Union Guardian Trust Co. v. Rood
| Decision Date | 24 February 1944 |
| Docket Number | No. 73.,73. |
| Parties | UNION GUARDIAN TRUST CO. v. ROOD. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Action by the Union Guardian Trust Company, a Michigan corporation, wherein Collateral Liquidation, Inc., was assignee, against John R. Rood and others, wherein plaintiff recovered a deficiency judgment. When the suit was about to be outlawed, the plaintiff commenced a suit at law in the Circuit Court for Lapeer County, and defendant filed a petition in Wayne County Circuit Court for an injunction to restrain the action in Lapeer County. An injunction was granted, and plaintiff appeals.
Injunction dissolved and petition dismissed.
Appeal from Circuit Court, Wayne County; Robert M. Toms, judge.
Before the Entire Bench.
Stanley E. Hathaway, Harry L. Shaberman, and Samuel S. Willis, all of Detroit, for appellants.
John R. Rood, of Lapeer, in pro per.
The present controversy between Colateral Liquidation Inc., assignee of Union Guardian Trust Company, and the defendant, John R. Rood, arose out of a mortgage foreclosure which has been before this court in Union Guardian Trust Company v. Rood, 261 Mich. 188, 246 N.W. 74, on rehearing in 265 Mich. 354, 251 N.W. 309, and again on motions to vacate sale and confirmation in 267 Mich. 343, 255 N.W. 347.
A deficiency decree was entered against Rood on June 13, 1932. Being unable to collect the money due under this decree, a suit at law based upon it was begun against Rood in the Circuit Court of Lapeer County on June 10, 1942, by Collateral Liquidation, Inc., just before the deficiency decree was about to expire by reason of the statute of limitations. 3 Comp.Laws 1929, § 13976, Act No. 72, Pub.Acts 1941, Comp.Law Supp.1942, § 13976 (Stat.Ann.1943, Comp.Cum.Supp. § 27.605). Rood entered a special appearance in Lapeer county and moved to dismiss for want of jurisdiction, which motion was denied. He then moved to vacate the order denying the motion to dismiss and for a rehearing, which motion was noticed for hearing in the Circuit Court for Lapeer county on December 1, 1942.
On November 24, 1942, Rood filed a petition in the Circuit Court for the County of Wayne, where the deficiency decree had been entered. He sought to restrain the law action in Lapeer county. Collateral Liquidation, Inc., opposed the issuance of the injunction and asked in the alternative that it be granted leave nunc pro tunc to pursue its remedy in Lapeer county. The trial judge in the Wayne county injunction action denied this alternative request and perpetually enjoined the law action in Lapeer county. From this decree Collateral Liquidation, Inc., has appealed.
Appellant asks to have the injunction set aside on the ground that leave is not required before the institution of a suit at law upon a mortgage deficiency decree, where the suit is based solely upon the decree and not upon the original debt; and argues that, in the event prior leave is necessary, the circuit court should and could have entered an order granting such leave nunc pro tunc.
The statute in question, 3 Comp.Laws 1929, § 14367 (Stat.Ann. § 27.1135), provides in mortgage foreclosures in equity that: ‘After such bill shall be filed, while the same is pending, and after decree rendered thereon, no proceedings whatever shall be had at law for the recovery of the debt secured by the mortgage, or any part thereof, unless authorized by the court.'
Appellee contends that the language of this statute precludes any suit at law without leave of the court in which the foreclosure decree was entered, and he cites in support of this contention Shields v. Riopelle, 63 Mich. 458, 30 N.W. 90, 92. The Riopelle case is distinguishable on its facts and contains a statement which, although dictum in that case, is most persuasive against appellee's contention in the instant case. The court there said: ‘The decree settles the amount of the debt and the report of the circuit court commissioner determines the amount of the deficiency when confirmed after the sale, and the statute provides the mode of its enforcement by execution, and it must be resorted to before an action at law can be maintained for its recovery, and then the action will lie upon the decree, and not upon the original obligation.’ (Italics ours).
The New York Civil Code contains a section substantially the same as our own. It reads: ‘While an action to foreclose a mortgage upon real property is pending or after final judgment for the...
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