Colonial & United States Mortgage Company, Limited v. Northwest Thresher Company

• Decision Date: 27 April 1905
• Citation: 103 N.W. 915,14 N.D. 147
• Court: North Dakota Supreme Court

103 N.W. 915

14 N.D. 147

THE COLONIAL & UNITED STATES MORTGAGE COMPANY, LIMITED, v. THE NORTHWEST THRESHER COMPANY

Supreme Court of North Dakota

April 27, 1905

Appeal from District Court, Cass county; Pollock, J.

Action by the Colonial & United States Mortgage Company, Limited against the Northwestern Thresher Company.Judgment for plaintiff, and defendant appeals.

Reversed.

Judgment reversed, and judgment entered in favor of the appellant and against the respondent for the dismissal of the action and for the taxable costs and disbursements.

Ball Watson & Maclay, for appellant.

The absence from the state, or the nonresidence of the original mortgagor, does not extend the time within which an action of foreclosure may be brought, as against subsequent grantees or holders of the equity of redemption.Wood v Goodfellow,43 Cal. 185;Watt v. Wright,66 Cal. 202, 5 P. 91;Lord v. Morris,18 Cal. 482;George v. Butler,67 P. 263;Anderson v. Baxter,4 Ore. 105;Eubanks v. Leveridge, Fed. Cases, 4544;Bush v. White,85 Mo. 339;Arthur v. Screven,17 S.E. 640;Fowler v. Wood, 28 N.Y.S. 976.

Where no personal liability rests upon a person to pay the debt, the action is substantially one in rem.Hogaboom v. Flower,72 P. 547.

If the mortgagor has parted with the title and has no power to give a new mortgage binding upon the premises, he has no power to revive a mortgage already outlawed.Cook v. Prindle,66 N.W. 781;Hubbard v. Insurance Co.,25 Kan. 172;Schmucker v. Sibert, 18 Kan. 104, 26 Am. Rep. 765.

The right to sue upon the debt (not the debt itself) might be extinguished, while the right to bar the redemption might still exist as against the owner of the property.Satterlund v. Beal,12 N.D. 122, 95 N.W. 518.

As pointed out in Arthur v. Screven, and Fowler v. Wood, supra, the action contemplated by the statute is an action against the person who has left the state.Rev. Codes 1899, section 5210.Although the action is in rem, it is necessary to make the owner of the legal title defendant since the action is brought to foreclose his right of redemption.The action exists only against the owner, and if the absence of any person can affect the right to commence and maintain an action in rem, it must be the absence of him against whom the action may be brought.

A foreign corporation can plead the statute of limitations if it has placed itself in such a position that it can be served with process.13 Am. & Eng. Enc.Law, 904;Turcott v. Railway,45 S.W. 1067;City of St. Paul v. Chicago, M. & St. P. Ry. Co., 48 N.W. 17, 21.

Newman, Spalding & Stambaugh, for respondent.

This is a civil action in personam, and all the provisions of the Code of Civil Procedure for the limitation of time for the bringing of civil actions on contract for the payment of money and the foreclosure of mortgages, as well as suspending the running of the statute, as those limiting the time for commencing such action, apply with full force to this action.Rev Codes 1899, section 5156and5181.Anderson v. Baxter,4 Ore. 105, followed in Eubanks v. Leveridge, 4 Sawyer, 274, stand alone in holding a foreclosure action to be one in rem.The latter case follows only because pending in a federal court sitting in Oregon.The doctrine is repudiated in Minnesota, Iowa and Illinois.Walley v. Eldridge,24 Minn. 358;Brown v. Rockhold,49 Iowa 282;Emery v. Kiegham, 94 Ill. 543.

The statute of limitations, including sections suspending its running, applies to all actions in which there is necessarily a plaintiff and a defendant, regardless of the character of the action, the relief sought or other circumstances.Grattan v. Wiggins,23 Cal. 16.

Absence of the mortgagor from the state at the maturity of the debt secured by the mortgage, his continuous residence out of, and failure to return to, the state, prevents the running of the statute of limitations.Section 4859, Comp. Laws.

The statute cannot be pleaded by either of the subsequent grantees, subject to the mortgage, until both the mortgage and debt are barred.Rev. Codes, section 4694;Waterson v. Kirkwood,17 Kan. 9;Schmucker v. Seivert, supra;Cross v. Allen,141 U.S. 528, 35 L.Ed. 843, 12 S.Ct. 67;Ewell v. Daggs,108 U.S. 143, 27 L.Ed. 682;Eborn v. Cannon,32 Tex. 244;McKean v. James,87 Tex. 104;Mahon v. Cooley,36 Iowa 479; Jones on Mortgages, section 1204;Coe v. Finlayson,26 So. 704;Willis v. Farley,24 Cal. 491;N.Y. Life Ins. Co. v. Covert,6 Abb. N. S. 154;Murdock v. Waterman,145 N.Y. 55, 39 N.E. 829;Herndt v. Porterfield, 9 N.W. 322.

Appellant took the mortgaged premises subject to the mortgage debt.The land continued in its hands a primary fund for the payment of the debt, and to the extent of the value of the mortgaged premises it became a principal debtor.Johnson v. Zink,51 N.Y. 333;Sands v. Church,6 N.Y. 347;Hartley v. Harrison,24 N.Y. 170;Freeman v. Auld,44 N.Y. 50;Insurance Co. v. Nelson,78 N.Y. 137;Bennett v. Bates,94 N.Y. 354;Murray v. Marshall,94 N.Y. 611;Colgrove v. Talman,67 N.Y. 94, 23 Am. Rep. 90;Horton v. Davis,26 N.Y. 495;Fuller v. Hunt,48 Iowa 163;Tice v. Anin,2 Johns. Ch. 125;Palmer v. Butler,36 Iowa 576;Sanger v. Nightingale, 122 U.S. 176, 30 L.Ed. 1105.

The statute of limitations commenced to run upon this implied agreement, that having taken the premises subject to the mortgage, promised to pay it, at the time it was made, that is, at the time of the conveyance of the equity of redemption.Schmucker v. Seibert, supra.

The land being in the hands of appellant, a primary fund for the payment of the debt secured by the mortgage, which is still a subsisting, valid debt, and it, having purchased subject to the mortgage, cannot plead the statute of limitations.Hyer v. Pruyn, 7 Paige Ch. 465, 34 Am. Dec. 355;Hughes v. Edwards, 9 Wheaton, 489, 22 U.S. 489, 6 L.Ed. 142;Waterson v. Kirkwood,17 Kan. 9;Schmucker v. Seibert, supra;Life Ins. & Trust Co. v. Covert,6 Abb. Pr. N. S. 154;Murdock v. Waterman, supra.

A foreign corporation cannot plead the statute of limitations.Olcot v. Tioga R. R. Co.,20 N.Y. 210, 75 Am. Dec. 393;Rathburn v. Northern Central Ry. Co.,50 N.Y. 656;Larson v. Aultman & Taylor Co.,56 N.W. 915;Hanchett v. Blair,100 F. 817;Bauserman v. Blunt,147 U.S. 647, 13 S.Ct. 466, 37 L.Ed. 316;State v. Cent. P. Ry. Co,10 Nev. 47;N. Mo. R. R. Co. v. Akers,4 Kan. 453, 96 Am Dec. 183;Lain v. Bank,6 Kan. 74;Morrill v. Ingle,23 Kan. 32;Bauserman v. Charlotte,46 Kan. 482;State v. National Acc. Soc. of New York,79 N.W. 220; Thompson on Corporations, sections 7841,7900;Rev. Codes, section 5121.

ENGERUD, J. YOUNG, J. (dissenting).

OPINION

ENGERUD, J.

This is an action to foreclose a mortgage upon 160 acres of land situated in Dickey county.The mortgage was executed on May 16, 1883, and recorded on June 11, 1883.It was given by Fred West, who was then the owner of the land, to secure his note for $ 335 of even date.The note became due November 1, 1888.No payments have been made upon it.In the fall of 1887 West moved from the territory of Dakota, and has since been absent from this jurisdiction.In December, 1887, after leaving the territory, he conveyed the land to E. S. Brown, receiver of the Northwestern Manufacturing and Car Company, a Minnesota corporation.On February 1, 1888, Brown conveyed to the Minnesota Thresher Manufacturing Company, also a Minnesota corporation.Both deeds expressly except the plaintiff's mortgage from the covenants of warranty.On August 7, 1901, the last-named grantee conveyed to R. H. Bronson, who had been appointed receiver for said corporation, and on August 9, 1901, the latter conveyed to the Northwest Thresher Company, a Minnesota corporation, the defendant in the present action.These several corporations had complied with the laws of the territory and state, and were at all times amenable to suit in this jurisdiction.The mortgagor and debtor is not made a party to this action.The only relief sought is a decree for the foreclosure of the mortgage and the sale of the mortgaged premises to satisfy the debt.The defendant interposed as its sole defense the statute of limitations.This defense was overruled by the trial court, and judgment was rendered as prayed for in the complaint.The defendant has appealed from the judgment, and demands a review of the entire case in this court, under section 5630,Rev. Codes 1899.

The only question involved upon this appeal is whether the statute of limitations is available to this appellant as a defense against the plaintiff's action.The time within which an action to foreclose a mortgage of real property must be commenced in this state is limited to ten years from the time the cause of action accrued.Rev. Codes 1899, sections 5199,5200.If, when a cause of action shall accrue against any person, he shall be out of the state, the statute does not begin to run until his return into the state.Rev. Codes 1899, section 5210.

Appellant first contends that this action is one in rem against the mortgaged property, and hence that the several objections which will be hereafter noticed, urged against the defense of the statute on the ground that the person against whom the cause of action accrued was absent from the state, have no application.We are agreed that this is not an action in rem but an action in personam.Our views on this subject are fully and clearly expressed by Judge Mitchell in Bardell v. Collins,44 Minn. 97, 46 N.W. 315, 9 L. R. A. 152, 20 Am. St. Rep. 547;"It is not an action in rem, but an action in personam.It is true, it has for its object certain specific real property against which it is sought to enforce the lien of the mortgage, and in that sense it partakes somewhat of the nature of a proceeding...