204 N.W. 856 | N.D. | 1925
This is an action to foreclose a real estate mortgage. On the 10th day of January, 1912, the defendants F.L. Branner and Nancy C. Branner executed and delivered to the plaintiff a mortgage on their homestead in Towner county, North Dakota, to secure the payment of a promissory note for $440.52. The note was due on the 10th day of November, 1912, and this action was commenced on the 28th day of April, 1923. On the 4th day of November, 1918, the defendant F.L. Branner paid $10.00 upon the said note, and on the 1st day of April, 1921, the defendant F.L. Branner paid $200 upon said note, which payments were endorsed upon said note and were made without knowledge of the defendant Nancy C. Branner. The defendant set up the statute of limitations on the note as to the defendant Nancy C. Branner and on the mortgage as to both defendants alleging that the defendant Nancy C. Branner is the wife of the defendant F.L. Branner and that during all of the time stated in said complaint was a resident and citizen of Towner county, North Dakota, the head of a family, having living with him and depending upon him for her support the defendant Nancy C. Branner, and that they were living upon, and occupying as their home and homestead under the laws of the State of North Dakota the premises described in the complaint and that the cause of action set forth in the complaint did not accrue within ten years before the commencement of the said action and was therefore barred.
Upon the facts as stated the trial court made its conclusions of law, holding that action upon the note was barred as to the defendant Nancy C. Branner, that the action on the note was not barred as to the defendant F.L. Branner against whom he ordered judgment for the balance due on the note together with costs of the action, and that the said action for the foreclosure of the mortgage was barred by the statute of limitations.
The plaintiff, in appealing to this court, does not question the findings of fact or conclusions of law in relation to the defendant Nancy C. Branner, but bases his appeal on the conclusion of law by the trial court, "that the action to foreclose the mortgage was barred by the statute of limitation." It is his contention that the payments made by the plaintiff on the 4th day of November, 1918, and on the 1st day of April, 1921, toll the statutes of limitation both as to the note *895
and mortgage. He relies on the decisions of this court in Omlie v. O'Toole,
The trial court disposes of the case of Roberts v. Roberts, supra, with the statement: — "It is true that in the case of Roberts v. Roberts, supra, the court permitted the foreclosure of a mortgage though the action was not commenced until after eleven years from the date the mortgage was due but that was a case where the mortgagor was dead and apparently his representative did not raise the question of the statutes of limitation." The trial court overlooked a part of the decision in the case of Roberts v. Roberts, for, in the Roberts case, the statutes of limitations were pleaded and passed upon by the court. On page 532 of volume 10, (88 N.W. 290) the court says: — "The action is brought against Callie Roberts as executrix of L.B. Roberts, deceased. She answers in such capacity, and individually, that she executed said mortgage as surety for her husband and at his solicitation and request; that she received no consideration whatever for the giving of the same; that the plaintiff well knew that she executed such mortgage as surety for her husband only;that no payments were ever made on such note or mortgage with herknowledge, consent or authority; that the cause of action basedon such mortgage, so far as the mortgage is concerned did notaccrue within ten years prior to the commencement of the action."Thus the statute of limitation was pleaded in the same languageas in the case at bar.
On page 534 (88 N.W. 291) the court, quoting from the case of Smith v. Scherck,
In the case of Omlie v. O'Toole, 16 N.D. page 134, 112 N.W. 681, the court says: — "This court has intimated in a case directly in point what a wife's interest in a homestead is, where the title, as in this case, is in the husband, and has held thather assent is not necessary to an extension of the time ofpayment of the mortgage debt and that without her assent herhusband can prevent the statute running against a mortgage of thehomestead. The facts in the case cited infra are so nearly identical with those in the case at bar in relation to this phase, and the principles are so fully discussed in the opinion of Judge Morgan in that case that no additional consideration of this point is now necessary. We reaffirm the principles there developed." Roberts v. Roberts, supra. But the trial court in the memorandum opinion, and the respondent in his brief, contend that the case of Roberts v. Roberts, supra, was overruled by the case of Colonial U.S. Mortg. Co. v. Northwest Thresher Co.
In the case of McCarty v. Goodsman, supra, the mortgage was given to secure a debt of $700 represented by five promissory notes falling due on different dates. The mortgage provided that in case of default in the payment of any of the notes, the mortgagee might declare the whole sum due. The mortgagee did not avail himself of this provision and at the time the action was brought to foreclose the mortgage some of the notes were barred by the statute of limitation, and the court held that while some of the notes were barred "the mortgage is given to secure the entire debt of $700 and the fact that the indebtedness is represented by installment notes maturing at different dates can not affect the creditor's right to stand upon the singleness of his cause of action to foreclose for the nonpayment of the entire debt when all of it shall become due." In this case the court points out that while there are two remedies there is but one debt, and, carrying that just a little further, since there is but one debt, a payment on the note is a payment on the mortgage. If the payment on the note extends the life of the note, is there any reason why it should not also extend the life of the mortgage, if the mortgagor, at the time of payment, owns the equity of redemption in the land? According to our view, there are none.
The appellant says there is no conflict in the decisions and nothing in any of the opinions overruling any of the law as laid down by this Court on the subject matter of this action.
In the case of Colonial U.S. Mortg. Co. v. Northwest Thresher Co. Judge Engerud says: — "The only question involved upon this appeal is whether the statute of limitation is available to this appellant as a defense against the plaintiff's action. The time within which an action to foreclose a mortgage of real property must be commenced in this state is limited to ten years from the time the cause of action accrued." "If, when a cause of action shall accrue against any person *898 he shall be out of the state, the statute does not begin to run until his return into the state." Continuing, on page 152 — "We are all, therefore, of the opinion that the absence from the state of the person against whom the cause of action accrued stays the running of the statute of limitations against an action to foreclose a mortgage the same as in any other action in personam."
In his dissenting opinion Judge Young says: — "As stated in the majority opinion we are agreed that this action is not in rem and we are of the opinion that the absence from the state of a person against whom the cause of action accrued, stays the running of the statute of limitation against an action to foreclose a mortgage the same as in any other action in personam. In other words, § 5210, supra, which extends the time for commencing the action when the person against whom the cause of action accrues is absent from the state, applies to this action." (Which was an action to foreclose a mortgage.) The note in this action was due November 1st, 1888. No payments were made upon it. In the fall of 1887 the mortgagor moved from the Territory of Dakota and never returned. In December, 1887, he conveyed the mortgaged land to A.S. Brown and on February 1st, 1888 Brown conveyed to the Minnesota Thresher Mfg. Co. and the real question in the case is, Did the defendant's absence from the state toll the statute of limitations on the mortgage after he had sold all his interest in the land? The prevailing opinion holds that it did not for the reason that the mortgagor had sold his interest in the land and was not a necessary party to the action to foreclose the mortgage. He had no more interest in the land. His equity of redemption was gone. The purchaser of the land, the Minnesota Thresher Company, stood in his place and during all of the years was constructively a resident of North Dakota on account of its doing business in the State and having a person within the State upon whom service might be made, therefore the statute of limitations ran against the mortgage upon which action was barred. The dissenting opinion holds that the absence of the mortgagor from the state tolled the statute and action was not barred even though the mortgagor had sold the land. This is the only disagreement between the members of this court in said action and is all there is in that case.
In arriving at the conclusion that the mortgagor was not a necessary *899 party in the foreclosure proceeding, this court followed the trend of decisions holding that there are two remedies for the enforcement of a note secured by a real estate mortgage: One in an action on the note, and the other an action for the foreclosure of the mortgage, and that each was independent of the other. Upon this principle the trial court held that since there are two remedies that are independent of each other, the payments on the note, in the case at bar, did not extend the right of action upon the mortgage.
In the case of Colonial U.S. Mortg. Co. v. Northwest Thresher Co.
"There are only two things which could stay the running of the statute against this action; absence of the defendant, or an acknowledgment or new promise within ten years, which new promise or acknowledgment can be proven only by partial payments or written evidence. In this case neither of these are present and the court has no power to recognize any exception to the statute other than those which the legislature has made." Citing Teigen v. Drake,
In other words, a new promise in writing signed by the party to be charged, or a partial payment, would have tolled the statute in the case of Colonial U.S. Mortg. Co. v. Northwest Thresher Co., but there was no new promise or partial payment and therefore nothing to stay the statute. In the case at bar there were partial payments made by the mortgagor and therefore action on note and mortgage was extended.
No court has stated the doctrine, in relation to the two remedies against note and mortgage, better than Judge Mitchell in the case of Slingerland v. Sherer,
"Where a debt is secured by mortgage, the creditor, if default be made, has two distinct remedies, to-wit: (1) The recovery of a personal judgment for the debt; and (2) the foreclosure of the lien of the mortgage upon the land. Under the old practice both remedies might be pursued (either consecutively or concurrently) in separate actions *900 at law and in equity. The court of chancery never rendered any personal judgment for the debt, or for any deficiency after sale of the land. If the mortgagee wished to pursue any such remedy he had to resort to the law court for that purpose. But under the reformed practice both remedies may, in a proper case, be obtained in the same action. One of the remedies, however, may be lost without affecting the other. The mortgage may be discharged or released without affecting the personal liability of the mortgagor; and, on the other hand, the personal liability may be terminated by the statute of limitation, a discharge in bankruptcy, or by convention of the parties, without extinguishing the lien of the mortgage. Also a mortgage may be executed without the mortgagor being personally liable. The person who is personally liable for the debt may not be a party to the suit, as when the mortgagor has parted with all his interest in the land. Again, the person who is entitled to recover the personal judgment may not be the person entitled to foreclose the mortgage."
This decision is in accord with the prevailing opinion, Colonial U.S. Mortg. Co. v. Northwest Thresher Co. supra, and yet Judge Mitchell, in the case of Carson v. Cochran,
"Defendant's last contention is that the right to foreclose was barred by the statute of limitation, the action not having been commenced until May, 1889, more than 15 years after the maturity of the bond secured by the mortgage. Partial payments, however, were made every year down to 1886 and one as late as 1889; and the question is, whether these payments tolled the statute as to the mortgage. The general, if not the universal, rule is that a partial payment or an acknowledgment of the debt which would prevent the statute from running against it will also prevent the statute from running against the remedy on the security and there is certainly nothing in our statute of limitations indicating an intention to establish any new and different rule. The limitations as to actions to foreclose mortgages, as amended in 1887, is one of the provisions found under the general title, `The Time of Commencing Civil Actions' and there is no reason for holding that the provisions of §§ 15 and 24 of that chapter are not as applicable to actions of foreclosure as to any other civil actions. By holding that *901
an action to foreclose a mortgage is a personal action and not a proceeding in rem, as we did in Whalley v. Eldridge,
Section 7712, General Statutes of Minnesota, 1913, relating to new promise, acknowledgment, and effect of partial payment, is in the exact language of § 7394, Compiled Laws of North Dakota for the year 1913 relative to the same subject.
Wisconsin is cited in the prevailing opinion in Colonial U.S. Mortg. Co. v. Northwest Thresher Co. supra, as recognizing the two independent remedies and in the case of Hughes v. Thomas,
"But it is strenuously insisted by counsel for respondent that, since the debt was barred and extinguished at the time this action was commenced, the twenty year limitation should begin to run, not from time of last payment of interest, but from the time the right to foreclose accrued. The authorities seem to be against respondent's contention. The insistence of respondent is that part payment upon the debt does not extend the twenty year limitation on the sealed instrument given to secure the debt beyond six years after the last part payment. The payment of interest had the effect of a new promise to pay the debt secured by the mortgage, and, a cause of action having accrued upon *902
the debt at the time of such payment of interest and new promise, no reason is perceived why the cause of action to enforce the lien under the mortgage should not continue for twenty years from the date of such part payment." Spear v. Evans,
The Kentucky Court, in the case of Clift v. Williams,
"It is insisted in petition for rehearing that the opinion herein is in conflict with the opinion of this court in Tate v. Hawkins,
The axiom stated by Judge Young as "The general, if not universal, rule is that a partial payment or an acknowledgment of a debt which would prevent the statute from running against it will also prevent the statute from running against the remedy on the security," (
"Any act of the mortgagor which operates to keep the mortgage debt on foot, also operates to keep up the mortgage lien, as an acknowledgment of the debt by the mortgagor in the mode and with the formalities required by law. A part payment of principal or interest made by the mortgagor or his agent revives the mortgage, and gives it a new lease of validity from the date of such payment; and a payment by one of two or more mortgagors, while the mortgage is still operative, it seems, will keep up the right of entry against all." 2 Wood, Lim. 4th ed. p. 1056.
"The general rule that the payment of interest on a debt operates as an acknowledgment from which a promise to pay the principal obligation may be inferred has been frequently applied to the payment of interest on a mortgage debt upon which a cause of action has accrued, in which case it has been held that the payment operates as a new promise and keeps the lien of the mortgage alive for the statutory period of limitation from that time. Thus, if a husband and wife execute a mortgage on their homestead to secure the payment of a note made by him only, his payment of interest periodically though without her knowledge, has been held to stop the running of the statute." 17 R.C.L. § 297, p. 934.
"The general rule being that the mortgage is incident to the debt, and, as payment of the latter extinguishes the lien of the former, so, by a parity of reasoning, the renewal of the debt extends the lien of the mortgage. This is invariably so as between the mortgagor debtor and the mortgagee creditor." 19 R.C.L. § 250, pp. 463, 464 and cases cited.
The theory is that the partial payment of a debt is an acknowledgment of the debt from which a new promise can be inferred. Mrs. Branner knew that her husband had given the mortgage upon the homestead to secure the payment of a debt. She signed both note and mortgage. She knew both she and her husband promised to pay the debt when they signed the note. She knew that it was her husband's duty to pay the note and she can not complain because he made payments thereon. It was his debt and his land. When he made a payment on the note he thereby decreased the debt and the amount of the *904
mortgage lien. There is no conflict in the decisions of this court on the subject matter of this action. The case of Colonial U.S. Mortg. Co. v. Northwest Thresher Co.
The judgment of the District Court is erroneous and is hereby reversed. The plaintiff in this action is entitled to judgment of foreclosure of the mortgage as prayed for in the complaint. It is so ordered.
CHRISTIANSON, Ch. J., and BIRDZELL, NUESSLE and JOHNSON, JJ., concur.