First National Bank of Sheridan v. Citizens' State Bank of Dubuque, Iowa

• Decision Date: 24 November 1902
• Citation: 11 Wyo. 32,70 P. 726
• Parties: FIRST NATIONAL BANK OF SHERIDAN v. CITIZENS' STATE BANK OF DUBUQUE, IA., ET AL
• Court: Wyoming Supreme Court

70 P. 726

11 Wyo. 32

FIRST NATIONAL BANK OF SHERIDAN v. CITIZENS' STATE BANK OF DUBUQUE, IA., ET AL

Supreme Court of Wyoming

November 24, 1902

ERROR to the District Court, Sheridan County, HON. RICHARD H SCOTT, Judge of the First Judicial District, presiding.

This action was instituted in the District Court sitting in and for the County of Sheridan by the Citizens' State Bank of Dubuque, Iowa, for the foreclosure of three mortgages upon certain real estate in Sheridan County. The mortgages had been executed by George Tschirgi and his wife, Marie T Tschirgi. The First National Bank of Sheridan was the holder of a mortgage covering some of the lands, and was made a defendant in the suit. The lien of plaintiff's mortgages was adjudged to be superior to the mortgage of defendant bank, and the latter mortgage was held void as to the homestead. Complaining of the judgment, the defendant bank prosecuted error. The material facts are stated in the opinion.

Affirmed.

E. E Enterline and N. K. Griggs, for plaintiff in error.

The allegation of the answer of defendant bank that the lien of its mortgage was prior and superior to the liens of plaintiff under its mortgage was sufficient to raise the statute of limitations, in the absence of a motion to reform, even though such allegation should be held to state merely a legal conclusion. The amendment offered was for the purpose of more fully setting up the bar of the statute, and it was error to strike it out. (Pomeroy's Code Rem., Sec. 549; Harris v. Halverson (Wash.), 63 P. 549.)

The defendant bank requested the court to find and state its conclusions of fact and of law separately. This request was made by one of the attorneys for defendant bank on June 20th 1900. This request was made long prior to the rendition and entry of judgment, which was not made or entered until the 30th day of August, 1900. Under the provisions of our statutes, the court must find and state its conclusions of fact and of law separately when requested by a party to the action. (R. S., Sec. 3660.) We do not think that our statutes require that the request be made at the time of submission of the cause, but rather before the making and entry of the findings. Here request was made more than two months prior to the making and entry of the findings and judgment. (Franks v. State, 12 O. St., 1.) The object of the statute is to give the losing party an opportunity to except to the decision of the court on questions of law involved in the controversy. As it will be seen hereafter, there were a great many questions of law involved, the decision of which affected very materially the rights of the defendant bank, and among a few can be mentioned the extension of indebtedness secured by plaintiff's mortgages, renewal notes and contracts entered into between the mortgagor and mortgagees of the mortgages assigned to plaintiff.

No cause of action for foreclosure of the mortgage declared upon in second cause of action was stated in the plaintiff's amended petition. This cause of action is based upon a note for $ 7,316.71, dated November 22, 1887, given by George Tschirgi to one D. H. Moon, payable on or before--years after date, the said note being lost. There is no allegation that the same was given for value received, nor is there a copy of the note set forth in the pleading. It is further alleged that the note was secured by a mortgage given by George and Marie T. Tschirgi to said Moon on certain real estate therein fully described. It was also pleaded that the mortgage contained a provision that if the principal sum or interest was not paid the mortgagee, his heirs or assignees might sell, as provided by law. The note and mortgage, it is alleged, was assigned before maturity to Peter Kiene, by the latter thereafter to Matthew Tschirgi and by Matthew Tschirgi to plaintiff; or, rather, we should say that the renewal note was assigned by Matthew Tschirgi to plaintiff--not the original note or mortgage. On February 8, 1898, it being alleged that $ 1,291.84 was then due, a note was given by George Tschirgi to Matthew Tschirgi in renewal of said indebtedness, which note is set forth, and from which it appears that it is payable two years after date, with interest at the rate of 8 per cent. per annum, payable annually, and that a failure to pay the interest within thirty days after due should cause the whole note to fall due, at the option of the holder. The default pleaded is that George Tschirgi failed to pay the interest due on the renewal note falling due February 8, 1899. This action was begun on the 22d day of April, 1899, so that, at the commencement of the action, the renewal note, or the time for payment thereof, had not expired, as it fell due February 8, 1900.

It was not pleaded that the mortgage contained a provision providing for the renewal of the original note, nor, in fact, did the mortgage contain any such provison.

As the petition does not show an existing cause of action as to the matters pleaded in the second cause of action, at the commencement of the suit, the plaintiff must fail in its efforts to foreclose the mortgage declared upon in its said second cause of action, for the reason, as stated, that no default was pleaded in the non-payment of the original indebtedness secured. (4 Enc. Pl. & Pr., 605; Bannigan v. Village, 49 N. Y. Sup., 199; Lewis v. Fox (Cal.), 54 P. 823; State v. Humphries (N. J.), 32 A. 106; Wiesinger v. Bank (Mich.), 64 N. W., 59; Heard v. Ritchey, 112 Mo. 516; Bank v. Mnfg. Co. (Kan.), 48 P. 863.) Such defense may be set up by other defendants than the debtor. (Boisat on Mech. Liens, Sec. 579; Wiltsie on Mort. Forecl., 51-2; Burt v. Saxon, 1 Hun., 551; Thomas v. Turner, 16 Md. 105; Dodge v. Crandall, 30 N.Y. 294; Faxton v. Taxon, 28 Mich. 159.) A suit prematurely brought cannot be maintained. (Ford v. Parr, 57 Ill.App. 139; Collins v. Montemy, 3 Id., 182; Hilliard v. Rothell (N. H.), 8 Atl., 826; Dickerman v. R. R. Co., 44 Conn. 228.)

And the premature commencement of a suit may even be raised by demurrer. (Dickerman v. R. R. Co., supra; Cox v. Dawson (Wash.), 26 P. 973; Bank v. Mnfg. Co., supra; Hicks v. Branton, 21 Ark. 186.) Or may be taken advantage of under general issue on the trial. (Hicks v. Branton, supra.) It is only in actions involving fraud that actions may be maintained or commenced on claims not due. (R. S., Secs. 4031-4032; Wearne v. France, 3 Wyo., 273; Crane v. Bode, 5 Wyo., 255; Greene v. Raymond, 9 Neb. 295.)

The second cause of action, in so far as it attempts a foreclosure of the mortgage, and have the same adjudged prior and superior to that of the defendant bank, is barred by the statute of limitations.

The note being payable--years after date, as alleged, then, in law, it is either an instrument due at once, as many authorities hold, or a demand instrument, as held by others. In either view of the case, the note is barred.

It will probably not be contended that a prior mortgagee can, by any sort of an agreement with the mortgagor, in any way affect a subsequent mortgagee's rights. The rule is that the first mortgagee cannot renew the note, and thereby extend the statute of limitations so as to affect the junior mortgagee. Nor as against a subsequent incumbrancer can the mortgagor by stipulation prolong the time of payment of the indebtedness secured by the senior mortgage. (Bank v. Brooks (Cal.), 59 P. 303; Wood v. Goodfellow, 43 Cal. 185; Damon v. Leque (Wash.), 50 P. 485; Cottrell v. Shepherd (Wis.), 57 N.W. 983.) On a note payable on demand the statute of limitations runs in general from its date, and not from demand of payment. (Randolph on Com. Paper, Sec. 1607; Farro v. Gay, 146 Mass. 118; Craft v. Thomas, 123 Ind. 513; Trustees v. Smith, 52 Conn. 434; O'Neil v. Wagner, 81 Cal. 631; Milnes Appeal, 99 Pa. St., 493; Shutts v. Fingas, 100 N.Y. 539.) Some authorities hold that when no time is stated or fixed for payment the note falls due at once. (Libby v. Mikelborg, 28 Minn. 38; Irvin v. Brooks, 111 N. C., 358.) The mortgage being a specialty, action thereon is barred in five years. (R. S., Sec. 3454; Kerr v. Lydecker, 37 N. E., 267; 23 L. R. A., 842; Balch v. Arnold (Wyo.), 59 P. 434; Worsham v. Lancaster (Ky.), 47 S. W., 438; Flewellen v. Cochran (Tex. Civ. App.), 48 S. W., 39; Newhall v. Sherman, 124 Cal. 509.) And the junior mortgagee may interpose the defense of the statute of limitations, though the debtor does not. (Lord v. Morris, 18 Cal. 482; Wood v. Goodfellow, supra; McCarthy v. White, 21 Cal. 495; Corbey v. Rogers (Ind.), 52 N. E., 748.)

No testimony was introduced to prove the contents of the Moon note. There was no proof as to the consideration for which it was given, nor when given, or where given or payable, nor when due. No testimony was offered as to what, if any, rate of interest it drew, nor was it mentioned in the mortgage securing the same. This note was assigned to Kiene, and by him to Matthew Tschirgi, although the latter claims he never received it. It was never at any time endorsed or delivered to the plaintiff. Besides, as appears from the testimony of the president of plaintiff bank, as well as from the testimony of Matthew Tschirgi, plaintiff did not institute the suit. When a note is alleged to be lost its terms must be clearly shown, and the plaintiff could not recover on the meager proof offered. (Randolph on Com. Paper, Secs. 689, 1702-3.)

The suit or cause of action cannot be maintained by plaintiff, because the Moon note was never endorsed to it or in its possession.

To support such cause of action, the plaintiff must prove: (a) the execution of the note as alleged; (b) that it was negotiable--negotiability will not be presumed; (c) the plaintiff's title to it by endorsement and delivery, for if not actually...