Berkin v. Healy

158 P. 1020, 52 Mont. 398, 1916 Mont. LEXIS 81
CourtMontana Supreme Court
DecidedJune 3, 1916
DocketNo. 3,661
StatusPublished
Cited by14 cases

This text of 158 P. 1020 (Berkin v. Healy) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berkin v. Healy, 158 P. 1020, 52 Mont. 398, 1916 Mont. LEXIS 81 (Mo. 1916).

Opinion

MR. JUSTICE HOLLOWAY

delivered the opinion of the court.

In the complaint in this action it is alleged that on November 6, 1885, David C. Miller executed and delivered to C. A. De Witt his promissory note and a mortgage upon 160 acres of land to secure the payment; that the mortgage was duly recorded and ever since has remained of record and uneanceled; that the indebtedness has never been paid in whole or in part; that the right to recover it is barred by statutes of limitation, the appropriate sections of which are cited; and that the lien of the mortgage has been extinguished. It is further alleged that the plaintiffs are the present owners of the land; that the defendants are the heirs and successors of De Witt; that in July, 1913, defendants executed and filed for record an affidavit purporting to extend or renew the mortgage of 1885; that the affidavit was made and filed without the consent of plaintiffs; [401]*401and that the mortgage and this affidavit constitute clouds upon plaintiff’s title and should be canceled.

The answer admits substantially all of the allegations of the complaint and, by way of equitable counterclaim, repeats the history of the mortgage transaction, and alleges that in 1906 Miller, the original mortgagor, then the owner of the land, commenced an action to have the mortgage canceled, and that his complaint constituted such an acknowledgment as operated to take the case out of the statute of limitations. The prayer is that the mortgage be decreed to be a valid lien upon the land and that it be foreclosed. There is an allegation that a payment of $100 was made by Miller in 1896. To this counterclaim plaintiffs interpose a general demurrer which was sustained, and, defendants failing to plead further, a decree conforming to the prayer of the complaint was rendered and entered, and from that decree this appeal is prosecuted.

It may be conceded at once that, in the absence of a statute [1] declaring a different rule, the lien of a mortgage is not extinguished by the mere lapse of the period fixed by the statute within which an action to enforce the payment of the debt may be brought and prosecuted to a successful termination. This rule was declared by the courts of New York (Pratt v. Huggins, 29 Barb. (N. Y.) 277; Waltermire v. Westover, 14 N. Y. 16), and was incorporated in the proposed Civil Code prepared by David Dudley Field and his associates for the state of New York (sec. 1605). That proposed Code was adopted, almost in its entirety, by California; but the legislature, for reasons satisfactory to itself, changed the language of section 1605 to read: “A lien is extinguished by the lapse of the time within which, under the provisions of the Code of Civil Procedure, an action can be brought upon the principal obligation.” (Sec. 2911, Cal. Civ. Code.) In Mutual Life Ins. Co. v. Pacific Fruit Co., 142 Cal. 477, 76 Pac. 67, the California court refers to this bit of legislative history as follows: “It should be remarked that section 2911 was designedly passed to change the former rule respecting the continued existence of a lien after the statute of [402]*402limitations has barred the remedy upon the principal obligation. Thus the proposed Civil Code of New York (the Field Code), from which admittedly so many of the provisions of our own Code have been taken, provided (section 1605), in accordance with the common rule: ‘A lien is not extinguished by the mere lapse of the time within which, under the provisions of the Code of Civil Procedure, an action can be brought upon the principal obligation.’ Our own codifiers industriously changed this language, and declared that a lien is extinguished by such lapse of time. We have thus adopted a rule contrary to that existing at the common law (Taunton v. Goforth, 6 Dowl. & R. 384), and contrary, therefore, to the authorities of those states where the common-law rule has not been abrogated by express statute.”

In 1895 we adopted our Civil Code from California (Report of Code Commissioners, p. 13), and with the knowledge that the change noted above had been made, our legislature followed the California lawmakers and incorporated section 2911, above, without change as section 3792 of our Civil Code, and this was brought forward and re-enacted as section 5728, Revised Codes of 1907, and made directly applicable to mortgages, by section 3735, Civil Code (see. 5709, Rev. Codes). When our Civil Code became effective, July 1, 1895, the Miller note was then barred by the statute of limitations, and, by virtue of section 3792, above, the lien of the mortgage was altogether extinguished and the mortgage itself stripped of its vitality. (Henderson v. Grammar, 66 Cal. 332, 5 Pac. 488; San Jose Safe Deposit Bank v. Bank of Madera, 144 Cal. 574, 78 Pac. 5; Vandall v. Teague, 142 Cal. 471, 76 Pac. 35.)

The payment of $100 made by Miller in 1896, after the [2] principal obligation was barred, though it may have operated to create a new obligation binding in foro conscientiae, notwithstanding the statute, could not re-create the lien of the mortgage which was already fully extinguished, for “a mortgage of real property can be created, renewed or extended only by writing with the formalities required in the case of a grant of [403]*403real property,” (Sec. 3842, Civil Code; sec. -5.749, Rev. Codes; Wells v. Harter, 56 Cal. 342.) The payment of $100 in 1896 was in reality without any practical effect, for it is conceded that no payment was thereafter made and nothing was done to prevent the running of the statute for more than eight years.

But notwithstanding this mortgage ceased to be a lien upon [3] the property twenty years ago or more, it is a cloud upon plaintiff’s title, because it is ostensibly a mortgage valid upon its face and requires extrinsic evidence to demonstrate that it is in point of fact of no force or validity. (7 Cyc. 255.) If the principal obligation had been kept alive constantly by payments or otherwise, the lien of the mortgage would have continued. It requires extrinsic evidence to disclose that the debt is barred and the lien therefore extinguished.

Counsel for appellants insist that the complaint filed by Miller in 1906 constituted such an acknowledgment of the debt, within the meaning of section 6472, Revised Codes, as to take it without the statute. If the inquiry were a material one, we should doubt the soundness of counsel’s position (Braithwaite v. Harvey, 14 Mont. 208, 43 Am. St. Rep. 625, 27 L. R. A. 101, 36 Pac. 38); but it is not, for, as we have observed before, the reinstatement of the debt in 1906 could not vitalize the mortgage which was extinguished in 1895.

It may be conceded that as a general rule a court of equity will not cancel a mortgage of record at the suit of the mortgagor or his privies, merely because the principal obligation is barred by the statute of limitations.

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Cite This Page — Counsel Stack

Bluebook (online)
158 P. 1020, 52 Mont. 398, 1916 Mont. LEXIS 81, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berkin-v-healy-mont-1916.