Dworkin v. First Nat. Bank of Fairbanks, 929

CourtSupreme Court of Alaska (US)
Writing for the CourtBefore NESBETT; RABINOWITZ
Citation444 P.2d 777
PartiesLazar DWORKIN, Appellant, v. FIRST NATIONAL BANK OF FAIRBANKS et al., Appellees.
Docket NumberNo. 929,929
Decision Date06 September 1968

Patrick E. Murphy, Robert A. Parrish, Fairbanks, for appellant.

William V. Boggess, Fairbanks, for appellees.




In this appeal appellant questions the superior court's determination that his pro se complaint failed to state a claim upon which relief could be granted. 1

At the outset it is necessary to determine whether the order entered below is a final judgment and thus appealable. 2 In City of Fairbanks v. Electric Distribution System, 3 we said:

In their motion to dismiss appellees contended that the order from which the appeal was taken was not a 'final judgment,' within the meaning of Supreme Court Rule 6, because the order dismissed the appellant's complaint, rather than the action. There are instances where an order dismissing a complaint, without dismissing the action, will not be appealable. But that is not the situation here.

In the case at bar appellees moved for the entry 'of an order dismissing this action * * * because the complaint fails to state a claim * * * upon which relief can be granted.' The superior court subsequently entered an order granting appellees' motion to dismiss. 4 We construe the superior court's order as one in which appellees' motion to dismiss appellant's cause of action was granted. Since the action rather than the complaint was dismissed, the requisite degree of finality is present for purposes of our appellate jurisdiction.

Under our Rules of Civil Procedure a pleading must contain 'a short and plain statement of the claim showing that the pleader is entitled to relief * * *.' 5 The federal counterpart of Civil Rule 8(a) has received a very liberal interpretation. Professor Moore quotes an early decision under the federal rules which stated:

The modern philosophy concerning pleadings is that they do little more than indicate generally the type of litigation that is involved. A generalized summary of the case that affords fair notice is all that is required. 6

Nevertheless, it remains necessary that the complaint disclose information from which a court could conclude, under Civil Rule 8(a), a valid claim was alleged 'showing that the pleader is entitled to relief * * *.'

In the complaint which was filed below, appellant asserted that between September 1, 1959, and October 3, 1959, one Abraham Mugerdichian advanced the sum of $17,500 against certain specifically described real property

upon which he has claimed a lien and is entitled to a lien, notice of which Claim of Lien was given in writing duly executed and recorded * * * on October 26, 1959 * * *.'

Appellant requested that the mortgage lien be adjudged paramount and that the same be foreclosed. Attached to and made part of the complaint was a copy of the 'Notice of Claim of Lien.' This document described certain real property and claims a lien thereon 'for and on account of monies given between September 1, 1959, and October 23, 1959.' 7 Although one Edward Merck is identified as the owner of the real property, the notice of lien fails to identify the recipient of the monies alleged to have been advanced. The complaint further states that on April 2, 1967, Abraham Mugerdichian assigned the mortgage lien to appellant. 8

In his brief and oral argument before this court, counsel for appellant conceded that formal defects in the asserted lien furnished a 'basis for dismissal of a cause of action based solely upon a legal mortgage.' On the other hand, appellant's position is that at the time the superior court ruled upon the motion to dismiss it had before it appellant's 'assertion that the lien was intended by the original parties to the transaction as a mortgage and that at the time of the lien the mortgagor had full power to mortgage his land.' From this appellant argues that 'Under such circumstances an equitable mortgage can arise and will be enforced by a court against the original mortgagor and all who take from him with notice or actual knowledge.' Specifically, appellant claims that his complaint, together with his memorandum and oral argument in opposition to the motion to dismiss, 'stated a cause of action for an equitable mortgage and alleged and presented facts upon which relief could be granted.'

Here appellant misconceives the court's function in deciding Civil Rule 12(b) (6) motions for dismissal which are grounded on the 'failure to state a claim upon which relief can be granted.' Such a motion tests the legal sufficiency of the complaint's allegations. Well pleaded allegations of the complaint are deemed admitted for purposes of the motion but unwarranted factual inferences and conclusions of law are not considered admitted in resolving the merits of such motions. 9 In short, in reviewing the lower court's holding, the court will not consider matters extraneous to the complaint.

The concept of equitable mortgages or liens has received wide recognition. A representative statement of the theory is found in Foster Lumber Co. v. Harlan County Bank 10 where the Kansas court cited a New York court decision stating:

There can be no doubt * * * that where one party advances money to another upon the faith of a verbal agreement by the latter to secure its payment by a mortgage upon certain lands, but which is never executed, or which, if executed, is so defective or informal as to fail in effectuating the purpose of its execution, equity will impress upon the land intended to be mortgaged a lien in favor of the creditor who advanced the money for the security and satisfaction of his debt. 11

The defect in the complaint in the case at bar is that it does not disclose adequate information as to the basis for the claim. Significantly, absent is any allegation from which the trial court could have reasonably inferred that Merck, alleged owner of the real property, agreed with Mugerdichian, creditor and appellant's assignor, that the property would be encumbered as security for the $17,500 purportedly advanced by Mugerdichian. 12 Since the complaint itself affords no factual basis for an equitable mortgage claim, granting of appellees' motion to dismiss was proper. 13

One additional point in this appeal remains. In support of the lower court's ruling, appellees argue that appellant's cause of action was barred by the statute of limitations. 14 Appellees contend that AS 09.10.050 of our Code of Civil Procedure establishes the governing period of limitations. This statute provides in part:

No person may bring an action (1) upon a contract or liability, express or implied, excepting those mentioned in § 40 of this chapter * * * unless commenced within six years. 15

Appellees further contend that this six-year period of limitation bars appellant's claim because the October 24, 1959, Notice of Claim of Lien states that the $17,500 'is now due owing and remaining unpaid.' 16

As has been mentioned previously, appellant contends his cause of action is based upon equitable mortgage principles. 17 That portion of our Code of Civil Procedure which deals with limitation of actions does not contain any provision which specifically establishes a limitation period governing the foreclosure of either legal or equitable mortgages. 18 AS 09.10.050, on the other hand, does fix a six-year period of limitations covering the debt or obligation which is secured by the mortgage. Nevertheless, appellant argues that the applicable period governing foreclosures of equitable mortgages is 10 years. 19

We take a contrary view and hold that the six-year statute of limitations, which governs the underlying $17,500 obligations, is determinative of the period of time in which appellant was required to commence this action to foreclose the purported equitable mortgage security. Judicial precedent is divided concerning the question of whether a foreclosure action can be maintained in face of the fact that the applicable statute of limitations has barred an action upon the debt or obligation secured. Typical of those authorities holding that the foreclosure action is barred in such circumstances is Pratt v. Pratt 20 where the court quoted with approval the following from McGovney v. Gwillim, 16 Colo.App. 284, 65 P. 346 (1901):

'In Colorado, whether the form of security be a mortgage or a deed of trust, the debt is the principle thing. The security is a mere incident. * * * A mortgage has a lien merely. * * * An action to foreclose a mortgage or deed of trust is simply, in effect, an action to collect the debt, to secure the payment of which was the sole purpose of its execution; and, when the statute after the lapse of a certain time bars an action upon the debt for its collection, we believe it includes all actions seeking to effectuate that purpose.' 21

Representative of the authorities which distinguish between actions upon the underlying debts and actions to foreclose the accompanying security is Davis v. Stone 22 where it was said:

Assuming that the right of the defendant to recover on the debt has been barred by the statute of limitations, it does not follow that the defendant would be without the right to proceed to foreclose the deeds of trust, for the period of limitation thereon had not elapsed. 23

In our view the sounder result is reached by those authorities which hold that in the absence of a controlling statute the foreclosure action is subject to the same period of limitations as the underlying debt. 24 We believe it an undersirable result which permits a mortgagee to maintain a foreclosure action after the limitations period has run on the underlying debt or obligation. Since the allegations of appellant's complaint alleged that the $17,500 was then due and owing in October of 1959, institution of suit more than six years later was barred by the provisions of AS 09.10.050.


To continue reading

Request your trial
29 cases
  • Alaska Tr., LLC v. Ambridge, S–14915.
    • United States
    • Supreme Court of Alaska (US)
    • March 4, 2016
    ...security interests, it would have provided an exception in plain language.”).55 15 U.S.C. § 1692a(6)(A)–(F) (2012).56 Dissent at 227–29.57 444 P.2d 777, 780–82 (Alaska 1968).58 Id. at 782 (citing 3 R. Powell, The Law of Real Property ¶ 461, at 682–83 (1967)); see also id. at 782 n. 24 (noti......
  • Hootch v. Alaska State-Operated School System, STATE-OPERATED
    • United States
    • Supreme Court of Alaska (US)
    • May 23, 1975
    ...1964); Fairview P.U.D. No. 1 v. City of Anchorage, 368 P.2d 540, 542 (Alaska 1962); cf. Dworkin v. First National Bank of Fairbanks, 444 P.2d 777, 780 (Alaska 1968); Rego v. Decker, 482 P.2d 834, 841 (Alaska 59 See Milliken v. Bradley, 418 U.S. 717, 744, 94 S.Ct. 3112, 3127, 41 L.Ed.2d 1069......
  • Forrer v. State, Supreme Court No. S-17377
    • United States
    • Supreme Court of Alaska (US)
    • September 4, 2020
    ...June 9, 2020).159 Haines v. Comfort Keepers, Inc. , 393 P.3d 422, 429 (Alaska 2017) (quoting Dworkin v. First Nat'l Bank of Fairbanks , 444 P.2d 777, 779 (Alaska 1968) ).160 For example, Forrer claims that it was error for the superior court not to accept his allegation that "[t]he bonds cr......
  • Aspen Exploration Corp. v. Sheffield, S-1277
    • United States
    • Supreme Court of Alaska (US)
    • June 19, 1987
    ...1979); Schaible v. Fairbanks Medical & Surgical Clinic, 531 P.2d 1252, 1255-57 (Alaska 1975); Dworkin v. First National Bank of Fairbanks, 444 P.2d 777, 779 (Alaska 1968). See generally 5 C. Wright & A. Miller, Federal Practice and Procedure § 1357 (1969) (hereinafter Wright & Miller); 2A J......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT