Commercial National Bank v. Grant

103 N.W. 68, 73 Neb. 435, 1905 Neb. LEXIS 104
CourtNebraska Supreme Court
DecidedApril 5, 1905
DocketNo. 13,406
StatusPublished
Cited by1 cases

This text of 103 N.W. 68 (Commercial National Bank v. Grant) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commercial National Bank v. Grant, 103 N.W. 68, 73 Neb. 435, 1905 Neb. LEXIS 104 (Neb. 1905).

Opinion

Sedgwick, J.

The defendant John Grant gave his promissory notes to the plaintiff, and as collateral to secure the payment thereof pledged to the plaintiff shares of the capital stock of the Grant Paving Company. This action was brought in the district court for Douglas county to foreclose the lien of the pledge. For this purpose the petition contained the usual allegations and prayer, and also contained the prayer that the plaintiff should have permission to apply for judgment for any deficiency which might remain after the sale of the stock. There was a decree of foreclosure and the stock pledged was sold thereunder. Objections were filed to the confirmation of the sale and to the enter- ’ ing of a deficiency judgment. These objections were overruled and the sale confirmed, and a judgment entered against the defendant for the deficiency. From this decree the defendant appeals.

[436]*4361. Some technical objections were interposed to the regularity of the sale of the pledged stock, but these objections were practically abandoned at the argument, and do not seem to be substantial nor to require further discussion.

2. The main question which the defendant, who is appellant here, presents to this court is as to the power of the court to enter a deficiency judgment in an action to foreclose a pledge. We have no doubt that the judgment of the district court is correct in this regard. It is insisted by the defendant that, when an action to foreclose a pledge has proceeded so far as to confirm the sale which has been ordered and apply the proceeds thereof upon the indebtedness, the plaintiff may commence an action in the same court to recover the deficiency, but he cannot file a pleading in the same action and ask for that deficiency. This may be in harmony with the old practice alluded to in the Michigan case which seems to be relied upon (Johnson v. Shepard, 35 Mich. 115), but it is not in harmony with our code. We have but one district court, and but one form of action, and may join as many causes of action as we may have whether they be legal or equitable or both. Why should a plaintiff be compelled to have two actions instead of one when the whole matter can be disposed of in one action? The answer made in the argument is that the causes of action which may be united in the same suit must be existing and not merely prospective causes of action. It seems to be supposed that Weinland v. Cochran, 9 Neb. 482, in which such language is used, disposes of this case. In that case it was sought to unite a cause of action to set aside a fraudulent conveyance and subject the land to the lien of the judgment, when judgment should be obtained, with a cause of action upon an indebtedness to obtain the judgment, and it was said that no right of action to set aside the fraudulent conveyance existed until the judgment had been obtained. There, the cause of action to set aside the conveyance was based upon the judgment. Here, the cause of action is based upon the prom[437]*437issory notes, which existed when this action was begun. The plaintiff in this case might have begun his action upon the note at the time he began his action to foreclose, or he might begin his action to foreclose, or he might bring both actions together, under our code. The appellant virtually concedes this when he says that probably the plaintiff might have brought his action upon the notes and in the same action have asked that the securities be sold and applied upon the judgment; that is, he may. set up both matters in his petition, provided he sets out the right one first, but he cannot invert the order. It may be conceded that the chancery courts of an early day had no jurisdiction of common law actions. The chancery courts and common law courts being then entirely distinct tribunals, questions frequently arose as to the jurisdiction and prerogatives of the respective courts. An action brought in the wrong court must fail because of a want of jurisdiction to entertain it. At a later day and while the distinction between courts of law and courts of equity was maintained, the practice obtained in some of the states, where both courts were presided over by the same judge, of transferring causes from the equity side to the law side of the court, or vice versa. Under such practice questions might arise in regard to jurisdiction of causes of action which cannot arise under a practice giving the same court general chancery and common law jurisdiction. In such a court there can be no question of jurisdiction, and, under section 87 of our code, there can be no question of the proper practice and procedure.

It was admitted upon the argument that there is no distinction between actions of foreclosure of pledges and those of foreclosure of chattel mortgages in this regard. That it is the proper practice to enter deficiency judgments in such cases is indicated or assumed, if not declared, and so far ns we have observed has never been denied, in jurisdictions under code practice similar to ours. 7 Cyc. 102, and notes.

In an action to foreclose a chattel mortgage, the su[438]*438preme court of Oregon held that a personal judgment could not be rendered against one who had purchased the property from the mortgagor, without showing that such purchaser had sold or disposed of the property, or that it could not be produced or delivered so as to satisfy the indebtedness. The reason for this is that the purchaser was not originally liable for the indebtedness and would not make himself so by simply purchasing the property. The court, however, said:

“I think it might properly be decreed, where the evidence showed that the party in such case had disposed of the property, that he be required to pay its value, or a sufficient part thereof to make up any deficiency that might be found after applying the proceeds of the sale of the remaining property to the payment of the debt.” Commercial Nat. Bank v. Davidson, 18 Ore. 57, 22 Pac. 517.

The supreme court of Illinois in Wylder v. Crane, 53 Ill. 490, which was an action to foreclose a chattel mortgage, said:

“It is urged that the court below should have rendered a decree against Crane (the mortgagor) for the balance of the debt due to plaintiff in error. If, after failing to establish a right to equitable relief against the property, he was entitled to such a decree, having, as he had, a complete remedy at law, he should have asked for the decree. Such relief was not prayed for in the bill, and to have received it he should have asked for it under the prayer. If entitled to receive it, and he had asked for it, the court below would have granted it.”

And the supreme court of South Carolina held, in an action to foreclose a mortgage on property which is in the possession of the defendant, who holds both a senior and junior mortgage on the same property, and who is not personally indebted to the plaintiff, it is error to give a personal judgment against such defendant. The ground for this decision is plainly stated in the opinion:

“As far as we can see, the defendant was not personally indebted to plaintiff, either by contract, or in any [439]*439other way.” Edwards v. Dorgan, 30 S. Car. 177, 8 S. E. 858.

It is said by the supreme court of Washington in Weir v. Rathbun, 12 Wash. 84, 40 Pac.

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Bluebook (online)
103 N.W. 68, 73 Neb. 435, 1905 Neb. LEXIS 104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commercial-national-bank-v-grant-neb-1905.