Boyd v. Buchanan

• Citation: 162 S.W. 1075,176 Mo. App. 56
• Parties: BOYD v. BUCHANAN.
• Decision Date: 19 January 1914
• Court: Missouri Court of Appeals

162 S.W. 1075

176 Mo. App. 56

BOYD v. BUCHANAN.

Kansas City Court of Appeals. Missouri.

January 19, 1914.

1. LIMITATION OF ACTIONS (§ 43)—ACCRUAL OF ACTION—"ACCRUE."

A cause of action has "accrued," under Rev. St. 1909, providing that limitations begin to run from the time the cause of action shall have accrued, when a right exists to institute a suit for its enforcement.

2. LIMITATION OF ACTIONS (§ 48)—ACCRUAL OF ACTION—ACTION ON NOTES.

Though a note provided that, on failure to pay any installment of interest when due, the holder "may" collect the principal and interest at once, a cause of action on the note accrued, so as to start the running of limitations, when an installment of interest became due and payable, though the holder of the note was not then bound to enforce the note.

3. LIMITATION OF ACTIONS (§ 66)—ACCRUAL OF ACTION.

A right of action on a demand note accrues on the day of its date so as to start limitations to run on that day, unless the contract shows an intention to delay performance, or that a cause of action should not exist until a demand is made.

4. LIMITATION OF ACTIONS (§ 167)—EFFECT —FORECLOSURE—INJUNCTION.

Since the period of limitations for a mortgage or trust deed is by statute, the same as for the secured note, and since equity follows the law in applying the limitations prescribed by law, a suit to enjoin the foreclosure of a trust deed by sale by the trustee may be maintained by the owner, on the ground that an action on the note is barred by limitations.

Appeal from Circuit Court, Callaway County; D. H. Harris, Judge.

Action by Bennett W. Boyd against J. H. Buchanan. From a judgment dismissing the bill, plaintiff appeals. Reversed and remanded, with directions to sustain action.

J. R. Baker and N. T. Cave, both of Fulton, for appellant. H. N. Eversole, of Fulton, for respondent.

ELLISON, P. J.

Plaintiff is the owner of certain lands in Callaway county formerly the property of B. P. Jigglin, who gave a deed of trust thereon to Benton Canon to secure the payment of his note to Canon, reading as follows: "Fulton, Missouri, Nov. 6th, 1899. On or before three years after date, for value received, I promise to pay to the order of Benton Canon fifteen hundred and 00/100 dollars, with interest at the rate of 6 per cent. per annum, payable semiannually, as per six coupons hereto attached. It is agreed that, if this note is not paid at maturity, it shall then draw interest at the rate of 8 per cent. per annum, and that, on failure to pay any installment of interest when due, the holder hereof may collect the principal and interest at once." The last two semiannual interest coupons due on the 6th of May and November, 1902, were not paid, nor was any part of the principal. S. B. Gilliland became the owner of the note. The trustee in the deed of trust died, in which event the deed provided the sheriff of the county should act. In the latter part of October, 1912 (the particular day not certain), at Gilliland's request, the sheriff began to foreclose the deed of trust by advertising a sale of the land to take place on the 23d November following. The plaintiff thereupon filed a bill for injunction, on the ground that the note was barred by the statute of limitation, and a sale under the trust deed would cloud his title. The trial court found against plaintiff, and dismissed the bill.

It appears on its face that the note became due the 6th of November, 1902, but the first of the last two interest payments became due on the 6th of May preceding; while, as we have just said, the beginning of foreclosure proceedings (by advertising the sale) was in October, 1912, the sale to take place November the 23d following. From this, it will be observed that more than ten years (the period of limitation) had elapsed between the maturity of the semiannual interest, due in May, 1902, and the day in October when foreclosure proceedings were begun. The question is: Did the nonpayment of that installment of interest cause the cause of action to accrue on the note so as to set in motion the statute of limitations?

The statute (section 1887, R. S. 1909) declares that limitation will begin to run when the "cause of action shall have accrued," and we have decided at this term that a cause of action has accrued when a right exists to institute a suit for its enforcement. Stark Bros. v. Gooding, 162 S. W. 332 (not yet officially reported). In this case the holder undoubtedly had a right to bring his action on the note when default was made the 6th of May, 1902, on the interest payable that day. Stark Bros. v. Gooding, supra, and authorities there cited; Construction Co. v. Coal Co., 205 Mo. 49, 64, 103 S. W. 93; Burnes v. Ballinger, 76 Mo. App. loc. cit. 63-65.

But, since the phraseology of the note in controversy is "that, on failure to pay any installment of interest when due, the holder hereof may collect the principal and interest at once," it is suggested that it gave the holder an option to claim the whole note, which he need not exercise, and that his refusal to exercise it could not redound to the payor's benefit in the way of a claim to the protection of the statute of limitations. The law is otherwise. In Hemp v. Garland, 4 Q. B. 519, the contract was that plaintiff, in case of default of an installment, "should be at liberty to enter up judgment and issue execution" for the whole debt. The court said that by the terms of the contract "the plaintiff was not obliged to give further time in case of default, but might, if he pleased, upon nonpayment of any installment, proceed to recover all that remained due of the principal sum." And that "the statute of limitations runs from the time plaintiff might have brought his action, * * * and, as the plaintiff might have brought his action upon the first default, if he did not choose to enter up judgment, we think that the defendant is entitled to the verdict upon the plea of the statute of limitations."

In Reeves v. Butcher, 2 Q. B. 509 (1891), the contract of loan, like that in this case, concerned default in interest, and provided that, on default in the payment of...