Summary
In Blumberg v. Birch, 99 Cal. 416, 37 Am. St. Rep. 67, one who had foreclosed his mortgage against an absent mortgagor, where a personal judgment could not be entered, was allowed afterward to maintain a personal action to recover the debt still unpaid.
Summary of this case from Savings Bank of San Diego County v. Central Market Co.Opinion
Department One
Appeal from a judgment of the Superior Court of Ventura County.
COUNSEL:
H. L. Poplin, for Appellant.
Orr & Hall, for Respondent.
JUDGES: Belcher, C. Temple, C., and Vanclief, C., concurred. Harrison, J., Garoutte, J., McFarland, J.
OPINION
BELCHER, Judge
It is alleged in the amended complaint in this case that, on the thirteenth day of August, 1887, the defendant executed and delivered to the plaintiff his promissory note and a mortgage on certain real property to secure payment of the same; that on the 15th of December, 1890, the plaintiff commenced an action against the defendant in the superior court of Ventura County to foreclose the said mortgage, and that a summons in the action was issued and served on the defendant by publication only, he being then a non-resident of this state and absent therefrom; that defendant did not appear in the action, and, after the time allowed by law for him to appear and answer or demur, his default was duly entered by order of the court; that the court then heard proof of plaintiff's demand set out in his complaint, and examined him on oath respecting any payments that had been made on account of such demand, and thereupon made and entered in the action its decree of foreclosure in the usual form; that under this decree, on March 27, 1891, an order of sale was duly issued to the sheriff of the county and in pursuance thereof the sheriff advertised for sale, and on April 27, 1891, sold the said real property for the sum of $ 1,000 and applied the same to the payment of the said indebtedness, interest, attorneys' fees, costs, and expenses, as directed by said decree; that, after so applying the said sum, there remained due and unpaid to the plaintiff, on said indebtedness for principal and interest on the said note, and as determined by said decree, the sum of $ 1,746.99; that the sheriff's return being made showing such balance or deficiency, judgment was duly docketed therefor in favor of the plaintiff and against the defendant on April 28, 1891, and that no part of said sum had been paid. Wherefore the plaintiff demands judgment against the defendant for the sum of $ 1,746.99, with interest thereon, etc.
The defendant demurred to the complaint upon the ground that it did not state facts sufficient to constitute a cause of action, and his demurrer was sustained. Judgment was thereupon entered that the plaintiff take nothing, from which judgment he appeals.
There can be no doubt that the court, by the constructive service of the summons by publication in the foreclosure case, acquired jurisdiction to ascertain the amount secured by the mortgage and to make and enter a valid decree of foreclosure, directing a sale of the mortgaged property and the application of the proceeds to the payment of the amount so secured, including costs and expenses. It did not, however, thereby acquire jurisdiction to enter or docket a personal judgment against the defendant for any deficiency left unpaid by the proceeds of the sale. (Pennoyer v. Neff , 95 U.S. 714; Belcher v. Chambers , 53 Cal. 639; Anderson v. Goff , 72 Cal. 65; 1 Am. St. Rep. 34.) But notwithstanding no valid judgment could be entered for the deficiency, still, when properly ascertained, the deficiency constituted a subsisting indebtedness then due from the defendant to the plaintiff. The plaintiff brought this action to recover that indebtedness, and in his complaint set out all the facts on which he based his right of recovery, and the defendant's contention is that no sufficient cause of action was stated, because, -- 1. The personal judgment set out was void; and 2. The note was merged in the foreclosure judgment, and under section 726 of the Code of Civil Procedure no new or other action could be maintained thereon.
It is true that the personal judgment docketed against the defendant was void, and also that under the section of the code cited there can be but one action for the recovery of any debt or the enforcement of any right secured by mortgage upon real or personal property. It does not follow, however, that after the mortgage security is exhausted, leaving a deficiency which is no longer secured, no new action on the note [34 P. 103] can ever be maintained. On the contrary, it has been held that an action may be maintained against an indorser of a note, payment of which has been secured by a mortgage given by the maker, to recover any deficiency resulting after a sale of the mortgaged premises under a judgment of foreclosure against the mortgagor. (Vandewater v. McRae , 27 Cal. 596; Allin v. Williams , 97 Cal. 403.) It seems to us, therefore, that in a case like this, the amount realized from the proceeds of the sale may properly be treated as a payment on the note, and that an action thereon may be maintained to recover the balance left unpaid. But however this may be, it is clear and not disputed that the defendant was justly indebted to the plaintiff in some form for the amount of the deficiency, and, being so indebted, the familiar maxim of the law that where there is a right there is a remedy, ubi jus ibi remedium, is applicable to the case.
Under our system of pleading, the complaint should contain a statement of the facts constituting the cause of action in ordinary and concise language, and the court may grant the plaintiff any relief consistent with the case made. (Code Civ. Proc., secs. 426, 580.) Here the complaint complies with the rule prescribed, and whether it be said to be based on the note or on an indebtedness resulting from the facts stated is, in our opinion, immaterial. In either view it states facts sufficient to constitute a cause of action, and the demurrer was therefore improperly sustained.
We advise that the judgment be reversed and the cause remanded with directions to the court below to overrule the demurrer.
For the reasons given in the foregoing opinion, the judgment is reversed and the cause remanded with directions to the court below to overrule the demurrer.