Opinion
No. 32161.
March 16, 1936. Suggestion of Error Overruled, April 13, 1936.
1. LIMITATION OF ACTIONS.
Parol evidence is admissible to identify debt and apply writing to its subject in determining sufficiency of new promise to toll statute of limitations (Code 1930, section 2318).
2. LIMITATION OF ACTIONS.
Chattel deed of trust expressly acknowledging secured indebtedness evidenced by note for exact amount of note secured by prior trust deed held sufficient acknowledgment of indebtedness secured by prior trust deed to toll statute of limitations where original note was identified as being included in indebtedness acknowledged (Code 1930, section 2318).
3. MORTGAGES. Vendor and purchaser.
New promise to avoid bar of statute of limitations is not required to be recorded except as to creditors and subsequent purchasers for value without notice (Code 1930, section 2147).
4. MORTGAGES. Vendor and purchaser.
"Creditor" or "subsequent purchaser" within statute providing that recorded lien should have no effect as to "creditors" and "subsequent purchasers" where remedy thereon was barred by limitations unless renewal or extension is entered on record is person who has parted with something of value on appearance of record, so that apparent bar cannot be availed of by one who became junior lienor before bar attached, and while notice imparted by recorded instrument was in full force (Code 1930, sections 2147, 2154).
5. MORTGAGES. Vendor and purchaser.
Person who became judgment creditor of mortgagor before bar of limitations against enforcement of lien by mortgagee appeared of record held not "creditor" or "subsequent purchaser" within statute requiring recording of extension or renewal of mortgage which appears of record to be barred by limitations for acknowledgment to waive limitations as to creditors or subsequent purchasers (Code 1930, sections 2147, 2154).
APPEAL from chancery court of Lowndes county. HON. T.P. GUYTON, Chancellor.
Loving Loving, of Columbus, for appellant.
It will be observed that the court below in its finding, and the decree it rendered in this cause, based the same entirely upon the case of Herron et ux. v. Land, 119 So. 823. The appellant does not consider this case as a parallel case or a case on all fours with the case at bar. It will be observed that the case cited by the court, and on which he based his decree, was a contest between a mortgagor and a mortgagee, that the mortgagor set up the statute of limitations against the mortgagee, and quite a different question is involved in this case. This is a case of a contest between a mortgagee and a judgment creditor, and not by the mortgagor, as to the priority of claims, or as to whether the appellant has any lien whatsoever.
When the appellant secured a decree in the chancery court of Lowndes county, Mississippi, against the mortgagor and had it enrolled in the office of the circuit clerk of Lowndes county, Mississippi, it became a lien by virtue of a solemn adjudication of a court, and not by any contract or agreement of the parties, but in case of a renewal or a waiver of the statute of limitation on deeds of trust these liens are acts of the parties and not contractual and not judicial.
Street v. Smith, 85 Miss. 359, 37 So. 837.
Under the circumstances and giving due consideration to the words used, we must submit that this was merely given as additional security, without any intention on the part of the party to that instrument to waive the statute of limitations, which had more than two years to run, or to renew it, or extend the payment of the note of June 1, 1925, in any sense whatsoever. If such had been the case to have complied with section 2154, Code of 1930, this instrument should have been placed on record.
1 Bro. C.C. 90; Edwards v. Rainier's Ex'rs, 17 Ohio St. 597; Minor v. Ferris, 22 Conn. 371; Black's Law Dictionary (2 Ed.), page 19; Bouvier's Law Dictionary.
There must be some words used that will clearly indicate that the statute of limitation is waived, and the debt promised to be paid, or an acknowledgment of it, and that the intention of the party is that the security shall stand for the debt, and that the debt shall not be barred and the security be not lost, but the renewal, or extension, or waiver, or acknowledgment, or promise to pay is recognized in this case.
Helfin v. Kinard, 67 Miss. 522, 7 So. 493; Hart v. Boyt, 54 Miss. 547; Stewart v. Forman, 90 Miss. 83, 43 So. 67; Hollard v. Dickerson, 41 Iowa, 367, 373; State v. Carew, 13 Rict. Law 498, 541, 91 Am. Dec. 245; Webster Dictionary; Edwards v. Kearzey, 96 U.S. 600, 24 L.Ed. 796.
The debt, from this instrument, showing on its face that it was barred on June 1, 1932, that the appellant's lien having intervened and this not renewed by the marginal entry until more than four months after the lien attached, no action, suit or proceedings could be had under this instrument.
Section 2290, Code of 1930.
The appellee for a foreclosure would have to resort to his chattel trust deed, which states it is given as additional security. It does not authorize the sale of anything, except the property described in said trust deed, hence no realty could be advertised and sold under this chattel trust deed. There is no reference whatever in this trust deed to any real estate, but it does refer to some trust deed and the property set out in it, but it gives no reference whereby the said trust deed could be located, so that a description of the property could be found, or whether the property is realty or personalty.
Smith v. Childress, 80 So. 345.
Where an attempt is made to renew a debt or to extend the time, this debt must be clearly identified, and there must be no doubt as to what is done, or what debt is referred to, and it must be done before the debt is barred, which was not the case in this instance according to the marginal entry on the record, the debt had been extinguished, the remedy was also barred, and the lien was lost.
McDaniel v. Short, 127 Miss. 520, 90 So. 186; Heflin v. Kinard, 67 Miss. 522, 7 So. 493.
This unrecorded chattel trust deed cannot affect the lien of the appellant, as it was wholly a secret instrument between the mortgagor and the appellee, and was retained for more than a year before appellant's lien attached, and, in fact, remained a secret lien, until the filing of the appellee's answer on June 8, 1935, more than five years after it had been executed, and the rights of the appellant can in no way be affected by this instrument.
Section 2148, Code of 1930; Taylor v. Desoto Lbr. Co., 137 Miss. 829, 102 So. 260; Philip v. Hicks, 112 Miss. 581, 73 So. 610; Clementson v. Williams, 8 Cranch (U.S.), 72, 3 L.Ed. 491; Davidson v. Morris, 5 S. M. 564; Hembree v. Johnson, 119 Miss. 204, 80 So. 554. John F. Frierson, of Columbus, for appellee.
Counsel for the appellant endeavor in their brief to differentiate between the case of Herron et ux. v. Land, 119 So. 822, 151 Miss. 893, and the case at bar. That was the case of a renewal of a deed of trust on a homestead, which original deed of trust had been executed jointly by husband and wife, and in the renewal of which the wife had not joined. The holding of the court was that the execution of the renewal and extension of the indebtedness, that is, the acknowledgment in writing of the indebtedness by the wife, was not necessary. Herron v. Land case is exactly similar to the case at bar in all its circumstances, with the very slightest variation in the verbiage of the written acknowledgment of the debt. The very renewal and extension of the obligation was from time to time by chattel trust deed, executed by the husband.
In that case the note and trust deed securing same were given more than six years before the suit was brought and the renewal as set out in the chattel trust deed was relied upon, just as in the case at bar, to take the case out of the statute of limitation. The court says, ". . . (a) promise in writing by him alone (husband) made before the bar of the statute of limitations has attached, operates to prevent such bar and to give a new period for both the debt and the security to him."
We respectfully submit that the language in the chattel trust deed as relied on by Phillips, appellee, to take the case out of the statute of limitations, is just as broad and comprehensive.
All authorities are to the effect that oral testimony may be introduced to identify the debt.
37 C.J. 1249; Hart v. Boyt, 54 Miss. 547; First National Bank v. Woodman, 93 Iowa, 668, 57 A.S.R. 287; 17 R.C.L. 905; Heflin v. Kinard, 67 Miss. 522, 7 So. 493.
The appellant obtained his judgment before there was any appearance of any bar on the record, and is neither a creditor nor subsequent purchaser within the meaning of the statute, section 2462, Code of 1930.
Bank of Lexington v. Cooper, 76 So. 659, 115 Miss. 782; Klaus v. Moore, 77 Miss. 701, 27 So. 612; Bramlett v. Wetlin, 15 So. 934, 71 Miss. 902.
On June 1, 1925, Charles C. Buder executed a deed of trust in favor of the appellee, F.P. Phillips, to secure an indebtedness of four thousand one hundred fifty-three dollars and sixteen cents, evidenced by a promissory note for that sum, due June 1, 1926, and this deed of trust was duly recorded in the office of the chancery clerk of Lowndes county. On October 22, 1931, the appellant, the Richter Phillips Company, secured a decree in the chancery court of Lowndes county against the said Charles C. Buder for the sum of one thousand four hundred sixty-one dollars and fifty-five cents, and this decree was duly enrolled on the judgment rolls of the county.
On January 28, 1934, the appellant filed its bill of complaint setting forth the foregoing facts and copies of the records of the different instruments bearing upon the asserted liens, alleging that the deed of trust in favor of the appellee dated June 1, 1925, became barred by the statute of limitation on June 1, 1932, and praying that its enrolled judgment lien be declared to be superior to any lien held by appellee, and that the land conveyed by the said deed of trust be sold to satisfy the aforesaid enrolled decree.
Appellee answered this bill of complaint, admitted the correctness of the exhibits thereto, and averred, in addition to other defensive matters, that the indebtedness secured by the deed of trust dated June 1, 1925, was renewed and extended by an unrecorded chattel deed of trust executed by the said Charles C. Buder in favor of appellee on the seventeenth day of March, 1930. This chattel deed of trust was signed and duly acknowledged by Charles C. Buder on March 17, 1930, and a copy thereof was filed as an exhibit to the said answer. The acknowledgment in writing of the former indebtedness which was relied upon to take the note and deed of trust dated June 1, 1925, out of the operation of the six-year statute of limitation, appears in this deed of trust and reads as follows: "In trust, however, for the following purposes: The first party is justly indebted to the third party in the sum of Five Thousand Nine Hundred and Ninety-Eight and 66/100 ($5,998.66) Dollars, being amount of promissory note heretofore made of Four Thousand One Hundred Fifty-Three and 16/100 ($4,153.16) Dollars, with accrued interest thereon, and also with expenses incurred by the third party for the payment of taxes and insurance on the property set out and described in said deed of trust and this chattel mortgage is given as additional security for that obligation."
This deed of trust contains the further provisions that it should be void if the obligation secured thereby was paid, and that in the event of default in such payment, the property conveyed thereby should be sold at public sale and the proceeds thereof applied to the payment of such indebtedness.
The court below held that the said chattel deed of trust contained a sufficient acknowledgment in writing of the note and deed of trust dated June 1, 1925, to keep that instrument alive and continue it in full force and effect, and entered a decree dismissing the bill of complaint; and the only question presented by this appeal is whether or not the court erred in so holding.
Section 2318, Code 1930, provides, in part, as follows: "In actions founded upon any contract, an acknowledgment or promise shall not be evidence of a new or continuing contract whereby to take any case out of the operation of the provisions of this chapter or to deprive any party of the benefit thereof, unless such acknowledgment or promise be made or contained by or in some writing signed by the party chargeable thereby."
The writing relied on here to save the bar of the statute of limitation expressly acknowledged a secured indebtedness to the appellee, evidenced by a promissory note for the sum of four thousand one hundred fifty-three dollars and sixteen cents, the exact amount of the note secured by the deed of trust dated June 1, 1925. As to the sufficiency of the written acknowledgment, the only point that presents any difficulty is whether or not the indebtedness referred to in the chattel deed of trust, and for which it was given as additional security, is sufficiently identified as being included in the indebtedness secured by the deed of trust dated June 1, 1925. In the case of Heflin v. Kinard, 67 Miss. 522, 7 So. 493, it was held that, in determining the sufficiency of a new promise, parol evidence is admissible to identify the debt and to apply the writing to its subject. In the case at bar, in addition to the acknowledgment of an indebtedness evidenced by a promissory note of the exact amount of the one secured by the prior deed of trust, we have the testimony of appellee's bookkeeper and secretary who handled the transaction and made the calculations of interest in arriving at the total amount secured by the chattel deed of trust. This witness produced the original note for four thousand one hundred fifty-three dollars and sixteen cents, with the calculations made by him prior to the execution of the chattel deed of trust, entered thereon, and fully identified it as being the note included in the indebtedness acknowledged and secured by the chattel deed of trust; and we think the new promise was sufficiently definite to save the bar of the statute of limitation.
Appellant contends, however, that on account of our registration statutes, any new promise appearing in the unrecorded deed of trust could not affect the priority of its lien. Except as to creditors and subsequent purchasers for a valuable consideration without notice, there is no requirement that a new promise that will avoid the bar of the statute shall be recorded. Section 2147, Code 1930, provides that mortgages and deeds of trust shall be void as to all creditors and subsequent purchasers for a valuable consideration without notice, unless they are acknowledged and filed for record; and when a mortgage or deed of trust has been recorded, section 2154, Code 1930, provides that where the remedy to enforce the same "appears on the face of the record to be barred by the statute of limitations, the lien shall cease and have no effect as to creditors and subsequent purchasers for a valuable consideration without notice, unless within six months after such remedy is so barred the fact that such mortgage, deed of trust, or lien has been renewed or extended be entered on the margin of the record thereof, by the creditor, debtor, or trustee, attested by the clerk, or new mortgage, deed of trust, or lien, noting the fact of renewal or extension, be duly filed for record within such time."
In the case of Klaus v. Moore, 77 Miss. 701, 27 So. 612, in construing section 2462, Code of 1892, which upon the point here under consideration is the same as section 2154, Code 1930, the court held that a creditor or subsequent purchaser within the meaning of that statute was one who parted with something of value on the appearance of the record, and that an apparent bar cannot be availed of by one who became a junior lienor before the bar attached and while the notice imparted by the recorded instrument was in full force and effect. This principle was recognized in Bramlett v. Wetlin, 71 Miss. 902, 15 So. 934, and expressly approved and reannounced in Bank of Lexington v. Cooper, 115 Miss. 782, 76 So. 659. The appellant became a judgment creditor of the mortgagor long before there was any appearance of a bar on the face of the record of the original deed of trust, and it was charged with notice thereof; and, consequently, it was neither a creditor nor subsequent purchaser within the meaning of this statute.
The decree of the court below will therefore be affirmed.
Affirmed.