Gibbes MacHinery Co. v. Rivers

The opinion of the Court was delivered by Mr. Justice Hydricic. To clearly understand the issue involved, a brief statement is necessary. On March 20, 1911, defendant gave plaintiff two notes for $72.02 and $73.45, respectively, and secured them by mortgage of a planing machine, for the purchase price of which they were given in part payment. The notes were not paid at maturity, and, plaintff’s demand for possession of the planer, in order that hemightsellit under the mortgage, having been refused, he brought an action of claim and delivery against defendant and J. C. Dowling (who seems to' have had actual possession) to recover the possession, or the value thereof, in case delivery could not be had, and damages for the detention thereof. The defendants did not answer, but appeared and consented that the whole case be referred. The referee took the testimony and reported that the value of the property sued for was $200, that there was due on defendant’s notes to plaintiff $150, and that plaintiff had been damaged $50 by the detention of the property. His report concluded as follows: “I find as a matter of law, that the plaintiff is entitled to the possession of the machinery in question, for the purposes contemplated by his mortgage over the same; *344 and, in case the said property can not be delivered h> plaintiff, plaintiff is entitled to judgment against the defendants, jointly and severally, in the sum of one hundred and fifty and 00-100 dollars, and in the sum of fifty dollars, actual damages, together with the costs of this action.” There were no' exceptions to the report. On hearing the report, the Court passed the following order for judgment: “It is ordered, that the said report be, and the same is hereby, confirmed and made the judgment of this Court. It is further ordered that the plaintiff herein, A. M. Gibbes, have leave to enter up judgment against the defendants, J. T. Rivers and J. C. Dowling, for the possession of the property mentioned and described in the affidavit and complaint in this action, and in case a delivery thereof cannot be had, then for the sum of two hundred dollars, the value thereof, and for the sum of fifty dollars’ damages as found by the referee, and for his costs and disbursements in this action.” Judgment was entered accordingly, and execution was issued thereon. That judgment was satisfied by payment of the costs and damag'es and delivery of the property tO' the plaintiff, who' sold it under the mortgage, and credited the net proceeds of the sale on the notes. Plaintiff then brought this action to' recover judgment for the balance due on the notes. Defendant pleaded, besides several other defenses', that the matter was res -judicata, because the referee had found and reported the amount due on the notes in the action of claim and delivery, and his report had been confirmed by the Court. All the defenses were overruled, except the plea of res judicata, which was sustained. As to the satisfaction of the judgment, the record is somewhat confusing. While the “Case” states that the judgment entered on the referee’s report has been fully satisfied, it will be seen, upon examination of defendant’s answer and the testimony, that defendant only claimed that the judgment was satisfied “by the delivery of the machine and pay *345 vncnt of the costs.” He did not contend that it was satisfied by payment of the amount found due to the plaintiff on the notes. On the contrary, he alleges in his answer that the machine was advertised and sold by the plaintiff, under the mortgage, and brought $40, which was credited on the notes. The answer practically admits, and the evidence shows, that the debt was not paid. The Court erred in sustaining the plea of res judicata. The finding in the claim and delivery action of the amount due on the notes was not intended to and did not authorize the entry of judgment for that amount, and no judgment therefor was entered. The finding was made under the authority of section 331 of the Code of Procedure, which provides that “in every action for the recovery of personal property which has been pledged in any way to secure credit or debt, the defendant may plead his counterclaim arising out of the same transaction, and the jury in such case may find, in addition to- the verdicts now provided by law, the amount due to the plaintiff, if any; and in such case the defendant shall have the right -to pay said amount, and costs, and the property shall thereafter be free from the encumbrance.” As it frequently happens that the only contention between the mortgagor and mortgagee of personal property is as to the amount due on the mortgage, and as the mortgagee has the right to the possession of the property, after condition broken, for the purpose of selling it and applying the proceeds to- the mortgage debt, if anything is due thereon, the act above quoted was passed, in 1909, in order that the amount due might be ascertained in the claim and delivery action (which could not have been done prior to the act), so that the mortgagor might pay it, and save further expense and costs. But the finding of the amount due was, by the terms of the statute-, limited- to- that purpose, and no authority is thereby given for the entry of a personal judgment against the mortgagor for -that amount. The defendant might have paid the- amount found to 'be due and *346 the costs, and, by the terms of the statute, the property would have been released from the encumbrance of the mortgage. But, having failed to pay the amount, he is bound for the balance due on the debt after application of the proceeds of the sale of the mortgaged property. Reversed. The Chiee Justice and Justices Woods and Fraser concur.