Burns v. Burns

• Decision Date: 19 October 1943
• Docket Number: 46242.
• Citation: 11 N.W.2d 461,233 Iowa 1092
• Parties: BURNS et ux. v. BURNS et al. BURNS v. EICHHOFF et al.
• Court: Iowa Supreme Court

11 N.W.2d 461

233 Iowa 1092

BURNS et ux. v. BURNS et al.

BURNS v. EICHHOFF et al.

No. 46242.

Supreme Court of Iowa

October 19, 1943

Van Allen & Van Allen, of Mt. Pleasant, for appellant.

J. V. Gray, of Mt. Pleasant, for appellee Hans Eichhoff.

Galer Galer & Galer, of Mt. Pleasant, for appellee Ernest R Mitchell.

C M. Vance, of Mt. Pleasant, for plaintiffs and for the referee.

OLIVER Justice.

On April 16 1925, Joe Burns and wife executed and delivered to Stark Doan their note for $2,500, due two years after date, together with their mortgage securing the same upon Joe Burns' undivided 1/5 interest in certain land in Henry County Iowa. Said mortgage was recorded. Appellees hold judgments of Henry County District Court against Joe Burns.

This controversy is one phase of an action to partition said real estate, in which action Joe Burns and his brother, appellant Damien Burns, as owners of undivided interests therein, are parties. The referee in partition filed a report setting out said mortgage and judgments, stating the mortgage appeared to be outlawed, and asking the court to determine the validity and priority of the various liens. Thereafter, on March 7, 1942, Stark Doan assigned said note and mortgage to appellant, Damien Burns, for a consideration of $50 cash and a promise of an additional $100, if the lien of said mortgage should be established as prior to said judgments. On March 7, 1942, Joe Burns and wife made to appellant, Damien Burns, their signed written admission of, and promise to pay, the indebtedness upon said note and mortgage in the sum of $2000, plus certain interest.

The judgment held by appellee, Mitchell, was secured March 2, 1936. The judgment of appellee, Eichhoff, was secured on October 5, 1937, for $2,740.55 and costs.

Pleadings were filed by the contending parties and the matter was tried to and determined by the court. Part of the Mitchell judgment was for rent. The court held the lien of such part was barred by the two-year limitation period of Section 11033.1, Code of Iowa 1939. The remainder, $75.60 with interest and one-half the costs of that suit, was held not barred. The order provided that the mortgage owned by Damien Burns should not be allowed as a prior lien on the net share of Joe Burns in the proceeds of the partition sale, and (subject to certain taxes) said order fixed the Mitchell judgment, in the reduced amount, as the first lien and the Eichhoff judgment as the second lien. From said adjudication Damien Burns has appealed.

There is some disagreement between the members of this court relative to certain legal propositions involved in this case and dissenting opinions by Chief Justice Mulroney and Justice Bliss have been filed. The latter would overrule Kerndt & Bros. v. Porterfield, 56 Iowa 412, 9 N.W. 322. As a result of our efforts to answer the dissents, this opinion is somewhat overextended. It may be noted that from the practical standpoint of the contending parties the result of this opinion and each of the dissents would be the same.

The general statute of limitations, Section 11007, Code of Iowa 1939, limits the time of bringing actions upon written contracts to ten years after their causes accrue. It is a statute of repose which simply takes away the right to maintain an action but does not destroy the cause of action. Williams v. Burnside, 207 Iowa 239, 222 N.W. 413. It affects the remedy but not the right. Meek v. Meek, 45 Iowa 294, 297.

There is some diversity of opinion whether a new promise to pay a debt already barred creates a new cause of action so that the suit should be brought upon it and not upon the original promise. 37 C.J. 1140; 34 Am.Jur. 236, 237. However, it is the settled rule in Iowa that the promise does not constitute a new cause of action. It is effective only to revive the original cause of action, or to extend its life by tolling the statute of limitations and starting it anew. Mortenson v. Knudson, 189 Iowa 379, 386, 176 N.W. 892, 895; Frisbee v. Seaman, 49 Iowa 95; Bayliss v. Street, 51 Iowa 627, 2 N.W. 437. In jurisdictions adopting this view it is said the statute does not annihilate the debt but merely suspends the remedy. 34 Am.Jur. 237. See Beckett v. Clark, 225 Iowa 1012, 1016, 282 N.W. 724, 726, 121 A.L.R. 912; 25 Iowa Law Review 146 to 153.

Code, Section 11018, provides that causes of action founded on contract are revived by a signed written admission of the party to be charged. Such admission may be made either before or after the statute has run. In re Estate of Sleezer, 209 Iowa 56, 227 N.W. 644. It operates to waive the defense of the statute. Spilde v. Johnson, 132 Iowa 484, 109 N.W. 1023, 8 L.R.A.,N.S., 439, 119 Am.St.Rep. 578.

A mortgage upon real property is not a sale thereof. It does not constitute a pro tanto disposition of the property by the mortgagor. As pointed out by Judge Dillon in Newman v. DeLorimer, 19 Iowa 244, a mortgage is not an estate in the land but simply a specific lien or charge on the land to secure a debt.

Clinton County v. Cox, 37 Iowa 570, states: "Under the laws of this State a mortgage conveys no interest in, or title to, lands, but is simply a lien thereon for the purpose of securing the indebtedness which is its foundation. It is an incident-a security, in the nature of a lien-of the debt. It survives until the debt be paid or discharged, or the mortgage is released. It is a convoy bearing a lien for the protection of the debt, and as long as that exists it is not relieved of the duty of protection or rendered ineffective for that purpose. When the debt is discharged or, by operation of law, may no longer be enforced its functions terminate, and not before."

Our attention has been called to a statement in Fitzgerald v. Flanagan, 155 Iowa 217, 135 N.W. 738, 740, Ann.Cas.1914C, 1104: "*** the mortgage, being considered a mere incident to the debt, is as a general rule extinguished when the debt for which it is given is barred by the statute of limitations."

That statement may be subject to an interpretation not entirely accurate. The status of the mortgage and the debt are usually identical. A more accurate statement in Fitzgerald v. Flanagan, 155 Iowa 217, 220, 135 N.W. 738, 740, Ann.Cas.1914C, 1104, is: "*** It is a general rule that, if there be no debt, there is no mortgage, and consequently, if action for the debt be barred, an action to foreclose the mortgage is also barred." (Italics supplied.)

And in the same case (155 Iowa at page 223, 135 N.W. at page 741, Ann.Cas.1914C, 1104): "*** we are committed to the doctrine that, if the debt be barred by statute, the right to enforce a mortgage given to secure the debt is also barred, ***."

Statements that the mortgage is extinguished when the debt is barred by the statute of limitations mean the condition of the mortgage is the same as that of the debt which it secures. If the debt is unenforceable, the mortgage is in the same situation. But if the debt is not absolutely discharged or terminated beyond revivor, the mortgage likewise is not extinguished. Our authorities agree that usually the lifting of the suspense of the remedy on the debt, by written admission, also renders the security again enforceable. As was said in Mahon v. Cooley, 36 Iowa 479, 483: "*** the mortgage will follow it and will be valid as long as the debt can be enforced. It is then but an incident of the debt; its existence is measured and prolonged by the life of the debt. These are familiar doctrines that do not require for their support the citation of authorities. ***."

Code, Sections 11602, 11603, make judgments liens upon real estate. A judgment lien is not a specific lien upon any real estate of the judgment debtor but is a general lien upon all his real estate, subject to prior liens or equities. Stiles v. Bailey, 205 Iowa 1385, 1388, 219 N.W. 537, 540. The lien of a judgment is junior to the lien of a prior mortgage even though the mortgage be unrecorded. Chapman v. Coats, 26 Iowa 288. A judgment creditor is not a purchaser for value of the land. Cumming v. First National Bank of Sigourney, 199 Iowa 667, 202 N.W. 556.

I. The opinion of Chief Justice MULRONEY would adopt what it calls the "controlling equities" rule. We are told that whether the subsequent lienholders or grantees "acquired their liens or titles before or after the statutory period expired, the true rule is that the revived first lien will be superior if the controlling equities are in favor of this lien." As we view this suggestion it would in effect cast aside the recognized principles and rules by which courts have heretofore been governed in such cases and thus deprive the court of guiding landmarks. We cannot subscribe to this theory.

We think that what the opinion of Chief Justice MULRONEY refers to as the true rule is merely an exception to the general rule and is in the nature of an estoppel.

Kerndt & Bros. v. Porterfield, 56 Iowa 412, 9 N.W. 322, 323, states: "As between the mortgagor and mortgagee it cannot be doubted that a new promise, which is sufficient to revive the debt, will also revive the mortgage. It seems that the same rule ought to prevail against all persons interested in the mortgaged property, unless there exist reasons which in equity would render it unconscionable to enforce the mortgage lien as against their interest. ***."

Gilman v Heitman, 137 Iowa 336, 113 N.W. 932, 935, cites the following example. "*** it has been held that under some circumstances, where an innocent purchaser for a valuable consideration takes conveyance by warranty deed in which the mortgagee joins as a grantor [he] takes the title free from the lien of the mortgage which the record shows to have been barred by the statute, and that a new promise thereafter...