Demai v. . Tart

Seawell, J. The appeals of plaintiff and defendant present two main questions: (a) whether the note due 15 December, 1928, was barred by the statute of limitations as a matter of judicial determination, and (b) whether, upon foreclosure of the deed of trust, the proceeds of the sale may be lawfully applied to the debt evidenced by the barred note. (1) The first question depends upon the effect of the purported credit endorsement on the note maturing 15 December, 1928. Much the greater weight of authority of decided cases is to the effect that a credit endorsement in.the handwriting of the payee made upon a promissory note is competent in evidence of the fact of the payment when supported by evidence aliunde that the endorsement was actually made before the bar of the statute fell. Anno., 59 A. L. R., 905. This is put upon the ground that the credit, by reason of the fact that it diminishes the amount due upon the note, is in the nature of a declaration against interest. Goddard v. Williamson, 72 Mo., 131; Wilson v. Pope, 37 Barb. (N. Y.), 321; Williams v. Alexander, 51 N. C., 137; Addams v. Seitzinger, 1 Watts & S. (N. Y.), 243. The holding is otherwise as to such an endorsement made after' the bar of the statute has become complete, since the endorsement would be obviously in the category of a self-serving declaration. Smith v. Simms, 9 Ga., 418; Young v. Alford, 118 N. C., 215, 23 S. E., 973; Bond v. Wilson, 129 N. C., 387, 40 S. E., 182; Concklin v. Pearson, 30 S. C. L. (1 Rich.), 391. Our own Court has long been committed to the majority view. Williams v. Alexander, supra; Woodhouse v. Simmons, 73 N. C., 30; Grant v. Burgwyn, 84 N. C., 560; White v. Beaman, 85 N. C., 3; Young v. Alford, supra; Bond v. Wilson, supra. The fact that the entry itself bears date within the statutory period, without evidence aliunde that the endorsement was actually so made, is not accepted as evidence of the date of the endorsement. Goddard v. Williamson, supra; Grant v. Burgwyn, supra; Mills v. Davis, 113 N. Y., 243, 21 N. E., 68. The credit of a relatively insignificant amount on a large obligation, close to the time at which the bar of the statute would become complete, is looked upon with suspicion, Chambers v. Walker, 38 S. C. L. (4 Rich.), 548; Merchants & P. Nat'l Bank v. Hunt, 113 S. C., 394, 102 S. E., 720, and presents a circumstance which challenges the soundness of the ruling. But it is still within the range of minor tolerances which are often the price of a rule intended to be of general service. Our courts, while agreeable to the admission of endorsements as evidence of payment, when supported by proper evidence aliunde, have not yet adopted the view that such evidence, when admitted, is given a presump *109 tive effect in the sense that it is in law a prima facie establishment of the fact of payment; and the best considered cases in other jurisdictions regard it as a matter for the jury. Brown v. Hutchings, 14 Ark., 83; Smith v. Simms, supra (9 Ga., 418); Wheeler v. Robinson, 50 N. H., 303; Ward v. Hoag, 78 App. Div., 510, 79 N. Y. Supp., 706; Mills v. Davis, supra (113 N. Y., 243, 21 N. E., 68); Young v. Alford, supra (118 N. C., 215, 23 S. E., 973). In the case at bar it is not necessary to pass upon the legal effect of the endorsement as evidence of payment, since there is in the record no evidence aliunde as to when the endorsement was made. The court below was therefore justified in holding as a matter of law that the note had been barred by the statute when the present action was instituted. (2) Under C. S., 437 (3), an action for the foreclosure of a mortgage or deed of trust is barred unless begun “within ten years after the forfeiture of the mortgage, or after the power of sale became absolute, or within ten years after the last payment on the same.” Of significance in the case at bar is the expression “within ten years after the last payment on the same.” It is admitted that on 21 March, 1931, a payment of $725.83 was made upon the note maturing 13 April, 1928, or at least within ten years from the maturity of the said note. Although this payment was allocated to one of the notes in a series of two evidencing the entire indebtedness, the language employed in the subsection above quoted — C. S., 437 (3) — must be held to refer to any payment on the debt secured by the deed of trust, without regard to its subdivision into notes suitable to the convenience or necessities of the parties. It is only when we seek the forum of enforcement that a distinction arises, and that relates to a distinction between causes of action rather than a difference in the nature of the secured debt. Unlike the older statutes which created a rebuttable presumption of payment, our present statute limits the time within which actions may be brought and thus operates upon the remedy and not the right. The bar of the statute on a sealed promissory note — C. S., 437 (2) — is of that character, and while it takes away the forum for the enforcement of the note, it does not destroy the debt. See cases cited infra. A mortgage or deed of trust which creates a lien upon lands and in effect sets them apart in a trust for the payment of a debt with suitable provisions for sale and application of the proceeds is a separable specific agreement and raises an obligation with respect to both the debt and the lands not comprehended in the promissory note given with respect to the same debt but is in addition thereto, and, in the absence of an agreement to the contrary, it is independently enforceable. Capehart v. Dettrick, 91 N. C., 344, 352; Menzel v. Hinton, 132 N. C., 660, 44 S. E., *110 385. The equitable remedy of foreclosure and execution of the trust is still available, although the legal remedy of personal action on the note is barred. Lewis v. McDowell, 88 N. C., 261; Capehart v. Dettrick, supra; Long v. Miller, 93 N. C., 227; Arrington v. Rowland, 97 N. C., 127, 131, 1 S. E., 555; Overman v. Jackson, 104 N. C., 4, 8, 10 S. E., 87; Woody v. Jones, 113 N. C., 253, 18 S. E., 205; Williams v. Kerr, 113 N. C., 306, 18 S. E., 501; Taylor v. Hunt, 118 N. C., 168, 172, 24 S. E., 359; Hedrick v. Byerly, 119 N. C., 420, 25 S. E., 1020; Menzel v. Hinton, supra; Jenkins v. Griffin, 175 N. C., 184, 186, 95 S. E., 166. In Menzel v. Hinton, supra, the principle was applied to the power of sale, although action upon the mortgage might be barred. This resulted in the enactment of C. S., 2589, which prohibits the execution of the power of sale when a mortgage or deed of trust has become barred. Spain v. Hines, 214 N. C., 432, 434, 200 S. E., 25. The exceptions disclose no error upon either the plaintiff’s or the defendant’s appeal. No error.