Court Opinion

ID: 6989619
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:22:33.486859+00
Date Added: 2024-06-11T16:09:34.363947
License: Public Domain

Pleasants, J. On the 16th day of July, 1866, John T. McConnell and Camilla, his wife, by warranty deed of that date, in consideration of $3,000, conveyed four lots in Carlin-ville, therein described, to Jackson Busher, with the following provision: “And the party of the first part hereby retains a lien upon the said premises by way of mortgage to secure a certain note of this date for the sum of one thousand dollars, due on the 26th day of January, A. D. 1867, payable to said John T. McConnell with interest from date at the rate of eight per cent per annum until due, and after maturity to draw interest at the rate of ten per cent per annum, being given for a portion of the purchase money for the said premises.” Some short time afterward McConnell, for a valuable consideration, assigned to the Blackburn University a note, of which the following is a copy: “ $1,000. On or before the 26tb day of January, A. D. 1867, for value received, I promise to pay to John T. McConnell, or order, the sum of one thousand dollars with interest from date at the rate of eight per cent per annum until due, and after maturity to draw interest at the rate of ten per cent, per annum. June 16, 1866. Jackson Busher.” By his deed of February 20, 1868, Busher conveyed said lots to John H. Caynor; September 7, 1868, Caynor reconveyed to Rnslier; January 19, 1869, Rusher conveyed to Julius Hamilton, and he, on December 25, 1872, to appellee Weer. In each of these deeds, after the one first above mentioned, the lien thereby declared was expressly retained, and payment of the note so secured, or intended to be, assumed by the grantee, and all, including the first, were duly recorded shortly, after the execution of the same respectively. Interest was paid each year on said note in the hands of • appellant’s treasurer — by Rusher to January 26, 1869; by Hamilton from that time to December 26, 1872, and by Weer thereafter to January 26, 1883. On the 13th of March, 1883, Weer executed to the First Rational Bank of Carlinville a mortgage upon said lots, and on January 26, 1885, to Milton McClure, who was president of said bank and therein described as its “ custodian,” a quitclaim deed of the same. , Ho further payment being made upon, said note the bill herein was filed February 5, 1885, by the University against said Weer, the Bank, McClure and Anderson, setting forth the. facts above stated, averring that the note so assigned to complainant was the identical note referred to in the deed from McConnell to Rusher and was actually made by Rusher on the same-day the deed was executed, though the month in the date was--. written “ June ” by mistake for “ July;” that McClure, for the-bank, has leased or claims to have leased the premises described, to Weer for a year, and that Anderson is or claims to be a judgment creditor of said Weer;. that the liens' retained by the several deeds are all valid and subsisting and inured to the. benefit of complainant for its security, and that its rights in. the premises are prior and superior to those of the defendants;; and praying that they may be so declared by a decree to that-effect, that an account be taken of the amount due it, and the=' defendants, or some of them, required to pay the same by a: time to be fixed, or in default thereof that the lots be sold, and the equity of redemption foreclosed. ■A demurrer to the bill interposed by the defendants having - been overruled, the Bank and McClure filed a joint, and Weer - a separate answer, alike in their material parts, which denied. that the note assigned to complainant was the one intended to be described in the McConnell deed, and set up the Statute of Limitations. Anderson was defaulted. Replications to the answers were put in, the cause referred to the master, proofs taken and reported, and on final hearing the bill was dismissed. Inspection shows that the note in evidence corresponds ex-actly with the description in the McConnell deed in the following particulars: (1) The year of date; (2) the day of the month; (3) the payee; (4) the amount of principal; (5) the date of maturity; (6) the rate of interest until that date; (7) the new rate thereafter, and the statement in the deed that it was given for purchase money, affords ground for inference that it was made by the grantee therein' named. It varies from the description only as to the month of the date, which is the one next preceding — a mistake of easy and frequent occurrence. That it was a mistake in this case is manifest from the amount of Rusher’s first payment on February 9,-1867, which was §42.22, being the exa'Ct amount of interest due. at maturity from the 16th of July instead of June. The payment of interest upon it by each of the parties who assumed to pay it upon the one mentioned in the deed recognized it as the same, and we can not entertain the slightest doubt of its identity. Of the existence, character and amount of this lien the Bank and McClure had constructive notice by the recorded deeds. They also had actual notice from Weer himself as he testifies, and McClure admits that the note was outstanding, unpaid, and in the hands of complainant by its treasurer. A recorded assignment of the lien by McConnell to complainant could have given them no fuller or clearer information. They therefore occupy no such position as was protected in Ogle v. Turpin, 102 Ill. 148, but stand in Weer’s shoes and hold subject to complainant’s claim unless it is barred by the Statute of1 Limitations, which is the only question in the case. The provision relied on is Sec. 11 Ch. 83 of the R. S. 1874, which became a law on July 1, 1872, and declares that <(Ho person shall commence an action or make a sale to foreclose any mortgage or deed of trust in the nature of a mortgage, unless within ten years after the right of action or right to make such sale accrued.” The deed from Hamilton to Weer by which the latter assumed to pay this lien, was executed December 25,1872, after the statute took effect. The note being then overdue, the right to foreclose as against Weer accrued immediately, and yet the bill herein was not filed until February 5, 1885, more than ten years thereafter. Appellees therefore claim that the right to foreclose upon Weer’s assumption was absolutely barred by the statute, and further, that Rusher, the original mortgagor, paid no interest on the note after January 19,1869, which was seventeen days more than sixteen years before the filing of the bill; so that under the rule of the courts as held before the statute, by which the right to foreclose ceased only with the right to maintain an action for the debt, it was also barred as to him. Perhaps it may be doubted whether this 11th section, which in terms applies only to “ a mortgage or deed of trust in the nature of a mortgage ” — technical terms, having a well known common law meaning — embraces a lien of the kind here in question, notwithstanding it may be within the reason of the law. Bedell v. Jenney, 4 Gilm. 205 et seq., and authorities there cited; Hazel v. Shelby, 11 Ill. 9. But since the earlier strictness of construction has been somewhat relaxed (C. & N. W. Ry. Co. v. Jenkins, 103 Ill. 595-6), we are not prepared to hold it does not. Assuming it does, it becomes important to ascertain what lien or liens this bill seeks to enforce,' and the relations of these successive grantees, by virtue of their several assumptions and of their ownership of the equity of redemption, to each other, to the original mortgagee, McConnell, and his assignee, the complainant. Counsel for appellees insist it is the lien retained by the deed from Hamilton to Weer of December 25, 1873, and none other. If this were true, we might not deny that the bill was rightly dismissed. Considered solely as an original, independent lien, it may be that it was barred by the statute, though if it were legally possible to arrest .its running, he .certainly,did it.by his repeated payments of the interest. But for reasons here following, wé do not feel called on to express an opinion upon that .question. The counsebwho thus insist, however, open, their argument here with the statement that “ this was an action by bill to foreclose a mortgage * * * executed by JaeksonRusher on the 16th of July, 1866.” This statement, we apprehend,, is cott reet so far as it goes, but does not fully present the character and object of the bill. The "bill itself does not.-explicitly state them, but besides. ,the. reservation in the deed . to Rusher, it is careful to.set out also the retention clauses in the several subsequent conveyances, and -expressly.avers-they are all valid and subsisting liens and inured to complainant’s benefit. It thug relies upon each and. all, and if either was subsisting it was prior to the claims of appellees and, warranted .the relief asked. , . . ... Here then, were- a -promissory- note assigned to appellant before its maturity, .and several successive, and distinct, but not unrelated liens by way of - mortgage to secure it, executed before there was any statute limiting the time within which foreclosure.might be had. Were they all barred by the Act of 1872? - '.. ..- The following general- propositions -are so familiar that ,we need only to indicate them with the utmost brevity : ■ . The assignee of a note secured is regarded in equity as the purchaser of all the securities and remedies attached to it. Vansant v. Alimon, 23 Ill. 30; Lucas v. Harris, 20 Ill 165. ■ A, mortgage, .considered as.security,-is only an incident- to the debt, and.untilthe Act of 1872 took effect subsisted.against a bar by limitation just-as long as its principal. Lock v. Caldwell, 81 Ill. 417; Hagan, v. Parsons, 67 Ill. 170; Medley v. Elliott, 62 Ill. 532; Pollock v. Maison, 41 Ill. 546; Olds v. Cummings, 31 Ill. 188; Roberts v. Lawrence, 16 Ill. App. 455, and cases last above. . The courts do not give to statutes of limitation a , retroactive effect by construction, but only upon a clear expression of the Legislative will. Conway v. Cable, 37 Ill .90; Marsh v. Chestnut, 14 Ill. 227; Thompson v. Alexander, 11 Ill. 54; Smartv. Morrison, 15 Ill. App. 228-9. "This rule has been expressly applied .to the act in question. Dickson v. C., B. & Q. R. R. Co., 77 Ill. 332; Hyman v. Bayne, 83 Ill. 256; Means v. Harrison, 114 Ill. 248;'Smart v. Morrison, 15 Ill. App. 228. The law in force when a cause of action accrues will govern, unless the later one clearly indicates otherwise. Beasley v. Spencer, 25 Ill. 216. Every promise by the .debtor'to pay the debt, expressed or implied, arrests the running of the statute,.and such a promise is implied by his partial, payment of the principal or any interest. Kallenback v. Dickinson, 100 Ill. 427; Carroll ,v. Forsyth, 69 Ill. 127; Lowery v. Gear, 32 Ill. 382. Payment by another for him, by his authority or with his consent, is the same in effect. Kallenback v. Dickinson, 100 Ill. 427; Mellick v. De Seelhorst, Breecher’s Breese, 222. All who claim "under á mortgagor, 'with notice of the mortgage at the time they acquire their interest, whether actual or constructive, are bound by his payment as a new promise arresting the course of the statute against the mortgage debt. Emory.v; Keighan, 88 Ill. 482; Hughes v. Edwards, 9 Wheat. 489 ; Heyer v. Pruyn, 7 Paige, Chy. R. 465; Palmer v. Butler, 36 Iowa, 581-2. The application of these propositions is obvious. The statute in force when the note here in question was given and matured was that of ^November 5, 1849, which limited the right of action thereon to sixteen years from the time the cause accrued. It has been seen that the last payment on account of it by Rusher, the maker, in person, was made a little more than sixteen years before the commencement of this suit. But Hamilton Ms immediate grantee of the equity of redemption in the mortgage premises, who was charged by him and assumed to pay it, and is presumed to have deducted from the price an amount sufficient for that purpose, made payments on account of it within the sixteen years next before the filing of the bill herein. Why, then, were not these, in effect, payments by Rusher, which arrested the running of the statute against the note as'to him ? And why are not the appellees, all of whom claim under him, with notice, also hound by them as to their effect upon the mortgage ? Counsel say that by his assumption of the debt Hamilton became principal debtor and Rusher surety, and that payment by the principal will not prevent the bar of the statute in favor of the surety; citing, Kallenback v. Dickinson, 100 Ill. 427. But the reason for this, as the case cited and the authorities there referred to-show, is, that operating as it does in that be-, half only as a new promise, it can bind only those by whom or whose authority it is made; and there can be no • presumption that a principal, in making payment, acts for or by authority of his surety. Being primarily his own debt he pays it for himself. • So of a co-contractor, or copartner after dissolution of the partnership. But, as the same authorities further show, it is otherwise when made for another and by his authority, express or implied, as by a surety for his principal, or by a copartner for his firm during the existence of the co-partnership. We apprehend that Rusher could not, by a,ny arrangement with Hamilton alone, affect his relation or liability to appellant, and that Hamilton, by his assumption of the debt and lien, became principal in his stead only as between himself and Rusher. In Jones on Mortgages, Sec. 740, it is said: “ As between these parties.(the mortgagor and his grantee assuming the debt) the purchaser then becomes primarily liable and the mortgagor only a surety for the payment of the debt,” and in Sec. 741 the statement is repeated, in substance, with this addition: “ The mortgagee may treat both as principal debtors and may have a personal decree against both.” Hamilton’s assumption, then, did not, ipso facto, extinguish or change the liability of Rusher to appellant. Its effect was to give it an additional obligation and security at its option. There is no evidence in the record of its consent or intention to hold Rusher as surety only, unless_it be the bare acceptance of interest from Hamilton. But apart from the deed there is nothing to show the character in which he made the payments, and none whatever as to that in which appellant recognized him. In such absence of proof the presumption would be it treated him as would best subserve its own interest without any. violation of his rights, and a court of equity might well so hold upon the principle declared in Edgerton v. Young, 43 Ill. 464, and Ætna Life Ins. Co. v. Corn, 89 Ill. 170. This would be as the agent of Rusher, the original debtor and mortgagor, who had conveyed to him the equity of redemption in the mortgaged premises and thereby expressly ■ charged him' to .pay the debt. Rusher must have known that Hamilton’s acceptance of the deed did not discharge or change his liability to' the creditor. It was therefore a clear authority given to pay it for him. In Barger v. Durvin et al., 22 Barb. 68, after a discussion of the principle involved and a review of the authorities, the case and the law applicable to it are thus briefly stated by the court: “ Here the defendants, within six years before this suit was barred as to them by the Statute of Limitations, conveyed their property to trustees, and' directed them- to pay this note among others, naming and describing it; to pay in full if their property was sufficient, if otherwise, to pay a ratable dividend upon it, with other debts. Is there any difference in principle between this authority and that conferred by an express, written direction by the debtors to an agent to pay a particular amount upon a given debt? There could be no doubt that a payment by an agent, under such an authority and direction, would be equivalent to a payment by the debtor himself, and would afford incontrovertible evidence of liability and a new promise. “ I can see no reason why the act of the assignees of these defendants, under all the circumstances of the case, should not be treated as an act of. the defendants themselves, by an agent duly authorized for that purpose, and as evidence of a new promise by the debtor to pay this note.” There appears to be no substantial difference in principle between that case and the one at bar. Still more analogous, and more nearly than any other we have found, is that of E. J. Cockfield, tutor, etc., v. Farley et al., 21 La. Ann. 521. It was a contest between mortgage creditors for the proceeds' of the sale' of the mortgaged .premise's in the hands of the Sheriff. At the succession sale of ¥m. Cockfield, Mrs. Myers purchased the land, giving for .-a part of the purchase money the note held by plaintiff, payable May 1, 1861, secured by mortgage upon the same prcm•ises. On May 12, 1859, she conveyed it to Lewis, who assumed her outstanding note and gave others.of his own se■cured by like mortgage, which were held by the defendants. .On Nov. 21, 1865, Lewis sold it to Pipes, who assumed the .payment of all, and on March 12, 1866, paid a large sum on .the.note of Mrs. Myers. .. The premises were sold at the instance of defendants under fth'e mortgage executed by Lewis to Mrs. Myers. Plaintiff .opposed the application of the fund to the mortgage of dedéndants, claiming priority for the balance due on her note: ¿Defendants claimed that said note was barred by the Statute ¡of Limitations as to her, and consequently her mortgage also, .■but admitted it was valid and subsisting as against Lewis, who had assumed'its payment, and so insisted that,.being secured .only by the same mortgage which also secured those held by tliem, it could only be - paid concurrently with • them. The .court said: “We do not concur in the view taken by the defendants. A large payment Aras made on the note before prescription accrued by Pipes, who in a notarial act assumed to pay the nóte for the maker, Mrs. Myers. We regard the payment made by the purchaser, who retained in his hands the amount due to the original vendor and had assumed to pay it, as an interruption of prescription as to both himself and the original debtor, being made in discharge of the obligation of the latter Avith her implied assent.” Plaintiff’s .claim was accordingly given preference. Here payment by a remote grantee of the mortgagor, who had assumed to pay the debt, was held to arrest the running of the statute in favor of the mortgagor because of implied authority from her to make it. By this rule even the payments by Weer would have kept the debt alive as' against Rusher, much more those made by Hamilton, the immediate grantee, expressly-charged to make them. ; We hold that, as to appellant, Hamilton was the agent of Rusher, duly authorized to make these payments for him. Here, then, were a promissory note and a mortgage to ■secure its payment, executed before the limitation law of 1872 took effect, on account of which payments were made by the maker and mortgagor through his duly authorized agent within sixteen years before the filing of this- bill. And the question remains whether that act applies to and bars such a mortgage after ten years from the time it came into effect. It is not claimed that this act which reduced the limitation of actions on promissory notes from sixteen to ten years, would affect any right accrued on this note under the act previously in force. Even without the saving by Sec. 24 of rights accrued under acts thereby repealed, the ■ right of action on this note for sixteen years- after the last payment upon it by the maker or by his authority would have been saVed, because the courts will not give to limitation laws a retroactive operation without a cléar expression of the Legislative intention to that effect. But it is contended 'that' 'since there was no statute previously in- force" limiting the time for foreclosure, the act might operate upon existing mortgages without violating the rule against retroaction; and the general proposition thus contended for is sustained by the Supreme Court in Gridley v. Barnes, 103. Ill. 211. But does it apply to mortgages previously given to secure promissory notes ? The saving clause in Sec. 24 is that this section, which is held to mean this act in Hyman v. Bayne, 83 Ill. 256, “ Shall not be construed so as to affect any rights or liabilities, or any causes of action that may have accrued before this act shall take effect;” that is to say, the express repeal of" the Act of Nov. 5, 1849, which was in force when appellant’s rights upon this note accrued, shall leave them in full force as they were under that act. 'In Means v. Harrison, 114 Ill. 248, 'the Supreme Court noticed that this saving clause is of unusual breadth for such á provision, embracing “rights or liabilities” as well as “ causes of action,” and held it applicable to a note made before, but upon which a cause of action did not accrue until after the act took effect. They say “ some additional meaning should be allowed to the words ‘ rights or liabilities ’ and that the act was designed to be wholly prospective in its operation, and not to affect contracts then existing.” The Appellate Court for the Fourth District had before taken the same view. Smart v. Morrison, 15 Ill. App. 228. This construction would seem to save all existing remedies and means for realizing rights and causes of action accrued or accruing under.the repealed acts.. To the note here in question there was attached, as incident to it, what was not attached to notes in general — something more than a right to bring an action at law upon it. at any time within sixteen years from its maturity or from the date of the last payment on account of it. There was a “ right ” to proceed also in equity within the same time, to enforce a specific lien for the amount due, upon certain lots of land, and a corresponding “ liability'” of the maker, as owner of the equity of redemption in those lots, and of those claiming under him, though not parties-to the note, to have "them sold under a decree for that purpose. This was a very substantial right, being not merely a remedy in addition to the action at law, but a security also. It came with the note and depended wholly upon it. Doubtless it was the inducement to the acceptance of the note by McConnell, and by the appellant. The right to foreclose accrued with the cause of action upon the note, and would have had no existence without it. We are therefore of opinion it was among the “ rights or liabilities” saved by the provision in section 24 of the Act of 1872. Thus the original debt and lien for its security, created by ¡Rusher July T6, 1866, were still subsisting and in force as against him and the appellees who claim through him, with notice, when the bill herein was filed. By parity of reasoning the additional lien created by Hamilton by his acceptance of the deed from ¡Rusher, of Jan’y 19, 1869, was also then in force and binding upon him and them. He fully acknowledged and promised anew to pay the debt by repeated payments of the interest due upon it, within the sixteen years next before the commencement of this suit and by his retention of the lien in his deed to Weer of December 25, 1872, of all which the appellees had notice. Since the bill did not ask for a personal decree, and Rusher (who is deceased) and Hamilton had parted absolutely with their interest in the mortgaged premises, there was no necessity to make them parties, or if there was, the bill should not have been dismissed, but retained for amendment in that respect. For the reasons above given the decree will be reversed and the cause remanded for further proceedings in conformity herewith. The Supreme Court, since this opinion was written, has decided that the limitation law of 1872 does not apply to mortgages previously given to secure the payment of promissory notes. McMillan v. McCormick. Opinion filed at Ottawa May 15, 1886. jReversed and remcmded.