Berkin v. Healy

• Decision Date: 03 June 1916
• Docket Number: 3661.
• Citation: 158 P. 1020,52 Mont. 398
• Parties: BERKIN ET AL. v. HEALY ET AL.
• Court: Montana Supreme Court

158 P. 1020

52 Mont. 398

BERKIN ET AL. v. HEALY ET AL.

No. 3661.

Supreme Court of Montana

June 3, 1916

Appeal from District Court, Fergus County; Roy E. Ayers, Judge.

Action by T. A. Berkin and another against Tena De Witt Healy and others, with counterclaim by defendants. Decree for plaintiffs, and defendants appeal. Affirmed.

Wight & Pew, of Helena, for appellants.

E. K Cheadle, of Lewistown, for respondents.

HOLLOWAY J.

In the complaint in this action it is alleged that on November 6 1885, David C. Miller executed and delivered to C. A. De Witt his promissory note and a mortgage upon 160 acres of land to secure the payment; that the mortgage was duly recorded and ever since has remained of record and uncanceled; that the indebtedness has never been paid in whole or in part; that the right to recover it is barred by statutes of limitation the appropriate sections of which are cited; and that the lien of the mortgage has been extinguished. It is further alleged that the plaintiffs are the present owners of the land; that the defendants are the heirs and successors of De Witt; that in July, 1913, defendants executed and filed for record an affidavit purporting to extend or renew the mortgage of 1885; that the affidavit was made and filed without the consent of plaintiffs; and that the mortgage and this affidavit constitute clouds upon plaintiff's title and should be canceled. The answer admits substantially all of the allegations of the complaint and, by way of equitable counterclaim, repeats the history of the mortgage transaction, and alleges that in 1906 Miller, the original mortgagor, then the owner of the land, commenced an action to have the mortgage canceled, and that his complaint constituted such an acknowledgment as operated to take the case out of the statute of limitations. The prayer is that the mortgage be decreed to be a valid lien upon the land and that it be foreclosed. There is an allegation that a payment of $100 was made by Miller in 1896. To this counterclaim plaintiffs interposed a general demurrer which was sustained, and, defendants failing to plead further, a decree conforming to the prayer of the complaint was rendered and entered, and from that decree this appeal is prosecuted.

It may be conceded at once that, in the absence of a statute declaring a different rule, the lien of a mortgage is not extinguished by the mere lapse of the period fixed by the statute within which an action to enforce the payment of the debt may be brought and prosecuted to a successful termination. This rule was declared by the courts of New York (Pratt v. Huggins, 29 Barb. 277; Waltermire v. Westover, 14 N.Y. 16), and was incorporated in the proposed Civil Code prepared by David Dudley Field and his associates for the state of New York (section 1605). That proposed Code was adopted, almost in its entirety, by California; but the Legislature, for reasons satisfactory to itself, changed the language of section 1605 to read:

"A lien is extinguished by the lapse of the time within which, under the provisions of the Code of Civil Procedure, an action can be brought upon the principal obligation." Section 2911, Civil Code of California.

In Mutual Life Ins. Co. v. Pacific Fruit Co., 142 Cal. 477, 76 P. 67, the California court refers to this bit of legislative history as follows:

"It should be remarked that section 2911 was designedly passed to change the former rule respecting the continued existence of a lien after the statute of limitations has barred the remedy upon the principal obligation. Thus the proposed Civil Code of New York (the Field Code), from which admittedly so many of the provisions of our own Code have been taken, provided (section 1605), in accordance with the common rule: 'A lien is not extinguished by the mere lapse of the time within which, under the provisions of the Code of Civil Procedure, an action can be brought upon the principal obligation.' Our own codifiers industriously changed this language, and declared that a lien is extinguished by such lapse of time. We have thus adopted a rule contrary to that existing at the common law (Taunton v. Goforth, 6 Dowl. & Ryle, p. 384), and contrary, therefore, to the authorities of those states where the common-law rule has not been abrogated by express statute."

In 1895 we adopted our Civil Code from California (Report of Code Commissioners, p. 13), and, with the knowledge that the change noted above had been made, our Legislature followed the California lawmakers and incorporated section 2911, above, without change as section 3792 of our Civil Code, and this was brought forward and re-enacted as section 5728. Revised Codes of 1907, and made directly applicable to mortgages, by section 3735, Civil Code (section 5709, Rev. Codes). When our Civil Code became effective, July 1, 1895, the Miller note was then barred by the statute of limitations, and, by virtue of section 3792, above, the lien of the mortgage was altogether extinguished and the mortgage itself stripped of its vitality. Henderson v. Grammar, 66 Cal. 332, 5 P. 488; San Jose Safe Deposit Bank v. Bank of Madera, 144 Cal. 574, 78 P. 5; Vandall v. Teague, 142 Cal. 471, 76 P. 35.

The payment of $100 made by Miller in 1896, after the principal obligation was barred, though it may have operated to create a new obligation binding in foro conscientiæ notwithstanding the statute, could not re-create the lien of the mortgage which was already fully extinguished, for "a mortgage of real property can be created, renewed or extended only by writing with the formalities required in the case of a grant of real property." Section 3842, Civil Code; section 5749, Rev. Codes; Wells v. Harter, 56 Cal. 342. The payment of $100 in 1896 was in reality without any...