Court Opinion

ID: 9703833
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:09:43.107381+00
Date Added: 2024-06-11T18:21:52.076412
License: Public Domain

Krivosha, C. J.,
dissenting.
I respectfully dissent from the majority opinion in this case. In my view the majority has reached a wrong conclusion because it has set its sights on the security and not upon the debt. In the instant case we have but a single transaction involving a single note secured by a single mortgage describing three parcels of ground. Western State Bank had but a single cause of action, and when it elected to sue on the note and *239foreclose the mortgage, it in effect brought its only cause of action. To therefore permit Western State Bank to subsequently sue again on the very same note and seek to foreclose on the very same mortgage, I believe, constitutes a splitting of a cause of action and is not permitted. The matter is fully explained in 1 G. Glenn, Mortgages, Deeds of Trust, and Other Security Devices as to Land § 88 at 533 (1943), wherein the author notes:
The mortgage presents the phenomenon of only one debt, with only one pledge to secure it. The debt may be split into bonds, or it may be payable in a series of notes, but in a broad sense it remains true that there is one debt, which arose out of one transaction. In like manner, there is only one pledge, although there may be many parcels of land, and many types of security. It follows that a foreclosure must be of the entire security; and, no matter how many parcels of land there may be, all should be included in the suit. To do otherwise is to “split an entire case,” and that fault is penalized, in our jurisprudence, by refusal to hear the deferred portion in a later suit. It follows that a foreclosure upon one of two parcels will preclude a later foreclosure upon the other.
See, also, Layden v. Layden, 228 N.C. 5, 44 S.E.2d 340 (1947). That, likewise, has been the law in this jurisdiction since at least 1903. In the case of Nebraska Loan & Trust Co. v. Domon, 4 Neb. (Unoff.) 334, 93 N.W. 1022 (1903), it was said: “The foreclosure of a mortgage for the interest only on the principal debt secured thereby, where the whole debt, both principal and interest, is due and payable at the time of such foreclosure, ordinarily exhausts the lien of the mortgage, and is a bar to a second foreclosure suit.” (Syllabus of the court.) It was further said in'the Nebraska Loan & Trust Co. case, supra at 338, 93 N.W. at 1023: “In fact the general rule is, that where by the terms of a mortgage the whole amount of principal and interest is due, a foreclosure for a part thereof exhausts the lien of the mortgage.”
And in Johnson v. Payne, 11 Neb. 269, 272, 9 N.W. 81, 82 (1881), we said that “whatever amount is due under the mortgage at the time of its foreclosure constitutes but a single and indivisible demand, and therefore cannot be separated and *240collected by several actions.” See, also, Haines v. Flinn, 26 Neb. 380, 42 N.W. 91 (1889).
In Dooly v. Eastman, 28 Wash. 564, 68 P. 1039 (1902), the Supreme Court of Washington, in a case very similar to the instant case, said:
One having a mortgage on several pieces of land to secure the same debt cannot foreclose it by piecemeal, and if he attempt to do so he waives his lien upon the premises not included in the decree. As was well said by the supreme court of California in Mascarel v. Raffour, 51 Cal. 242, “by the foreclosure the mortgage is merged in the judgment, and a new action could not be maintained to foreclose the mortgage as to the omitted lot. A mortgage cannot be foreclosed by piecemeal in that way, and the legal effect of omitting from the decree a portion of the mortgaged premises is a waiver of the mortgage lien as to that portion. The mortgagor, therefore, cannot complain of the decree.” . . . The loss of his lien may, and no doubt will, work a hardship upon appellant, but, as he shows that it was the result of his own voluntary act, he must abide the consequences.
Id. at 577-78, 68 P. at 1043-44.
The majority relies upon Michigan National Bank v. Martin, 19 Mich. App. 458, 172 N.W.2d 920 (1969), as illustrative of the majority’s position and reasoning. It is interesting, however, to note that the court in Michigan National Bank v. Martin, supra, makes the very distinction which the dissent seeks to make. In Michigan National Bank v. Martin, supra, there were two notes and three separate mortgages on three separate parcels of ground. In affirming the trial court’s decision to permit successive actions, the Court of Appeals for the State of Michigan said at 462-63, 172 N.W.2d at 921:
Defendants have not cited any authority which would apply the rule against splitting to bar successive foreclosures upon separate mortgage instruments. Dooly v. Eastman (1902), 28 Wash 564 (68 P 1039), relied upon by defendants, is distinguishable, since there the mortgagee held but a single mortgage which covered several tracts of land. It was held that, where one holding a *241single mortgage upon two tracts of land foreclosed against one only, he thereby waived any right to later foreclose upon the other tract. In the instant case, plaintiff held not one, but three separate mortgages.
Obviously, the Michigan court did not believe that whether there was but a single note and a single mortgage versus multiple notes and multiple mortgages was putting form over substance as suggested by the majority herein.
Furthermore, the majority’s concern about what would happen if property was in more than one county is not well founded. Neb. Rev. Stat. § 25-402 (Reissue 1979) specifically provides:
If the real property, the subject of the action, be an entire tract, and situated in two or more counties, or if it consists of separate tracts situated in two or more counties, the action may be brought in any county in which any tract or part thereof is situated, unless it be an action to recover the possession thereof....
Refusing to permit one who holds a mortgage to split a cause of action is not putting form over substance. I would have affirmed the judgment of the district court.