Jordan v. Sayre

Mr. Justice Raney

delivered the opinion of the court:

There are thirteen grounds of objection to the bill of complaint set up in the appellant’s demurrer. We shall confine our observations to the points made and the argument advanced in his solicitor’s brief, and treat any ground of demurrer not covered by them as abandoned. Southern Express Company vs. Van Meter, 17 Fla., 783. It is contended in the first place that the complainants’ right of action is barred, and this contention is based upon the idea that in this State the same period of time that bars an action of ejectment is a bar to a suit to foreclose a mortgage.

In Browne vs. Browne, et als., 17 Fla., 607, decided A, D. 1880, it was held that a suit in equity to sell land mortgaged and apply the proceeds to the payment of a promissory note secured by the mortgage is an action upon a contract founded upon an instrument of writing under seal, within the meaning of section 10 of our limitation act of 1872, and that such suit could be maintained in equity though an action at law upon the note was barred by the-provision of the statute fixing the time within which such an action on the note might be brought. The statute of limitations covers not only legal, but also equitable remedies-The bar of a civil action on a sealed instrument is twenty years, and of one on a promissory note five years. Between nine and ten years had elapsed between the maturity of the note and the filing of.the bill by the payee of the note against the surviving mortgagors and heir and representative of a deceased mortgagor.

It is unnecessary to review the authorities discussed in the opinion and which support its conclusion, but we mm' remark of Lord vs. Morris, 18 Cal., 482, where it is held that the same period of limitation bars both an action on the note and one on the mortgage, that there is nothing in it inconsistent with the view that, had the statute of California prescribed a different (instead of the same) limitation to an action on a sealed instrument from that prescribed for an action on a written instrument not under seal, the decision of the court would have been to the effect that the limitation as to the sealed instrument controlled a suit to foreclose a mortgage. The view of the court was that the limitation of actions for recovery of real estate founded upon the title could not be adopted by analogy for the reason that a mortgage of itself gave, under the system in that State, no right of possession, either real or technical, and that the limitation pirescribed for “ a contract, obligation or liability founded upon an instrument in writing, applied to a mortgage, because the statute makes “ no distinction in the period of limitation between a simple contract and a contract under seal,” and the mortgage was “ as much within the general designation of ‘ a contract obligation or liability founded upon an instrument of writing' as * * * the note itself.” Though there are expressions in the opinion which, when considered alone, .might be taken to indicate that the suit on the mortgage was barred for the reason that an action on the note was, (a doctrine which, however plausible it may seem, has not met -with very much favor,) yet such is not the real doctrine of the opinion. In Low vs. Allen, 26 Cal., 141, 145, it is remarked: “The mortgage contract of Tharp and Ramsdell is distinct from the note it was given to secure, and is manifestly one of the written contracts on which the Statute provides that no action shall be brought except within five years after the cause of action has accrued.”

The conclusion reached in Browne vs. Browne is sustained by the decisions of the courts of those States where the character of the statutes as to the limitation of remedies and as to mortgages is similar to those obtaining here.

We understand counsel for appellant not to dissent from the result reached in Browne vs. Browne, if it is considered in connection with the facts of that ease, it being a foreclosure suit with parties, as explained above, and there being in the mortgage, according to inference of counsel,, though we do not so understand from the report of the case, a distinct covenant to pay the debt, and bringing the case within the twenty-year provision for instruments of" writing under seal. As there is in the mortgage before us, as is substantially alleged in the bill of complaint, a covenant by the parties of the first part, “ for' themselves, their heirs, executors and administrators * * to pay unto the said party of the second part, his heirs, executors or assigns the said sum' of money, principal and interest and all costs, charges and expenses, including attorneys’ fees which the party of the second part may incur or be put to in collecting the same by foreclosure,” we might, if there had been, as in Browne vs. Browne, no transfer of the mortgage of the land, dispose of the case upon the theory of the effect of such covenant.

In jurisdictions where the statute of limitations has applied only to legal remedies, equity has adopted in suits of foreclosure of mortgages the limitation prescribed for actions of ejectment or other actions founded upon title for the recovery of real estate instead of the limitation controlling a personal action against the mortgagor or debtor for the mere debt. Originally at common law a mortgage conveyed the legal estate to the mortgagee, and upon the mortgagor’s default in paying the debt at the time specified for such payment, the estate became vested absolutely in the mortgagee. Equity regarding the mortgage as security for a debt rather than a sale of the land, came to the relief of the mortgagor and permitted him to redeem by paying the debt, and as equity gave this relief, the right to it was called the equity of redemption. It also gave the mortgagee a remedy by foreclosure, through which a limit to the right of redemption might be fixed by decree, and if the redemption was not made as decreed, the mortgagor’s equity was extinguished and the estate was absolute in the mortgagee. This was called a strict foreclosure. This kind of foreclosure fell into disuse and the practice of decreeing a sale of the mortgaged property at public outcry to the highest bidder has long obtained. Goodenow vs. Ewer, 16 Cal., 461. In dealing with the question of limitation to the remedy of foreclosure and sale, equity regarded the instrument as conveying, technically at least, the legal title, and the remedy of foreclosure as one upon such title and to divest the mortgagor of possession of the premises, and on this principle applied by analogy the limitation controlling the legal remedies for the recovery of possession. Wilkins et al. vs. Flowers, 37 Miss., 579; Nevitt vs. Bacon, 32 Miss., 212.

In Florida a mortgage is not only in equity merely a lien, but under our statute it is nothing more than this at law. Berlack vs. Halle, 22 Fla., 236. It is not a conveyance of the legal title or estate, but only a lien upon it. It gives the mortgagee no right of possession. The theory of any such right, either actual or technical, existing in the mortgagee by virtue of the mortgage, is entirely antagonistic to both the spirit and letter of our statute. No decree giving the mortgagee, as such, possession, can be rendered in favor of the mortgagee simply upon the mortgage and the debt it secures. It is only as purchaser under a decree of foreclosure and sale, and not as mere mortgagee, that the assistance of the court can be obtained for giving him possession. This being the case we cannot see any basis for an analogy to legal actions for recovery of real property.

The fact that twenty years are allowed to enforce a mortgage lien, whereas only seven are given to recover possession on the legal title against an adverse holding, is not an anomaly in the statute. It allows twenty years for the enforcement of a common law judgment or simple money decree, which are, by our statutes, made also a lien on the interest of the defendant in any real estate. There is no more reason why the lien of a judgment should thus be preserved for twenty years than that of a mortgage. The record of either makes it, in law, notice to all the world, and whoever acquires the title of the mortgagor takes subject to such lieu ; in each case the evidence of the lien is a record, aud the purpose of the lien is to secure the payment of money.

The first transaction of Jordan in connection with any of the eighty feet of land covered by the mortgage is his purchase of the west fifty feet from Sayre. This purchase was made September 25, 1883, about four years and eight months after Sayre obtained from the master in chancery the deed pretending to convey to him the whole eighty feet, which deed was futile as a conveyance of the land, as the legal title to it was in Myers, who was not a party to the foreclosure proceedings instituted September 25,1879, and under which the master sold and conveyed. Berlack vs. Halle, 22 Fla., 236. The conveyance from Sayre was by deed with warranty of title and for the consideration of twelve hundred dollars. Warrock, the mortgagor, conveyed by warranty deed to Myers, March 20th, 1876, and at this time the mortgage was on .record and legal notice to Myers. On the 16th day of August, 1884, Myers, “ by deed of quit-claim, released his interest in said lot to Jordan,” who, says the bill, “ thereby claims to have become the owner in fee by means of said deed.” Of course Sayre’s deed to Jordan, whatever may be its effect for other purposes, does not affect the east thirty feet of the lot against which the foreclosure is now sought. The only interest in, or connection with, these thirty feet that Jordan has, so far as the pleadings advise us, is that which he has derived from Myers, and Myers’ interest was the ownership of the legal title subject to the mortgage, and of this mortgage Jordan, or any one else dealing with Myers, was charged with notice.

Had Warrock continued to hold the land, the statutory bar of the mortgage would not have run until the latter part of March, 1894. Neither Myers, who purchased from Warrock, nor any grantee of Myers, has any better position as against the mortgage. Although the period of limitation began to run against the mortgage on the maturity of the note in March, 1874, and, as we must presume in the absence of any showing to the contrary, continued to run; yet Myers’ possession was not adverse to the mortgage in the sense of either changing his relation to it, or' lessening the period prescribed asa bar to its enforcement,- or otherwise impairing the rights of the holder of it.

The case of Benson vs. Stewart, 30 Miss., 49, is cited by counsel for appellant in support of his contention that the possession of Myers was adverse to the mortgage. In that State the period barring an entry at law is adopted by analogy as barring a foreclosure of the mortgage. In Nevitt vs. Bacon, 32 Miss., 227, where it is held that the statute' of limitations commences to run from the time the mortgagee’s right to file his bill accrues, it is said in the opinion of the court, delivered by Justice Handy, who delivered the opinion in Benson vs. Stewart, “ and here it may be' proper to remark that what is said in that ease (Benson vs. Stewart) with respect to adverse possession, had reference-to the party who purchased from the mortgagor, in whose behalf the statute was not a bar when the bill was filed and that party not being protected by an adverse possession under his purchase from the mortgagor for a sufficient length of time to be protected by the bar, he would occupy the position in which the mortgagor stood, in whose favor' the period of time necessary to constitute the bar had not run when the bill was filed against him.”

The fact that Warrock conveyed by warranty deed does-not change the rule, Heyer vs. Pruyn, 7 Paige, 465; Thayer vs. Cramer, 1 McCord’s Chan., 395; Lent vs. Morrell, 25 Cal., 492; Drayton vs. Marshall, Rice’s Reports, 373; Wright vs. Eaves, Rich. Eq., 81.

In Heyer vs. Pruyn et al., VanDyke purchased in Sept. 1812, the mortgaged land under a junior judgment against •the mortgagor, but subject to the prior incumbrances and •under an arrangement for taking them up, to which the mortgagee, Heyer, was not a party. Afterwards VanDyke sold in 1813 to Shaver, giving him a deed with covenants. 'Shaver had no notice of Heyer’s mortgage, except the conetuctive notice arising from the record of it. VanDyke knew of the mortgage. Shaver purchased in 1813, and the mortgage had become due in December, 1810, more than twenty years before the bill was filed. “If,” says. Chancellor Walworth, who had previously remarked that VanDyke, by his covenants in the deed to Shaver, and running with the land to subsequent purchasers, was bound to pay oft the mortgage, so as to protect the premises from its lien, “ he (VanDyke) had continued the owner of the premises until the commencement of this suit in January, 1832, it is evident he could not have set up lapse of time as a bar to complainant’s suit, even if there had been no subsequent payment on the bond and mortgage, nor any recognitions of the same as a subsisting debt. The defendants, therefore, claiming through the conveyance from VanDyke to Shaver, sit in the seat of the grantor in that conveyance, and are bound by his recognition of the mortgage as a subsisting Incumbrance upon the premises within twenty years.”

In Lent vs. Morrell, the mortgagor, Grover, conveyed by «deed of general warranty to Charles Morrell, and the latter to O. F. Morrell, who conveyed to Chambers. Chambers, when he purchased, did not know that the mortgagor had, before selling to O. F. Morrell, extended the time for payment of the note. A default was entered as to the mortgagor, who had failed to answer, but the other three defendants answered. It was held by the court that if the maker of a note secures the same by mortgage on land, and while still the owner of the mortgaged property, extends the time of the payment of the note, or if he divests himself of the title to the lands and then extends the time of payment of the note, and afterwards acquire title, the purchaser from the mortgagor of the lands mortgaged, takes the same subject to the lien of the mortgage until the note is barred by the-statute of limitations, although at the time of his purchase he did not know that the time of the payment of the note-had been extended. As to the covenant in Grover’s deed to Morrell, a link in Chambers’ deraignment from Grover, the court says : “ The note, the mortgage and the renewal of February 13th, 1859, all antedate the deed. Lent was not a party to the deed, and, therefore, was not a party to the covenant, nor has he become privy to it since by any species of succession.”

It is clear that as against the legal title, neither Benedict, Sayre nor Halle has ever had any other status than that of mortgagee, and no other limitation than that applicable to a mortgage, which is twenty years, applies to them. Of this period only a little over twelve years had passed at the filing of the present bill. Neither of them has at any time been in a positiou to maintain an action for the recovery of possession. If a suit for foreclosure can be called such an action, then the bar to it, viewed as such, is twenty years, for the right to such suit is founded upon the mortgage. Having, however, no other status than that of a mortgagee, the laches imputable to an ofituer of the legal title from the lapse of seven years without suit can not be attached to them. Had Sayre acquired the legal title by his purchase in chancery of December 5th, 1880, from the master, it would have terminated his relation of mortgagee and a different case would be presented, but he did not do so, and the result is that we have only to deal with him as mortgagee and against one holding under the title of the mortgagor and subordinate to the mortgage. No other case is shown by the record, and upon the case shown, it is clear that no other limitation than that applicable to mortgages obtain, and this has not run. Medley vs. Elliott, 62 Ill. 532; Rockwell vs. Servant, 63 Ill., 424; Brown vs. Devine, 61 Ill., 262; Pratt vs. Pratt, 96 U. S., 704; Coulter vs. Phillips, 20 Penn. St., 154.

II. It is contended that if the complainant is entitled to any relief, it can not be had in the method pursued here , and in support of this proposition the cases of Goodman vs. Ewer, 16 Cal., 461; Boggs vs. Fowler & Hargrave, Ib., 560; Abadie vs. Lobero, 36 Cal., 391, are cited.

In Goodenow vs. Ewer the facts were as follows : Downer and Morris were the owners, each of an undivided half of a town lot, Downer mortgaged his undivided half to plaintifts in May, 1857, to'secure $2,000, and the mortgage was duly recorded. In June following Downer and Morris •sold and conveyed to the defendant, Ewer, an undivided one-third of the entire property. The effect of this was that Downer, Morris atld Ewer, each held an undivided one-third interest in the property, and one-half Ewer’s interest (the one-sixth he had purchased from Downer) being subject to Downer’s mortgage to plaintifts. In December following the plaintiffs instituted a suit to foreclose their mortgage, making no one but Downer a defendant, and in January following obtained a decree for a sale of all the interest that Downer possessed in the land at the date of the mortgage. In February, 1858, defendant, Ewer, purchased the remaining interest of Morris, and in March the remaining interest of Downer, in the premises. At a sale made under the above decree in June, 1858, the plaintiffs became the purchasers, bidding the full amount due on their judgment, and in proper time received a deed of conveyanee from the officer making the sale. The plaintiffs, after obtaining their deed of conveyance, filed a bill of partition and account against Ewer, who had been in possession receiving rents from after the salé to plaintiffs under the decree.

It was held that the decree and sale were of no effect as to Ewer’s title to the one-sixth interest which he had purchased from Downer before the institution of the foreclosure suit; that a mortgagor, or if he has disposed of his title, his grantee, is a necessary party -to a suit of foreclosure and sale ; that though the plaintiffs did not understand that it was necessary that Ewer should have been a party, but thought they were acquiring the entire half interest covered by Downer's mortgage, and the officer making the sale had stated, in accordance with the decree, that such half interest was offered for sale, they acquired only one undivided third of the whole land, and that the effect of the purchase thereof, for the full amount of the decree, satisfied the decree, and that the one-sixth interest sold by Downer to Ewer was thereby discharged from the lien of the mortgage; and that the mistake as to the extent of the interest in the land acquired at the sale, was one purely of law, and not such as equity would relieve against.

In Boggs vs. Fowler and Hargrave, there was a sale under a decree of foreclosure and sale, to which suit and decree the grantee of the mortgagor was not a party. The purchaser at such sale brought an action at law against the mortgagee to recover the money paid by him on his bid. He was aware when he made this bid that the mortgagor had sold the premises before the institution of the foreclosure suit; and there was no showing of any fraud in the sale. It was decided that although the doctrine of caveat emptor did not apply, the action would not lie ; that though the purchaser made a mistake as to the effect of the decree, (which was held to be void from the absence of the grantee or legal owner of the property as a party,) it was one from which no relief could be obtained at law.

In Abadie vs. Lobero, it was held that a purchaser at a Sheriffs sale does not by such purchase acquire any interest in the judgment on which the execution or order of sale issued, or the debt or mortgage upon which the judgment was rendered, nor does a redemptioner, as such, or an assignee of the certificate of sale, acquire any interest in such judgment, debt or mortgage; and that neither of such parties, upon his own ex parte motion made in his own name, is entitled to have the judgment vacated and himself substituted as plaintiff in order that he may file a supplemental complaint to bring in other parties.

In the first of the above three cases it was said that upon proper application in the original foreclosure suit, the court would undoubtedly have released the plaintiffs from the purchase, set the sale aside, opened the decree, and allowed them to file a supplemental complaint bringing in Ewer and others interested, as parties; and in second case it was stated that the plaintiff must resort to the original suit and that upon his application there the court might order the sale to be set aside, the satisfaction of the decree to be cancelled, and authorize a supplemental bill for a resale of the premises to be filed and conducted in the name of the complainants in that suit for the plaintiffs’ benefit, and direct that the mortgagor’s grantee and others interested be brought in as a party ; and in the third case, the remark italicised is spoken of as a dictum, and being a proposition for which no authority had either been cited or fallen under the court’s observation.

The case before us is unlike either of these cases. Unlike Goodenow vs. Ewer, there was nothing acquired by Sayre by his purchase and deed under the decree against War-rock aud wife to operate as a satisfaction of his decree, even to the amount of his bid. The complainants here are not mere purchasers, with no other standing, like the plaintiff in Boggs vs. Fowler and Hargrave.

In State Bank of Wisconsin vs. Abbott, 20 Wis., 599, it was held that when in the foreclosure of a mortgage the owner of the equity of redemption has, through mistake, not been made a party, the mortgagee who has purchased at a sale under the decree for the whole amount of the mortgage debt and costs may maintain a second action to-foreclose the equity of such owner and for a new sale to-mate the principal and interest due on the mortgage, but, not for costs of the former suit. It was said in the opinion by Dixon, C.-J., that even if the effect of the sale for the full amount of the decree was to extinguish all personal liability of the mortgagor, who was the defendant in the former suit, that this was all the effect that could be given the proceedings, and that in all other respects the plaintiff, who was the assignee of the mortgage and the note it secured, stood as if no proceedings whatever had been had. See also section 1679 of Jones on Mortgages, where the same rule is observed.

III. No lien, for any amount capable of adjudication under the allegations of the bill, it is urged, can be enforced exclusively against the east thirty feet. The reason given for this contention is that the mortgage contract did not put it there. The case of Mickler vs. Townsend, 18 N. Y., 578, is relied upon. This case, considering the facts of the one at bar, seems to be authority in favor of the complainants being estopped to enforce the mortgage against the west fifty feet held by Jordan under deeds from both Myers- and Sayre, but there is nothing in it considering the facts before us, to support the view with which it is urged. If it be that complainants are estopped to enforce the mortgage against the west &(ty feet, or to claim the consideration therefor, $1,200, as against Jordan, there is no reason why the balance of the debt should not be enforced against the other part of the land. A release, whether made either directly or indirectly, ofapartof the debt secured and of the lien of a mortgage as to part of the property mortgaged, does not affect the residue of the' debt or the lien of the mortgage as to the residue of the property.

Wilson vs. Troup, 2 Cowen, 195, cited as authority for the doctrine that a conveyance by the mortgagee of a part of the estate will not carry with it a corresponding part of the power to enforce the lien, and that there can be no foreclosure as to the east thirty feet involved here, is a case in which the owner of a mortgage having a power of sale, made conveyances of part of the land to several different persons, and afterwards sold all the land at public sale under the power, after due advertisement of the same, and became the purchaser thereof. It was held that the private sales did not affect the mortgagor’s right of redemption, nor the owner’s power to foreclose as against the mortgagor under the power of sale, but that as to the parcels sold previously, the foreclosure by sale pursuant to the power, and the purchase thereunder, operated for the benefit of the previous vendees, and that as to them the owner of the mortgage could never claim anything for himself under his foreclosure and purchase. Had the mortgagor, Wilson, previously conveyed or released his interest to the vendees of the owner of the mortgage, it is clear that there would have been in him no equity of redemption as to the parcels so conveyed, and the owner of the mortgage would have been estopped to enforce the mortgage as against the land so held by them by deeds from both himself and the mortgagor, in other words, from the owners of the legal and the equitable title.

There is nothing in this case to the effect that a mortgage cannot be released either directly or indirectly as to part of the debt and part of the land, and enforced as to the balance.

It is true that an assignment simply of the mortgage or of the mortgagee’s interest in the land, without the debt, is held to be a nullity. In the case at bar, however, we have before us as complainants, both the assignor and the assignee, and upon the record, the assignment of both the balance of the debt and the lien as to the east thirty feet is admitted; and the terms of the deed as set forth in the bill are sufficient to carry the mortgage interest as to the land involved in this suit, and should be held to do so. Johnson vs. Leonards, 68 Maine, 237; Hunt vs. Hunt, 14 Pick., 374; 15 Pick., 83; Ruggles vs. Barton, 13 Gray, 506.

There is no error in the decree appealed from, and it will be affirmed.

Case Details

Case Name: Jordan v. Sayre

Court Name: Supreme Court of Florida

Date Published: Jan 15, 1888

Citation: 24 Fla. 1

Court Abbreviation: Fla.