15 Colo. App. 389 | Colo. Ct. App. | 1900
In his complaint the plaintiff alleged generally that one Miller in 1892 was the owner of certain real estate. In March of that year the owner made his note for 11,200 payable five years after date on certain conditions, and to secure it executed a trust deed to one Aldrich, as the trustee, naming the Colorado Securities Company as the beneficiary. In the succeeding month the note was sold and transferred for a valuable consideration to the plaintiff, who since that time had been the holder of it. The plaintiff made divers allegations in regard to the nonpayment of the debt and the nonpayment of much of the accruing interest. He then alleged that Miller conveyed in 1893 to Broad the equity which he held after the execution of the security. In 1896 Broad sold the timber on the land to the New Mexico Lumber Company, which corporation afterwards, through Broad’s permission and procurement, cut and carried it off. It amounted to about 400,000 feet of sawed lumber, valued at f800, aud Broad and the company converted the proceeds to their own use. The
This question is whether in this state the holder of a security may bring this kind of an action because of the destruction or impairment of his security. It is a question which has been much discussed in various states, and while generally the right has been maintained, and perhaps I might truthfully say universally so far as regards the authorities called to our attention, the doctrine has been put on various grounds. The one most generally relied on is that in case of a mortgage the mortgagee takes absolute title, and after maturity is the owner of the fee and therefore entitled to bring any suit necessary to protect his inheritance. This, however, is not the only principle relied on, because there are many cases where under the statutory or judicial determination of the mortgagee’s rights, he has been held to have simply a lien or a security and no title, but he has nevertheless been permitted to bring actions of this sort on the general hypothesis that he may bring suit and recover damages wherever there has been an unlawful impairment of his security. The latter seems to be the logical and legitimate basis on which the doctrine ought to rest and it is one which cannot be successfully or easily attacked. The appellees rely entirely on the case of The Pueblo & Arkansas Valley R. R. Co. v. Beshoar, 8 Colo. 32. That was a suit brought for trespass for damage
The appellee urges that the action ought not to have been brought prior to foreclosure because of the difficulty to ascertain the damages. No authority is called to our attention on the point and we see no reason why the beneficiary should await foreclosure in order to bring suit. It would not be true
We believe the court erred in sustaining the demurrer and the judgment therefore will be reversed and remanded for further proceedings.
Reversed.