Mitchell, J.
This was an action to foreclose a mortgage on real estate. The only questions raised by the appeal áre whether the conclusions of law were justified by the findings of fact.
1. The first and second assignments of error go to the point that a certain trust (Exhibit A of the complaint) attempted to be created by Thompson, Kingsley, and Lane, and under which they assumed to execute the mortgage in question, is void.
To this there are at least three complete answers: First. The only interest which the defendants claim in the property is under [72]*72this very trust, either as trustees or as the grantees of the trustees; and the ground of their attack on the mortgage is not that it is, in and of itself, invalid, but that the mortgagors had no title or interest in the land to convey. The position of the defendants is suicidal; for, if they are right in their contention, they themselves have no interest either in the property or in the result of this action. The mortgagor, and those claiming under him, are estopped to thus deny his title. The decree of foreclosure binds his interest, whatever it may be, and.nothing more, and to such a decree the mortgagee is entitled. Second. If Exhibit A is not valid either as a trust or a power in trust, then Thompson, Kingsley, and Lane remained the absolute owners of the land under the conveyance from Wykoff, and as such, of course, had power to execute the mortgage. The finding is that the allegation of the complaint that, “at the time of the execution of said instrument, [Exhibit A,] they owned all the lands therein described,” is true. The conveyance to them from Wykoff was in fee simple, and it nowhere appears that he conveyed the lands for the purposes of any such trust, or that the declaration of trust was in pursuance of, or any part of, an agreement between him and them. The mere fact that the instruments are of the same date does not, of itself, establish any such connection between the two. This declaration of trust may have been the voluntary act of Thompson, Kingsley, and Lane, alone, or the result of some arrangement between them and the proposed beneficiaries of the trust. The recital in the instrument (to which Wykoff was not a party) that the title had been placed in their names to enable them “to carry out with greater facility the object aforesaid, [the improvement and development of the land as a townsite,] but in trust for the parties contributing the funds aforesaid,” is entirely consistent with such a hypothesis. Third. But, in any view of the case, Exhibit A, if not valid as a trust, under 1878 G. S. ch. 43, § 11, is at least valid, under section 14 of the same chapter, as a power in trust to convey or mortgage the lands. 1878 G. S. ch. 44, § 2, defines a power as ' “an authority to do some act in relation to lands, or the creation of estates therein or of charges thereon, which the owner granting or reserving such power might himself lawfully perform.”
[73]*732. The third assignment of error goes to the point that, oh the facts found, the mortgage had been fully paid. The bond secured by the mortgage, executed December 24, 1569, was due and payable July 1, 1871, with interest at twelve per cent, per annum, but contained no provision as to the rate of interest after maturity. The principal not having been paid at maturity, the obligors continued to pay interest regularly, at the rate of twelve per cent., until 1877. These payments were made voluntarily, and, as the court finds, expressly made and received as interest, and applied as such, with the consent of both parties. Finally, in 1877, a dispute having arisen as to the right of the plaintiff to any more than seven per cent, after maturity, they settled the matter by agreeing that the payments already made and applied as interest should remain unchanged, but that thereafter the plaintiff should receive only seven per cent.
The contention .of the defendants is that inasmuch as, under the laws of this state in force at that time, the bond would only draw seven per cent, after maturity, therefore the excess paid over that rate should be reapplied on the principal, which, if done, would more than pay the bond in full.
It seems to us that this question is settled adversely to defendants’ contention by several decisions of this court, under the statutes then in force, to the effect that if there is paid voluntarily and without any mistake of fact, as and for interest, a greater rate than is legally enforceable, the appropriation thus voluntarily made by the parties will not be disturbed. It will stand as any other payment which a person, without any obligation to do so, but with full knowledge of the facts, chooses to make. Woolfolk v. Bird, 22 Minn. 341; Taylor v. Burgess, 26 Minn. 547, (6 N. W. Rep. 350;) Cornell v. Smith, 27 Minn. 132, (6 N. W. Rep. 460.)
And there is no distinction in this respect between a case like the present, where the debtor is seeking a reapplication of such excess in reduction of the amount due upon the demand, and one where he seeks to recover it back in an action brought for that purpose. Cornell v. Smith, supra. Neither is there any ground for the distinction attempted to be made between the cases cited and the present one, because in the former there was an agreement in form, although not [74]*74binding, to pay the larger rate of interest. In either case the important fact remains that the party has voluntarily paid what he was under no obligation to pay. Neither does the fact that the obligors may have been trustees at all affect the rule. In all dealings with the world, they were the representatives of the beneficiaries, and had full control of the business and property. The rule is equally applicable against subsequent purchasers from the mortgagor. They have no greater rights in this respect than he had, even though they purchase without notice of the actual state of the accounts between him and mortgagee. The record does not purport to show how much has been paid on the mortgage, or how the account stands between the par'ties to it. Of course, a subsequent purchaser or incumbrancer has a right to rely on the record, as to the original aniount of the mortgage; but he takes his chances as to how much, if anything, has been paid, and buys subject to the state of the account as it then exists between mortgagor and mortgagee, and has no better or other right than the former in that respect, unless he shows some equity peculiar to himself. In so far as Whittacre v. Fuller, 5 Minn. 508, (Gil. 401,) holds to the contrary, it has been long since virtually overruled, and is no longer the law in this state. See Lash v. Edgerton, 13 Minn. 210, (Gil. 197;) Martin v. Lennon, 19 Minn. 75, (Gil. 45.)
3. Defendants’ last contention is that the right to foreclose was barred by the statute of limitations; the action not having been commenced until May, 1889, — more than fifteen years after the maturity of the bond secured by the mortgage.
Partial payments, however, were made every year down to 1886, and one as late as 1889; and the question is whether these payments tolled the statute, as to the mortgage. The general, if not the universal, rule is that a partial payment or an acknowledgment of the debt which would prevent the statute from running against it will also prevent the statute from running against the remedy on the security; and there is certainly nothing in our statute of limitations indicating an intention to establish any new and different rule.
Free access — add to your briefcase to read the full text and ask questions with AI
Mitchell, J.
This was an action to foreclose a mortgage on real estate. The only questions raised by the appeal áre whether the conclusions of law were justified by the findings of fact.
1. The first and second assignments of error go to the point that a certain trust (Exhibit A of the complaint) attempted to be created by Thompson, Kingsley, and Lane, and under which they assumed to execute the mortgage in question, is void.
To this there are at least three complete answers: First. The only interest which the defendants claim in the property is under [72]*72this very trust, either as trustees or as the grantees of the trustees; and the ground of their attack on the mortgage is not that it is, in and of itself, invalid, but that the mortgagors had no title or interest in the land to convey. The position of the defendants is suicidal; for, if they are right in their contention, they themselves have no interest either in the property or in the result of this action. The mortgagor, and those claiming under him, are estopped to thus deny his title. The decree of foreclosure binds his interest, whatever it may be, and.nothing more, and to such a decree the mortgagee is entitled. Second. If Exhibit A is not valid either as a trust or a power in trust, then Thompson, Kingsley, and Lane remained the absolute owners of the land under the conveyance from Wykoff, and as such, of course, had power to execute the mortgage. The finding is that the allegation of the complaint that, “at the time of the execution of said instrument, [Exhibit A,] they owned all the lands therein described,” is true. The conveyance to them from Wykoff was in fee simple, and it nowhere appears that he conveyed the lands for the purposes of any such trust, or that the declaration of trust was in pursuance of, or any part of, an agreement between him and them. The mere fact that the instruments are of the same date does not, of itself, establish any such connection between the two. This declaration of trust may have been the voluntary act of Thompson, Kingsley, and Lane, alone, or the result of some arrangement between them and the proposed beneficiaries of the trust. The recital in the instrument (to which Wykoff was not a party) that the title had been placed in their names to enable them “to carry out with greater facility the object aforesaid, [the improvement and development of the land as a townsite,] but in trust for the parties contributing the funds aforesaid,” is entirely consistent with such a hypothesis. Third. But, in any view of the case, Exhibit A, if not valid as a trust, under 1878 G. S. ch. 43, § 11, is at least valid, under section 14 of the same chapter, as a power in trust to convey or mortgage the lands. 1878 G. S. ch. 44, § 2, defines a power as ' “an authority to do some act in relation to lands, or the creation of estates therein or of charges thereon, which the owner granting or reserving such power might himself lawfully perform.”
[73]*732. The third assignment of error goes to the point that, oh the facts found, the mortgage had been fully paid. The bond secured by the mortgage, executed December 24, 1569, was due and payable July 1, 1871, with interest at twelve per cent, per annum, but contained no provision as to the rate of interest after maturity. The principal not having been paid at maturity, the obligors continued to pay interest regularly, at the rate of twelve per cent., until 1877. These payments were made voluntarily, and, as the court finds, expressly made and received as interest, and applied as such, with the consent of both parties. Finally, in 1877, a dispute having arisen as to the right of the plaintiff to any more than seven per cent, after maturity, they settled the matter by agreeing that the payments already made and applied as interest should remain unchanged, but that thereafter the plaintiff should receive only seven per cent.
The contention .of the defendants is that inasmuch as, under the laws of this state in force at that time, the bond would only draw seven per cent, after maturity, therefore the excess paid over that rate should be reapplied on the principal, which, if done, would more than pay the bond in full.
It seems to us that this question is settled adversely to defendants’ contention by several decisions of this court, under the statutes then in force, to the effect that if there is paid voluntarily and without any mistake of fact, as and for interest, a greater rate than is legally enforceable, the appropriation thus voluntarily made by the parties will not be disturbed. It will stand as any other payment which a person, without any obligation to do so, but with full knowledge of the facts, chooses to make. Woolfolk v. Bird, 22 Minn. 341; Taylor v. Burgess, 26 Minn. 547, (6 N. W. Rep. 350;) Cornell v. Smith, 27 Minn. 132, (6 N. W. Rep. 460.)
And there is no distinction in this respect between a case like the present, where the debtor is seeking a reapplication of such excess in reduction of the amount due upon the demand, and one where he seeks to recover it back in an action brought for that purpose. Cornell v. Smith, supra. Neither is there any ground for the distinction attempted to be made between the cases cited and the present one, because in the former there was an agreement in form, although not [74]*74binding, to pay the larger rate of interest. In either case the important fact remains that the party has voluntarily paid what he was under no obligation to pay. Neither does the fact that the obligors may have been trustees at all affect the rule. In all dealings with the world, they were the representatives of the beneficiaries, and had full control of the business and property. The rule is equally applicable against subsequent purchasers from the mortgagor. They have no greater rights in this respect than he had, even though they purchase without notice of the actual state of the accounts between him and mortgagee. The record does not purport to show how much has been paid on the mortgage, or how the account stands between the par'ties to it. Of course, a subsequent purchaser or incumbrancer has a right to rely on the record, as to the original aniount of the mortgage; but he takes his chances as to how much, if anything, has been paid, and buys subject to the state of the account as it then exists between mortgagor and mortgagee, and has no better or other right than the former in that respect, unless he shows some equity peculiar to himself. In so far as Whittacre v. Fuller, 5 Minn. 508, (Gil. 401,) holds to the contrary, it has been long since virtually overruled, and is no longer the law in this state. See Lash v. Edgerton, 13 Minn. 210, (Gil. 197;) Martin v. Lennon, 19 Minn. 75, (Gil. 45.)
3. Defendants’ last contention is that the right to foreclose was barred by the statute of limitations; the action not having been commenced until May, 1889, — more than fifteen years after the maturity of the bond secured by the mortgage.
Partial payments, however, were made every year down to 1886, and one as late as 1889; and the question is whether these payments tolled the statute, as to the mortgage. The general, if not the universal, rule is that a partial payment or an acknowledgment of the debt which would prevent the statute from running against it will also prevent the statute from running against the remedy on the security; and there is certainly nothing in our statute of limitations indicating an intention to establish any new and different rule.
The limitation as to actions to foreclose mortgages (1878 G. S. ch. '66, § 11, as amended by Laws 1887, ch. 69) is one of the provisions [75]*75found under the general title, “The Time of Commencing Civil Actions;” and there is no reason for holding that the provisions of 1878 G-. S. ch. 66, §§ 15, 24, are not as applicable to actions of foreclosure as to any other civil actions.
By holding that an action to foreclose a mortgage is a personal action, and not a proceeding in rent, as we did in Whalley v. Eldridge, 24 Minn. 358, and Bardwell v. Collins, 44 Minn. 97, (46 N. W. Rep. 315,) and that under the provisions of 1878 Gr. S. ch. 66, § 15, the time during which the owner of the equity of redemption was a nonresident is to be excluded, as we did in Whalley v. Eldridge, supra; Rogers v. Benton. 39 Minn. 39, (38 N. W. Rep. 765;) and Foster v. Johnson, 44 Minn. 290, (46 N. W. Rep. 356,) — we virtually decided this case.
Whether a payment or other acknowledgment of the debt by the mortgagor, after he has parted with the property, will keep alive the lien of the mortgage, as against the purchaser, (a question upon which there is some conflict of authority,) it is not necessary to consider; for in the present case a payment was made within fifteen years, and before any of the appellant defendants had purchased from the trustees. And all the authorities hold that a purchaser from the mortgagor, with actual or constructive notice of the mortgage, will be bound by any previous acknowledgment of the debt by his grantor. Heyer v. Pruyn, 7 Paige, 465; Hughes v. Edwards, 9 Wheat. 489.
Judgment affirmed.
(Opinion published 53 N. W. Kep. 1130.)