#### W. H. HUMPHREY v. REXFORD STEPHENS, Administrator of S. J. TAYLOR, Deceased, and BUTTERS LUMBER COMPANY, a Corporation.

(Filed 27 January, 1926.)

*1.*Limitation of Actions — Debtor and Creditor — Deceased Persons — Executors and Administrators — Actions.

C. S., 412, barring tbe surviving cause of action against tbe personal representative of a deceased debtor one year from tbe time tbe action would bave been barred in tbe lifetime of tbe deceased debtor, is an enabling statute, but does not extend tbe time for tbe commencement of tbe action if tbe action was barred in tbe lifetime of tbe deceased. Tbe rights of creditor and debtor discussed and statute construed.

2. Same — Mortgages—Foreclosure—Sales.

A mortgage is an incident of tbe note it secures, and tbe statute of limitations will not run against its foreclosure when it bas not run against tbe note.

3. Limitation of Actions — Statutes—Prospective Effect.

The conclusive presuimption of payment of a note secured by mortgage or deeds of trust of land after fifteen years, etc., is prospective in effect, and inapplicable to such instruments theretofore executed. Const, of N. C., Art. I, sec. 17.

Appeal by defendants from *Grady, J.,*at March Term, 1925, of RobesoN.

Affirmed.

*W. H. Humphrey, Jr., and McEmnon & Fuller for plaintiff.*

*McLean & Stacy for defendants.*

Clarkson, J.

On 2 December, 1909, S. J. Taylor, for value, executed and delivered to tbe plaintiff bis note, under seal, for tbe sum of $110, and, at tbe same time, executed a mortgage deed on a tract of land in Robeson County, containing 66 acres, more or less, for tbe purpose of *102securing the payment of said note. Thereafter, to wit, on 10 June, 1911, S. J. Taylor conveyed the mortgaged lands to George B. McLeod, who, in turn, on 11 March, 1913, conveyed the premises to the defendant, Butters Lumber Company. S. J. Taylor, maker of the note and mortgage,- died on 26 December, 1914, and, on 31 May, 1924, the defendant Rexford Stephens, was appointed administrator of his estate. This action was instituted on' 17 July, 1924.

There are only two questions involved in this appeal: (1) Is the action as to the defendant administrator barred? (2) Is the right of the foreclosure of the mortgage deed barred? We do not think the action on the debt barred, and the mortgage is an incident to the debt and is not barred. There is a difference in the statute between creditor and debtor.

O. S., 412, in part, is as follows:

If a person — a creditor — one who has claim on another — “entitled to bring an action died before the expiration of the time limited for the commencement thereof and the cause of action survives, an action may be commenced by his representatives after the expiration of that time and within one year from his death,” etc.

In *Lowder v. Hathcock,*150 N. C., 440, it is said: “It is true this is an enabling and not a disabling statute, and does not cut down the time given by the general statute, but extends'it (if not, expired) .to at least one year after death of a *creditor*and at least one year after "issuing letters to the representative of a *debtor. Person v. Montgomery,*120 N. C., 111.”

The enabling statute giving one year to the representatives of the creditor does not apply if the creditor died after the bar of the statute was complete.

Under C. S., 412, *supra,*if a person is a debtor, one who owes another, the statute says: “If a person against whom an action may be brought dies before the expiration of the time limited for the commencement thereof, and- the cause of action survives, an action -may be commenced against his personal representative after the expiration of that time, and within one year after the issuing of letters testamentary or of administration, provided the letters are issued within ten years of the death of such person.”

*Benson v. Bennett,*112 N. C., 505, John Irvin, the debtor, died 9 July, 1885; J. C.' Bennett was appointéd administrator of his estate 21 August, 1885. The cause of action out of which the claim arose was 24 May, 1884. If the debtor, Irvin, had not died the action would have been barred under the 3-year statute, 24 May, 1887. The claim would have been barred ’24 May, 1887, three years from time action arose after his death without the enabling statute. The action was brought 5 July, 1887 — 1- month and 10 days too late, without the enabling statute. Exclude the time the statute did not run- from the debtor’s *103death 9 July, 1885, to time letters of administration were issued, 21 August, 1885 — 1 month and 12 days. We have one day margin — making 2 years and 11 months and 29 days — time within 3-year statute. *Redmon v. Pippen, 113*N. C., 93; *Person v. Montgomery,*120 N. C., 111; *Winslow v. Benton,*130 N. C., 58; *Fisher v. Ballard,*164 N. C., 326; *Irvin v. Harris,*182 N. C., 660; *S. c.*(rehearing), 184 N. C., 547.

In *Geitner v. Jones,*176 N. C., 544, it was held: “The court below was of the opinion that the action was barred by the statute of limitations. The note in suit fell due 18 June, 1912, A. A. Shuford, the payee, died 2 May, 1912. J. G. Hall died 1 August, 1913, and his personal representative was not appointed till 4 August, 1917. Hall having died before the expiration of the time limited for the commencement of this action, the plaintiffs were entitled to institute this action 'within one year after the issuing of letters testamentary, provided such letters were issued within ten years after the death’ of the debtor. Revisal, 367 (C. S., 412). His administrator was made party to this action by summons issued 15 February, 1918, and the claim therefore is not barred. *Coppersmith v. Wilson,*107 N. C., 31; *Winslow v. Benton,*130 N. C., 58, which holds that the section is an enabling- and not a disabling statute. The debt not being barred, the foreclosure of the security can be ordered. Revisal, 391 (3),” (0. S., 437 (3).

The facts in the present case: S. J. Taylor, the debtor, executed a note under seal, secured by mortgage on certain land to plaintiff "W. H. Humphrey, the creditor, on 2 December, 1909. The 10-year statute would have barred the note under seal, if Taylor had lived, on 2 December, 1919 (according to the record it was due the day it was made). He died on 26 December, 1914 and within 10 years as set forth in the statute — on 31 May, 1924, the defendant, Rexford Stephens, was appointed administrator of his estate. This action was instituted 17 July, 1924. According to the enabling statute, exclude the time between death of the debtor, S. J. Taylor, 26 December, 1914, and the administration on his estate within 10 years of his death, 31 May, 1924, the note being under seal is not barred. Is the right of foreclosure of the mortgage barred by the 10-year statute of limitation? The *Geitner case, supra,*decides it is not.

C. S., 437 (3), (period prescribed 10 years in which to bring action), quoted in *Geitner case, supra,*is as follows: “For the foreclosure of a mortgage, or deed in 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 became absolute, or *within ten years after the last payment on the same.”*The above is Revisal, 391 (3) and section 152 (3) of The Code, 1883, vol. 1, and is construed by *H. G. Connor, J.,*in *Menzel v. Hinton,*132 N. C., 660. The opinion was delivered 19 May, 1903. *104*Walker, J.,*in *Cone v. Hyatt,*132 N. C., 812, says: *“We*have beld at this term, in *Memel v, Hinton,*that the statute of - limitations does not apply to a power of sale contained in a mortgage or deed of trust, when the deed is foreclosed, not in an action brought for that purpose, but simply by the mortgagee or trustee executing the power of sale. The statute was intended to apply only to actions or suits, and this is apparent from the very language of the law. In a case where it became necessary to decide whether a sale under a power was a suit or an action within the meaning of a statute, it was held that ‘the proceeding to foreclose a mortgage by advertisement is not a suit; such a proceeding is merely the act of the mortgagee exercising the power of sale given him by the mortgagor. In no sense is it a suit in any court, and all the definitions of that word require it to be a proceeding in some court.”

C. S., 2589, is as follows: "The power of sale of real property contained in any mortgage or deed of trust for the benefit of creditors shall become inoperative, and no person shall execute any such power, when an action to foreclose such mortgage or deed of trust for the benefit of creditors would be barred by the statute of limitations.” Revisal, sec. 1044, had the additional: “Wherever an action to foreclose any such mortgage or deed of trust is now barred by the statute of limitations, the authority to execute the power of sale contained therein shall be barred on the first day of January, one thousand nine hundred and seven.” This act was passed to bar the power of sale and meet the decisions in the *Menzel*and *Cone cases, supra. Scott v. Lumber Co.,*144 N. C., p. 44.

When a debt is secured by a’mortgage, the debt is the principal and the mortgage only the incident, security for the debt, An assignment of the debt passes all the rights of the creditor in the mortgage. *Hyman v. Devereux,*63 N. C., 629; *Smith v. Godwin,*145 N. C., 242; *Stevens v. Turlington,*186 N. C., 194; *Trust*Co. *v. White,*189 N. C., 283. If the mortgage debt is barred that does not *per se*bar the right of foreclosure. *Worth v. Wrenn,*144 N. C., p. 661. A transfer of the debt does not *per se*carry a right to exercise the power of sale in a mortgage. *Jones v. Williams,*155 N. C., 179. The note, under seal, in the present ease was made when C. S., 412, *supra,*was the law of the State.

“In *House v. Parker,*181 N. C., p. 42, it is said: ‘But the general laws of the State in force at the time of itsi execution and performance enter into and become as much a part of the contract as if they were expressly referred to or incorporated in its terms. *O’Kelly v. Williams,*84 N. C., 281; *Graves v. Howard,*159 N. C., 594; and *Van Huffman v. Quincy,*4 Wallace, 552.’ ” *Douglas v. Rhodes,*188 N. C., 582.

“If a mortgage is a mere incident to the debt which it is given to secure, it necessarily follows that it lives as long as the debt, and that it may be foreclosed so long as an action upon the debt is not barred by *105tbe statute of limitations.” *Menzel v. Hinton,*132 N. C., 660, reported in 95 Amer. St. Rep., 669, Note C, citing: *Moulton v. Williams,*6 Idaho, 424; *Hagan v. Parsons,*67 Ill., 170; *Hibernian Banking Assn. v. Commercial Nat. Bank,*157 Ill., 524; *Brown v. Rockhold,*49 Iowa, 282; *Jenks v. Shaw,*99 Iowa, 604; *Prewitt v. Wortham,*79 Ky., 287; *Clift v. Williams,*105 Ky., 559; *Berry v. Marshall,*23 La. Ann., 244; *Fraser v. Bean,*96 N. C., 327; *Balch v. Arnold,*9 Wyo., 17.

Public Laws 1923, cbap. 192, material part, is as follows: “That tbe conditions of every mortgage,'deed of trust, or other instrument securing tbe payment of money shall be conclusively presumed to have been complied with or tbe debt secured thereby paid as against creditors or purchasers for a valuable consideration from tbe trustor, mortgagor, or grantor, from and after tbe expiration of fifteen years from tbe date when tbe conditions of such instrument by tbe terms thereof are due to have been complied with, or tbe maturity of tbe last installment of debt or interest secured thereby, unless tbe bolder of tbe indebtedness secured by such instrument or partly secured by any provision thereof shall file an affidavit with tbe register of deeds of tbe county where such instrument is registered,” etc.

In *Hicks v. Kearney,*189 N. C., 316, it is held: Tbe conclusive presumption of tbe payment of a debt secured by mortgage, etc., after fifteen years, as against creditors or purchasers (Public Laws 1923, cbap. 192) is prospective in its effect. Const. of U. S., Art. I, sec. 10; Const. of N. C., Art. I, sec. 17. It would seem that tbe Legislature, in passing tbe above statute, construed tbe decisions of this State as we do in this case, and have provided a method to quiet mortgages and liens of long standing. Tbe mortgage follows tbe debt. Tbe debt here is not barred nor is tbe mortgage.

For tbe reasons given, tbe judgment below is

Affirmed.