65 P. 63 | Idaho | 1901
This action was brought to recover a deficiency alleged to be due after applying the proceeds of a sale of mortgaged chattel property in part payment of the debt secured by such mortgage. Among other facts, the complaint alleges: On April 20, 1895, the defendant, Callaway, being indebted to the plaintiff in the sum of $1,700, executed and delivered to him his promissory note for that sum, and, to secure payment of the same, gave a chattel mortgage upon thirty-three
The only error assigned is the action of the court in overruling the demurrer. It appears from the record that the mortgaged property was taken from the appellant by the respondent and sold by him without either a foreclosure in court, or a foreclosure under the provisions of section 3391 of the Revised Statutes. We are called upon to decide whether the power of sale above quoted from said mortgage could be lawfully exercised by the mortgagee, and, if so exercised, whether he could thereafter recover any balance there may be due on the mortgage debt after applying the proceeds of such sale upon the debt.
As to the first proposition, section 4520 of the Revised Statutes provides, inter alia, as follows: “There can be but one action for the recovery of any debt, or the enforcement of any right secured by mortgage upon real estate or personal property, which action must be in accordance with the provisions of this chapter.” Under the provisions of said section, chattel mortgages can only be foreclosed by an action in court as therein
The second point is, The mortgagee having exercised said power, can he thereafter recover any balance that remains due on the mortgage debt after applying the proceeds of the sale, thereon? Under the views above expressed, the sale made by the mortgagee of the mortgaged property was illegal and void, and it now remains as if respondent had brought this action upon the note without first foreclosing his mortgage. As the mortgagee by his own illegal act has deprived himself of his. security, he cannot maintain his action upon the note. (Hibernia Sav. etc. Soc. v. Thornton, 109 Cal. 427, 50 Am. St. Rep. 52, 42 Pac. 447.) This is not a case where the security was destroyed or became valueless without the act or fault of the mortgagee. If it were, a different rule would apply. It is contended by counsel for respondent that it would be a useless and idle act to attempt a foreclosure of said mortgage after the property had been sold by the mortgagee, as bad been already done. While that .contention is true, it is also a well-recognized rule that, where a mortgagee by his own act unlawfully disposes of the mortgaged property, he cannot thereafter maintain a suit upon the debt secured by his mortgage. In this state, as in the state of California, the mortgaged property becomes the primary security, and the personal obligation of the mortgagor a secondary one. The mortgagor under our statutes, is personally liable only after foreclosure, and then only for the balance shown to be due by the return of the sheriff, unless it is made to appear that the property has been destroyed or otherwise become valueless without the fault of the mortgagee. It was said in Biddel v. Brizzolara, 64 Cal. 354, 30 Pac. 609, that “the liability of the
The court erred in overruling said demurrer, and the judgment must be reversed, and the cause remanded, with instructions to the lower court to sustain said demurrer, and it is so ordered. Costs of this appeal are awarded to appellant.