Thompson v. West

• Decision Date: 07 March 1900
• Citation: 59 Neb. 677,82 N.W. 13
• Parties: THOMPSON ET AL. v. WEST ET AL.
• Court: Nebraska Supreme Court

59 Neb. 677

82 N.W. 13

THOMPSON ET AL.

v.WEST ET AL.

Supreme Court of Nebraska.

March 7, 1900.

Syllabus by the Court.

1. In the absence of a general saving clause, the repeal of a statute will not affect a suit previously brought to enforce a right founded thereon or accrued thereunder.

2. The repeal of the statute permitting the recovery of deficiency judgments did not affect actions then pending.

3. An incorporated religious society has no power to acquire or hold real estate for any purpose other than that of promoting the object of its creation.

4. A contract entered into by such a corporation for the purchase of real estate as a matter of speculation merely is ultra vires and void.

5. Where, in an action by an indorsee of a promissory note, it is established that the instrument was illegal in its inception, the burden is cast upon the plaintiff to show that he is an innocent holder for value and before due.

6. The action of the majority of a board of trustees of a religious society will not bind the latter without notice to or participation therein by the other members of the board.

7. A corporation cannot ratify a contract which it had not the power to make.

Appeal from district court, Lancaster county; Holmes, Judge.

Action by Frank Thompson and others against George W. West and others. Judgment for defendants, and plaintiffs bring error. Affirmed.Morning & Berge, for appellants.

C. S. Rainbolt and T. F. A. Williams, for appellees.

NORVAL, C. J.

This was a suit to foreclose a real-estate mortgage executed and delivered by one George W. West to Ward S. Mills to secure the payment of one principal note and coupon notes thereto attached. The principal note was transferred by the payee, Mills, to the First Christian Church of Lincoln, and, by two of the trustees, sold and indorsed to James Thompson, now deceased. A decree of foreclosure was entered, the mortgaged premises were sold, and the sale confirmed, and, a deficiency existing after the proceeds of sale were applied on the debt, a judgment therefor was asked against said church as an indorser of the paper, which request was denied. Plaintiffs appeal.

The only question raised is whether the court below erred in refusing to render a deficiency judgment against the church. It is disclosed by the record that certain of the trustees of the First Christian Church of Lincoln, and who assumed to act for it, purchased of Mills a number of vacant and unimproved lots situate in Mills' Second addition to University Place. The lots were purchased for the purpose of speculation, or with the view of being resold at an advance over the cost price; but the title to the property was permitted to remain in the name of Mills, who, on the trustees making the sale of a lot, at their request, executed a deed to the purchaser, and the latter gave to Mills a note, secured by a mortgage on the property, for the unpaid purchase money. Mills thereupon indorsed and transferred the note and mortgage to the First Christian Church of Lincoln. One of these lots was sold to West, who executed the note and mortgage in suit to Mills for the amount of the purchase price remaining unpaid, and this note was indorsed without recourse by the payee, and delivered to said church. Subsequently the note and mortgage were transferred by certain of the trustees, in the name of the church, to James Thompson, plaintiffs' decedent. The governing board of the trustees of the church corporation never held any meeting for the purpose of taking an action relative to, nor did such board, as a body, authorize, the purchase and sale of the lots or the transfer of the note and mortgage in question. The defendant church contends that no deficiency judgment could properly be rendered against it, for the following reasons: (1) No judgment for a deficiency can be lawfully rendered in this state in a suit to foreclose a mortgage. (2) The contract relative to the purchase of the lots of Mills for the purpose of speculation was without the power of the First Christian Church of Lincoln, and therefore ultra vires and void. (3) The indorsement of the note and the sale thereof to plaintiffs' decedent was never authorized or sanctioned by the board of trustees of said church. These propositions will receive consideration in the order stated.

Prior to 1897 the following sections were parts of the Code of Civil Procedure of this state:

“Sec. 847. When a petition shall be filed for the satisfaction of a mortgage, the court shall not only have the power to decree and compel the delivery of the possession of the premises to the purchaser thereof, but on the coming in of the report of the sale, the court shall have the power to decree and direct the payment by the mortgagor of any balance of the mortgage debt that may remain unsatisfied after a sale of the mortgaged premises, in the cases in which such balance is recoverable at law; and for that purpose may issue the necessary execution, as in other cases, against other property of the mortgagor.”

“Sec. 849. If the mortgage debt be secured by the obligation or other evidence of debt of any other person besides the mortgagor, the complaint may make such person a party to the petition, and the court may decree payment of the balance of such debt remaining unsatisfied after a sale of the mortgaged premises, as well against such other person as the mortgagor, and may enforce such decree as in other cases.”

It is plain enough that under the quoted sections, and prior to their repeal, it was proper, in a foreclosure case, on the coming of the report of sales to enter a decree of judgment against the mortgagor and other persons liable for the payment of the mortgage debt. Plow Co. v. Mewis, 10 Neb. 317, 4 N. W. 1059;Clapp v. Maxwell, 13 Neb. 542, 14 N. W. 653;Cooper v. Foss, 15 Neb. 515, 19 N. W. 506;Association v. Moore, 40 Neb. 686, 59 N. W. 115;Hare v. Murphy, 45 Neb. 809, 64 N. W. 211, 29 L. R. A. 851;Flentham v. Steward, 45 Neb. 640, 63 N. W. 924. But these sections of said Code were repealed by the legislature of 1897 (Laws 1897, c. 95), and by reason thereof it is strenuously argued by counsel for the church that the power to enter deficiency judgments is abrogated in all cases without regard to the date the debt was contracted, or whether proceedings may have been taken to enforce the same at the time the repealing statute was adopted. On the other hand, it is argued by counsel for plaintiffs that the repealing act of 1897 had no application to suits then pending, nor to causes of action then accrued, nor decrees already entered. Whether or not a statute which denies the right to a deficiency judgment as to existing debts is unconstitutional, as impairing the obligations of contracts, the court is not at this time called upon to decide, and we refrain from now entering upon a discussion of the question. Section 2, c. 88, Comp. St., declares that, “whenever a statute shall be repealed, such repeal shall in no manner affect pending actions founded thereon, nor causes of actions not in suit.” If the jurisdiction of the district court to enter deficiency judgments exists independent of statute, as has been argued, it is too plain to require elaboration that it was not taken away by the repeal of sections 847 and 849 of said Code. On the other hand, if the power to render a deficiency judgment is purely statutory, as was intimated in Devries v. Squire, 55 Neb. 438, 76 N. W. 16, it is equally clear that, as to pending suits, such right was not abolished by the repeal of said sections, owing to the provisions of section 2, c. 88, Comp. St., quoted above. Klechner v. Turk, 45 Neb. 176, 63 N. W. 469. The record not only conclusively shows that long prior to the adoption of said repealing act this suit was brought in the court below, a decree of foreclosure had been entered, the mortgaged premises sold thereunder, and the order denying a deficiency judgment against the church, which is sought to be reviewed by this proceeding, had been entered, and the cause docketed in this court. So that the repeal of said sections 847 and 849 cannot be invoked to defeat the recovery of a deficiency judgment against the church.

Sections 42 and 55, c. 16, Comp. St., follow:

“Sec. 42. The trustees or directors who may be appointed under the provisions of this subdivision, and their successors in office, shall have perpetual succession by such name as may be designated, and by such name be legally capable of contracting and prosecuting...