Hibernian Banking Ass'n v. Commercial National Bank

41 N.E. 919, 157 Ill. 524

Opinion

Mr. Justice Carter

delivered the opinion of the court:

In Hibernian Banking Ass.v. Commercial Nat. Bank, (infra, p. 576,) on appeal from the Appellate Court, we held that a freehold was involved in this controversy, and affirmed the judgment of that court dismissing the appeal thereto taken. It is unnecessary to repeat the reasons here for that decision, but the conclusion is, that the writ of error was properly issued to bring the record of the circuit court directly to this court for review, on the ground that, the complainant’s claim of the title in fee being put in issue by the pleadings and controverted on the trial, a freehold is involved in the case.

If the Commercial National Bank became the owner in fee of the lands in question by the sheriff’s deed of January 24, 1884, the lien of the Hibernian Banking Association created by Caulfield’s deed to Clarke, absolute in form but in fact given as a mere security for a debt due the banking association, was cut off, and became a cloud on the title of the Commercial Bank. If, however, as insisted by plaintiff in error, the sheriff’s deed, taken in connection with the agreement between the Caulfields and the Commercial Bank and the deed of the Caulfields to said bank of March 1, 1883, must be construed to be a mortgage, then it is plain that the lien of plaintiff in error created by the deed to Clarke was not lost and the title of defendant in error was not clouded thereby.

It appears to us very clear that the Commercial Bank did not obtain absolute title to the property by the sheriff’s deed. On March 1,1883, about five months after the sheriff’s sale and about ten months before obtaining the sheriff’s deed, the Commercial Bank took from the Caulfields a deed for the property, and at the same time entered into an agreement reciting that the grantors owed the grantee $23,000, with interest at six per cent, to be computed from January 1, 1883, and had by said deed conveyed the property, one-third of which belonged to Mr. Caulfield and two-thirds to Mrs. Caulfield, to the bank to secure said iudebteduess. The agreement also recited the sheriff’s sale of October 23,1882, of Caulfield’s interest in the property, and that if no redemption should be made within fifteen months the bank would be entitled to a sheriff’s deed. It then provided that the bank should procure the sheriff’s deed, and a settlement should- be made by allowing the bank the $23,000 and interest, and all advances made to protect the title, with interest thereon, and the aggregate should be paid by having the lots into which the property was divided, appraised', the appraisers to be appointed by the parties, and a sufficient number of such lots set off to the bank, at their appraised value, to pay its debt, and the remaining lots should be conveyed to Mrs. Caulfield, or to such person as she should direct. If the lots, at their appraised value, should not be sufficient to pay the debt, then Caulfield was to pay the deficiency. It was proved that the amount paid by the bank for the property at the sheriff’s sale entered into and formed a part of the indebtedness of §23,000 mentioned in the agreement. No appraisement of the lots or conveyance of any of them to Mrs. Caulfield was ever made. While it appears that the Commercial Bank took possession after obtaining the sheriff’s deed, paid taxes and purchased tax titles, the effect of the evidence is that it never treated its title as adverse to Caulfield. On the contrary, by its accounts and by its intervention in the Warder suit, where, by cross-bill, it sought to foreclose its lien on the property as against the Caulfields, and to have the amount of its debt as it then stood adjudicated and the property sold to pay it, and by its purchase of the property at the master’s sale under the decree in the Warder suit, which decree preserved the equity of redemption of Mrs. Caulfield in the whole property, the bank, in effect, treated its various titles as mere security for its demands, and in nowise as an absolute title in fee hostile to Caulfield. The fact that the equity of redemption was preserved to Mrs. Caulfield, and not to Mr. Caulfield, did not change the effect of the instruments from that of a mortgage to that of a title in fee simple. They still constituted a mere lien to secure the indebtedness specified. The bank could not treat the sheriff’s deed as a complete divestiture of Caulfield’s title, and still hold against him, as an indebtedness, the amount it had paid for his interest at the sheriff’s sale, with interest thereon, and as being secured by its lien on the land acquired by the deed and agreement of March 1, 1883.

We are inclined to agree with, the conclusions of the master in his report to the court below, that the legal effect of these transactions was, that the Commercial Bank redeemed the interest of Caulfield in said lands from the sheriff’s sale, for him, and charged against him the moneys paid in making such redemption, and that the certificate and sheriff’s deed became merged in the general claim of the bank, and, together with the agreement and deed of March 1, 1883, constituted its lien on the property to secure the re-payment of its debt. We cannot see how the money paid by the Commercial Bank for Caulfield’s interest at the sheriff’s sale could be treated, as the same was treated, as an indebtedness of his to the bank, without treating it as money advanced by the bank for him to redeem from the judgment sale. Had the Caulfields paid the whole demand of the bank after the bank received the sheriff’s deed, without carrying out the provisions respecting the appraisement and division of the property, (and that provision never was carried out,).such payment would have amounted to a redemption of the whole property, and equity would have compelled a restoration of the title as it stood before the sale. It may be that for laches of the banking association, or other equitable causes, the lien of the plaintiff in error, under its deed to Clarke, became postponed to that of the Commercial National Bank; but we are of the opinion that it was not cut off by the sheriff’s deed operating as vesting title in fee simple absolute in said bank.

It is also contended by defendant in error that plaintiff in error has lost its mortgage lien by reason of its failure to foreclose the same within-ten years after the right of action accrued under the 11th section of the Limitation act, which provides that “no person shall commence an action or make a sale to foreclose any mortgage, or deed of trust in the nature of a mortgage, unless within ten years after the right of action or right to make such sale accrues.” Aud it is said that inasmuch as Caulfield’s interest in the laud had passed to defendant in error, (if not by the sheriff’s deed, then by the master’s sale and deed under the decree in the Warder suit,) and inasmuch as plaintiff in error had from Caulfield a power of attorney to confess judgment, and inasmuch as the court retained jurisdiction to foreclose the mortgage of plaintiff in error notwithstanding Caulfield’s departure from the State, no reason remains why the exception contained in section 18 should apply or the time of his absence from the State be deducted; and that plaintiff in error, having commenced no action to foreclose or enforce its lien within ten years after the right to do so accrued, when it might have done so at any time, is now barred from such right by said 11th section, and that it has become immaterial to inquire whether the indebtedness was barred or not.

We have seen that by the agreement and deed of March 1, 1883, those instruments and the sheriff’s deed became, in the hands of defendant in error, a mere mortgage, and while it was adjudged in the Warder suit, when the decree was rendered, in 1890, that Caulfield’s title had vested in defendant in error under the sheriff’s deed, such decree could not affect the lien of plaintiff in error, it not being a party to the suit. But aside from this line of argument, it has been repeatedly decided by this court that the mortgage is a mere incident of the debt, -and is barred when the debt is barred, and not before, and that the rule remains the same since the enactment of section 11. (Schifferstein v. Allison, 123 Ill. 662; VonCampe v. City of Chicago, 140 id. 361, and cases there cited.) It follows, therefore, that if Caulfield’s indebtedness to plaintiff in error, secured by the mortgage, was not barred, the mortgage was not barred. While it may be true that the reason for the exception created by section 18 of the statute does not exist in full force when applied to this case, inasmuch as the absence of Caulfield from the State did not prevent foreclosure of the mortgage or the obtaining of a personal judgment against him, by confession, prior to his death, still, as the case comes within the express language of the exception, we cannot assume the province of the legislature and say that the exception ought not to apply, and that although having departed from the State after the cause of action accrued, and residing in another State, he, having substituted certain supposed equivalents for his presence in this State, should be treated as present, within the meaning of the statute. Bedell v. Janney, 4 Gilm. 193; Hazell v. Shelby, 11 Ill. 9; Stevenson v. Westfall, 18 id. 209; Pells v. Snell, 130 id. 379; Bassett v. Bassett, 55 Barb. 505 ; Rockwood v. Whiting, 118 Mass. 337; Angell on Limitations, (6th ed.) secs. 485-487, 194; Wood on Limitations, sec. 252; Sacia v. DeGraaf, 1 Cow. 356; McIver v. Ragan, 2 Wheat. 25; Amy v. Watertown, 130 U. S. 320; Parker v. Kelly, 61 Wis. 552; Pryor v. Reyburn, 16 Ark. 671; Powell v. Patterson, 76 Me. 196; Fairbanks v. Long, 91 Mo. 628 ; Dozier v. Ellis, 28 Miss. 730.

The principle contended for by defendant in error does not come within the doctrine that an exception may be engrafted upon the statute by what is called invincible necessity, — such, for instance, as civil war. It is, however, contended, that the debt was barred under the statutes of Dakota, which provided, first, that actions in such cases must be brought within six years; second, that in case of the death of the debtor before the expiration of the time limited, actions might be brought against the administrator within one year after his appointment, and not thereafter; and third, that administration was had and closed in Dakota on the estate of Caulfield, and the claim of plaintiff in error was not presented or allowed within the time limited, and that by the statutes of that then territory all claims not so presented and allowed within the time so limited were forever barred; and it- is said that the debt, being so barred in Dakota, is, by virtue of the 20th section of our Limitation act, barred here. We cannot regard either position relied upon as tenable. This suit was begun in March, 1892, and it is undisputed that Caulfield removed to and became a permanent resident of Dakota in October, 1878, and died there in December, 1887. Interest was paid on the note which the'mortgage was given to secure, to July 30, 1874, and neither the debt nor the right to foreclose would, under the 11th or 16th sections of our statute, be barred until ten years after such payment of interest. But after the cause of action accrued in this State, Caulfield departed from this State and took up his residence in Dakota, and by section 18, and the construction given to it in Wooley v. Yarnell, 142 Ill. 442, the time of his absence cannot be counted as any part of the time limited for the commencement of the action, and section 20 does not apply for the reason that the cause of action accrued in this State before his departure, and it could not be said to have arisen in Dakota. The six year statute of Dakota therefore had no application. Deducting the period of his absence, ten years had not elapsed when the suit was begun, and the bar of the statute of this State had not become complete.

It is said, however, that when Caulfield died his absence terminated, and that a cause of action then arose in Dakota against his administrator, and no action having been there commenced or claim filed against his estate, by virtue of the statute of Dakota the debt was barred there, and under said 20th section is barred here. It is true that only his absence up to the time of his death can be deducted, for when he died the section of the statute providing for deducting such absence ceased to apply, except as to the time of such absence preceding his death, and the time began to run again under the ten year section, as before his departure from the State, unless prevented by the 19th section of our statute, as contended by plaintiff in error. His death did not prevent the running of the statute, unless the statute itself so provided. (Bonney v. Stoughton, 122 Ill. 536). The 19th section is as follows: “If a person against whom an action maybe brought die before the expiration, of the time limited for the commencement thereof, and the cause of action survives, an action may be commenced against his executors or administrators after the expiration of that time, and within one year after the issuing of letters testamentary or of administration.”

It is urged by counsel for plaintiff in error that the statute did not commence to run again at all after the death of Caulfield. They say: “As no administration has been taken out in this State, the running of the statute never began after the death of Caulfield. The foreign administration is immaterial on this point. Our statute relates to administration in this State, and this only would be equivalent to the return of the non-resident or his representative. — See Gallup v. Gallup, 11 Metc. 445.” Whether counsel are correct in this contention, or whether it is a sufficient answer to it to invoke the familiar rule that one disability cannot be tacked to another to prevent the running of the statute, it is not necessary here to decide, for, as before said, if it be conceded that the statute began to run again at Caulfield’s death, the ten year bar did not become complete. Nor can it be said that because of his death any cause of action arose against his administrators which did not before exist against him. One provision of the Dakota statute was, that in case of death before the bar had become complete a year should be allowed in which to bring suit after the administrator was appointed. This was a mere enlargement of the time limited by other provisions because of the death of the debtor. But in this case the six years allowed by the Dakota statute in which to bring suit had expired before his death, and it could not be said that a cause of action arose on his death against his administrator when the same cause of action was barred against him before his death. The question is not simply whether or not the debt was barred by the laws of Dakota, but also whether or not the cause of action arose in Dakota. Under the construction given to the statute in Wooley v. Yarnell, supra, it is plain that the cause of action did not arise in Dakota, but in Illinois. In that case it was said that the doctrine was the same as announced in Hyman v. Bayne, 83 Ill. 256, and Hyman v. McVeight, (unreported, but mentioned in 87 Ill. 708,) and that what was said in the latter case “must be limited and confined to the facts presented by the record then before the court, — that neither the maker nor the payee of the note, at the time the cause of action arose, resided in Illinois.”

No sufficient showing is made by the bill or proof to establish title in defendant in error by virtue of the certain tax sales and deeds mentioned in the record, and we do not understand counsel to contend very seriously that complainant’s title is so derived, or that it held possession or paid taxes under such title as color of title made in good faith for seven successive years. As we understand the record, the disbursements for these tax titles were charged up against the Caulfields as a part of their indebtedness to defendant in error, one of its witnesses testifying that these disbursements were included in the $23,000 mentioned in the agreement of March 1, 1883. And it will also be noticed that under that agreement all disbursements for taxes, with interest thereon, were to be added to the $23,000. None of these moneys having been repaid, as contemplated by the agreement, they were carried forward and set up as a charge against the Caulfields and the property in the Warder suit, and the property was, under the decree in that case, sold to reimburse defendant in error for all of its outlays. No argument is needed to show that such payment of taxes for seven successive years could not, under the statute, coupled with the possession and title held by defendant in error, ripen into an independent title.

Counsel have at some length discussed the question of laches, and it is insisted on the part of defendant in error that even if the mortgage lien is not barred by the Statute of Limitations, it is barred by the laches of plaintiff in error. Whether or not, under proper allegations of the bill, the doctrine of laches could be invoked as applicable to such a state of facts shown by the proof, we shall not consider, for there is no allegation in the bill under which any such relief could be granted, even if otherwise proper. Zeigler v. Hughes, 55 Ill. 288.

When the defendant in error received the master’s deed to the land in controversy under the decree and sale in the Warder suit, it became the owner of the title to the property, and the contract of June 10, 1891, whereby Mrs. Caulfield was given the right to re-purchase within a certain time at a certain price, did not convert the master’s deed into a,mortgage. There was no indebtedness of Mrs. Caulfield to be secured by any such mortgage, and by the contract she expressly released and quit-claimed to the bank, in case of her failure to redeem under the decree, any and all interest which she might have in the property, and it was expressly provided that the contract should not continue any such interest in her, but all such interest, should be forever forfeited and abandoned, and that she did not take or acquire any interest in the land by the contract except the right to re-purchase. We cannot, upon the face of these papers, hold that by this contract and deed the bank became the mere mortgagee of this land. We are of the opinion that defendant in error showed sufficient title in itself to sustain the bill, had it been able to support its allegations respecting the mortgage lien of plaintiff in error. Failing, however, in the latter respect, it was not entitled to the decree which it secured.

The decree of the circuit court will be reversed and the cause remanded.

Reversed and remanded.