Austin v. Steele , 68 Ark. 348 ( 1900 )

Hughes, J.,

(after stating the facts.) Prior to the passage of the act of March 15, 1889 (Sandels & Hill’s Digest, §§ 5094, 5095), the limitation of actions to foreclose mortgages or deeds in trust upon real estate was seven years, the period allowed by the statute within which to bring ejectment for the possession of the land. Section 4815, Sandels & Hill’s Digest, as to limitation of right to bring ejectment (act of January, 1851). “Seven years continuous adverse possession against the mortgagee will bar his action for the recovery of the mortgaged premises, or for foreclosure of the mortgage; but to constitute adverse possession against a mortgagee it is not sufficient that the mortgagor, or those holding under him, occupy, use, improve and pay taxes on the premises as their own absolute property, but the possession must be in open denial of the mortgagee’s title, and accompanied with such acts or declarations of the holders as are sufficient to put the mortgagee on notice that they claim and hold in hostility to his rights, and adversely to him. Until then the possession is consistent with his rights, and not adverse, and the statute does not begin to run.” Ringo v. Woodruff, 43 Ark. 469; Whittington v. Flint, 43 Ark. 504. This statute as to the question of limitation of the right to bring this action controlled until the passage of the act of March 15, 1889, which provided that “in suits to foreclose or enforce mortgages or deeds of trust it shall be sufficient that they have not been brought within the period of limitation prescribed by law for a suit on the debt or liability for the security of which they were given, etc.” Actions on promissory notes not under seal are barred if not brought within five years after the cause of action shall accrue. Section 4827, Sandels & Hill’s Digest.

The debt in this case was evidenced by a promissory note due on the 1st of August, 1887, secured by a trust deed upon the lands in controversy, and bearing date 13th of July, 1882, in which deed of ti’ust there was an express covenant to pay said debt. This trust deed was properly acknowledged and recorded on the 26th day of July, 1882, in the office of the clerk and recorder of Benton county, in which county said lands are situate. The note was assigned by Leonard, the payee, to the appellee, Steele, without recourse. On 20th October, 1883, Phoenix and wife conveyed of said real estate to Bichinger the southeast quarter of the southeast quarter of section 21, and the northeast quarter of the northeast quarter of section 28, in the aggregate 80 acres, in township 20 north, range 33 west. This piece was afterwards conveyed to the appellant, Austin.

The other 80 acres, the southwest quarter of the southwest quarter of section 22, and the northwest quarter of the northwest quarter of section 27, township 20 north, range 33 west, was, on the 8th of June, 1890, conveyed by Baker Phoenix and wife to Emily Halpin, to whom a properly executed and acknowledged deed was made on the 8th day of June, 1890, which was duly recorded in the office of the recorder of Benton county on the 31st of January, 1896. On the 29th of January, 1896, Emily Halpin conveyed the same tract to appellant, Austin, and on 31st January, 1896, the deed to him therefor was recorded in the office of the recorder of Benton county, and the appellant entered into possession of the laud, and was in possession thereof when this suit was commenced. This possession was, however, not adverse.

On the 11th day of July, 1887, before the debt secui’ed was due, and before the statute had begun to run, and the debt being unpaid, by an agreement in writing between Baker Phoenix and W. F. Leonard, the payee and owner of the note, the time for the payment of the same was extended ñve years, or until the 1st of August, 1892. This made the date at which the right of action would have been barred after the 1st of August, 1897, and this suit was brought on the 6th of January, 1897, nearly seven months before the right of action to foreclose the mortgage was barred.

We need not, therefore, notice the extension of the time of payment, made by Leonard at the instance of McAnally. It is true the extension of the time of payment made by agreement between Phoenix and Leonard was made after Phoenix had sold one 80 acres of the land, but Phoenix was liable to pay the note at the time of the extension of payment, and the purchasers from Phoenix had constructive notice of the mortgage on record, and in contemplation of law bought subject to it; in other words, bought only the equity of redemption. Barrett v. Prentiss, 57 Vt. 300; Hughes v. Edwards, 9 Wheaton (U. S.) 489, 498. His grantees could stand in no better condition than Phoenix himself. Hughes v. Edwards, 9 Wheaton, 489.

The statute requiring indorsement of payment on the record to prevent the bar of the statute does not apply. The mortgage was kept alive by written agreement, and in fact the covenant in the mortgage was not barred until 1897, the period of limitation on that covenant being ten years, it being a covenant in the mortgage under seal to pay the debt.

The decree is in all things affirmed.