Opinion
No. 29671.
January 18, 1932. Suggestion of Error Overruled February 15, 1932.
1. MORTGAGES.
Chancery court may, and, upon proper prayer, must, render final monetary personal decree on debt involved in trust deed foreclosure proceeding as part of decree ordering sale.
2. MORTGAGES.
Complainant in trust deed foreclosure proceeding has option to take complete personal monetary decree in foreclosure decree or to take therein only decree adjudging amount due, declaring lien, and ordering sale, and obtain personal decree for balance due after sale (Code 1930, section 466).
3. MORTGAGES.
Where complete monetary decree is taken in trust deed foreclosure decree, recitals of second decree for balance due should show it is merged with first decree.
4. MORTGAGES.
If first complete monetary decree taken in foreclosure decree is enrolled, second decree for balance due should carry recital that, upon enrollment of second decree on judgment rolls, first enrollment shall thereupon be canceled by circuit clerk.
APPEAL from chancery court of Harrison county. HON. D.M. RUSSELL, Chancellor.
Gardner Backstrom, of Gulfport, for appellants.
The record herein shows two final personal monetary judgments rendered by the same court, on the same indebtedness, in the same cause of action, against the same defendant. Both of these judgments cannot stand. One must be erroneous.
If the erroneous judgment is not canceled by this court on appeal, it necessarily follows that the appellant will be forced to file an independent suit in the chancery court of Harrison county, Mississippi, to set aside and vacate one judgment or the other.
Prior to the enactment of section 466 of the Code of 1930 the chancery court, in foreclosure proceedings, could render no relief further than a foreclosure of the lien of the mortgage.
The mortgagee was then forced to sue in a court of law for the deficit remaining after the mortgaged property had been exhausted.
Stark v. Mercer, 3 How. 377; Dollohite v. Orne, 2 S. M. 590; Tanner v. Hicks, 4 S. M. 294; Mosby v. Wall, 23 Miss. 81, 55 Am. Dec. 71; Cobb v. Duke, 36 Miss. 60, 72 Am. Dec. 157.
Upon the enactment of section 466 of the present Code of 1930 the rule above set forth was modified by statute to the extent that a court of chancery was given the power and authority on motion of the complainant, to enter a personal judgment against the mortgagor for the deficit remaining after the mortgaged property had been exhausted, but this jurisdiction extended to the deficit only and still gave the court of chancery no jurisdiction to render a personal judgment against the mortgagor for the full amount of the mortgage indebtedness until after the mortgaged property had been exhausted. The court could not, as it did in the case at bar, enter a personal monetary judgment against the mortgage on the trial of the foreclosure issue.
The jurisdiction of the chancery court to render a personal monetary judgment against the mortgagor remained a question over which courts of chancery exercised jurisdiction as courts of special and limited jurisdiction until the Constitution of 1890 was adopted, and still remains a matter over which they exercise jurisdiction as courts of special and limited jurisdiction unless by that constitution they were given general jurisdiction over judgments in personam in foreclosure proceedings. We submit that the constitution did not give courts of chancery general jurisdiction over judgments in personam on indebtedness secured by mortgages and other liens.
If the lower court committed no error in the case at bar then section 466, Code of 1930, has no place in our statute laws and should be stricken down.
The case at bar is ruled by Continental Gin Company v. Mathers, 132 Miss. 821, 96 So. 744. The case at bar must be reversed or the Continental Gin Company case must needs be overruled.
On authority of section 466 of the Code of 1930 and the Continental Gin Company case, we submit that the lower court was in error when it rendered a final monetary personal judgment against the appellant in its decree of foreclosure dated March 21, 1931, and this case should now be reversed, and that personal judgment set aside, vacated and annulled.
Buntin McIntosh, of Gulfport, for appellee.
Appellee in drawing its decree, that is the first decree signed by the chancellor in this matter, followed the exact form found in Griffith Chancery Practice as Form No. 28 on page 885, which is the form of decree that has been used in taking judgments in foreclosure matters more extensively in this state than any other form since this text was published, because Griffiths Chancery Practice is recognized as the best guide in Chancery Practice in the state of Mississippi.
The chancery court has authority to enter a personal monetary judgment on notes where jurisdiction of the court has been conferred by an equity issue presented along with the suit on the note.
It seems that our courts formerly held that courts of equity had no power or jurisdiction to settle issues between parties that were purely legal issues, although said issues arose in a cause wherein said court had jurisdiction because of certain equitable principles, holding that the limit of the equity court's jurisdiction was to settle the equitable principles involved therein, leaving litigants to their recourse at law for the legal questions. This rule and the reasons therefor is fully set forth in the following cases.
Stark v. Mercer, 3 How. 377; Dollohite v. Orne, 2 S. M. 590; Tanner v. Hicks, 4 S. M. 294; Mosby v. Wall, 23 Miss. 81, 55 Am. Dec. 71; Cobb v. Duke, 36 Miss. 60, 72 Am. Dec. 157.
Subsequent to said cases, however, section 1935 of the Code of 1880 was enacted, this being section 466 of our 1930 Code, and said section enabled complainants in chancery court following this section to foreclose upon their lien and after application of the proceeds of sale to the amount found due, to take a personal monetary judgment over for the balance. Following the enactment of this code section the courts held that personal judgment could be obtained in chancery provided this section was followed.
The Constitution of 1890 broadened jurisdiction of the chancery court.
Sections 160 and 161, Constitution of 1890.
Since the adoption of our Constitution of 1890 our courts have consistently held that where courts of equity have taken jurisdiction of a matter because of equitable principles involved, they have the general and inherent power to decide and grant relief on all issues presented to them, even though said issues be entirely legal ones, going so far as to hold that even though the equitable principles for which the court had taken jurisdiction have failed, the court still retains jurisdiction and settles all issues and grants relief on all matters involved, even though they be purely legal.
Griffith Mississippi Chancery Practice, page 31, section 28; Atkinson v. Felder, 78 Miss. 83, 29 So. 767; Baker v. Nichols, 111 Miss. 680, 72 So. 1; R.R. Co. v. McConnell, 127 Miss. 592, 90 So. 321; Vicksburg Co. v. Citizens Co., 79 Miss. 354, 30 So. 725; Robertson v. Krauss, 129 Miss. 310, 92 So. 74; Lumber Yard v. R.R. Co., 96 Miss. 116, 50 So. 445; Hale v. Bozeman, 60 Miss. 966.
To hold that a court of equity could not accept and take jurisdiction of and grant judgment in a suit on promissory notes wherein the bill, in addition to judgment on said notes, prayed for a special lien on certain property because of a mortgage covering said property securing said notes would certainly be holding that equity could not grant full relief on matters where it had properly taken jurisdiction.
It certainly cannot then be seriously argued that complete relief would have been granted complainants without granting them a personal monetary judgment under the first decree, especially in the face of such strenuous objection to such a personal judgment. If a judgment would not catch other properties, or would not embarrass defendant or in some way accrue to the benefit of complainant, then defendant could have had no reason for objecting to same, and if, on the other hand, it was going to catch other property or was going to embarrass defendant and accrue to the benefit of complainant, then complainant had a right to same and thus prevent the working upon them of fraud between the time of the first decree and the date set for confirmation of sale.
Griffith's Mississippi Chancery Practice, page 692, section 614.
The two decrees as drawn certainly do not constitute two final personal monetary judgments as to the defendant in the same cause of action, but on the other hand the second decree clearly shows on its face that the first decree or judgment, whichever it be, is brought forward and credited with net proceeds of the sale, and clearly shows what the balance due defendant by complainant under the whole transaction amounts to.
Appellant, being indebted to appellee in a large sum of money, executed and delivered unto appellee its promissory note to evidence the debt, and to secure the said note appellant executed and delivered its deed of trust on certain lands owned by appellant. Default having been made in the payment of the note, appellee filed its bill of foreclosure in the chancery court, the prayer of the bill being for a personal decree on the note as well as for proceedings to foreclose.
Legal service of process was had on appellant and on the trustee. The latter answered, admitting the allegations of the bill, and appellant having failed to answer, a decree pro confesso was taken against it, and thereupon the cause having been by the clerk set for hearing on the issue docket, appellee took a final decree, which decree contained two main features: First, a complete monetary personal decree against appellee for the amount due on the note together with interest and attorney's fees; and, second, a decree declaring the existence of the mortgage lien on the property and ordering that, unless the amount decreed should be paid within the time fixed in the decree, the mortgaged land should be sold by a commissioner of the court, and the decree carried all the other and further provisions necessary and appropriate to the foreclosure proceedings. The said decree followed substantially the form for such a decree as suggested at pages 885, 886, Griffith's Mississippi Chancery Practice.
The amount decreed was not paid; the special commissioner sold the land and reported his sale for confirmation on the day appointed in said original decree for said report; and the chancellor finding that in all things the commissioner had proceeded in accordance with the terms of the said decree and otherwise as provided by law, the sale was confirmed; and in the decree confirming said sale, the chancellor, on motion of appellee, ascertained the exact balance of the proceeds of sale after deducting the costs of the court and of the said sale, and thereupon included in his decree of confirmation a personal or final monetary decree for the exact amount of the balance due to appellee by appellant as a general decree of personal liability after applying the net proceeds of the sale made under the original decree. The said final decree of confirmation, by apt recitals, discloses on its face that it was in furtherance of the original decree, was a part thereof, and the said recitals are sufficient to disclose that the said latter decree was a merger or a bringing forward of the original decree into a final sum of the balance due, thereby closing the entire matter, so far as any decree or decrees of the court were concerned.
Appellant objects, first, that it was not within the power of the court to render a final monetary decree in the first decree; that the extent of the authority of the court in that decree was to order a sale of the property; and the sale being made, then upon report thereof the court could render a final monetary decree, upon motion, under section 466, Code 1930. In this contention, appellant is mistaken. Since the adoption of the Constitution of 1890, and particularly since the decision of the court in Atkinson v. Felder, 78 Miss. 83, 29 So. 767, the governing principles of which decision have been followed by a long and unbroken line of cases, there has remained no serious doubt of the power, and upon the proper prayer of the duty of the chancery court to render a complete and final monetary personal decree upon the debt involved in a foreclosure proceeding, as a part of its decree ordering the sale; and for the last twenty-five years this has become the usual practice in the chancery courts of this state, and without question, so far as we are advised, until this present appeal.
However, it is optional with a complainant in a foreclosure proceeding whether he will take a complete personal monetary decree in his decree of foreclosure, or whether he will take therein only a decree adjudging the amount due, declaring the lien and ordering a sale, in which latter event he can avail of section 466, Code 1930, to obtain a personal decree for the balance due, after the sale is made. The latter course is often taken either by reason of some agreement to that effect between the parties, or because preferred by the complainant. Section 466 is kept in our code for two reasons: First, in order to serve the purposes of a case wherein it is preferred to take the course last mentioned; and, second, in order that, where a general personal monetary decree is taken in the first decree, there may be a statutory provision by which the court so completely retains control over the said first decree that, when the sale is reported, and the net proceeds ascertained and applied, a further final decree may be made which merges the said first decree into the latter decree, and by which the exact final amount due as and for a personal decree may be fixed, and the whole matter then judicially determined and brought down into what then becomes the real final decree, and from which the running of the statute of limitations as upon a personal decree may be calculated. See Continental Gin Co. v. Mathers, 132 Miss. 821, 96 So. 744. It is essential, where a complete monetary decree is taken in the first decree, that, in taking the second decree for the balance due, the recitals of the second decree shall be such as to show that it is a bringing forward of the first decree, is a merger therewith, so that upon the record of the entire proceedings it shall be substantially clear that, so far as the money decree is concerned, there is only one money decree, and that in that respect the second decree supersedes the first. That, as we have already mentioned, was done with sufficient clearness in the second decree here before us.
Appellant contends, secondly, that to allow the procedure which we are hereby approving is to place two personal decrees, apparently at least, on the minutes of the court for one and the same debt. Appellant calls attention to the fact that under section 346, Code 1930, it is the duty of the chancery clerk, within ten days after the expiration of the term at which any decree for money shall be made, to furnish the circuit clerk with an abstract of such decree, and that it shall thereupon be the duty of the circuit clerk forthwith to enroll the same. It is suggested, therefore, that if the clerk does his duty in a case such as this, there will be two judgments enrolled for the same debt. When the second decree is taken, if the first decree has been enrolled, the said second decree should carry a recital that upon the enrollment of that second decree on the judgment rolls the first enrollment shall thereupon be canceled by the circuit clerk. But if the second decree should fail to carry any such a direction, it would be the duty of the judgment creditor, in enrolling his second decree, to cancel the first enrollment by a proper reference to the second and, if he fail to do so, then, or on subsequent demand, there are at least four remedies open to the judgment debtor by which he may obtain relief against the first enrollment.
There is but one final monetary decree in this case against appellant; that decree is the final decree confirming the sale and adjudging and fixing the final balance due, and the latter decree is the only one that is now entitled to a place on the judgment rolls. In the absence of any sale and of any bringing forward of the proceeds of that sale and of any merger of the two decrees, the first decree would be the final decree, and after seven years would be barred. Goff v. Robins, 33 Miss. 153. The latter is, of course, not the case here, but it is mentioned in order to make clear what is the exact import of this opinion. The first decree is a final decree; but, under the section of the code mentioned, the court, after sale, has the jurisdiction and power to merge it into another decree of final balance, which then becomes the final monetary decree.
Affirmed.