Felton v. West

Garoutte, J. The appellants, on May 16, 1893, executed and delivered to the respondent their promissory note for the sum of ninety thousand eight hundred and sixty dollars and twenty-six cents. This note was dated, delivered, and made payable in San Francisco. It was secured by a mortgage upon lands situated in the state of Oregon. The appellants made two payments thereon, and then defaulted. Respondent thereupon began suit in the proper court in Oregon to foreclose the said mortgage. He was unable to, and did not, obtain personal service of the summons in such action upon appellants, as they were residents of California, and could not be found in the state of Oregon; service was, therefore, had upon them by publication only. This mode of service appeared upon the face of the record in said suit, and a judgment in the usual form of foreclosure was made and entered therein, decreeing a sale of the mortgaged property to satisfy the indebtedness. Under this judgment the property was sold for about thirty-two thousand dollars, and the amount was credited upon the note. There [268]was no judgment for a deficiency. The respondent then began this action in the state of California upon the note for the balance due, to wit, the sum of about forty-four thousand dollars. This is an appeal from a judgment rendered in favor of plaintiff Felton.

There is no dispute but that this is an action for the recovery of a debt secured by mortgage, nor is there any dispute about the fact of there having been a former action in the courts of Oregon to recover for this identical debt, and under section 726 of the Code of Civil Procedure appellants contend that the action cannot be maintained unless the plain and unambiguous language of that section of the code is disregarded. Respondent insists, notwithstanding said section, that under certain circumstances there can be two or more actions brought to recover a debt secured by mortgage. It will thus appear that the sole and only question presented upon this appeal is, under the circumstances above set forth, may a second action be maintained on the note which was secured by the mortgage? And this interrogatory necessitates a consideration of the aforesaid section of the Code of Civil Procedure upon which appellants rest the merits of their appeal. The section 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, which action must be in accordance with the provisions of this chapter. In such action the court may, by its judgment, direct a sale of the encumbered- property (or so much thereof as may be necessary), and the application of the proceeds of the sale to the payment of the costs of the court, and the expenses of the sale, and the amount due to the plaintiff; and if it appear from the sheriff’s return that the proceeds are insufficient, and a balance still remains due, judgment can then be docketed for such balance against the defendant or defendants personally liable for the debt, and it becomes a lien on the real estate of such judgment debtor, as in other cases in which execution may be issued.”