Court Opinion

ID: 3495343
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:03:09.863337+00
Date Added: 2024-06-11T14:05:12.723469
License: Public Domain

September 7, 1927, defendant executed the following note:
"Detroit, Mich., September 7, 1927
"On or before three years after date I promise to pay to Etta S. Sprague or order Ten Thousand and 00/100 dollars at Griswold First State Bank, Detroit, Michigan with interest thereon at the rate of six per cent. per annum, payable semi-annually until paid.
"Value received.
"$10,000
                                            "LOUIS SAVAGE, "417 Book Bldg.,
"This note is secured by mortgage bearing even date herewith."
The mortgage securing payment of the note provided:
"Witnesseth, that the said mortgagor, in consideration of the sum of $10,000, the receipt of which is acknowledged, and for the purpose of securing the repayment of the said sum, with interest, as hereinafter provided, and the performance of the covenants hereinafter contained, hereby mortgages and warrants unto the said mortgagee her heirs and *Page 200 
assigns, the lands, premises and property situated in the township of Bloomfield county of Oakland and State of Michigan. * * *
"And the said Louis Savage mortgagor for himself, his heirs, executors and administrators, hereby covenant with the said mortgagee her legal representatives and assigns, as follows:
"First. Said mortgagor will pay to the said mortgagee her legal representatives and assigns, the said sum of $10,000, payable on or before three years from date hereof. With interest thereon at the rate of six per cent. per annum, payable semi-annually, until the full payment of said principal sum, according to the terms of a certain promissory note bearing even date herewith, executed by Louis Savage to the said mortgagee, and will pay interest at the rate of seven per cent. per annum, semi-annually, upon all overdue interest or principal from the time of its maturity."
Plaintiff holds the note and mortgage and brought foreclosure proceedings in equity. It appearing that the general statute of limitations (3 Comp. Laws 1929, § 13976 [Stat. Ann. § 27.605]), barred personal liability on the note, the court held there could be no decree for deficiency.
Plaintiff appeals and contends that the mentioned provision in the mortgage constitutes a covenant of debt by specialty and, inasmuch as remedy for personal liability on covenant has not been barred (3 Comp. Laws 1929, § 13976, subd. 1 [Stat. Ann. § 27.605]), a decree for deficiency should have been granted.
The recital in the mortgage is not a covenant of debt, independent of the note, for it refers to the note and, read in connection with the note, is not a covenant upon which a personal action can be brought after remedy on the note is barred by the *Page 201 
statute of limitations. The mortgage does not constitute the debt such by specialty for it makes reference to the debt evidenced by the note and this deprives it of the character of a debt by special covenant.
A note is not essential to bring personal liability to a mortgagor, for a mortgage by specialty may contain a covenant of debt and fasten personal liability on the mortgagee. But where there is a note, evidencing the debt and identified and referred to in the mortgage, there cannot exist remedy on the provision in the mortgage after remedy in personam on the note is barred by the statute of limitations.
Stating or repeating in a mortgage the terms and conditions of a note, evidencing the debt, does not constitute a covenant of debt by specialty. The note remains the sole personal obligation. A special covenant of debt in the mortgage must be complete and wholly apart from engagement of debt by a note therein referred to. A mortgage is security for a debt and, as such, must identify the debt. This may be done in case of a note by reference thereto in the mortgage.
The recital in this mortgage cannot be held a special covenant of debt extending personal liability of the mortgagor beyond the period when personal liability on the note was barred by the statute of limitations.
The decree in the circuit court should be affirmed, with costs.
CHANDLER and McALLISTER, JJ., concurred with WIEST, C.J. BUTZEL, J., did not sit. *Page 202