurisdiction of it for all purposes and dispose of all questions in the case even though this involves a determination of legal issues. 31 Am.Jur. 567; 19 Am.Jur. 125; 35 C.J. 162.'

In Montana Ore Purchasing Co. v. Boston & Montana Consolidated Copper & Silver Min. Co., 27 Mont. 288, 70 P. 1114, 1121, this court said: 'It may be stated, as a general proposition, that it is not an objection to the jurisdiction of a court in equity that legal questions are presented for consideration which might also arise in a court of law. If the controversy be one in which a court of equity only can afford the relief prayed for, its jurisdiction is unaffected by the questions involved. * * * If it took jurisdiction for any purpose, it took jurisdiction for all purposes, and determined all questions involved, whether legal or equitable, and that, too, without the intervention of a jury, except at the discretion of the chancellor.'

In that decision it was pointed out that in various decisions prior to the adoption of the Constitution this court had adopted that rule. Gallagher v. Basey, 1 Mont. 457; Fabian v. Collins, 3 Mont. 215; Mantle v. Noyes, 5 Mont. 274, 5 P. 856. The principle having been well settled before the Constitution was adopted, and the constitutional provision merely continuing the right of jury trial as it then existed, defendant's contention cannot be sustained.

This action was brought for the collection of the note and the foreclosure of the mortgage. 'In a suit to foreclose a mortgage the court will ordinarily treat the case as a unity and as one of exclusive equitable jurisdiction. It is settled, therefore, that the chancellor may determine the issue of indebtedness as one lying across the very threshold of his jurisdiction to decree a foreclosure.' 1 Pomeroy's Equitable Jurisprudence, Fifth Ed., section 240. 'A suit to foreclose a mortgage was of purely chancery jurisdiction when our Constitution was adopted, and was a suit in which there was no right to a trial by jury. * * * 'Where a court of equity has obtained jurisdiction over some portion or feature of a controversy, it may, and will in general, proceed to decide the whole issues, and to award complete relief, although the rights of the parties are strictly legal, and the final remedy granted is of the kind which might be conferred by a court of law.' 1 Pom.Eq., section 231. * * * In order to determine whether the plaintiff was entitled to the relief sought, it was absolutely necessary to ascertain that there was a debt secured by the mortgage, for, if there was no debt, there was nothing upon which the power of the court could be exercised. It was not possible to make a step of progress in the decree without settling the question of the defendants' indebtedness.' Carmichael v. Adams, 91 Ind. 526. The existence and the enforcibility of the lien required an adjudication by a court of equity, but before arriving at that question the court had first to determine whether the debt existed; having determind that question it was not deprived of the power so to adjudge because it found also that the security had become lost and the mortgage lien unenforcible. In fact, as pointed out by Professor Pomeroy, an equity court will even proceed to award damages if necessary to afford relief, where the equitable...