Montgomery v. Merrill

62 Cal. 385 | Cal. | 1882

McKee, J.:

This appeal is taken on the judgment roll, from a final judgment entered on the pleadings in the case. The judgment was entered in an action commenced December 8, 1881, to foreclose a mortgage given to secure payment of a promissory note and a counsel fee, at the rate of five per cent, upon the principal and interest due upon the note in case of foreclosure. In the complaint it was alleged that the wife of the mortgagor, who was named in the complaint as a party defendant, had or claimed to have some interest in or lien upon the mortgage premises, which she claimed to have acquired subsequent and subject to the mortgage lien; and that, since the execution of the mortgage the mortgagor had become insolvent, and, therefore, against him, no judgment was asked for any deficiency after a sale of the mortgage premises. By the answer of the defendants all the allegations of the complaint were admitted; but it was affirmatively averred that the mortgagor had been adjudicated insolvent on October 29, 1881, and that all proceedings against him, as an insolvent debtor, had been stayed. Also, “ that on the-day of -, A. D., 18—,” the defendant, as head of a family, had acquired a homestead interest in the mortgaged premises, by making, acknowledging, and filing, according to law, “ on that day,” a declaration of homestead upon the premises.

Upon these pleadings the Court, on motion, gave judgment in favor of the plaintiff, according to the prayer of his complaint, for the amount of the principal and interest of the mortgage debt, and $188.65, “ attorney’s fee provided in the mortgage,” and costs; and to this no exception was taken by the defendants. But it is contended that the judgment is erroneous, because the answer contained matter which operated as a bar to the maintenance of the action.

The adjudication of the defendant’s insolvency did not constitute a defense to the action, nor did the existence of a stay of all proceedings against the insolvent debtor have that effect. The action was not brought against the insolvent to recover a money judgment upon the debt; it was brought to obtain a decree of foreclosure and sale of the mortgaged premises for the satisfaction of the debt. As a creditor of the insolvent debtor, having a mortgage lien, the plaintiff had the right, when the mortgagor was adjudged insolvent, to look to the mortgage alone, or to prove the mortgage debt against the estate of the insolvent, pursuant to the provisions of Section 44 of the Insolvent Act. (Stats. 1880, p. 92.) According to those provisions, a mortgage creditor of an insolvent debtor is not permitted to prove his debt in whole, unless he releases or transfers his mortgage to the assignee in insolvency; nor in part, unless he agrees with the assignee upon the value of the mortgaged premises, and the value should be less than the mortgage debt; or unless he agrees that a sale of the mortgaged premises may be made, under an order of the Court, “in such manner as the Court may direct;” in such cases he will be admitted to prove any deficiency. Or, if he releases or transfers his mortgage to the assignee, he will be admitted to prove the entire debt and share in the administration of the assets. But unless the value of the mortgaged premises shall be ascertained by agreement, or the property itself shall be sold under the directions of the Court, or the mortgage shall have been released or transferred to the assignee in insolvency, it is not permissible for the mortgage creditor to prove his debt in whole or in part, nor to maintain any action against the insolvent debtor for the collection of his debt. Such an action would be against the policy of the insolvent law and in violation of the order of the Court, which stayed all proceedings against the insolvent debtor. Yet as the assignee in insolvency takes only such interest and rights as the insolvent debtor had in the mortgaged premises, subject to the mortgage, the insolvency proceedings do not affect the right of the mortgagee to foreclose his lien; and in this case the mortgagee relied wholly on his mortgage lien. By his complaint he waived personal judgment for any deficiency which might be remaining after execution of a foreclosure and sale; he, therefore, had no debt or claim proved or provable against the estate of the insolvent debtor, and as his action was not to enforce the collection of his debt out of the assets of the estate, it could not interfere with the insolvency proceedings, and the order staying all proceedings against the estate did not operate to prevent the plaintiff from maintaining the action.

But if the order could be construed as having any effect whatever upon the right of the plaintiff to sue for foreclosure, the Court that made the order had jurisdiction to modify or set it aside in favor of a mortgage creditor, so as to permit him to proceed by action on the equity side of the Court to foreclose; and the presumption is, that the “ stay” was so modified or set aside as to the plaintiff, because the complaint avers, and it is not denied, “ that the action was' brought by leave of the Court first had and obtained.” The stay of proceedings, therefore, in no way affected the right of the plaintiff to maintain his action, nor did it operate to postpone the action pending the insolvency proceedings.

Nor did the answer otherwise disclose any defense to the action, or contain any matter which would defeat or delay the action. The new matter, by which the defendants attempted to assert a homestead claim or interest in the mortgaged premises, was not well pleaded; it did not, affirmatively or otherwise, show any existing claim which had attached prior to the mortgage lien. Taken in connection with the admission by the defendants of the allegations in the complaint, that the “ claim” asserted by the defendants was subsequent and subject to the mortgage, the answer itself must be regarded as frivolous—it admitted every averment in the complaint, and contained no defense; and the case was one in which it was proper for the Court to order judgment for the plaintiff upon the pleadings. (Hemme v. Hays, 55 Cal. 337.)

And in adjudging that the plaintiff was entitled to the sum awarded for an attorney’s fee, as provided in the mortgage, there appears no error. It. was the duty of the Court to fix the amount of the attorney’s fee. (Stats. 1873-4, p. 707.) Presumably the Court discharged that duty. The judgment rendered recites that there was due the amount stated, for principal and interest, upon the mortgage debt, and one hundred and eighty-eight dollars and sixty-five cents for an attorney’s fee, provided in the mortgage, and the judgment to that effect was according to the allegations and prayer of the complaint in the case. There is no bill of exceptions or statement on appeal, and, in the absence from the record of anything to the contrary, it must be presumed by the appellate Court, that the Court below proceeded regularly in fixing the amount of the attorney’s fee, and that the judgment is, in all respects, correct. (Hastings v. Cunningham, 39 Cal. 137.)

Judgment affirmed.

Boss and McKinstry, JJ., concurred.