140 P. 495 | Ariz. | 1914
Action by appellee to remove a cloud upon his title to lots in Willcox, Cochise county, Arizona. The alleged cloud consists of a deed of trust executed on November 17, 1899, by A. Josef Schwertner and wife to the Title Guarantee & Trust Company, trustee, to secure a loan evidenced by note from the Provident Mutual Building-Loan Association. The trust deed is set out in complaint in Jiaec verba, followed by an allegation that the note to secure which the trust deed was given, and all interest and penalties, had been fully paid and discharged; that trust deed remains unsatisfied of record and is a cloud upon plaintiff’s title. Prayer for its cancellation. The Title Guarantee & Trust Company defaulted. The Provi
While the appellant suggests other errors, its main contention is that an action to remove a cloud, being an equitable action, cannot be maintained for the cancellation of an unsatisfied mortgage, even though limitation has run against it, and the debt secured by it is barred. The form in which the action is prosecuted has not the sanction of the statutory law. However, “the jurisdiction of courts of equity to remove clouds from title is well settled, the relief being granted on the principle of quia timet; that is, that the deed or other instrument or proceeding constituting the cloud may be used to injuriously or vexatiously embarrass or affect a plaintiff’s title.” Section 1398, i Pomeroy’s Equity Jurisprudence.
Had proof been made of the recordation of the trust deed, its payment in full as alleged, and the refusal of appellant to enter satisfaction of record, a judgment directing its surrender and cancellation would have been proper. But there was no proof of payment and satisfaction offered or made. Judgment was entered upon the pleadings for the reason that the answer upon its face showed that the balance claimed was outlawed. Outlawry, under the statute of limitation, affects the remedy and not the right. It does not extinguish or satisfy the debt; it only prevents a recovery when properly invoked by the debtor. It is a shield and not a sword. It can be used for defense, but not for assault. Had appellant brought suit to recover, the plea of the statute would have defeated its recovery. But will a court of equity, where it is admitted, as in this case, by the demurrer to answer that a large amount is still due on the trust deed, permit the debtor or his successor in interest to force the creditor into court,
In the .present case the trust deed was ordered canceled for the sole and only reason that the debt had been fully paid. In the developments of the case, it is shown and admitted by appellee that the debt has not been paid; that only the remedy has been lost, and, as before said, the wiping out of the remedy does not extinguish the debt. The obligation still exists. Pomeroy, Equity Jurisprudence, volume 1, section 388, has well said: “It may be regarded as a universal rule
As stated heretofore, if proof had been submitted sustaining the allegation of full payment, the equities of the case would demand a judgment ordering the cancellation of the trust deed. It is also urged in the brief of appellee that the amount claimed as due on debt is usurious; that the principal and legal interest have been paid; and that for those reasons the deed should be canceled. If the record disclosed these things, or either of them, to be true, it would afford a basis of equitable relief, but the pleadings raise no question of usury, and the statement, even though true, is not sustained by the record. The facts of payment and usury are open questions that should have been passed upon by 'the trial court, if desired to be reviewed here.
The judgment is reversed, and case is remanded for a new trial, and if, upon such trial, any balance be found due appellant on debt, the appellee is to be allowed sixty days in which to pay same, whereupon trust deed should be canceled; and, in case the appellee should default in making such payment, it is ordered that the action be dismissed.
FRANKLIN, C. J., and CUNNINGHAM, J., concur.
NOTE.—On the question of bar of statute of limitations as ground for quieting title as against encumbrance, see note in 6 L. It. A., N. E, 516.