Colorado National Bank v. Meadow Creek Livestock Co. , 36 Idaho 509 ( 1922 )

RICE, C. J.

This was an action by respondent for the foreclosure of a chattel mortgage upon certain cattle.

Appellants demurred to the complaint generally and specially upon the ground that there was another action pending between the same parties for the same cause. The complaint stated a cause of action, and it nowhere appeared upon the face thereof that another action was pending involving the same subject matter or between the same parties. The demurrer was properly overruled. (Stevens v. Home Building Loan Assn., 5 Ida. 741, at page 751, 51 Pac. 779.)

Appellants thereupon moved to dismiss the complaint upon the ground that another cause of action was pending between the same parties involving the same cause, supporting the motion by affidavits. The motion was properly denied. Under C. S., secs. 6692 and 6693, an objection that there is another action pending between the same parties for the same cause must be taken by demurrer or answer; otherwise, the objection is deemed to be waived. (See Vance v. Heath, 42 Utah, 148, 129 Pac. 365.)

Appellants answered, making certain denials, and by way of affirmative defense attempted to plead that another action was pending between the same parties for the same cause. The affirmative defense was by the court, on motion, stricken from the answer. In this the court did not err.

It appeared from the affirmative answer that the former action was not between the same parties. The parties plaintiff were the same as the defendants herein, but the parties defendant included four others besides this respondent. The complaint filed in the former action was annexed to the affirmative answer and made a part thereof. It undertook to state a cause of action for damages growing out of an alleged breach of a contract in connection with which the notes involved in the present action were given. It concluded with a prayer, among other things, that the notes be delivered up for cancelation, but it did not state a cause of action for the rescission of the contract, or facts sufficient to justify a cancelation of the notes. The cause of action in the former case was not the same as that set out in the ease at bar. However, appellants claim that the cause at bar arises out of the same subject matter as that involved in the former action, and that if the respondent in this action had a claim against appellants it was its duty to set it up in that action by way of cross-complaint - or counterclaim.

They rely on C. S., sec. 6696, which provides: “If the defendant omit to set up a counterclaim in the cases mentioned in the first subdivision of the last section, neither he nor his assignee can afterwards maintain an action against the plaintiff therefor.”

In the case of Stevens v. Home Building Loan Assn., supra, on rehearing, it is said: “But a cause of action in favor of the defendants against one only of the plaintiffs, or in favor of one only of several defendants, cannot be set up by way of counterclaim.”

It is evident that the cause of action in this case does not come within the purview of the last quoted section. Moreover, C. S., sec. 6696, relates only to counterclaims and has no reference to cross-actions.

C. S., sec. 6699, provides: “Whenever the defendant seeks affirmative relief against any party, relating to or depending upon the contract or transaction upon which the action is brought, or affecting the property to which the action relates, he may, in addition to his answer, file at the same time, or by permission of the court subsequently, a cross-complaint.....”

This section of the statute is permissive .and not' mandatory. It cannot be doubted that an action for foreclosure of a chattel mortgage is one in which the plaintiff seeks affirmative relief, and if pleaded in the former action would have to be set up by way of cross-complaint, rather than counterclaim.

The answer upon which the case was tried raised but three issues:

(1) That respondent was not the holder in due course of the notes secured by the mortgage.

(2) That the sum'prayed for as attorney’s fees, or any other sum, is a reasonable attorney fee.

(3) That any demand was made for delivery of the personal property prior to the bringing of the action.

The fifth specification of error is to the effect that the court erred “in refusing to allow attorneys for appellants to inquire more particularly into the circumstances under which the respondent received the notes, and as to what the relation was between the respondent and the Western Livestock Commission Company, the indorser of said notes.”

We think the action of the court would have been erroneous if the issue had been material. (First Nat. Bank v. Hall, 31 Ida. 167, 169 Pac. 936.) But the question as to whether or not respondent was a holder in due course was wholly immaterial, by reason of the fact that there was no plea of any equities or defenses existing in favor of appellants. It was only necessary for respondent to show that it was holder of the notes in question. (Craig v. Palo Alto Stock Farm, 16 Ida. 701, 102 Pac. 393.)

It' is also claimed that the court erred in finding that due or proper demand, or any demand, was made for possession of the cattle in question before commencement of the present action. Such a finding is wholly immaterial. C. S., see. 6380, whatever view may be taken as to its effect, relates only to summary foreclosures by notice and sale. We are not aAvare of any statute Avhieh requires a demand for possession of the property as a condition to the right of foreclosure by action in a proper court.

At the trial, appellants were permitted to file a supplemental answer, in which they set up that subsequent to the filing of their previous answer they had sent to respondent the following telegram: “Can’t keep cattle longer. Will either have to turn cattle to you at contract price, or sell at market value”; that respondent replied by telegram as follows: “Answering your Avire of the 23d, we beg to state that we own and hold your notes, secured by chattel mortgage, and shall take such steps as are necessary to protect our interest. If you have done or shall do anything to jeopardize our security it was done or will be done at your peril”; that at the time respondent sent the telegram the cattle were reasonably Avorth $55 per head; that by holding them an expense of $20 per head was incurred in caring for them; that the cattle were sold by the receiver at the rate of $45 per head; that by reason thereof, a loss of approximately $25 per head was sustained through no fault of appellants, and praying that if a judgment be rendered in favor of respondent that appellants be given credit for the loss so sustained.

The court made no findings upon the issue sought to be raised by the supplemental answer, and error is assigned on that account. The court committed no error in this respect. The supplemental answer tendered no material issue. The telegram sent by appellants perhaps amounted to an offer to deliver possession of the cattle to respondent “at contract price.” But nowhere in the pleadings does it appear that respondent was bound by any contract to receive the cattle at any price. We know of no principle of law which requires a mortgagee, in the absence of a binding contract, to purchase the mortgaged property at the market price or at all, nor is he bound to consent to the sale of the mortgaged property by the mortgagor to a third party. If appellants offered to deliver possession of the cattle to respondent, unconditionally, as their counsel seem to think they did, respondent was not obliged to accept them unless bound by a contract so to do, or unless equity might require such action to be taken to prevent fraud. Generally a mortgagee cannot be compelled to pursue any remedies other than those provided by law.

The court did not err in the appointment of a receiver^ The appointment was authorized by C. S., sec. 6817, subdivision 2, which provides for the appointment of a receiver, “In an action by a mortgagee for the foreclosure of his mortgage and sale of the mortgaged property, where it appears that the mortgaged property is in danger of being lost, removed or materially injured, or that the condition of the mortgage has not been performed, and that the property is probably insufficient to discharge the mortgage debt.” Neither does it appear that the court erred in allowing the accounts of the receiver. The property was chargeable with the necessary expense incurred in its preservation and care. (34 Cyc. 350; Dalliba v. Wincshell, 11 Ida. 364, 114 Am. St. 267, 82 Pac. 107.)

The only question remaining is as to the authority of the court to enter judgment for attorney fees in this case. The allegation of the complaint with reference to attorney fees is as follows: “That said notes and each of them provide, and said chattel mortgage provides for the payment of reasonable counsel fees if suit be instituted for the collection of said note, and plaintiff alleges that the sum of $3,000 is a reasonable sum for attorney’s fees and for services in and about the foreclosure of said mortgage and the collection of the amounts due on said notes and mortgage.”

We think it is better practice in an action for the foreclosure of a mortgage, which provides for the payment of attorney fees in case of foreclosure, to allege the reasonableness of the fee claimed and the fact that the holder of the mortgage has paid or obligated himself to pay the same. However, in view of the decisions of this court it must be held that the foregoing allegation of the complaint is sufficient to support a judgment for attorney fees.

In the' case of Broadbent v. Brumback, 2 Ida. 366, 16 Pac. 555, it is said: “It may be observed that the theory upon which stipulations in mortgages are sustained is that they provide for expenses incurred by the plaintiff in foreclosure for the services of an attorney. If there is no attorney such expense is not incurred. If there is an attorney, the plaintiff’s expense is limited to the amount paid therefor, provided it is reasonable. If this is correct, it follows that the fact of payment or assumed liability is simply one element in the proof which is offered to establish the reasonableness of the allowance for the fee sought to be recovered. It is evidence offered to establish a substantive fact, and as such need not be set out in the pleadings.”

The foregoing appears to have been accepted as authoritative in subsequent Idaho decisions. (Warren v. Stoddart, 6 Ida. 692, 59 Pac. 540; Jones v. Stoddart, 8 Ida. 210, 67 Pac. 650; Porter v. Title Guaranty & Surety Co., 17 Ida. 364, 106 Pac. 299, 27 L. R. A., N. S., 111; Lewis v. Sutton, 21 Ida. 541, 122 Pac. 911.)

Thus in Porter v. Title Guaranty & Surety Co., supra, it is said: “To justify the court, then, in allowing attorney’s fees upon the foreclosure of a mortgage, where the mortgage contains a stipulation that attorney’s fees may be allowed on foreclosure of such mortgage, the plaintiff must also prove that he has agreed to pay his counsel a stipulated or a reasonable fee for his services, and the reasonableness of the fee agreed upon or what is a reasonable fee in such an action.”

In the case at bar, respondent offered evidence as to the reasonableness of the fee claimed, and also that respondent had agreed to pay his counsel a reasonable fee.

Judgment is affirmed, with costs to respondent.

McCarthy and Dunn, JJ., concur.