Menzel v. Hinton

• Decision Date: 19 May 1903
• Citation: 44 S.E. 385,132 N.C. 660
• Parties: MENZEL et al. v. HINTON et al.
• Court: North Carolina Supreme Court

44 S.E. 385

132 N.C. 660

MENZEL et al. v. HINTON et al.

Supreme Court of North Carolina

May 19, 1903

Appeal from Superior Court, Camden County; M. H. Justice, Judge.

Action by P. T. Menzel and others against C. L. Hinton and others. From a judgment in favor of defendants, plaintiffs appeal. Affirmed.

Clark C.J., and Douglas, J., dissenting.

G. W Ward and W. M. Bond, for appellants.

E. F Aydlett, for appellees.

CONNOR J.

The Code of 1883, § 152 (3) provides that the period prescribed for the commencement of "an action for the foreclosure of a mortgage or deed of trust for creditors with a power of sale of real property, where the mortgagor or grantor has been in possession of the property, within ten years after the forfeiture of the mortgage, or after the power of sale becomes absolute, or within ten years after the last payment on the same." We are unable to discover in this language any period of time fixed within which the mortgagee is required to execute the power of sale. It will be observed that this section prescribes the time for bringing an action (1) for the foreclosure of a mortgage, or (2) deed in trust for creditors, with power of sale. The instrument executed by Foreman to Hinton is a mortgage containing a power of sale, and is not within the language of the statute. It was not necessary for the mortgagee to institute an action for the foreclosure of the mortgage or the execution of the power; hence no time is fixed by the statute within which he must execute the power. The word "action" in the paragraph evidently has reference to the action for foreclosure, and not to the execution of the power of sale, which requires no action. To construe the statute otherwise, would be to write into it language which we do not find there.

It must be conceded that the language used by this court in Hutaff v. Adrian, 112 N.C. 259, 17 S.E. 78, would seem to sustain the contention of the plaintiffs. In that case the bond for the security of which the mortgage was given was barred by the statute of limitations, the last payment thereon having been made more than 10 years before the threatened execution of the power. The mortgagor applied for an injunction to restrain the sale by the mortgagee under the power, which was refused. The only question presented in that case was whether the mortgagor had any equity upon which to base his application for the interference of the court. The case is correctly decided. If the execution of the power was not barred by the statute, he was, of course, not entitled to an injunction; if it was barred and his right to execute the power at an end, the legal title would not pass by the sale. It will be observed that this case was decided prior to the passage of Act 1893, p. 37, c. 6, permitting actions to be brought to remove a cloud from title. Clark, J., in that case says: "The court will therefore not interpose by an injunction merely to prevent a cloud upon the title."

Hutaff v. Adrian, supra, is cited in Smith v. Parker, 131 N.C. 470, 42 S.E. 910. No question was involved in that case regarding the statute of limitations, nor was it cited for that purpose. Conceding that an action in personam upon the note held by Hinton against Overton was barred by the statute, it would not affect the decision of this cause. It is well settled that an action upon the debt may be barred without affecting the right to maintain an action to foreclose the mortgage given to secure it. Capehart v. Dettrick, 91 N.C. 344. This, because the bar of the statute affects only the remedy, and not the right. Parker v. Grant, 91 N.C. 338; Rouss v. Ditmore, 122 N.C. 775, 30 S.E. 335; 19 Am. & Eng. Enc. 146; Sturges v. Crowninshield, 4 Wheat. 206, 4 L.Ed. 529. Hence it is that in an action upon a debt barred by the statute, for the payment of which a "new and continuing promise" is relied upon, the "cause of action" is the original debt, and the new promise is relied upon to repel the bar. Falls v. Sherrill, 19 N.C. 372. In Kull v. Farmer, 78 N.C. 339, the distinction between an action on a debt barred by the statute and one discharged in bankruptcy is pointed out; in the latter "the cause of action" is the new promise, the old debt being a consideration to support the promise. The reason for the distinction is obvious. Prior to the adoption of our Code, there was no statute of limitations in regard to sealed instruments, bonds, and mortgages. There was a presumption of payment or satisfaction after the lapse of 10 years. Rev. Code, c. 65, § 18. This presumption affected the right, as distinguished from the remedy. Copeland v. Collins, 122 N.C. 619, 30 S.E. 315; Long v. Clegg, 94 N.C. 764. Of course, if the debt is paid or satisfied, either by actual payment or by presumption of law, the mortgage which is incidental to the debt is likewise discharged, and in equity--the purpose for which the legal title was conveyed being accomplished--would be treated as discharged, and the mortgagor as the owner of the land. Ray v. Pearce, 84 N.C. 485; Edwards v. Tipton, 85 N.C. 480; Simmons v. Ballard, 102 N.C. 109, 9 S.E. 495. That such is not the law under our statute of limitations is settled by the uniform and unanimous decisions of this court.

In Long v. Miller, 93 N.C. 227, 233, Smith, C.J., said: "As to the enforcement of the mortgage *** there is no statutory bar. While the personal action is barred, the action to enforce the mortgage is not, as was decided in Capehart v. Dettrick.'' Ijames v. Gaither, 93 N.C. 364.

In Arrington v. Rowland, 97 N.C. 131, 1 S.E. 557, Merrimon, J., said: "If the debt secured by the deed of trust had been independent of and apart from the deed, as contended by the defendants, the plaintiffs would have the right to have the trust executed. The court would not in that case deny the plaintiffs this remedy, simply on the ground that the debt intended to be secured is barred by the statute of limitations."

Clark, J., in Taylor v. Hunt, 118 N.C. 172, 24 S.E. 359, said: "The security, when not barred, is enforceable, though action on the debt is barred."

Smith, C.J., in Overman v. Jackson, 104 N.C. 4, 10 S.E. 87 (8), said: "Equally without support is the suggestion that, if the debt is barred, so must the mortgage to secure it be. These are essentially distinct as affected by the statute of limitations, as is held in Capehart v. Dettrick and Long v. Miller.''

In Jenkins v. Wilkinson, 113 N.C. 532, 18 S.E. 696, MacRae, J., said: "Indeed, though an action upon the note was barred by the statute, the lien created by the mortgage is not impaired in consequence of the running of the statute of limitations on the debt."

In Hedrick v. Byerly, 119 N.C. 420, 422, 25 S.E. 1020, Montgomery, J., said: "The statute of limitations defeats the remedy when the note is sued upon, but it does not discharge the debt, and, although the debt may be barred by the statute, yet the mortgage by which the debt is secured, if itself not barred, may be foreclosed by the mortgagee in proceedings for that purpose."

Thus we see it uniformly and without dissent held by this court that the right to subject the mortgaged land to the payment of the debt is not affected by the statutory bar of the debt. This is in accordance with the current of authority in other courts.

The question is clearly set forth and discussed in the case of Goldfrank v. Young, 64 Tex. 432, in which Stayton, A. J., said: "In reference to the operation of the statute of limitations in any matter in which the recovery of money is sought, the statute itself limits it to 'actions or suits in courts,' and it provided within what time 'actions or suits' in the different classes of cases may be brought; but it does not attempt to determine within what period any one must enforce a right which the debtor has placed it in the power of the creditor to enforce otherwise than by an 'action or suit in court.' *** The declaration that persons must institute 'suits or actions in courts' within a fixed period to enforce their claims, which can be enforced only in that manner, is not equivalent to declaring that a creditor, who has been given by contract a right and means by which he may enforce his claims otherwise than through the courts, shall not enforce it after the time at which he might institute an action or suit, without subjecting himself to the bar which would be urged by a plea of limitation. It is not always true that rights which cannot be enforced through the courts are valueless, nor that contracts which the courts cannot enforce are invalid." In this case the Supreme Court of Texas held "that the statute of limitation which applied to a money demand operates upon the remedy when its enforcement is sought by 'suits or actions' in courts. It does not deprive the creditor of a remedy when he had provided, by contract, to enforce through a trust deed the payment of his claim."

This case was approved in Fievel v. Zuber, 67 Tex. 275, 3 S.W. 273, the court saying: "The statute does not say that no debt shall be collected, but that no action shall be brought. Nor does it provide that the debt shall be extinguished. And statutes of limitation worded like ours are generally held to operate solely upon the remedy in the courts, and not to destroy the debt." Tombler v. Ice Co., 17 Tex.Civ.App. 596, 43 S.W. 896. To the same effect is Hartranft's Estate, 153 Pa. 530, 26 A. 104, 34 Am. St. Rep. 717; Slaymaker v. Wilson, 1 P. & W. 216; Gardner v. Terry, 99 Mo. 523, 12 S.W. 888, 7 L R. A. 67; Connecticut Mut. Life Ins. Co. v. Dunscomb (Tenn.) 69 S.W. 345, 58 L. R. A. 694. In Grant v. Burr, 54 Cal. 298, it is said: "The expiration of the statute time for bringing an action to recover a debt, or to enforce any personal obligation, does not operate as an...