Schifferstein v. Allison

Pillsbury, J.

The holding of the courts in England, and in most of the States of the Union, that a mortgagee, notwithstanding the debt is barred by the statute, might still assert his right under the mortgage to enforce the lien in analogy to the Statute of Limitations respecting actions for the recovery of real estate, has not been recognized by our courts. Here it is the settled doctrine that the debt is the principal thing, and the mortgage security but a mere incident, and anything that discharges the debt will have the effect of destroying the lien created by the mortgage, and can be set up as a defense to any proceeding instituted upon the mortgage to obtain satisfaction of the debt, whether by ejectment, scire facias or bill in equity to foreclose. Harris v. Mills, 28 Ill. 44; Brown v. Devine, 61 Ill. 260; Medley v. Eliott, 62 Ill. 532; Emory v. Keighan, 88 Ill. 482.

It was said in Medley v. Eliott, supra, “ that the mortgage is but an incident attached to the debt, and in reason and propriety it can not and ought not to be detached from its principal. The mortgage interest, as distinct from the debt, is not a fit subject of assignment. It has no determinate value. If it should be assigned, the assignee must hold the interest at the will and disposal of the creditor who holds the land.” And again, “ that when recovery upon the note is barred, the right of foreclosure is also barred. The converse must be equally true.” Emory v. Keighan, supra, was an- action of ejectment, wherein the plaintiff, Emory, showed & prima facie right to recover, and Keighan defended his possession under a sale made by virtue of the power of sale contained in a mortgage; but it appearing that the sale had been made more than, sixteen years after condition broken in non-payment of the debt, if it ever was broken, it was held that the Statute of Limitation barred the debt, as nothing appeared to take the case out of the statute, and that taking possession under the mortgage sale, after the right of entry was tolled by lapse of time, could not revive the debt nor the power of sale so as to confer upon the defendant any title. From these decisions it is manifest that the courts, whether of law or equity, had fixed as determinate a time when the right of entry under the mortgage should be tolled by lapse of time, as though it had been declared by legislative enactment. That time was determined to be that fixed by the statute for the barring a recovery upon the debt secured by the mortgage, and not the time prescribed for the recovery of real property. When the bar of the statute became complete as to the debt, it was equally so as to tlxo mortgage, regardless of tiro character of the proceeding taken to enforce it. The vitality of the mortgage lien depended upon the continued existence of the debt, and, when the debt fell, the lien went with it. We are, then, to inquire whether the party seeking to enforce the lien of his mortgage, after the expiration of the time limited by the statute for the commencement of an action to recover the debt, could show that such lien was still subsisting by proving any of the grounds known to the law for arresting the running of the statute against the debt; whether, keeping the debt alive, the mortgage lien, as such incident, was so closely connected with and attached to the debt as to still continue a substantial right in the mortgagee for the collection of the debt. Speaking of the presumption of payment arising from the lapse of time, it is said in Jones on Mortgages, Sec. 1196, that this presumption is not conclusive but may be controlled by evidence of part payment of the principal or interest, or other admissions or circumstances from which it may be found that the debt is still unpaid, but parol evidence, to control this presumption, should clearly show some positive act of unequivocal recognition of the debt within that time; and again, Sec. 1198, “ that a payment of interest or part of the principal renews the mortgage so that an action may be brought to enforce it within twenty years after such last payment. This is a rule universally recognized.”

Hough v. Bailey, 32 Conn. 288, was a case where a bill was filed to foreclose a mortgage after the expiration of fifteen years, the time limited in that State for barring such action where the mortgagor has been in possession, and to overcome the bar of the statute it was proved that the mortgagor, within the fifteen years, had acknowledged the existence of the debt and promised to pay it. As to the effect of such promise upon the mortgage, Hinman, C. J., said: “ This recognition of the .debt as still subsisting against him was, in effect, a recognition of the mortgage as a security for it, and prevented the time then elapsed from being counted or considered as any part of the fifteen years’ uninterrupted possession necessary in order to bar the mortgagee’s right to bring ejectment or to foreclose the mortgage.” Emory v. Keighan, 94 Ill. 543, is the same case reported in the 88th Ill., above cited, being taken to the Supreme Court a second time. On a new trial at the circuit, the defendant, in order to avoid the effect of the statute declared in the former opinion, proved that the mortgagor under whom he claimed had been out of the State a sufiic'ent length' of time to prevent the statute barring the note at the time the sale was made under the mortgage at which he became the purchaser. It was urged that the statute only permits the deduction of time the debtor was out of the State in actions on the note, and could not be used to uphold the power of sale in the mortgage, but the point was not considered tenable, the court saying: “ The power of 'sale inserted in the mortgage was for the purpose of subjecting the mortgaged property to the payment of the debt so long as it remained in force. Its legal effect was to authorize a sale after the debt matured, so long as it remained in existence and binding on the mortgagor. The mortgage was but a mere incident of the debt, and inhered to it as long as the debt remained in force against the mortgagor, as nothing was done to release or separate it from the debt.” Our present act concerning limitation of actions was enacted in 1872, and in the general revision became chapter 83 of the Eevised Statutes of 1874, and by it the time for bringing an action upon notes, bonds, etc., was reduced from sixteen to ten years, and in the same act the time for bringing an action or making a sale to foreclose a mortgage was fixed at the same period. This last provision was in legal effect but a legislative declaration of the existing rule. As we have seen, that was applied by both courts of law and equity in this State under the prior statute relating to actions upon the mortgage or mortgage debt; i. e., the time limited for the enforcement of the debt was also applied to the mortgage, and when a recovery was barred upon the former the latter was likewise barred, regardless of the forum wherein it was sought to enforce it; and there can be no doubt that, under the decisions of our Supreme Court in a former part hereof referred to, without this section of the statute especially referring to mortgages, they would have been held subject to the limitation prescribed for the principal thing, the debt, and be barred in the same time as now fixed by the statute, the period of ten years. We do not think that it was the intention of the Legislature to entirely separate the incident, the mortgage, from its principal, the debt, for the payment of which it was pledged, thereby discharging the lien created by it when, under another provision of the same act equally authoritative and positive, and fixing the same limitation, the debt might still be subsisting; but we consider it rather the adoption into the written law of a rule theretofore enforced by the courts in analogy to the existing limitation prescribed by the statute for the recovery of the same debt, the statute now applying whether the debt be evidenced by note, bond, or by the mortgage. We treat this section 11, relating to mortgages, as what, in relation to the debt, has ever been considered a mere Statute of Limitation, to be construed, not as discharging the debt, but as taking away the remedy for the enforcement of its collection, by creating a presumption- of its payment and consequent discharge of the lien, unless rebutted by proof of some act of the debtor or mortgagor, unequivocal in its nature, recognizing the continued existence of the mortgage Hen as security for the debt. Any act of the debtor, sufficient to take the debt out of the operation of the statute by suspending it for a given time, or by fixing a new date from which the ten years’ limitation must again commence to run, is such a clear and distinct recognition" of the mortgage as a security for such debt as alike to operate upon it and, by the same act, the bar of the statute, so far as it has run, is removed from both. Whatever recognizes the debt as still subsisting, also recognizes the mortgage as security for it, as it is hut the mere incident, and can not, without express agreement, he separated from it. This seems to be the holding in Hough v. Bailey, supra, and of our courts so far as the question has been presented, as it is likewise in other States having limitation laws relating to the right of entry under mortgages. The rule seems to be founded in reason and supported by authority, and we see no cause for not following it. The appellant here purchased the equity of redemption of the mortgagor while the mortgage was upon its face in full force and effect, ten years from the maturity of the note not yet having elapsed, and it is but reasonable to suppose that she purchased with a full understanding that the premises were pledged for the debt secured by it, and made her hid accordingly. She stands in the place of the mortgagor, and, as in our view the mortgage could be enforced against him at any time within ten years from the time he made the last payment upon the note, while still the owner of the equity of redemption, she is bound by this act of the revival by him of the time from which the limitation is to commence running anew, and still holds the land charged with the payment of this debt. The decree of the court below, being in accordance with the views above expressed, will he affirmed.

Decree affirmed.