Porter v. Smith, 240 Neb. 928, 486 N.W.2d 846 (Neb. 1992)
Legal information, not legal advice. Verify against the cited opinion.
- Citation: Porter v. Smith, 240 Neb. 928, 486 N.W.2d 846 (1992) (decided June 26, 1992). Citation and caption confirmed against the Harvard Caselaw Access Project primary text (static.case.law/neb/240/cases/0928-01.json).
- Court / Year: Nebraska Supreme Court, 1992.
- Topic tags: forfeiture | foreclosure | election_of_remedies | deficiency | liquidated_damages
- Facts: A February 22, 1982 land sale contract covering buildings and wheatland in Deuel County (purchase price ~$586,000, 11.5% interest, annual amortized installments with a 15-year balloon). The contract gave the seller two remedies on default — foreclosure of the contract and forfeiture of the payments. After default the seller (Porter, individually and as trustee for his children) sought a deficiency judgment. The district court dismissed, holding the contract barred a deficiency and/or that the seller had elected forfeiture.
- Holding: A vendor in an executory land contract, upon the vendee’s default, has the right to foreclose the contract as if it were a mortgage and obtain a deficiency judgment after foreclosure. Even after sending a notice of forfeiture, the vendor may alter the choice of remedies and commence an action either for money damages or for foreclosure of the land contract. But under the election-of-remedies doctrine the vendor is barred from a deficiency once forfeiture has been accomplished — i.e., where the vendor has taken/retained possession and kept the payments without crediting them to the balance — because that would permit an impermissible double recovery. The contract’s payment-retention provision was construed as liquidated damages, not a penalty.
- Reasoning: Whether a vendor who forfeits may also recover a deficiency was an issue of first impression in Nebraska. The court adopted the majority U.S. rule: forfeiture (retaining payments + possession) and a deficiency judgment are inconsistent remedies; the election-of-remedies doctrine prevents double recovery and harassment of the defendant. The remedies remain interchangeable up to the point forfeiture is actually completed.
- Practical impact for CFD operators/buyers: Nebraska sellers may treat a defaulted land contract like a mortgage and foreclose for a deficiency, or forfeit and keep payments — but not both. The election crystallizes when forfeiture is completed (possession retaken, payments kept). Operators who want a deficiency must foreclose rather than forfeit.
- Good-law status: Good law; followed/extended in Mackiewicz v. J.J. & Associates, 245 Neb. 568, 514 N.W.2d 613 (1994), and cited in the line leading to beckner-v-urban-2021.
- Source (retrieved): Harvard Caselaw Access Project (primary): https://static.case.law/neb/240/cases/0928-01.json — full opinion text retrieved 2026-06-10; caption (Leland Porter, individually and as Trustee for his children, v. Robert D. and Sandra E. Smith), citation (240 Neb. 928, 486 N.W.2d 846), date (June 26, 1992), and the deficiency / election-of-remedies / liquidated-damages holdings confirmed verbatim. (Justia mirror at https://law.justia.com/cases/nebraska/supreme-court/1992/685.html 403-blocks automated fetch.) · Verified: 2026-06-10
Jurisdictions that follow / cite: nebraska
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.