Platts v. Pacific First Federal Savings & Loan Association of Tacoma, a Corp.

• Decision Date: 27 March 1941
• Docket Number: 6826
• Court: Idaho Supreme Court
• Parties: SIDNEY D. PLATTS and VIOLA PLATTS, his wife, Appellants, v. PACIFIC FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF TACOMA, a corporation, and MARINE TRUST COMPANY OF BUFFALO, a corporation (Successor to CITIZENS TRUST CO., a corporation), Respondents

111 P.2d 1093

62 Idaho 340

SIDNEY D. PLATTS and VIOLA PLATTS, his wife, Appellants, v. PACIFIC FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF TACOMA, a corporation, and MARINE TRUST COMPANY OF BUFFALO, a corporation (Successor to CITIZENS TRUST CO., a corporation), Respondents

No. 6826

Supreme Court of Idaho

March 27, 1941

JUDGMENT-LIEN DURATION OF-EXECUTION-TIME FOR ISSUANCE-MORTGAGES-FAILURE TO SATISFY-ACTION-EVIDENCE.

1. In action to quiet title and for penalty for failure to satisfy mortgage, wherein defendant filed cross-complaint on mortgage, evidence held to sustain finding that plaintiffs were indebted to defendant for balance of installments due taxes and outlay for bringing abstract up to date.

2. Evidence held to authorize refusal to impose penalty upon mortgagee for failure to satisfy mortgage, in view of bona fide controversy concerning amount due. (I. C A., sec. 44-815.)

3. The five years during which lien on judgment is granted by statute operate as a substantive part and limitation on the right created, not as a mere defense to be pleaded or waived and hence such lien should be removed as cloud on judgment debtor's title after five years elapsed without payment or renewal of judgment. (I. C. A., secs. 5-215, 7-1109.)

4. The five-year lien created by judgment did not exist at common law, and is purely the creation of statute. (I. C. A., sec. 7-1109.)

5. To support an execution sale under statutory judgment lien, as against a purchaser for value, issuance of execution within five years after docketing the judgment must be proved. (I. C. A., sec. 7-1109.)

6. One asserting existence of judgment lien to support execution sale as against purchaser for value has burden of proving that execution was issued within five years after docketing of judgment. (I. C. A., sec. 7-1109.)

7. Though partial payment or extension may extend maturity date and toll statute of limitations as against judgment, it will not extend or continue the judgment lien unless made in writing so as to be entitled to recordation. (I. C. A., secs. 5-238, 7-1109.)

8. Expiration of judgment lien does not extinguish the judgment but simply terminates the statutory security. (I. C. A., sec. 7-1109.)

APPEAL from the District Court of the Eleventh Judicial District, for Cassia County. Hon. T. Bailey Lee, Judge.

Action to quiet title and for recovery of judgment, for statutory penalty of $ 100 for failure to satisfy mortgage. Judgment for plaintiffs, conditioned upon their paying into court, within twenty days, amount found due to defendant, Pacific Federal Savings & Loan Assn. of Tacoma, and denying judgment for penalty. Judgment for defendant, Marine Trust Company of Buffalo, sustaining its judgment lien. Judgment affirmed as between plaintiffs and defendant Pacific First Federal Savings & Loan Association, and reversed as between plaintiffs and Marine Trust Company.

Judgment affirmed in favor of the Association and reversed as to the Trust Company.

S. T. Lowe, for Appellants.

The Marine Trust Company of Buffalo, does not have a lien upon the premises described in the complaint and appellants were entitled to a judgment quieting their title against the apparent cloud, for . . . A.--When the statute creating a judgment lien contains a specific limitation upon the duration of the lien, the expiration of the statutory period wipes out the lien, for . . . 1.--When a statute creates a right which did not exist at common law and specifically limits the time within which that right may be enforced, the time so fixed is a limitation upon the right itself and expiration of the period terminates the right. (Western L. & B. Co. v. Gem State Lumber Co., 32 Idaho 497, 185 P. 554; The Harrisburg v. Rickards, 119 U.S. 199, 7 S.Ct. 140, 30 L.Ed. 358; Standrod v. Utah Implement Vehicle Co., 223 F. 517, 139 C. C. A. 65.)

At common law, a judgment did not constitute a lien upon the real estate of the judgment debtor. (15 R. C. L. 793, sec. 248; 34 C. J. 367, sec. 870.)

Judgment liens are creatures of statute, owing their life and force to the statute. (34 C. J. 569, sec. 871; 15 R. C. L. 994, sec. 250; Smith v. Toman, (Ill.) 14 N.E.2d 478, 118 A. L. R. 924; Gaines v. Van Demark, (Mont.) 74 P.2d 454; McMillan v. Davenport, (Mont.) 118 P. 756, Ann. Cas. 1912-D, 984.)

The statute which creates the judgment lien prescribes the duration of its existence and expiration of that period destroys the lien. (I. C. A., sec. 7-1109.)

Where it appears that a mortgage has been fully paid, demand is made for a release of the same, and the holder refuses to make release, it clearly presents a case where the statute should be enforced. (I. C. A., sec. 44-815; Blackfoot State Bank v. Crisler, 20 Idaho 379, 118 P. 775; Cornelison v. U. S. Building & Loan Assn., 50 Idaho 1 at 8, 292 P. 240.)

In order to entitle the appellants to recover the penalty it was not incumbent upon them to show bad faith on the part of the Federal Loan Association, but only that there was not a substantial controversy. (Harding v. Home Investment etc. Co., 49 Idaho 64, 286 P. 920.)

Bothwell & Povey and W. B. Bowler, for Respondent Pacific First Federal Savings & Loan Association.

The statute requiring the entry of judgment for $ 100.00 against a mortgagee who fails to release a mortgage which has been satisfied is penal, and should be strictly construed. And where there is substantial controversy as to the amount due, and the mortgagee does not act in deliberate bad faith the penalty should not be imposed. (I. C. A., sec. 44-815; Harding v. Home Investment Co., 49 Idaho 64, 286 P. 920.)

C. W. Thomas, for Respondent Marine Trust Company.

"A lien is extinguished by the lapse of time within which, under the provisions of the Code of Civil Procedure, an action can be brought upon the principal obligation." (California Civil Code, sec. 2911.)

Yet, even though the lien is expressly extinguished by statute, California has consistently held that a debt is not satisfied or extinguished by mere lapse of time, and the mortgagor of real property or the pledgee of personal property cannot, without paying his debt, quiet his title against the mortgagee or pledgee. (10 Cal. Jur., page 512 et seq.; Puckhaber v. Henry, (Cal.) 93 P. 114; Raggio v. Palmtag, (Cal.) 103 P. 312; Bulson v. Moffatt, (Cal.) 161 P. 259; Shimpones v. Stickney et al., (Cal.) 28 P.2d 673.)

A judgment is a debt and the ordinary statute of limitations applies thereto. (I. C. A., secs. 5-215, 5-229; Woods v. Locke, 49 Idaho 486, 289 P. 610; Simonton v. Simonton, 33 Idaho 255, 193 P. 383; Bashor v. Beloit, 20 Idaho 592, 119 P. 55.)

AILSHIE, J. Budge, C. J., Morgan and Holden, JJ., concur. GIVENS, J. (Concurring in part and dissenting in part).

OPINION

AILSHIE, J.

This action was commenced by the appellants, husband and wife, against the Pacific First Federal Savings and Loan Association of Tacoma, which will hereafter be referred to as the Association, and the Marine Trust Company of Buffalo, which will hereafter be referred to as the Trust Company, successor to Citizens Trust Company, as defendants, for the purpose of quieting title of appellants to a tract of land in Cassia county and to obtain judgment against the Association for the statutory penalty of $ 100 for failure to satisfy the mortgage of record, as provided for by sec. 44-815, I. C. A. The Association answered and filed a cross-complaint, alleging that it held a mortgage on the premises described and that the same had not been paid, and prayed a decree of foreclosure of its mortgage. The Trust Company answered and alleged that it was the successor of the Citizens Trust Company and as such was owner of a judgment against appellants and held a judgment lien on the realty involved. The mortgage which the Association sought to foreclose was executed May 1, 1922, to secure a promissory note in the sum of $ 2400, payable in 96 equal monthly installments.

Appellants contended that they had made full payment of all installments except a balance of $ 617.87 and that on September 28, 1936, and prior to the commencement of this action, they tendered the Association a check for that sum as payment in full for the mortgage indebtedness, together with all taxes and other expenses covered and secured by the mortgage. It is further alleged in the complaint that the tender, which appellants made, was $ 178.50 in excess of the amount actually owing and unpaid on the mortgage; that the evidence was not sufficient to sustain a finding for a greater sum than $ 439.37.

The court found that a valid tender had been made in the sum alleged ($ 617.87) and that it was the true amount owing and sufficient to cover all sums due from appellants to the Association. After making the tender, appellants made formal demand in writing, under the statute, sec. 44-815, I. C. A., for the release of the mortgage of record.

It will be of no value for us to review, in this opinion, the mass of evidence introduced in reference to the various installment payments and interest accrued in connection with this transaction. It is sufficient to say that there is substantial evidence in the record to sustain the finding of the trial court, to the effect that "the plaintiffs were indebted to the defendant, . . . in the sum of $ 617.87," which sum consisted of balance of installments due on mortgage note, taxes paid by mortgagee and necessary outlay for bringing abstract up to date.

The court also found that the Association had not acted in bad faith and that it was not liable for the $ 100 penalty under the statute. We are satisfied from the record before us that the trial court was correct in refusing to impose the penalty under the circumstances disclosed. There was a good faith and bona fide...