Farmers State Bank v. Gray , 36 Idaho 49 ( 1922 )

DUNN, J.

This is an appeal from an order of the district court of Ada county denying a motion to quash an attachment. The motion was made on the grounds: First, that the affidavit for attachment was in certain particulars untrue; second, that it was insufficient in that it appeared therefrom that the payment of the promissory note upon which the action was brought was originally secured by a mortgage on personal property, and that a part of said property had been sold by agreement between the plaintiff and defendants; third, that the affidavit for attachment was insufficient in that it did not appear therefrom that the indebtedness from the defendants to the plaintiff had not been secured by any mortgage or lien upon real or personal property, or any pledge of personal property, or if originally secured, that such security had, without any act of the plaintiff, or the person to whom the security was given, become valueless.

The claim of appellants that the affidavit for attachment is untrue is based in part upon the fact that by agreement between the respondent and appellants a portion of this property was put up and sold at public sale, and that in this way it was the act of the respondent that rendered valueless the security held by respondent on such property as was sold. This claim is also based in part upon the contention of appellants that $400 of the amount now owing from appellants to respondent is secured by a title-retaining note held by the respondent.

C. S., sec. 6780, provides that the clerk of the district court must issue a writ of attachment upon receiving an affidavit by or on behalf of the plaintiff which, in addition to other matters not involved in this controversy, specifies that the payment of the indebtedness sued on “has not been secured by any mortgage or lien upon real or personal property, or any pledge of personal property, or if originally secured, that such security has, without any act of the plaintiff, or the person to whom the security is given, become valueless.” In the case of Knutsen v. Phillips, 16 Ida. 267, 101 Pac. 596, the affidavit filed by the plaintiff stated that the payment of the indebtedness sued on had not been secured “by any mortgage or lien upon real or personal property,” omitting the words “or any pledge of opersonal property,” and this court held such affidavit insufficient, reversing the decision of the trial court. It thus appears that this court has held, in effect, that if there is no security the plaintiff seeking a writ of attachment must by the affidavit negative every form of security mentioned in this statute. In this case the affidavit admits that the indebtedness sued on had been secured by a chattel mortgage, but does not negative any other of the forms of security mentioned in said statute. Appellants point out the fact that even though the security by chattel mortgage is admitted, this is not a denial that appellant has.held a mortgage or lien upon real property or a pledge of personal property, and this is true. If it is necessary, in case there is no security, that the affidavit should set out specifically that the indebtedness sued on has not been secured “by any mortgage or lien upon real or personal property or any pledge of personal property,” or words to that effect, no reason appears why the affidavit 'should not be equally specific as to the other forms of security mentioned in the statute when it contains an admission that the appellant has had one kind of security mentioned therein. In such case it should clearly appear from the affidavit that the plaintiff had no other security than that admitted in the affidavit. The original affidavit was fatally defective in this respect.

After the motion to quash was filed and served an amended affidavit for attachment was filed by which it was attempted to meet the objections raised by appellants. The amended affidavit recites “that the payment of said note at the time of its execution was secured by a chattel mortgage upon certain personal property, dated October 23, 1920, but that prior to the commencement of this action all of the personal property described in such mortgage had, by agreement between the plaintiff and the defendants, been sold by the defendants and the moneys received therefor applied upon the payments made upon said note as above stated, and thus by the sale of said property so made by the defendants, the total security for such note has without any act of the plaintiff, the person to whom the security was given, become valueless; that the balance due on said note," to wit: Eleven Hundred Fifteen and 75/100 Dollars ($1115.-75) and the interest thereon from May 20th, 1921, is not, and at the date of the commencement of this action was not, secured by any mortgage or lien upon real or personal property, or any pledge of personal property.”

The question is now whether the statement in the amended affidavit that by the sale of the property covered by the chattel mortgage “the total security for such note has .... become valueless” meets the requirement that the affidavit shall negative all the forms of security mentioned in the statute other than the one admitted. While the statement might be made more explicit than it is, we think that by fair interpretation it means that the note in question has not been secured in any other manner than by the chattel mortgage. The amended affidavit is in this regard sufficient. The remainder of the statement above quoted may be regarded as surplusage.

It has been held that a sale of personal property pledged as security for the payment of a note and the application of the proceeds to the note secured does not defeat the right of a plaintiff to have a writ of attachment on the ground that the security has become valueless by act of the plaintiff. (Williams v. Hahn, 113 Cal. 475, 45 Pac. 815.) In the case at bar the plaintiff had a right to take the personal property covered by the chattel mortgage and sell it according to law and we can see no reason why a sale made by mutual agreement and without expense would be more open to the objection urged than the sale in the case of Williams v. Hahn, supra. If there were other parties who claimed a lien on the property an objection from them would rest upon entirely different grounds from those that can be urged by appellants who were directly interested and who authorized the sale. Respondent, as we view it, was no more an actor in the case of the private sale which was made by agreement of the parties than it would have been in the foreclosure proceeding strictly in conformity with the statute.

So far as the claim is concerned that $400 of the debt for which attachment was levied is secured by a title-retaining note, we think it clearly appears that said $400 is no part of the indebtedness sued for in this action. The order of the trial court denying the motion to quash the writ of attachment is affirmed. Costs to respondent.

(July 1, 1922.) McCarthy and Lee, JJ., concur.