Craig v. Burns

MR. JUSTICE HOLLOWAY delivered the opinion of the court. On December 13, 1918, E. J. Ball and Mollie T. Ball, his wife, were indebted to Robert Craig and Jane Craig in the sum of $19,200, secured by a mortgage upon real estate situated in Cascade county. The mortgagors agreed to keep the taxes upon the property paid, to pay interest upon the principal annually,- and to discharge the principal by annual installments beginning January 1, 1920. In the fall of 1919 the mortgagors seeded a portion of the land to winter wheat. They failed to pay the taxes for 1919, and likewise failed to pay the interest or the installment of the principal due January 1, 1920. Later, in January, 1920, Ball and his wife vacated the premises, and in writing directed Robert Craig to take possession thereof “with all crops growing on said land.” Under that authority Craig entered into possession, made certain necessary repairs, gave to the growing crop of wheat whatever attention was necessary, and at its maturity harvested it and had it ready to be threshed on September 8, 1920, when the sheriff of Cascade county seized it under an execution issued in an action wherein Edith M. Noren was plaintiff and E. J. Ball was defendant. A demand for the return of the wheat was made, but refused, and this action in conversion was commenced. Issues were joined, and the cause was tried to the court without a jury. The amount and value of the wheat were fixed by stipulation of the parties. From a judgment in favor of the plaintiff the defendants appealed. It is urged that the complaint does not disclose such a general or special property interest in plaintiff as will support an action in conversion, but the principal argument [555] in support of this contention is founded upon the assumption that whatever right plaintiff has is to be determined as of the date when this action was commenced. The assumption is altogether erroneous. Plaintiff’s right to damages is fixed as of the date of the conversion, and not as of the date when his complaint was filed. (Babcock v. Caldwell, 22 Mont. 460, 56 Pac. 1081; Didriksen v. Broadview Hardware Co., 58 Mont. 421, 193 Pac. 63.) The plaintiff alleges that at the time the wheat was seized he was the owner, in possession, and entitled to the possession thereof, and that allegation, standing alone, would be sufficient; but he also sets forth the facts disclosing his claim of title or interest, and the sufficiency of the complaint will be tested by these allegations. (Paine v. British-Butte Min. Co., 41 Mont. 28, 108 Pac. 12.) At the time the wheat was seized by the sheriff it had been severed from the soil, and was personal property. Craig was a mortgagee of the real estate, rightfully in possession of it and of the wheat by virtue of the authority conferred by the mortgagors, who were the owners, and as such mortgagee in possession he was entitled to retain the possession until his debt was paid in full. (Fee v. Swingly, 6 Mont. 596, 13 Pac. 375; Toole v. Weirick, 39 Mont. 359, 133 Am. St. Rep. 576, 102 Pac. 590.) If he had rented the premises he would have been held to account in equity for the rents and profits, and would- have been bound to apply them in reduction of the mortgage debt (Barnett v. Nelson, 54 Iowa, 41, 37 Am. Rep. 183, 6 N. W. 49; Toole v. Weirick, above; 2 Jones on Mortgages, sec. 1114), or if he had managed the property personally, and had planted the wheat after taking possession, the measure of his liability would not have been affected. The wheat would have belonged to him and he would have been held for the rental value of the premises. (Holton v. Bowman, 32 Minn. 191, 19 N. W. 734; Toole v. Weirick, supra; 2 Jones on Mortgages, sec. 1122.) However, he did not plant [556] the wheat, and it was not covered by the mortgage. It belonged to the mortgagors, and, if they had retained possession, and had harvested the crop before sale under foreclosure, their right to it could not have been questioned. (Locke v. Klunker, 123 Cal. 231, 55 Pac. 993; 27 Cyc. 1247-1249; 2 Jones on Mortgages, secs. 697-780.) The writing under which Craig held possession of the wheat was not a bill of sale. It did not purport to transfer title or do more than confirm his right to possession. In the absence of anything to indicate a contrary intention, it will be presumed that he held the wheat in trust, the proceeds to be applied toward the satisfaction of his debt (2 Jones on Mortgages, sec. 1126) and he was entitled to hold it against the attaching creditor of the mortgagor until the debt was paid, and he could be required to surrender only the excess, if any (27 Cyc. 1253). The interest which Craig had in the wheat at the time it was seized was sufficient to enable him to maintain an action for its conversion under all of the authorities. The record discloses that Craig and his wife had instituted a suit to foreclose the mortgage, but the proceedings had not progressed to judgment at the time the wheat was seized by the sheriff. After the seizure a judgment was obtained which recited that the amount due was something over $22,000. Under that judgment the real property was sold and bid in by Craig for $18,000. Section 9467, Bevised Codes of 1921, provides that there is but one action for the recovery of debt or the enforcement of any rights secured by mortgage upon real estate or personal property. Upon the authority of that section defendants contend that by commencing the action to foreclose the real estate mortgage plaintiff waived whatever lien or claim he may have had upon the wheat, and numerous eases are cited to support the rule that a mortgagee may not foreclose his mortgages by piecemeal. For example, the case of Mascarel v. Raffour, 51 Cal. 242, fairly illustrates the rule. In that case the plaintiff had three mortgages, two of which [557] were upon the same parcel of land, and the third was upon that parcel and another adjoining parcel. The decree foreclosed the three mortgages upon the first parcel, but omitted to foreclose the third mortgage upon the second parcel. The court held that mortgage security could not be foreclosed in that manner, and a deficiency judgment entered, and that the legal effect of omitting to foreclose upon the second parcel was a waiver of the mortgage lien upon that parcel, citing section 726, California Code of Civil Procedure, in terms the same as our section 9467 above; but those decisions have no application here. Plaintiff did not have a mortgage upon the wheat, and the restriction found in section 9467 cannot be construed to include personal or collateral security or any other form of security not falling fairly within the meaning of the term “mortgage” as employed in the section. (State Sav. Bank v. Albertson, 39 Mont. 414, 102 Pac. 692.) Finally, it is urged that the plaintiff cannot assert that there was anything due on the mortgage debt after the foreclosure and sale; that, since Ball.and his wife were absent from the state, and the service of the summons in the foreclosure suit was had by publication, the court was without authority to determine the amount due upon the debt or do more than fasten the amount of the lien upon the land. We are unable to appreciate the force of the argument. While it is true that the court could not enter up a deficiency judgment against Ball and his wife upon substituted service of summons, it is equally true that the court did not attempt to do so; but it does not follow that a sale of property for $18,000 satisfies and discharges an indebtedness of $22,000 merely because the judgment debtors are beyond the jurisdiction of the court. A debtor does not discharge his obligation by running away from it. In the foreclosure suit the court acquired jurisdiction to ascertain the amount secured by the mortgage, and, although it could not enter up a deficiency judgment, the unpaid portion of the debt remained and afforded ground [558] for a separate action to recover it. (Blumberg v. Birch, 99 Cal. 416, 37 Am. St. Rep. 67, 34 Pac. 102; 27 Cyc. 1758.) Rehearing denied February 27, 1923. We find no error in the record. The judgment is affirmed. Affirmed. Mr. Chief Justice Callaway and Associate Justices Cooper, Galen and Stark concur.