YORK v. ROBERTS, 47 Idaho 312 (1929)


274 P. 799

GEORGE B. YORK, Respondent, v. J. N. ROBERTS and LEE ROBERTS, Appellants.

No. 5208.Supreme Court of Idaho.
February 14, 1929.

APPEAL from the District Court of the Seventh Judicial District, for Washington County. Hon. C.J. Taylor, Judge.

Action on promissory note. Judgment for plaintiff Reversed.

D.L. Carter and Frank D. Ryan, for Appellants.

The least value placed on the land covered by the mortgage to York, was $5,000, testified to by plaintiff’s witness, Wilson, consequently, regardless of the amount of the first mortgage the security was not “valueless” as that word is construed in connection with C. S., sec. 6949, and plaintiff’s only remedy under such circumstances was to foreclose. (C. S., sec. 6949 Otto v. Long, 127 Cal. 471, 59 P. 895; Barbieri v. Ramelli, 84 Cal. 154, 23 P. 1086; Dyer Law Collection Co. v. Abbott, 52 Cal.App. 545, 199 P. 340; First National Bank of Lewiston v. Williams, 2 Idaho 670, 23 P. 552; Clark v. Paddock, 24 Idaho 142, 132 P. 795, 46 L.R.A., N.S., 475.)

George Donart, for Respondent.

An action brought by the holder of a note, the payment of which was originally secured by a mortgage, and which

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mortgage was afterward released with the consent of the mortgagor, is not an action for the recovery of a debt secured by a mortgage upon real estate or personal property. (J. I. Case Threshing Machine Co. v. Copren Brothers, 32 Cal.App. 194, 162 P. 647; Dahlstrom et al. v. Walker, 33 Idaho 374, 194 Pac. 847.)

The release of a mortgage by a mortgagee with the consent of the mortgagor does not release sureties or comakers of the note secured by such mortgage, unless such sureties or comakers were injured thereby. (Utah State National Bank v. Livingston
(Utah), 254 P. 781; Strother v. Wilkinson, 90 Okl. 247, 216 Pac. 436; Nuetzel v. Mackie, 80 Cal.App. 768, 253 P. 166 Berryman v. Dore, 43 Idaho 327, 251 P. 757; 8 C. J. 620; 32 Cyc. 216, 217.)

An action may be maintained upon a note originally secured by a mortgage where the security has, without any act of the mortgagee, become valueless. (Clark v. Paddock, 24 Idaho 142, 132 P. 795, 46 L.R.A., N.S., 475; Beal v. Stevens, 72 Cal. 451, 14 P. 186.)

BUDGE, C.J.

A first mortgage on land belonging to Benjamin F. Price and Katherine Price was executed in favor of one Stevenson, in the amount of $4,500, and about a year thereafter the Prices gave a note and second mortgage on the same property to respondent to secure a loan of $1,000. This note was signed by appellants, with the Prices, as comakers. Appellants were not mortgagors. The land was conveyed to Stephenson in satisfaction of the first mortgage, and he paid respondent $200 in consideration of the release of the second mortgage. This was without the knowledge or consent of appellants. The $200 was credited on the note by respondent, who brought this action against appellants to recover the alleged balance due and unpaid thereunder. From a judgment rendered in favor of respondent, appellants appeal.

The principal question here is whether or not an action can be maintained upon the note in view of the release of the mortgage by respondent without foreclosure of the same, as provided in C. S., sec. 6949.

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We must answer the question in the negative, unless it be shown that the security had become valueless subsequent to the giving of the mortgage. If the security still exists in its original form, it did not become valueless. Since an action to foreclose a mortgage is one in rem, the property being primarily liable for the debt it must be first resorted to. Under the facts of this case the security was not valueless within the meaning of C. S., sec. 6949, as construed in Clark v. Paddock, 24 Idaho 142, 132 P. 795, 46 L.R.A., N.S., 475. See, also, First Nat. Bank of Lewiston v. Williams, 2 Idaho 670, 23 P. 552. The supreme court of California passed squarely on the point in Barbieri v. Ramelli, 84 Cal. 154, 23 P. 1086, under a statute containing similar provisions, saying:

“It is contended here on the part of the defendants (appellants) that the action cannot be maintained, for the reason that it is prohibited by section 726 of the Code of Civil Procedure. That section, so far as it bears on this case, reads 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.’ We are of the opinion that the point is well taken. The statute is imperative. The word ‘secured’ in the section does not mean that the security shall be adequate, or that, in case prior liens upon it would exhaust the money derived from the land conveyed as security on a sale of it, that then the plaintiff is relieved from bringing the action to foreclose. The proper construction of the language of the statute is that, if the mortgage on its face purports to be a security to the plaintiff, then he must bring his action for foreclosure. This word has reference only to the purport of the mortgage, as it appears on its face. The interpretation of it is not proper when its meaning is sought in something outside of the mortgage instrument. The plaintiff is not authorized to waive the security, and bring an action on the indebtedness, and the court erred in so holding, as it did in effect, and rendering judgment for plaintiff.”

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To the same effect is Western Fuel Co. v. Sanford Lewald Co., 190 Cal. 25, 210 P. 419.

The judgment is reversed, with costs to appellants.

Givens, Taylor and Wm. E. Lee, JJ., and. Hartson, D. J., concur.