Palmer v. Butler

36 Iowa 576

• Court: Supreme Court of Iowa
• Decided: June 13, 1873
• Status: Published

Opinion

Miller, J.

— The first mortgage sought to be foreclosed was executed October 28, 1857, to secure a note of same date for $10,000, payable three years after date, falling due with days of grace added, October 31, 1860. This action was commenced on the 7th day of December, 1871, more than eleven years after a cause of action acrued thereon.

To remove the bar of the statute the plaintiff claims that the cause of action was duly revived by Bichard B. Hill at the time of tbe execution by bim of tbe mortgage made to Henry Hill and Julius A. Palmer, trustees, dated November 1, 1862, to secure tbe note of Wm. Allen.

It is admitted of record tbat at tbe date of tbe deed to defendant Butler, tbe following mortgages on tbe property in controversy were duly recorded in Scott county, Iowa:

R. B. Hill et ux. to Peter Wainright.

Dated October 28, 1857.

Recorded January 5, 1858.

Being tbe mortgage in controversy, to secure against tbe payment of said note of $10,000.

R. B. Hill et ux. TO Henry Hill & Julius Palmer, Trustees.

Dated Nov. 1, 1862.

Recorded May 29, 1863.

To secure tbe Wm. Allen note of $10,000, and subject to tbe Peter Wainrigbt mortgage above.

R. B. Hill et ux. to Rev. P. Fisk.

Dated May 27, 1862.

Recorded May 26, 1863.

To secure $5,800, January 15, 1861.

R. B. Hill et ux. .to . American Tract Society.

Dated March 31, 1865.

Recorded August 12, 1865.

To secure $1,000, payable in five years, interest at six per cent.

R. B. Hill et ux. to American Tract Society.

Dated October 16, 1865.

Recorded October 28, 1865.

Subject to $29,000; to secure $3,000, October 1, 1870 ; interest six per cent.

R. B. Hill et ux. to Linus Childs, Trustee.

Dated October 17, 1865.

Recorded, October 28, 1865.

To secure $3,000, subject' to prior incumbrances, $32,000; recorded in Scott county.

It is also admitted of record as follows :

“ That the said Bichard B. Hill was adjudged a bankrupt May 30, 1868, under the bankrupt act of March 2, 1867, and was granted a discharge March 5, 1869.

“ That after the application of the said B. B. Hill for discharge in bankruptcy, to wit: July 14, 1868, the Hon. J. M. Love,' judge of the United States district court, by deed of that date conveyed said real estate to Ira M. Gifford, assignee.

“ That the said Ira M. Gifford, assignee, by deed of date October 1, 1868, conveyed said real estate to the said Henry Hill (Butler’s grantor).

“ That in neither of said deeds last above mentioned, viz.: deed from Love to Gifford; also deed from Gifford to Henry Hill, is there any mention made of any existing incumbrance.

“ That execution of said note and mortgage, of date Oct. 28, 1857, is admitted, and also the due assignment and transfer to plaintiff.

“ That the mortgage of date November 1, 1862, on the said property, executed by Bichard B. Hill et ux., to Henry Hill and Julius A. Palmer, trustees, to. secure the note of W. Allen of same date for $10,000 (being one of the notes and mortgages sought to be foreclosed in this suit), recites as follows, to wit:

“ The above-described premises being already subject to a mortgage now in the hands of the before-named Henry Hill and Julius A. Palmer, trustees.

“ That the deed from Henry Hill et ux. to Peter Butler of date August 1, 1870, under which the said Butler claims title to said mortgaged premises, recites as follows, to wit: ‘ Subject, however, to a mortgage to secure the sum of $35,000, which said mortgages are duly recorded in the office of the recorder of said Scott county, and to interest thereon, and subject to the State and county taxes for' the year 1868, and also the taxes for the present year.’ ”

I. The cause of action on the first mortgage is barred by the statute of limitations unless the recital above quoted from the second mortgage has the effect to revive it. Under our statute, “ causes of action founded on contract are revived by an admission that the debt is unpaid, as well as a new promise to pay the same. But such admission or new promise must be in writing, signed by the party to be charged thereby.” Revision, § 2751; Penley v. Waterhouse, 3 Iowa, 418. The question, therefore, arises whether the recital in the mortgage of November 1, 1862, is such an admission as, under the statute, revives the cause of action on the first mortgage.

It is urged in argument by appellant’s counsel, that an admission which will revive a cause of action must be made to the party seeking its benefits, or to some one authorized to act for him, and that an admission to a mere stranger is insufficient. It is claimed that because Henry Hill and Julius A. Palmer held the first mortgage as trustees under the will of Joshua Sears, at the time of the execution to them by Richard B. Hill, of the mortgage containing the recital: “ the above-described premises being already subject to a mortgage now in the hands of the before-named Henry Hill and Julius A. Palmer, trustees,” that as to such recital or admission the said Hill and Palmer were mere strangers. We deem it unnecessay to enter into a discussion of the legal proposition contended for by appellant, since we are clearly of the opinion that the parties to whom the .admission was made were not strangers thereto. Hill and Palmur as trustees were the holders of the mortgage of October, 1867, at the time Richard B. Hill executed to them the mortgage of November 1, 1862, in which he recited that the latter mortgage was subject to the former one “ already in their hands,” and the fact that Hill and Palmer held the first mortgage as trustees under the will of Sears, and took the second as trustees under the will of Bowles, cannot have the effect to make them strangers to the admission. Hill and Palmer were agents of both estates at the same time and at the time the admission was made, so that it can make no difference if they held the first security for the benefit of one estate and took the second for the benefit of the other. The admission, whatever its effect, was made to the persons who represented those for whose benefit it was made. See Mahan v. Cooley, decided at the present term.

II. Is the recital in the mortgage of November, 1862, sufficient as an admission to revive the action ? It is in writing and signed by the party to be charged, and we think it is such an admission of the existence of the previous mortgage as implies a promise to pay the same. The language used, namely: “ the above-described premises being already subject to a mortgage now in the hands of the before-named Henry Hill and Julius A. Palmer, trustees,” most clearly implies that the mortgagor thereby admitted that Hill and Palmer had in their hands a prior mortgage which was unpaid, and that he thereby agreed that it should be first paid and satisfied from the land mortgaged. It is certainly a clear acknowledgment of a present indebtedness upon the prior mortgage, from which the law implies a promise to pay. Penley v. Waterhouse, supra, and cases cited.

III. The next inquiry is whether Butler, who claims title to the property under a deed from Henry Hill and wife, of date August, 1870, is in a position to claim the protection of the statute of limitations. It has been held by this court that a new promise to pay a debt barred by the statute, made by the mortgagor after he has conveyed the mortgaged premises, will not revive the right of action for foreclosure against the grantee of the mortgagor, but that such grantee may protect himself against the foreclosure by pleading the statute, notwithstanding the new promise of the mortgagor. Day v. Baldwin, 34 Iowa, 380. In the case before us, however, the acknowledgment of the debt by the mortgagor was made long prior to the appellant’s purchase of the mortgaged premises. The mortgage which it is sought to revive, as well as the subsequent one containing the acknowledgment, were both duly recorded prior to the time when the appellant acquired any interest in the premises. This presents the question in a new and different aspect from Day v. Baldwin, supra, and has never been decided by this court.

In Heyer et al. v. Pruyn et al., 7 Paige’s Ch. 465, which was a bill filed to foreclose a mortgage against the mortgagor and others, where the purchaser of a farm, which was subject to a prior mortgage, given by the former owner thereof, and duly recorded, had, within twenty years previous to the filing of the complainant’s bill to foreclose the mortgage, recognized the existence of the mortgage as a valid and subsisting incumbrance upon the premises; it was held that neither such purchaser, nor those who had derived their titles to the premises under him, subsequent to such recognition, could set up the statute of limitations in bar of the suit, although the mortgage had been due more than twenty years. And it was further held that a purchaser of mortgaged premises, who, at the time of his purchase, has either actual notice of the mortgage, or constructive notice thereof by means of the registry, is bound by a previous acknowledgment of the person under whom he claims, within the period of the statute of limitations. The same doctrine is held in Hughes v. Edwards, 9 Wheat. (U. S.) 490. These cases are in point in this case, and, in our opinion, are correct enunciations of the law. If Richard B, Hill, the mortgagor, had continued to be the owner of the premises mortgaged, it is very evident that he could not have set up the lapse of time as a bar to plaintiff’s action; that his acknowledgment in the mortgage of November, 1862, would have so revived the action against him that the statute could not have been successfully interposed. The appellant, Butler, deriving his title to the property through or under Richard B. Hill, is bound by his previous admission as contained in the mortgage of November, 1862. Mahan v. Cooley, supra. He stands in the shoes of the mortgagor. He acquired all the title and interest of the latter and took the premises subject to all existing liens thereon. When he purchased, the cause of action on the lien of the first mortgage had been duly revived by the written admission of the mortgagor, which became as binding upon the purchaser as upon the mortgagor.

It is insisted by appellant’s counsel that the cases cited are not applicable to the case at bar, for the reason that, by the statutes under which they were decided, the legal title vested in the mortgagee, whereas in this State he acquires but a mere lien, the legal title remaining in the mortgagor.

We cannot see that the question decided is in any manner affected by this difference in the statutes. Where the question of possession is involved in a defense setting up the statute of limitations, the cases in New York and some other States in which the mortgagee holds the legal title, may not be entitled to weight in construing our statute of limitations; see Gower v. Winchester, 33 Iowa, 303; but upon the question before us this difference as to the interest held by the mortgagee in the land mortgaged can have no influence. As to the effect, upon a purchaser from the mortgagor, of an admission or new promise by the latter reviving the mortgage debt, it can make no difference whether the title or a mere lien is conveyed by the mortgage.

We therefore hold, that the appellant having purchased the mortgaged premises with constructive notice of both mortgages, and after the mortgagor had, by a valid admission to the effect that the debt was unpaid, revived the cause of action on the first mortgage, within ten years previous to the commencement of the suit, he stands in no better situation than the mortgagor, from whom he derives his title, and cannot successfully interpose the bar of the statute.

As this holding is decisive of the case, we need not determine the other question which has been ably presented by counsel, namely, whether appellant is estopped by the recitals in his deed from Henry Hill.

The judgment and decree ot the district court will be

Affirmed.