Court Opinion

ID: 9469635
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:45:31.593973+00
Date Added: 2024-06-11T17:41:29.166037
License: Public Domain

DAN M. LEE, Justice,
dissenting:
Being unable to agree that the question certified is controlled by our decision in W. T. Raleigh v. Fortenberry, 138 Miss. 410, 103 So. 227 (1925), and being thoroughly convinced that the questions presented to us as are correctly stated in Part I of the opinion written by Justice Sugg, are controlled by Mississippi Code Annotated sections 15-1-21, 15-1-23 and 15-1-3 (1972) together with the decisions of this Court thereunder, I disagree. Basically, the crux *1124of applying Raleigh to the case sub judice is that Raleigh, for all that it may stand for had nothing whatever to do with filing a suit for a deficiency left over after a foreclosure on collateral. Raleigh dealt with a question of whether the three-year statute on open accounts would lie or a six-year statute on written contracts where there was no mortgage or collateral pledged to pay the debt. There being no collateral or mortgage involved, no foreclosure involved, then there was no question about there being a suit for a deficiency of that part of the debt that remained after the foreclosure which would activate section 15-1-21 which is as follows:
When a mortgage or deed of trust shall be given on real or personal estate, or when a lien shall be given by law, to secure the payment of a sum of money specified in any writing, an action or suit or other proceedings shall not be brought or had upon such lien, mortgage, or deed of trust to recover the sum of money so secured except within the time that may be allowed for the commencement of an action at law upon the writing in which the sum of money secured by such lien, mortgage, or deed of trust may be specified. In all cases where the remedy at law to recover the debt shall be barred, the remedy in equity on the mortgage shall be barred, (emphasis ours.)
Section 15-1-23 deals directly with the problem here involved, thereby reducing the six-year statute of limitations on a written note which is secured by a mortgage, deed of trust or otherwise, unless the same is commenced or brought within one year from the date of the foreclosure or sale of the property pledged as security for said note or notes. Section 15-1-23 is quoted in full as follows:
In all cases, no suit or action shall hereafter be commenced or brought upon any installment note, or series of notes of three or more, whether due or not, where said note or notes are secured by mortgage, deed of trust, or otherwise, upon any property, real or personal, unless the same is commenced or brought within one year from the date of the foreclosure or sale of the property pledged as security for said note or notes, (emphasis ours.)
Section 15-1-23 was originally passed in 1934 during the great depression when most people were facing financial ruin that brought on many foreclosures and tax sales which, perhaps, explains the reason for its passage.
This Court has passed upon section 15-1-23 and its predecessor (section 720 Miss. Code 1942, chapter 251 of the Laws of 1934) in the case of Guthrie v. Merchants National Bank of Mobile, 254 Miss. 532, 180 So.2d 309 (1965), where an action for deficiency on a note instituted almost four years subsequent to the date of sale of security therefor, was barred by the statute of limitations providing that action for balance due under the note must be brought within one year from date of sale of security given under chattel mortgage. The Court went on to say, speaking through Justice Brady, as follows:
It was also pointed out in that suit that, in an action on a contract, the statute of limitations of the state where the suit is brought governs. The suit at bar was brought in this state and its laws govern and control. There was no absence from this state, and more than a year had elapsed since the cause of action accrued; thus the suit was barred by Mississippi’s one year limitation, section 720, and appellant’s fifth instruction should have been granted. If this be an austere rule that is wanting in justice, then section 720 presents a problem for legislative consideration and correction. It is beyond the cable tow of judicial remedy. (254 Miss, at 545, 180 So.2d at 315 — emphasis ours.)
If there is any doubt as to what is meant in the last two lines of section 15-1-21, which two lines are, “In all cases where the remedy at law to recover the debt shall be barred, the remedy in equity on the mortgage shall be barred,” then one can turn to section 15-1-3 which clearly states:
The completion of the period of limitation prescribed to bar any action, shall *1125defeat and extinguish the right as well as the remedy. However, the former legal obligation shall be a sufficient consideration to uphold a new promise based thereon.
This Court has passed upon section 15-1-3 on many occasions. In Proctor v. Hart, 72 Miss. 288,16 So. 595 (1894), the effect of the statute is not only to deny the remedy and bar the action, but to extinguish the right itself upon the completion of the period of limitation. When a secured debt is barred, both the right and remedy are extinguished. McDaniel v. Short, 127 Miss. 520, 90 So. 186 (1921).
In Musser v. First National Bank of Corinth, 165 Miss. 873, 147 So. 783 (1933), where neither the notes nor the mortgage were renewed until the notes were barred, the rights and remedies as to both notes and mortgage were barred and could not be revived. In Temples v. First National Bank of Laurel, 239 Miss. 446, 123 So.2d 852, 125 So.2d 543 (1960), the Court held the running of limitation extinguishes both the note and the deed of trust securing it.
The clear distinction in the case sub judice from that of Raleigh, supra, is that no collateral or mortgage was given in Raleigh and therefore no foreclosure by Raleigh, which brought into play sections 15-1-21, 15-1-23 and 15-1-3. In the case sub judice, there was collateral given to secure the note and there was a foreclosure thereon which netted the appellant the sum of $112,372.14 on the $151,760 note which foreclosure was more than one year prior to the bringing of this suit for the sum of $39,-387.86, the deficiency remaining after the foreclosure. If this was not a deficiency suit after the foreclosure, I would agree that Raleigh would apply.
The question in Raleigh was whether or not the written contract, or bond, came within a specific statute of limitations, which was six years, or was an open account for which the three-year statute of limitations would apply, and whether the debt that the bond sought to insure was described in the bond. The Court in Raleigh decided the question based upon the statute of frauds and held that the bond or contract was governed by the six-year statute of limitations. This Court, in W. T. Raleigh Co. v. Fortenberry, 138 Miss. 410, 103 So. 227 (1925), stated as follows (entire opinion quoted):
ANDERSON, J. (after stating the facts as above). The three-year statute of limitations (section 3099, Code of 1906; section 2463, Hemingway’s Code) provides as follows
“Actions on an open account or stated account not acknowledged in writing, signed by the debtor, and on any unwritten contract, express or implied, shall be commenced within three years next after the cause of such action accrued, and not after.”
Appellees contend, and the court below so held, this to be an action on an open account not acknowledged in writing signed by the debtor. While appellant’s position is that the basis of the action is the guaranty contract, Exhibit B to the declaration, and that the account between appellant and Fortenberry, the principal, made Exhibit C to the declaration, is not the basis of the action, but simply embodies part of the evidence necessary to make out a case under the guaranty contract,. and therefore the six-year statute of limitations governs, and not the three-year statute. We think this question is settled in favor of appellant’s contention by Vicksburg Water Works Co. v. Y. & M. V. R. R. Co., 102 Miss. 504, 59 So. 825. The promise to pay, which was the basis of that suit, was in writing and therefore provable by writing, but the amount to be paid was not in writing but rested in parol. The court said, touching this question, that the action was predicated on a written contract, and the three-year statute of limitations had no application, notwithstanding the written contract left the amount of water furnished to be ascertained by parol evidence. Although the following cases are not squarely in point, they go to sustain appellant’s contention. Cock v. Abernathy, 77 Miss. 872, 28 So. 18; Masonic Benefit Ass’n v. Bank, *112699 Miss. 610, 55 So. 408; Washington v. Soria, 73 Miss. 665, 19 So. 485, 55 Am.St. Rep. 555.
Appellees, to sustain their position, rely principally on Foote v. Farmer, 71 Miss. 148, 14 So. 445, and Hembree v. Johnson, 119 Miss. 204, 80 So. 554. There is no conflict between those cases and Vicksburg Waterworks Co. v. Y. & M. V. R. R. Co., supra. In the Foote-Farmer Case, the court held that where a person secured an advance of money by giving an order for delivery of a county warrant for a certain amount, the cause of action upon its nondelivery was not based on such order as being in itself a promise to pay, or an acknowledgment in writing of an account due, but that the action was based on an unwritten contract and governed by the three-year statute of limitations (section 2670, Code of 1880). It was stated in the opinion in that case that in order to take the case out of the three-year statute it ws necessary that the writing, promising to pay the indebtedness, should be in such terms “as to render any supplementary evidence unnecessary.” The court in the use of that language, however, had no reference to the amount of indebtedness involved in that case. The question alone discussed, and decided was whether the written order on which the suit was based was a sufficient promise to pay any amount whatever. The question whether, if the promise to pay had been sufficient, the amount to be paid could be fixed by parol evidence was not before the court nor discussed.
In the Hembree-Johnson Case the court held that the recital in a deed of trust that it was given to secure a fixed sum of money, and in addition “any further indebtedness due the said Oscar Johnson that may accrue during the year by reason of advancement made to said T. L. Hembree and wife,” was not a written promise by the grantors in the deed of trust to pay such open account. The court said in part:
“We have carefully considered the terms and phraseology of the deed of trust here involved, and we fail to find any promise to pay, or any acknowledgment of the indebtedness contained therein, except the $800 note.”
There was no sort of obligation or promise by the defendant in the writing involved in either one of those cases to pay the indebtedness sued for. Instead, in each of those cases, the writing relied upon' simply recited a fact, not a promise.
Under the statute of frauds, a promise to answer for the debt of another need not describe with minute particularity such debt, such contracts like all others are to be read in the light of surrounding circumstances, and, where with their aid or the aid of other writing the debt may be identified with reasonable certainty, the memorandum will be deemed sufficient. 25 R.C.L. p. 649, § 280. If a writing be sufficient to meet the requirements of the statute of frauds, we think it is such a written contract as will be governed by the six-year statute of limitations.
We hold that the suit here is on the guaranty bond; that said bond is the basis and foundation of the recovery sought; that the bond, in explicit and unmistakable terms, obligated appellees to pay the indebtedness sued for. It is true that the bond itself does not name the amount for which the appellees are liable, but it points with certainty where and how that amount may be ascertained by parol testimony. It follows from these views that the judgment of the court below must be reversed. (138 Miss, at 420-422, 103 So. at 229-230)
Thus, it is seen that Raleigh turns on the question of whether the writing was sufficient to satisfy the statute of frauds when assuming the debt of another. The Court held that the writing was adequate and described the debt bonded sufficiently.
The bottom line of the question certified by the Fifth Circuit Court of Appeals to this Court is, do we have statutes or decisions that limits the time within which to bring a suit for a deficiency after a foreclosure on collateral that did not bring enough money to pay off the indebtedness that it *1127secured. If we do have such a statute, it would be a special statute and of course would control over a Mother Hubbard statute, such as Mississippi Code Annotated section 15-1-49 (1972), which is as follows:
All actions for which no other period of limitation is prescribed shall be commenced within six years next after the cause of such action accrued, and not after.
We do have a statute controlling this very exact question, section 15-1-23, and it has been properly interpreted by this Court as shown hereinbefore. This statute is specific in that a suit must be brought within one year after a foreclosure. This suit was not brought within the one year Guthrie, supra; Musser, supra, and Temples, supra.
The First National Bank of Columbus elected its remedy, to foreclose upon the property, receiving $112,372.14 at the foreclosure sale, then failed to file suit for a deficiency within the statutory period of time as specified by section 15-1-23.
Section 15-1 — 49 sought to be applied by First National Bank of Columbus excludes itself by its own terms. This section provides that “all actions for which no other period of limitation is prescribed shall be commenced within six years.” We do have such a statute, section 15-1-23, supra, which is a specific statute dealing with the length of time required within which a litigant may institute a suit for a deficiency judgment after a foreclosure sale, the specific question involved here. Therefore, we cannot resort to a Mother Hubbard statute, section 15-1 — 49.
The chapter dealing with statutes of limitations may be found in Volume 5, Mississippi Code Annotated (1972), beginning with section 15-1-1 and running through section 15-1-79. All one has to do to determine whether section 15-1-23 or section 15-1 — 49 applies is to read sections 15-1-3, 15-1-21,15-1-23 and 15-1 — 49 in that order for brevity. They are copied in full as follows:
§ 15-1-3.
The completion of the period of limitation prescribed to bar any action, shall defeat and extinguish the right as well as the remedy. However, the former legal obligation shall be a sufficient consideration to uphold a new promise based thereon.
§ 15-1-21.
When a mortgage or deed of trust shall be given on real or personal estate, or when a lien shall be given by law, to secure the payment of a sum of money specified in any writing, an action or suit or other proceedings shall not be brought or had upon such lien, mortgage, or deed of trust to recover the sum of money so secured except within the time that may be allowed for the commencement of an action at law upon the writing in which the sum of money secured by such lien, mortgage, or deed of trust may be specified. In all cases where the remedy at law to recover the debt shall be barred, the remedy in equity on the mortgage shall be barred, (emphasis ours.)
§ 15-1-23.
In all cases, no suit or action shall hereafter be commenced or brought upon any installment note, or series of notes of three or more, whether due or not, where said note or notes are secured by mortgage, deed of trust, or otherwise, upon any property, real or personal, unless the same is commenced or brought within one year from the date of the foreclosure or sale of the property pledged as security for said note or notes, (emphasis ours.)
§ 15-1 — 49.
All actions for which no other period of limitation is prescribed shall be commenced within six years next after the cause of such action accrued, and not after.
First National Bank of Columbus elected the remedy of foreclosing upon the collateral that secured the note of $151,760. The First National Bank received $112,372.14 at this foreclosure sale, leaving a balance of $39,387.86 which it sought to collect by filing suit more than one year after the foreclosure sale. The bank, having elected this remedy, is bound thereby. See 53 C.J.S., Limitations of Actions § 7, page 926, which is as follows:
*1128As a general rule, where a party has two or more remedies for the enforcement of a right, the fact that the statute of limitations had cut off one or more of them does not bar the other or others, but where the statute of limitations is held to bar the right as well as the remedy, as discussed supra § 6, a statute of limitations which bars the legal remedy bars the equitable one at the same time. Where a plaintiff has elected one of two remedies for the enforcement of a right, and such action is barred by the statute, he is bound by his election, and cannot thereafter resort to the other remedy for which a different limitation is provided. (emphasis ours.)
Had the bank not foreclosed upon the collateral securing the $151,760 note, there would be no question but that the six-year statute of limitations would apply to the written note and the written guaranty. However, when the bank elected this remedy to foreclose and did in fact foreclose, section 15-1-23 applied. This is the major distinguishing factor in Raleigh and the case sub judice.
The bank, upon the $151,760 note becoming due, could have called upon the five guarantors (who incidentally were the incorporators of J. C. H. Restaurants) who mortgaged the property to First National Bank of Columbus to secure the loan for $151,760) and simply stated to them: “Gentlemen, you have a problem and we have your security. Just pay us under your guaranty agreement and you can take a J. C. H. Restaurant and all the collateral and get as much as you possibly can for it. But pay us under the note and guaranty. In other words, you take the gamble, Mr. Guarantors, not us.” In that event, section 15-1-23 would not apply.
The facts here are that First National Bank of Columbus elected to foreclose upon the collateral, did sell the collateral, but did not get enough from the sale of the collateral to satisfy its entire indebtedness. It simply fell short by the sum of $39,487.86. Its remedy was to file a suit against the guarantors within one year after such foreclosure and there could have been no question that judgments could have been rendered. The bank did not do this but waited more than the one year permitted by our statute. Thus, it lost its right as well as its remedy. So says our statute.
I therefore would adopt Part I of the opinion of Justice Sugg wherein it sets out the question certified and exhibits that are being interpreted in connection with this case.
However, I would change Part II of the opinion. The question certified is controlled by our section 15-1-3, section 15-1-21 and section 15-1-23 set out above.
These sections have been interpreted to the effect that the statute is not only to deny the remedy and bar the action, but to extinguish the right itself upon the completion of the period of limitation. Musser v. First National Bank of Corinth, 165 Miss. 873, 147 So. 783 (1933); Greene v. Greene, 145 Miss. 87, 110 So. 218 (1926); McDaniel v. Short, 127 Miss. 520, 90 So. 186 (1921); Proctor v. Hart, 72 Miss. 288, 16 So. 595 (1894). Section 15-1-49 does not apply.
In response to the question certified, in my opinion, we should hold:
1. The one-year statute of limitations, section 15-1-23 applies to this case;
2. No other statute of limitations applies; and
3. The complaint was not timely filed by the bank.
Having responded to the questions certified, we then should direct that the entire record, including copies of the briefs submitted to this Court, be transmitted to the United States District Court of Appeals for the Fifth Circuit.