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). Volume/page confirmed against the CourtListener index of Vol. 240 Nebraska Reports.
- 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): https://law.justia.com/cases/nebraska/supreme-court/1992/685.html (opinion text accessed via search-engine retrieval; the Justia HTML blocked direct automated fetch this run — exact reporter pin cites flagged for re-verification). · Verified: 2026-06-08
Jurisdictions that follow / cite: nebraska
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.