Smith v. Bush
| Decision Date | 26 March 1935 |
| Docket Number | Case Number: 22392 |
| Citation | 173 Okla. 172,44 P.2d 921,1935 OK 331 |
| Parties | SMITH v. BUSH |
| Court | Oklahoma Supreme Court |
¶0 1. LIMITATION OF ACTIONS - Payments on Debt by Mortgagor Held to Prevent Statute Barring Foreclosure of Mortgage Against Interests of Third Parties in Property Acquired After Recording of Mortgage.
The payment of a portion of the principal or interest on a debt secured by a real estate mortgage, by the debtor and mortgagor (who still retains an interest in the mortgaged premises) after the debt becomes due and before the expiration of five years from the due date, prevents the statute of limitations from barring a foreclosure of the mortgage against portions of or interests in the mortgaged property acquired by third persons after the mortgage is recorded, until five years after such payment was made.
2. FIXTURES - Rights as Between Mortgagee of Land and Subsequent Lessee of Mortgagor.
When the mortgagor of land leases it to a third person and gives the third person the right to remove from the premises any chattels that he may attach, such chattels are not subject to the mortgage, if they can be removed without injury to the property. However, if the chattels cannot be removed without injury to the realty, they become subject to the mortgage lien as a part of the realty and the mortgagee is not required to pay the third person the value thereof.
3. LIMITATION OF ACTIONS - Interest Payments by Mortgagor Held to Prevent Statute Barring Foreclosure of Mortgage Against Interests of Third Persons in Property.
In 1920 W. mortgaged his real estate to B. to secure a note due in January, 1925. Between 1920 and 1925, W. conveyed interests in the mortgaged premises to S., C., and G., respectively. In 1925, W. and B. entered into an extension agreement extending the time of payment of the mortgage debt for five years and subsequently paid interest on the mortgage debt until 1929. B. assigned the debt and mortgage to A.B., who, in August, 1930, brings an action to foreclose against W., S., C., and G. Held, that by reason of the interest payments made by W., the foreclosure action against the interests of S., C., and G. is not barred by the statute of limitations.
Appeal from District Court, Creek County; Gaylord R. Wilcox, Judge.
Action by Alden Marland Bush and another against Glenn J. Smith and others to foreclose a real estate mortgage. Judgment for the plaintiffs, and certain defendants appeal. Remanded, with directions to modify the judgment.
N.E. McNeill and Rowland & Talbott, for plaintiffs in error.
Glenn O. Young and William E. McQuerry, for defendants in error.
Miley, Hoffman, Williams, France & Johnson and Hayes, Richardson, Shartel, Gillilland & Jordan, amici curiae.
¶1 This action to obtain a money judgment on a note and to foreclose a real estate mortgage was commenced in the district court of Creek county on August 18, 1930, by Alden Marland Bush, as plaintiff. Orlando Walking and his wife, Laverna B. Walking, who were the makers of the note and mortgage, and Glenn J. Smith, Jeanette E. Cook, and John B. Grieves, who had acquired interests in the property from the mortgagors subsequent to the mortgage, were named in the petition as parties defendant.
¶2 The case was tried piecemeal in the court below without the intervention of a jury. The plaintiff first obtained a judgment against Orlando Walking and his wife for the amount due on the note and decreeing a sale of the mortgaged property. No appeal has been perfected as to this judgment, or part of judgment. This first judgment or portion of judgment, is not said to affect the interests of defendants Smith, Cook, and Grieves, who apparently had not been served with summons at the time it was rendered. These defendants were later brought into court and the issues between them and the plaintiff were made up by appropriate pleadings. After the issues had been joined the cause was tried to the court as to the last-named defendants and resulted in a judgment declaring the debt due the plaintiff from the mortgagors to be a lien against their interests in the mortgaged property and decreeing that the same be sold to satisfy the debt.
¶3 The three defendants last above named have brought the case to this court on appeal. They appear herein as plaintiffs in error. Alden Marland Bush, plaintiff below, and E.R. Unger, who was appointed receiver in the trial court, are defendants in error. The parties will be referred to in this opinion as they appeared in the trial court when not otherwise designated; the term "defendants," however, will be used to include only those defendants who have appealed, and Orlando Walking and his wife will be referred to in this opinion as mortgagors.
¶4 The defendants contended in the trial court and now urge in this court that the plaintiff's right to foreclose his mortgage as to their interests is barred by the statute of limitations. This contention is based upon the following facts as developed at the trial:
¶5 The note and mortgage given to secure the same were executed by the mortgagors to one Alden S. Bush, mortgagee, on December 20, 1919. The note was for $5,000 with interest, and the maturity date of the note was January 1, 1925. The mortgage covered land situated in Creek county which was then owned by the mortgagors. The mortgage was filed for record on January 19, 1920, and subsequent purchasers of interests in the property were thereafter charged with constructive notice thereof. Section 11262, O. S. 1931." Subsequent to the date the mortgage was recorded, but prior to the due date of the note secured thereby, the defendants herein acquired their respective interests in the property. John B. Grieves acquired an oil and gas lease on the property on August 29, 1921. Glenn J. Smith acquired three-eighths interest in the oil and gas and mineral rights in place on the property on February 7, 1924. On the same date, Jeanette E. Cook obtained a one-eighth interest in the oil, gas, and minerals in place. Neither of these defendants ever assumed the payment or paid any part of the principal or interest on the debt secured by the mortgage, nor did either of them acknowledge or promise to pay the debt in writing. More than five years elapsed after the due date of the original note before this action was brought. On January 2, 1925, the day after the maturity date of the note, the mortgagor and mortgagees entered into an extension agreement, whereby the time for paymenet of the note secured by the mortgage was extended for five years. After this extension agreement had been executed and on February 10, 1925, the mortgagee assigned the note, mortgage, and extension agreement to the plaintiff in this action. Thereafter the mortgagors continued to pay interest on the indebtedness until and including 1929.
¶6 Unquestionably, the execution of the extension agreement and the subsequent interest payments made by the mortgagors kept the debt alive as to them and as to the interest in the mortgaged premises still owned by them at the time this action was brought. The defendants say, however, that since they were not parties to the extension agreement and did not make any of the subsequent interest payments, their interests in the mortgaged premises should not be affected thereby. They say that since more than five years have elapsed since the note became due, they are entitled to avail themselves of the statute of limitations to prevent a foreclosure and sale of their respective interests, notwithstanding the fact that the right of action as to the mortgagors is not barred by the statute.
¶7 The provisions of the statute relating to this action are of paramount importance in considering the problem involved. Section 10955, O. S. 1931, provides:
"A lien is to be deemed accessory to the act for the performance of which it is a security, whether any person is bound for such performance or not, and is extinguishable in like manner with any other accessory obligation."
¶8 Thus in this jurisdiction a mortgage on real estate is considered an incident to the debt secured thereby. Mamie H. Clark et al. v. W.W. Grant, 26 Okla. 398, 109 P. 234; Foster v. Augustanna College & Theological Seminary, 92 Okla. 96, 218 P. 335.
¶9 Section 10957, O. S. 1931, provides:
"A lien is extinguished by the mere lapse of the time within which, under the provisions of civil procedure, an action can be brought upon the principal obligation."
¶10 Since the mortgage is an incident to the debt secured thereby and the mortgage lien is extinguished by the lapse of time within which an action may be brought upon the principal obligation, it is important to determine the time within which such an action must be brought.
¶11 Section 98, O. S. 1931, provides:
"Civil actions can only be commenced within the periods prescribed in this article, after the cause of action shall have accrued; but, where, in special cases, a different limitation is prescribed by statute, the action shall be governed by such limitation."
¶12 Section 101, O. S. 1931, provides, in part, as follows:
¶13 Thus an action on the note involved in this case would, in the absence of other circumstances, have to be brought within five years from the due date thereof. However, if the person to be charged on such note acknowledges the existing liability or promises to pay the same in writing or pays any part of the principal or interest, the statute of limitations does not bar an action until five years from the date of such acknowledgment, promise, or part payment. This by virtue of section 107, O. S. 1931, which provides:
"In any case...
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