Menzel v. Hinton.

Connor, J.

The Code, Sea 152(3) provides that the period prescribed for the commencement of “an action for the foreclosure of a mortgage or deed of trust for creditors with a power of sale of real property, where the mortgagor or grantor has been in possession of the property, within ten years after the forfeiture of the mortgage, or after the power of sale becomes absolute, or within ten years after the last payment on the same.” We are unable to discover in this language any period of time fixed within which the mortgagee is required to execute the power of sale. It will be observed that this section prescribed the time for bringing an action, (1) for the foreclosure of a mortgage, (2) or deed in trust for creditors with power of sale. The instrument executed by Foreman to Hinton is a mortgage containing a power of sale and is not within the language of the statute. It was not necessary for the mortgagee to institute an action for the foreclosure of the mortgage or the execution of the power; hence no time is fixed by the statute within which he must execute the power. The word “action” in the paragraph evidently has reference to the action for foreclosure and not to the execution of the power of sale, which requires no- action. To construe the statute otherwise would be to write into it language which we do not find there.

It must be conceded that the language used by this court in Hutaff v. Adrian, 112 N. C., 259, would seem to sustain the contention of the plaintiff. In that case, the bond for the security of which the mortgage was given was barred by the statute of limitations, the last payment thereon having been made more than ten years before the threatened execution of the power. The mortgagor applied for an injunction to restrain the sale by the mortgagee under the power, which was refused. The only question presented in that case was whether the mortgagor bad any equity upon which to base bis application for the interference of the court. The case is correctly decided. If the execution of the power was not barred by the statute, be was of course not entitled to an injunction; if it was barred and bis right to execute the power at an end, the legal title would not pass by the sale. It will be observed that this case was decided prior to the passage of the Act of 1893, Chapter 6, permitting action to be brought to remove a cloud from title. Clark, J., in that case says: “The court will therefore not interpose by an injunction merely to prevent a cloud upon tbe title.”

Hutaff v. Adrian, supra, is cited in Smith v. Parker, 131 N. C., 410. No. question was involved in that case regarding the Statute of Limitations, nor was it cited for that purpose. Conceding that an action in personam upon the note held by Hinton against Overton was barred by the statute, it would not affect the decision of this cause. It is well settled that an action upon the debt may be barred without affecting the right to maintain an ’action to foreclose the mortgage given to secure it. Capehart v. Dettrick, 91 N. C., 344. This, because the bar of the statute affects only the remedy and not the right Parker v. Grant, 91 N. C., 338; Rouss v. Ditmore, 122 N. C., 775; 19 Am. & Eng. Enc., 146; Sturges v. Crowningshield, 4 Wheat. 206. Hence it is that in an action upon a debt barred by the statute, for the payment of which a “now and continuing promise” is relied upon, the “cause of action” is the original debt, and the new promise is relied upon to repel the bar. Falls v. Sherrill, 19 N. C., 372. In Kull v. Farmer, 78 N. C., 339, the distinction betwen an action on a debt barred by the statute and one discharged in bankruptcy is pointed out; in the latter “the canse of action” is the new promise, the old debt being a consideration to support the promise. The reason for the' distinction is obvious. Prior to the adoption of our Code, there was no- statute of limitations in regard to sealed instruments, bonds and mortgages. There was a presumption of payment or satisfaction after the lapse of ten years. Rev. Code, Ch. 65, Sec. 18. This presumption affected the right as distinguished from the remedy. Copeland v. Collins, 122 N. C., 619; Long v. Clegg, 94 N. C., 764. Of course if the debt is paid or satisfied either by actual payment or by presumption of law, the mortgage which is incidental to the debt is likewise discharged and, in equity, the purpose for which the legal title was conveyed being accomplished, would be treated as discharged and the mortgagor, as the owner of the land. Ray v. Pearce, 84 N. C., 485; Edwards v. Tipton, 85 N. C., 480; Simmons v. Ballard, 102 N. C., 109. That such is not the law under our statute of limitations is settled by the uniform and unanimous decisions of this court:

In Long v. Miller, 93 N. C., 227 (233), Smith, C. J., said: “As to the enforcement of the mortgage. . . . there is no statutory bar. While the personal action is barred, the action to enforce the mortgage is not, as was decided in Capehart v. Dettrick.” Ijames v. Gaither, 93 N. C., 364.

In Arrington v. Rowland, 97 N. C., 131, Merrimon, J., said: “If the debt secured by the deed of trust had been independent of and apart from the deed, as contended by the defendants, the plaintiffs would have the right to have the trust executed. The court would not, in that case, deny the plaintiffs this remedy, simply on the ground- that the debt intended to be secured is barred by the Statute of Limitations.”

Clark, J., in Taylor v. Hunt, 118 N. C., 172, said: “The security, when not barred, is enforcible though action on the debt is barred.”

Smith, C. J., in Overman v. Jackson, 104 N. C., 4 (8), said: “Equally without support is the suggestion that if the debt is barred so must the mortgage to secure it be. These are essentially distinct as affected by the statute of limitations, as is held in Capehart v. Dettrick and Long v. Miller.”

In Jenkins v. Wilkinson, 113 N. C., 532, MacRae, J., said: “Indeed, though an action upon the note was barred by the statute, the lien created by the mortgage is not impaired in consequence of the running of the Statute of Limi-itations on the debt.”

In Hedrick v. Byerly, 119 N. C., 420 (422), Montgomery, J., said: “The statute of limitations defeats the remedy when the note is sued upon, but it does not discharge the debt, and although the debt may be barred by the statute, yet the mortgage by which the debt is. secured, if itself not barred, may be foreclosed by the mortgagee in proceedings for that purpose.” «

Thus we see it uniformly and without dissent held by this court that the right to' subject the mortgaged land to' the payment of the debt is not affected by the statutory bar of the debt. This is in accordance with the current of authority in other courts.

The question is clearly set forth and discussed in the case of Goldfrank v. Young, 64 Tex., 432, in which Stayton, A. J., said: “In reference to the operation of the statute of limitations in any matter in which the recovery of money is sought, the statute itself limits it to 'actions or suits, in courts’, and it provided within what time 'actions or suits’ in the different classes of cases may be brought, but it does not attempt to determine within what period any one must enforce a right which the debtor has placed it in the power of the creditor to enforce otherwise than by an 'action or suit in court’. The declaration that persons must institute 'suits or actions in courts’ within a fixed period to. enforce their claims, which can be enforced only in that manner, is not equivalent to' declaring that a creditor who has been given by contract a right and means by which he may enforce his claims otherwise than through the courts, shall not enforce it after the time at which he might institute an action or suit, without subjecting himself to the bar which would be urged by a plea of limitation. It is not always true that rights which cannot be enforced throtigh the courts are valueless, nor that contracts which the courts can not enforce are invalid.” In this case the Supreme Court of Texas held, “That the statute of limitation which applied to a money demand operates upon the remedy when its enforcement is sought by 'suits or actions’ in courts. It does not deprive the creditor of a remedy when he had provided by contract, to enforce through a trust deed the payment of his claim.”

This case was approved in Fievel v. Zuber, 67 Tex., 275, the court saying “The statute does not say that no debt shall be collected, but that no action shall be brought. Nor does it provide that the debt shall be extinguished. Any statutes of limitation worded like ours are generaly held to operate solelv upon the remedy in the courts and not to destroy the debt.” Tombler v. Ice. Co., 17 Texas Civ. App., 596. To the same effect is Hartrauft’s Estate, 153 Pa., 540; 34 Am. St. Rep., 717; Slagmaker v. Boyd, 38 Pa., 216; Gardner v. Terry, 99 Mo., 523; 7 L. R. A., 67. In Grant v. Burr, 54 Cal., 298, it is said: “The expiration of the statute time for bringing an action to recover a debt, or to enforce any personal obligation, does not operate as an extinguishment or payment; therefore, where the legal title to land has been conveyed to a trustee to secure a debt, the title and power of the'trustee is not affected by the expiration of the period prescribed to bar the debt, and a court of equity will not interfere to enjoin a sale under the deed. The statute of limitations is to be employed as a shield and not as a sword; as a means of defense and not as a weapon of attack.”

In Hayes v. Frey, 54 Wis., 503, it is held, “The validity of a sale under a power in a mortgage is not affected by the fact that the statute of limitations had run upon the note secured by the mortgage.” Jones on Mortgages, Sec. 1204; Bush v. Cooper, 26 Miss., 599; 59 Am. Dec., 270.

“Except when the statute expressly or by fair inference destroys the remedy upon the mortgage at the same time that the remedy is destroyed as to the debt, it may be enforced after the statute has run upon the debt, unless the same stab-utory period is applicable to both.” 2 Wood on Limitations, Sec. 223, p. 549; Harding v. Boyd, 113 U. S., 765.

“The maker of a trust deed or mortgage with a power of' sale cannot enjoin a sale thereunder on the ground that the debt is barred by the statute of limitations; and this is held to be true even in those States where the general rule is that the bar of the debt bars the right to institute suit to foreclose. .... For similar reasons when the trustee or mortgagee has sold the mortgaged property under an express power of sale contained in the mortgage or trust deed, the sale can not be set aside on the ground that the debt and the instrument securing it were barred at the time of the sale.” 19 Am. & Eng. Enc. (2 Ed.), 178; Minor Inst., Book 3, p. 366.

These authorities conclusively settle the proposition that the right to enforce the mortgage is not affected by the statutory bar of an action in personam upon the debt. As we have said, a mortgage containing a power of sale not being within the words of the statute, and therefore the execution of the power not being affected thereby, we can see no reason why the mortgagee may not execute the power at any time. The debt being in existence, unnaid, no court of equity would enjoin the execution of the power upon the theory that there was a presumption of payment of the debt. It is conceded that if it were necessary for the mortgagee to bring an action to invoke the equitable aid of the court to foreclose his mortgage after the expiration of ten years from the last payment on the debt, the mortgagor being in possession, he would be barred because, in that event he would abandon his power of sale and ask for the intervention of the court, which would be compelled to enforce the statutory bar.

The point upon which we rest our decision is, that as the mortgagor has expressly put it in the power of the mortgagee to sell the land for the payment of the debt and thereby relieved him of the necessity of bringing an action for that purpose, bis right is not affected by the statute of limitations, which applies only to actions brought for the enforcement of rights. The legislature may, if in its wisdom it should see fit, place the execution of the power of sale, in respect to the timé within which it must be exercised, upon the same footing as actions to foreclose a mortgage with power of sale; but we cannot, in the absence of any legislative declaration,, make the law. It is ours simply to declare it.

This opinion does not overrule or question Hutaff v. Adrian, supra, in respect to the point decided in that ease, to-wit, that the plaintiff was not entitled to injunctive relief. In so far as it is said that after the expiration of ten years the mortgage is dead, the right is destroyed we cannot concur.

The judgment of, the court below is

Affirmed.