Court Opinion

ID: 9807756
Source: CourtListenerOpinion
Date Created: 2023-08-31 20:15:13.172614+00
Date Added: 2024-06-11T11:53:34.733322
License: Public Domain

Clark, C. J.,
dissenting: The exact point presented in this case has twice been decided in this court, without dissent, and having become a rule of property, men have acted upon it, and its reversal would shake titles which have been acquired in reliance upon these decisions.
In Hutaff v. Adrian, 112 N. C., 259 (1893), there was a mortgage with power of sale and more than ten years after maturity of the note, the mortgagee advertised under his power of sale. The court held that upon those facts alleged in the complaint, “the bond and mortgage are alike barred by the Statute of Limitations. The Code, Sec. 152 (2) and (3). A sale under such mortgage would carry to the purchaser no title. The plaintiff mortgagor being in possession has a full defense to an action for ejectment. Capehart v. Biggs, 77 N. C., 261; Fox v. Kline, 85 N. C., 173.”
If this had not been so prior to Chapter 6, Laws 1893, a mortgagor in a mortgage with power of sale never would have been protected by the lapse of time. At the last term, by *668a unanimous court, Hutaff v. Adrian was reviewed and reaffirmed in Smith v. Parker, 131 N. C., at p. 471, the court saying: “In Hutaff v. Adrian (decided February term, 1893) it was said that taking the allegations of the complaint as true the defendant’s bond and mortgage were barred by the Statute of Limitations, hence the purchaser at a mortgage sale would get no title for the mortgage was dead, which is a question of law, and the plaintiff being in possession no injunction would lie merely to prevent such cloud upon title,” except for the statute of 1893, Chapter 6, which had been enacted subsequent to Hutaff v. Adrian.
The basic reason of these decisions is this: A power of sale is no part of the conveyance, but is merely a power of attorney to do an act which is equivalent to a power to waive judgment in an action, if not barred by payment or otherwise, on the bond and for foreclosure. A power of sale changes in no wise the characteristics and incidents of a mortgage. 2 Pingree on Mortgages, Sec. 1313. When by lapse of time the bond and mortgage are both barred, or the debt has been paid, the power of sale falls and ceases to' be of any validity. A party is entitled to take the benefit of the statute, just as he would of actual payment having been made, if he pleads it at the first opportunity. The statute is simply an irrebutable presumption of payment, and, like payment, must be pleaded. If an action has been brought to foreclose this mortgage after the lapse of ten years, the mortgagor could have pleaded the Statute of Limitations. Only his failure to do so would be a' waiver. The absence of the mortgagor from the State suspended the running of the statute as to' the action on the bond, but not as to the lien on the land. Anderson v. Baxter, 4 Oregon, 105.
When there is a sale under the power of sale, there is no opportunity to plead either the statute or payment, and the mortgagor hence is entitled to do this when an action of *669ejectment is brought (as is held in the above cases) because this is his first and only opportunity to plead it as a defense. The action of ejectment not having been brought, the mortgagor is now proceeding, as authorized by Chapter 6, Laws 1893, to bring this action to remove a cloud upon title, in which equitable proceeding he can set up the fact that he would have pleaded the Statute of Limitations if the purchaser had brought an action of ejectment. This is the identical ground which would have authorized him to sustain an injunction to prevent the sale, had he so chosen. He has the election, being in possession, to do either, or to await an action of ejectment, provided he sets up the payment or Statute of Limitations at the first opportunity in proceedings pending in court.
There is no Statute of Limitations against the execution of a power of sale, and none is needed. It is a, mere power of attorney. When either payment or the Statute of Limitations can be, and is set up to the debt and mortgage, the execution of the power of attorney is a nullity, for the debt and mortgage have lost their validity, provided the defense is pleaded at the first opportunity. This opportunity may be afforded by an action of ejectment brought by the purchaser, or it may be set up by the mortgagor himself, either in an action for an injunction before the sale, or in an action to remove cloud upon title after the sale, as in this case. The statute, chapter 6, Laws 1893, does not compel an injunction to prevent a sale, but gives relief after sale, when, as here, the claimant does not bring his action of ejectment.
The substantial matter is the debt and mortgage, and the mortgage is barred in this case by the lapse of time, and the statute has been pleaded at the first opportunity in a proceeding in court. The power of sale is outside of court, and there was no opportunity afforded to plead the statute to that proceeding, even if there were one. Here, the mortgage be*670came barred 19 February, 1895, being ten years from the last payment. The sale under the power of sale, 4 May 1899, had no efficacy if the purchaser had chosen to bring an action of ejectment and the defendant had pleaded the statute. Hutaff v. Adrian, and Smith v. Parker, supra; Simmons v. Ballard, 102 N. C., at p. 109. Hence, doubtless, the purchaser did not move. The first proceeding actually in court, in which the statute' could be pleaded, is this to remove the cloud upon title. Upon the facts agreed, judgment should have been in favor of the plaintiffs.
It is true that the mortgage is not necessarily barred when the debt is, but when the bar of the statute of limitations can be successfully pleaded to the mortgage, the power of sale (which is a mere power of attorney to dispense with the formality of an action and judgment of foreclosure) is barred because it has nothing to act upon. Powers of sale are not favorites of the law (Mosby v. Hodge, 76 N. C., 387) and it would be exceeding strange if when, by reason of the statute of limitations, an action can not be maintained to foreclose the mortgage, a power of attorney to sell without formal decree of foreclosure should put vitality into a mortgage upon which a court is powerless to decree foreclosure.