Western Hold. Co. v. Northwest. L. L. Co. , 113 Mont. 24 ( 1941 )

I am unable to subscribe to the views of the majority in modifying the decision as first rendered.

The record shows the submission to the lower court of the case in its entirety as would be sufficient for judgment against all the defendants on plaintiff's theory of the case. Counsel for appellant, in oral argument on rehearing, stated that the case was so submitted to the lower court for complete adjudication and as against all the defendants. There is nothing in the judgment limiting it as in favor of the answering defendant only. There is nothing in the record to show any other disposition of the case as to the non-answering defendant. In the foreclosure of a lien, although default of the defendant has been entered, not until judgment is rendered by the court after proof made is the case disposed of. (Soliri v. Fasso, 56 Mont. 400,185 P. 322.)

As to the propriety of the trial court rendering judgment in favor of the non-answering defendant: It was incumbent upon the plaintiff to make out a case even though no defense had been interposed. If either the complaint, or the proof offered and admissible under the complaint, was insufficient, it was the duty of the court to dismiss the action as much as if the defendant were there and urging a dismissal.

To state a cause of action against one proceeded against as owner of the land, the complaint must show that his title or interest is encumbered by the lien of the mortgage. Where he was not the mortgagor, it must be shown that when he acquired his title he either expressly recognized the existence of the mortgage or had notice of its existence. If the recording of the mortgage is relied on as giving notice, it must appear that the mortgage was of record at the time the title was acquired and that it was during the period of time that the recording served to give constructive notice.

The defendant whose interests are here considered is the administrator of the estate of Wilmer S. Clark, deceased. All there is in the case to connect the Clark estate with the foreclosure action is the allegation in the complaint that "title to the lands described in the mortgage * * * reposes in the name of Wilmer S. Clark and that Wilmer S. Clark is deceased" and that Hullinger is administrator of the estate. There is nothing to show when or how Wilmer S. Clark became possessed of the title, and no allegation which in any way connects Clark, or the Clark estate, with the mortgage. In a default case, where the complaint is insufficient, the deficiency cannot be supplied by evidence submitted beyond the allegations of the complaint. With no date shown as to when the Clark title was acquired, the complaint does not show that it was acquired with constructive notice of the mortgage because of its recording. The date of the foreclosure complaint, April 19, 1935, which says that the title then reposed in Wilmer S. Clark, then deceased, is the only date shown in connection with the Clark title. On that date there was not constructive notice from the recording of the mortgage, the eight-year limitation period under section 8267, Revised Codes, having expired on April 1, 1930, more than five years before. A renewal affidavit is shown to have been filed, but not until August 18, 1931, which was not within the sixty-day period prescribed by the statute, and was therefore ineffectual.

Section 8267 is not a statute of limitations that needs to be pleaded to be operative. It does not limit the time for commencement of action. It limits the time during which the recording of the mortgage serves as constructive notice of its existence. It is substantive law that must be considered in every case where the recording alone is relied on as giving notice.

Here, then, on the facts pleaded as against the non-answering defendant, it is not alleged that the mortgage is effective as a lien on the title sought to be reached — the title and interest of the Clark estate. The court, by its judgment, says that the lien of the mortgage had expired, which was true as to the Clark estate, so far as the complaint discloses. The judgment of dismissal was therefore the only correct and proper judgment which the court could render in disposing of the case as against that defendant.

That a defendant in default is not entitled to participate further in the proceedings in the case is true as to the further steps that may be taken in completing the litigation to judgment upon the controversy in which he is involved. Whatever that judgment is, so long as it is confined within the limits of the cause of action as stated in the complaint, the defaulting defendant has to be content. But also he has the right to rest on that judgment as final. And if it is sought by appeal to a higher court to have the judgment reversed or modified to his detriment, he has the right to be heard in opposition and must be given notice of the appeal.

The rule is fundamental. In the multitude of cases where the question has arisen the rule itself has not been questioned, and the difficulty always has been in determining whether the defaulting defendant will be adversely affected by a reversal or modification of the judgment so as to bring him within the rule. (T.C. Power Bro. v. Murphy, 26 Mont. 387, 68 P. 411;Great Falls National Bank v. Young, 67 Mont. 328,215 P. 651; 4 C.J.S., Appeal and Error, sec. 398, p. 861; Wade v.Hope, etc., 65 Okla. 69, 162 P. 742; Allen v. Garner,45 Utah 39, 143 P. 228; Langton, etc., Co. v. Peery, 48 Utah 112,117, 159 P. 49; Rabinowitz v. Houk, 100 Fla. 44,129 So. 501; Armour Fertilizer Works v. N.G. Wade Investment Co.,90 Fla. 403, 105 So. 819; Megin v. Filor, 4 Fla. 203; ReCastle Dome Mining Smelting Co., 79 Cal. 246, 21 P. 746; DeArnaz v. Jaynes, 4 Cal. Unrep. Cas. 226, 34 P. 223;Bowering v. Adams, 126 Cal. 653, 59 P. 134; Annotation 88 A.L.R. 428 to 436.