57 Neb. 207 | Neb. | 1898
This was an action by the Home Fire Insurance Company of Omaha against William J. Maxwell and John T. Clark as joint makers of a promissory note for $1,900 given March 29, 1890, and due three years thereafter, drawing eight per cent interest from date of obligation. The defendants, for answer to the petition, admit the execution of the note, and allege, in substance, that the defendant Maxwell delivered to plaintiff as collateral security to the debt a certain promissory note for $5,4=00 executed by one George M. O’Brien, Jr., payable to the said Maxwell, and secured by mortgage on real estate situate in Douglas county; that after the maturity thereof Maxwell commenced a suit to foreclose such mortgage, in which the Home Fire Insurance Company of Omaha intervened, and in the decree rendered therein it was awarded a first lien on the mortgaged premises for $1,913.55, being the amount at that time due upon the note in controversy herein; that said decree is still in
The first argument of defendants below is that the taking of a decree of foreclosure in the suit on the collateral note and mortgage is a bar to the present action, by virtue of the provisions of section 847 et scq. of the Code of Civil Procedure, as they existed at the time when the note herein was given, this .action was instituted, and the judgment under review was pronounced: Section 845 of the Code of Civil Procedure (Compiled Statutes 1895) requires that a petition to foreclose real estate mortgages shall be filed in the county where the premises are situated. The next succeeding section authorizes the court in such a suit to decree a sale of the mortgaged premises, or such part thereof as may be sufficient to pay the amount due and costs. Section 847, as it then existed, relates to the rendition of deficiency judgments in foreclosure suits for’ the amount remaining due and unsatisfied after sale of the mortgaged premises, in cases in which such balance is recoverable at law, and authorizes the issuance of execution to collect such deficiency judgment. Sections 848 and 849 of said Code, as then in force, follow:
“Sec. 848. After such petition 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.
“Sec. 849. If the mortgage debt be secured by the*210 obligation or other evidence of debt of any other person besides the mortgagor, the complainant 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.”
The two sections quoted were considered and construed in connection with sections 850 and 851 of the Code of Civil Procedure, in Meehan v. First Nat. Bank of Fairfield, 44 Neb. 213, and in an opinion by the present chief justice it was ruled that the statute authorized either an action at law for the recovery of the debt secured by real estate mortgage or a suit to foreclose the mortgage, at the option of the owner and holder thereof; but when he chooses one remedy he must exhaust it before resorting to the other, unless permission of the court is first obtained to pursue both remedies at the same time; and that pending foreclosure suit or after decree an action at law on the obligation or evidence of debt of a person other than the mortgagor, such as an indorser of the note secured by the mortgage, cannot be prosecuted without consent of the court of equity. That this decision is sound we do not entertain the shadow of a doubt, and if this were an action at law against O’Brien to recover the amount of his mortgage debt, it is very evident the doctrine announced in the case of Avhieh mention has been made would control. Manifestly, after the entry of the foreclosure decree against O’Brien, an action at law could not be maintained to recover from him the sum due on the debt secured by the mortgage, without leave of the court, in which foreclosure AA’as brought, to pursue that remedy, having been first procured. However, this is not an action upon the O’Brien note, but upon an obligation to which he is not in any way a party, and which was not in existence when the mortgage was given. In the foreclosure against O’Brien no deficiency judgment could have been obtained against
The two New York cases cited by counsel for defend
In Suydam v. Bartle, 9 Paige Ch. [N. Y.] 294, it appears that James P. Bartle and others executed a real estate mortgage which on its face purported to secure a bond for |40,000, although the mortgage in fact was given as security for certain drafts or bills of exchange drawn by the obligors in the bond and one Westfall, which had been accepted by the plaintiff. In a suit to foreclose the mortgage permission was asked to proceed to trial and judgment in the action at law which had already been commenced for the recovery of the mortgage debt from Westfall, who was not a party to the foreclosure, and authority to do so was given. The chancellor said: “The object of the legislature unquestionably was to' relieve the mortgagor from the expense of a double litigation. And where it is evident that the complainant could have had a perfect remedy against all persons who were liable for the payment of the debt, by a decree over against them for the deficiency, if he had chosen to make them parties to his foreclosure suit, it might not be a proper exercise of discretion for the court of chancery to permit any further proceedings to be had in the action at law after the filing of the bill of foreclosure.” Permission to proceed at law was granted in that case, since it was doubtful whether a deficiency judgment against West-fall would have been proper had he been a party to the bill to foreclose, the mortgaged premises not being of sufficient value to pay the entire debt. We make no criticism on the ruling in that case, but that the decision has no application here is obvious. There the action at law was predicated qn the very debt secured by the mortgage, while such is not the case here.
In Scofield v. Doscher, 72 N. Y. 491, it is disclosed that Peter Donlan executed and delivered to plaintiff a bond secured by a real estate mortgage, and thereafter Donlan
The answer pleaded that Maxwell was principal and Clark was surety on the note, and the demurrer admitted the truthfulness of such averment, and yet a joint judgment was rendered against both, without it having been certified on the record which of them was the principal debtor and which the surety, as required by section 511 of the Code of Civil Procedure. This was reversible error. (Van Etten v. Fosters, 48 Neb. 152.)
It is urged that the objection is raised for the first time in this court. The record does not sustain this contention. In the motion for a new trial it was assigned that the judgment was contrary to law. The character of the obligations assumed by the defendant was specially pleaded in the answer, which the demurrer admitted to be true. The rendition of a judgment in opposition to admissions in the pleadings is certainly contrary to law. For the error indicated the judgment is reversed and the cause remanded with directions to the district court to enter judgment in favor of the plaintiff for the amount demanded in the' petition against Maxwell as principal debtor and Clark as surety.
Reversed and remanded.