Court Opinion

ID: 5171839
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:57:06.037066+00
Date Added: 2024-06-11T08:26:07.446384
License: Public Domain

ON SECOND REHEARING.
(Syllabus to Majority Opinion.)
1. Where a debt has been secured by chattel mortgage and the property covered by the mortgage has been sold by the mortgagor with the consent of the mortgagee, the security has become valueless without act of the mortgagee, within the meaning of C. S., see. 6,780.
2. An affidavit for attachment whieh, after reciting that the debt had been originally secured by a chattel mortgage and the mortgaged property sold by the mortgagor with the consent of the mortgagee, and the proceeds applied to the mortgage debt, states: “and thus by the sale of said property so made by the defendants, the total security for such note has without any act of the plain*56tiff, the person to whom the security was given, become valueless,” sufficiently negatived the existence of any other security than that given by the chattel mortgage.
BICE, C. J.
The remedy by attachment is purely statutory. It is a harsh remedy, in that it divests a person of the possession and control of his property before judgment and it may be upon a disputed claim. Although a harsh remedy, it nevertheless serves a useful and proper purpose. The effort should be to construe the statute so as to effectuate the real purpose of the legislation. The grounds for attachment against a resident, required to be set out by affidavit, are as follows:
“That the defendant is indebted to the plaintiff (specifying the amount of such indebtedness over and above all legal setoffs or counterclaims) and whether upon a judgment or upon a contract for the direct payment of money, and that the payment of the same has not been secured by any mortgage or lien upon real or personal property, or any pledge of personal property, or if originally secured, that such security has, without any act of the plaintiff, or the person to whom the security was given, become valueless.” (C. S., sec. 6780.)
The claim, therefore, must be one founded upon a contract for the direct payment of money, the payment of which has not been secured in any degree by any of the means specified in the statute. If it has been so secured, however inadequately, attachment cannot issue, unless such security has, without any act of the plaintiff, or the person to whom the security was given, become valueless. The security may become valueless by reason of the physical destruction of the property hypothecated or pledged, or the security as such may become valueless and lost by the removal of the property from the jurisdiction of the court, or by its concealment or theft, or perhaps by various other means. In all these instances, clearly it is without any act of the claimant or person to whom the security is given.
It has been held, also, that when the security has been exhausted by a foreclosure sale, and the proceeds applied upon the secured debt, attachment is available in an action *57for the unpaid balance. (Williams v. Hahn, 113 Cal. 475, 45 Pac. 815; Union Bank & Trust Co. v. Himmelbauer, 56 Mont. 82, 181 Pac. 332. And see Bowman v. Wade, 54 Or. 347, 103 Pac. 72.)
When a creditor takes security for his debt, he waives his statutory right of attachment in an action for the recovery thereof. The security becomes the primary source to which he must look for the recovery of the indebtedness. (Rein v. Calloway, 7 Ida. 634, 65 Pac. 63.) By a'foreclosure sale, the property of course becomes valueless as security. Although a foreclosure requires action on the part of the creditor or the person holding the security, the theory appears to be that the exhaustion of the security by foreclosure is by virtue of the law and through the authority of the mortgagor or pledgor. The mortgagee or pledgee could not voluntarily release the lien without the consent of one having given the security, and thus restore the statutory right of attachment. (Rein v. Calloway, supra; Barbieri v. Ramelli, 84 Cal. 154, 23 Pac. 1086; Hibernia Sav. & Loan Soc. v. Thornton, 109 Cal. 427, 5 Am. St. 52, 42 Pac. 447.) The expressions in the case of Wooddy v. Jamieson, 4 Ida. 448, 40 Pac. 61, to the contrary should be overruled, and the case of Parberry v. Woodson Sheep Co. et al., 18 Mont. 317, 45 Pac. 278, should not be followed. But where the mortgagor sells property covered by a mortgage, with the consent of the mortgagee, although such sale renders the security valueless to the mortgagee, it should not be held to have been accomplished by act of the mortgagee, any more than the foreclosure of the mortgage is held to render the security valueless by his act. It is the sale by the mortgagor, and not the consent of the mortgagee, which renders the security valueless.
I am therefore of the opinion that the sale of the property, as disclosed by the affidavits in this case, did not deprive respondent of its right of attachment; that the affidavit required by the statute, to the effect that the security had become valueless without any act on its part, could truthfully be made on its behalf.
*58I am of the opinion, however, that the amended affidavit is insufficient in substance to justify the attachment. The affidavit states: “Thus by the sale of said property so made by the defendants the total security for such note has, without any act of the plaintiff, the person to whom the security was given, become valueless; that the said balance due on said note, to wit, $1,115.75, and interest thereon from May 20, 1921, is not, and at the date of the commencement of this action was not secured' by any mortgage or lien upon the real or personal' property, or any pledge of personal property.” I think that the statement in the affidavit that the total security for such note has become valueless cannot reasonably refer to any other security than the mortgage referred to in the affidavit. It does not negative the existence of other security beside the mortgage. (Knutsen v. Phillips, 16 Ida. 267, 101 Pac. 596.) The further statement that the balance due is not and at the date of the commencement of the action was not secured by any lien on. real or personal property or pledge of personal property, is not sufficient to meet the requirements of the statute. It does not negative the existence of security between the date of the sale and the commencement of the action. The space of time intervening, it is true was short, but there was an intervening time which must be covered in order to comply with the statutory requirement. (Continental Oil Co. v. Jamieson, 53 Mont. 466, 164 Pac. 727.)
I am of the opinion, therefore, that the order should be reversed.