25 Colo. App. 502 | Colo. Ct. App. | 1914
delivered tlie opinion of the court.
March 2, 1910, defendant in error, as plaintiff, filed his complaint, in the nature of a bill in equity, in which the relief prayed for was that an accounting be had to find the amount due upon a certain promissory note, and that the court appoint a substitute trustee with power to perform the duties imposed and exercise the powers and authority conferred by a certain deed of trust, to the end that the said substituted trustee proceed under the terms and provisions of said deed of trust to make sale of the property described therein, in order to make collection in full of the principal and interest of said note, with costs of foreclosure.
The relief prayed for was predicated upon allegations in substance as follows: That some years, prior to his death, defendant’s husband, her grantor, had executed a promissory note for the principal sum of $425, payable November 1, 1893, with interest, and, to secure the payment of said indebtedness, executed a certain deed of trust, covering .certain lands in Bent county, in which deed The Colorado Loan & Trust Company (a Colorado
As a defense to the foregoing complaint, defendant pleaded, first, that the cause of action mentioned in the complaint did not accrue within six. years, and, second, that said cause of action did not accrue within five years, before the commencement of this action. Upon motion of the plaintiff, the court rendered judgment on the pleadings in his favor, by which it was.ordered and decreed :
“That Hamilton Armstrong, present acting sheriff of the City and County of Denver, Colorado, is hereby appointed substitute trustee for the purpose of carrying out all of the objects and purposes of said trust, by advertising for sale the property according to the tenor and effect of the authority of said deed of trust conferred on said trustee; and that the sale shall be noticed to take place at the Tremont street door of the court house in the City and County of Denver, Colorado.”
Tlie question presented for determination is whether the action brought by plaintiff was barred by the provisions of the two statutes of limitation pleaded, or either of them, it being conceded by the- motion for judgment on the pleadings that the action was brought more than six years after the cause of action accrued.
' • It is settled law in this state that the six years ’ statute of limitations does not operate as a bar to proceedings for the foreclosure of a deed of trust, when foreclosure is made by advertisement and sale by the trustee named in the deed of trust, without the aid or intervention of a court proceeding; that such proceedings are not an “action” within the provisions of our statute, which reads:
“The following actions shall be commenced within six years next after the cause of action shall accrue, and not afterwards.” — Section 4061, Rev. Stats. 1908; section 4627, Mills’ Ann. Stats. 1912.
Holmquist v. Gilbert, 41 Colo., 113, 92 Pac., 232; Foot v. Burr, 41 Colo., 192, 92 Pac., 236, 13 L. R. A. (N. S.), 1210.
It is also settled law in this state that if an action or suit is prosecuted to foreclose a mortgage or deed of trust, such action is barred by the said statute of limitations, if an action upon the note or for the collection of the debt secured by said mortgage or deed of trust is barred by said statute. — McGovney v. Gwillim, 16 Colo. App., 284, 65 Pac., 346. In the last case cited it is also ruled that when the statute, after the lapse of time, bars an action upon the debt for its collection, it includes all actions seeking to effectuate that purpose. In that case it was laid down as a fundamental principle that while a party may avoid the bar of the statute of limitations by adhering strictly to his remedy under the power of sale
Counsel for defendant in error contends that the decision in McGovney v. Gwillim, as interpreted by the supreme court in Holmquist v. Gilbert, is not applicable to the facts of this case, because, as counsel says, all that was decided by the court of appeals in that case was that the holder of the note elected to waive the right of sale by the trustee. It is true that the court of appeals, in
“It is sufficient to say that in the latter case (McGovney v. Gwillim) the court holds that in the case before it ‘by the bringing of this suit, the holder of the note and of the indebtedness has elected to waive the right of sale by the trustee,’ and treats the deed of trust as a mortgage. The question involved here was not presented in that case.”
But the waiver of the right of sale by the trustee was not the only, nor the principal, reason for sustaining the plea of the statute of limitations as a bar in the Mc-Govney case. It was given as an additional reason for the conclusion already reached. This is made plain .by the words of Wilson, Presiding Judge, when he said:
“Besides, in this instance, by the bringing of this suit, the holder of the note and of the indebtedness has elected to waive the right of sale by the trustee, which is the only distinguishing feature between a deed of trust and a mortgage, and thereby to have the instrument treated as a mortgage.” — (P. 287, 65 Pac., 348.) .
Neither that court nor the supreme court intimated that such waiver was the' only reason for the decision reached; and an examination of the complaint and prayer in the McGrovney ease will show that the sale by the trustee was not waived to any greater extent than in the present case, for, in that case, it was asked that the foreclosure be made by the trustee, or his successor in trust, or the sheriff, and in this case it is asked that the foreclosure be made by a trustee to be appointed and substituted by the court for the trustee, and successor in trust, designated in the deed of trust. The statement
It cannot be said that the action here under consideration has not for its purpose and object the collection of the debt. The collection of the debt is the avowed purpose of the relief prayed for, and the express purpose and effect of the decree. The suit is brought upon the theory and allegation that without the aid of the court, the express powers conferred in the deed of trust cannot be executed. Perhaps the case of McGovney v. Gwillim can be distingnunished from this case by reason of the fact that the action there was for foreclosure, while the action here is primarily for relief, without which the foreclosure as provided by the deed of trust could not proceed, as no' power is given by the deed to appoint a substitute trustee without the aid of a court of equity. But, in principle, it is a distinction without difference. Moreover, incidentally at least, foreclosure under the terms of the trust deed was prayed for and decreed. In effect, this is an action to foreclose the trust deed as a mortgage. Our conclusion is opposed to the conclusion reached by the supreme court of California in Sacramento Bank v. Murphy, 158 Calif., 390, 115 Pac., 232, and Travelli v. Bowman, 150 Calif., 587, 89 Pac., 347. These cases are practically on all fours with the case under consideration. In principle, we think they cannot be distinguished. The trust- deed in Bank v. Murphy contained a provision that in case of vacancy in the trusteeship, the bank, as cestui que trust, could appoint other trustee
II.
If it be conceded that for the purpose of obtaining the appointment of a trustee “to the end” that he may foreclose the deed of trust, and thereby collect the debt, as herein sought, the debt and its security are separable, and that this is not a suit to foreclose, as the trial court seems to have held, and, for that reason, the six years’ statute of limitations affecting actions for the collection of debts founded upon contract is not applicable to this action, then it comes within the exception designated in section 4637, Mills’ Ann. Stats., Rev. Stats. 1908, section 4071, as one of the ‘ ‘suits over the subject-matter of which a court of equity has peculiar and exclusive jurisdiction, and which subject-matter is not cognizable in the courts of common law,” and within, and is barred by, the provisions of sections 4638 and 4639; relative to bills of relief, which sections are construed together. — Morgan v. King, 27 Colo., 539, 63 Pac., 416; Ballard v. Golob, 34 Colo., 417, 83 Pac., 376; Empire R. & C. Co. v. Gehr, 54 Colo., 185, 129 Pac., 828.
Section 4639, commonly known as the equity statute of limitations, reads as follows:
“Bills of relief, in case of the existence of a trust not- cognizable by the courts of common law, and in all other cases not herein provided for, shall be filed within five years after the cause thereof shall accrue, and. not after. ’ ’
The defendant in error contends that the statute of limitations does not run against an express trust. Ordinarily, that well known rule applies only to actions between the cestui que trust and the trustee. That it does not apply to an action to foreclose a deed of trust or to this action is a necessary implication from, if not the direct holding in, McGovney v. Gwillim, supra.
The judgment is reversed, and cause remanded, with instruction to render judgment upon the pleadings in favor of the defendant.
Reversed.