Court Opinion

ID: 3303370
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:19:00.871652+00
Date Added: 2024-06-11T09:13:42.726696
License: Public Domain

I dissent. There are two distinct and separate methods provided by the Civil Code for the foreclosure of a chattel mortgage, one "in the manner and upon the notice prescribed by the title on `pledge'" and the other "by proceedings under the Code of Civil Procedure" *Page 462 
(Civ. Code, sec. 2967). The method of foreclosure in the manner and upon the notice prescribed by the title on pledge is a short and summary proceeding, and is one in which the services to be performed by an attorney are very simple, and consequently the charges of such attorney would be small. On the other hand, when the mortgagee resorts to proceedings under the Code of Civil Procedure, he must institute an action in court and prosecute the same until judgment is rendered and a sale under order of court These proceedings are much more extended, often quite complicated and frequently occupy a long period of time in the courts. It is apparent that the charges of an attorney to conduct such proceedings would be far greater than if he were employed to conduct a simple sale of the mortgaged property as a pledge. A mortgagor may be willing, and may agree, to pay a reasonable attorney's fee for the services of an attorney to conduct this less expensive method of foreclosing on the mortgaged property, and may be unwilling to obligate himself to pay the larger attorney's fee incident to a foreclosure of the mortgage by an action in court. The obligation to pay an attorney's fee is a matter governed solely by contract (Boob v. Hall, 107 Cal. 160
[40 P. 117]; Clemens v. Luce, 101 Cal. 432
[35 P. 1032].) Therefore, where a mortgagor has agreed to pay an attorney's fee simply for services rendered in foreclosure of the mortgage as a pledge, there is no authority on the part of the court, in which an action is instituted to foreclose said mortgage, to enter judgment against him for an attorney's fee in said action.
As before noted, these two methods of foreclosing a chattel mortgage are separate and distinct. In the one the mortgaged property is taken possession of by the mortgagee and sold as a pledge. This method is the one and the only one mentioned or referred to in the chattel mortgage in this action. The clause giving the mortgagee authority to "take possession of the said property, . . . and may immediately proceed to sell the same in the manner provided by law, and from the proceeds pay the whole amount of said note . . . including counsel fees" can only refer to the method of foreclosure in the case of a pledge. For in the foreclosure by an action at law the mortgagee does not take possession of the mortgaged property, but in the decree of *Page 463 
foreclosure, the officer named therein is empowered to seize the mortgaged property and sell the same under said decree of foreclosure (Pacific Investment Co. v. Ross, 131 Cal. 8
[63 P. 67]). The words "may immediately proceed to sell the same in same manner provided by law," must be read in connection with the words which precede them and as thus read these words can only mean that the property, after the same has been taken possession of by the mortgagee, must be sold in the manner as provided by law for the sale of pledged property. The majority opinion cites the case of Brickell v. Batchelder, 62 Cal. 623, 630, as containing a contrary holding. It was there held that the words "proceed to sell in the manner prescribed by law" in the mortgage there under consideration, empowered the mortgagee to institute an action to foreclose the mortgage and sell the mortgaged property under execution sale. The mortgage involved in that action, however, was a real estate mortgage and the decision was based expressly upon the law relative to foreclosure of mortgages upon real property which "prescribes but one mode of sale in the case of mortgaged (real) property." The law is entirely different, as has before been pointed out, regarding mortgaged personal property, concerning which the law expressly and definitely prescribes two modes of sale. That being the case, the words used in the present mortgage can only refer to the mode of foreclosure indicated in the context in which these words are used, and this as indicated above means a foreclosure by the mortgagor taking possession of the mortgaged property and immediately selling the same, "in the manner and upon the notice prescribed by the title on `pledge.'"
While this case appears to be one of first impression in this state, the question involved has frequently been before the courts of other jurisdictions. Jones on Mortgages enunciates the rule as follows: "Under a provision in a power of sale for an attorney's fee in case of foreclosure, [by seizure and sale] no allowance can be made if the mortgage is foreclosed in chancery instead." (3 Jones on Mortgages, p. 520, sec. 2060, citing VanMarter v. McMillan, 39 Mich. 304; Sage v. Riggs, 12 Mich. 313, and Hardwick v. Bassett, 29 Mich. 17.) All these cases are directly in point. For instance, as was said in the case ofSage v. Riggs, supra: *Page 464 
"The error complained of in this decree is the nonallowance of $100 attorney's fee for foreclosing the mortgage, provided for in the power of sale. It is insisted complainant is entitled to the $100, whether the foreclosure is in chancery, or at law by advertisement and sale under the power. It is not in a separate clause of the mortgage, standing by itself and providing a fee for foreclosing the mortgage generally, but in the power of sale of which it is a part. The language of the power is, `rendering the surplus moneys, if any there be, to the parties of the first part, their heirs, executors or administrators, after deducting the costs and charges of such vendue and sale aforesaid, and also one hundred dollars as an attorney fee, should any proceedings be taken to foreclose this indenture.' The meaning of the words, `should any proceedings be taken to foreclose this indenture' relied on by appellant, is easier asked than answered — nor is it necessary to decide. For they must be understood and construed with reference to the subject-matter of the power, that is, a foreclosure by advertisement and sale of the mortgaged premises, and not a foreclosure in equity, of which no mention is made in the power or in any part of the mortgage." In the case ofHardwick v. Bassett, supra, the opinion was rendered by Judge Cooley, and in part is as follows: "This is a foreclosure case in which a bill has been taken as confessed against all the defendants, and decree entered for the amount due on the mortgage, including seventy-five dollars for an attorney's fee, the power of sale having provided that in case of foreclosure `a reasonable number of dollars' might be deducted from the proceeds of sale for an attorney's, solicitor's or counselor's fee. The allowance of this sum was erroneous, as the clause which permitted it could only have reference to a foreclosure under the power of sale. (Sage v. Riggs, 12 Mich. 313.)" In the case ofVan Marter v. McMillan, supra, the identical question was involved and the court on the authority of Sage v. Riggs,supra, struck out the allowance for attorney's fees. This same question has been before the Supreme Court of South Carolina in two well-considered cases. In the case of Brown et al. v.Kolb, 92 S.C. 309 [75 S.E. 529], it is said: "The mortgage provided that on default the mortgagee might seize and sell the property, and that upon the sale `he shall apply *Page 465 
the proceeds of such sale, after deducting all expenses and charges, including attorney's fees, toward the payment and discharge of the indebtedness,' etc. Under a similar contract it was held in Walker v. Killian, 62 S.C. 482 [40 S.E. 887], that the mortgagee could not claim the fees if he foreclosed by action, and not by seizure under the power." In this action the judgment was modified by striking therefrom the attorney's fees.
My attention has not been called to a single case in any jurisdiction supporting the rule enunciated in the majority opinion. In the face of the well-considered cases above mentioned, in which some of our most eminent American jurists, including Judge Cooley of Michigan, have participated, it seems ill advised for this court to prescribe a rule in conflict with all the adjudicated cases to be found in the reports, and contrary to the views of our most reputable text-writers. Besides, it does not seem either equitable or just that the court should fasten on the unfortunate mortgagor, who has been unable to meet the payments called for by his mortgage, an obligation to pay the necessarily larger fee to which an attorney would be entitled in a foreclosure action, when his only contract was to pay the nominally small charge incident to summary proceedings to foreclose said mortgage as a pledge. In my opinion the judgment in this action should be modified by striking therefrom the provisions thereof allowing plaintiff an attorney's fee for foreclosing said chattel mortgage.