Rhodes v. Cannon

Smith, J. On the 2d day of January, 1912, appellee instituted this suit to foreclose a trust deed given by John P. Keiser to secure the payment of a note for $12,000, executed on the 30th day of January, 1905; due and payable on the 2d day of January, 1907. After alleging the payment of certain sums as interest the complaint recites that the maker of said note departed this life on October 17, 1907, and the defendant, J. W. Rhodes, was appointed administrator of his estate October 23, 1907, and has since been the duly qualified and acting administrator of said estate, and the said claim was never presented to the said administrator of said estate for allowance, or allowed by him; nor was the same ever presented to the court for allowance. It was further alleged in order to secure payment of said note, John P. Keiser and his wife executed their trust deed on the 30th day of December, 1905, in which they conveyed to J. W. Rhodes as trustee for the use of Mrs. E: A. Keiser, certain real estate; that Mrs. Keiser was dead and J. S. M. Cannon is the administrator of her estate. The defendant demurred to the complaint for the following reason: “That said complaint does not state facts sufficient to constitute a cause of action in this, that said complaint shows on its face that an administrator of the estate of John P. Keiser was duly appointed, qualified and acting, and that he has been such administrator for a period of more than four years and the claim sued on in this cause was never probated and the same is now barred by the statute of nonclaim.” Appellee took several depositions which tend to show that certain interest payments were made by the administrator regardless of the fact that the claim was never presented to him for allowance, and certain letters of the administrator are exhibited in which he expressed his intention (of paying the debt, notwithstanding the fact that the claim had never been probated. The court overruled the demurrer of the appellants and rendered judgment against them in the sum of $14,-417.50; decreed a lien upon property described in the trust deed and appointed a commissioner to sell the property in satisfaction of the lien, from which decree of the court this appeal is prosecuted. Appellants contend that the note sued on and the right to foreclose the trust deed was barred by the statute of nonclaim on the 24th day of October, 1908, and it is conceded that this note was barred by the statute of nonclaim at that time. Mueller v. Light, 92 Ark. 522; Stewart v. Thomasson, 94 Ark. 60. But appellee says the note was never barred by the statute of limitations, and that before the statute of limitations had run section 5399 of Kirby’s Digest, which provides that the right to foreclose mortgages or deeds of trust shall be barred when the debt therein secured is barred, was amended by tbe addition of the following proviso: “Provided that in all cases where any indebtedness has been or may hereafter be secured by any mortgage or trust deed, such mortgage or trust deed may be enforced or foreclosed at any time within the period prescribed by law for foreclosing mortgages or deeds of trust, so far as the property mentioned or described in such deed of trust or mortgage is concerned, but no claim or debt against the estate of a dead person shall be probated against such estate whether secured « by mortgage or deed of trust or not, except within the time prescribed by law for probating claims against estates.” Act May 10, 1911. (Acts 1911, page 256.) Upon consideration of the demurrer the court below held that the act was retroactive and that it revived claims which were barred before its enactment, and that the Legislature had the power to revive the claim of appellee and restore the lien. . . Able and exhaustive briefs have been filed in the cause and two questions are chiefly discussed. First, whether the act of 1911 is retroactive, and, second, whether one can have a vested right in the defense of the statute of limitations, where the bar of the statute has once attached as it had here. Is the act of May 10,1911, retroactive? If it is not, the debt here sued on remains barred by the statute of nonclaim. Unquestionably the debt was barred by the statute of nonclaim on October 24, 1908, and it remained barred under that statute, in any view of the case until the passage of this act of 1911. During this time a sale of the land described in the deed of trust might have been made free from any lien created by that instrument; .and indeed, so far as we may know from the record in this case, such a sale may have taken place. This condition of affairs demonstrates the wisdom of holding that no statute will be given retfoatcive effect if susceptible of any other construction. The Supreme Court of New York in the case of N. Y. & O. M. R. R. Co. v. Van Horn, 57 N. Y. 472, said: “A law is never to have retroactive effect, unless its express letter or clearly manifested intention requires that it should have such effect, if all its language can be satisfied by giving it prospective operation, it should have such operation only. In Dash v. Van Kleeck, 5 Am, Dec. 291, Kent, C. J., says that ‘We are to presume, out of respect to the law-giver, that the statute was not meant to operate retrospectively;’ and that a ‘statute ought never to receive such a construction, if it be susceptible of any other.’ In Jackson v. Van Zandt, Thompson, C. J., says: ‘It is a first principle of legislation that all laws are to operate prospectively. In Sayer v. Wisner, Savage, C. J., says: ‘A statute never ought to have such a construction as to divest a right previously acquired, if it be susceptible of any other giving it a reasonable object and full operation without such construction. ’ The same learned judge says in Hackley v. Sprague: ‘All statutes are to he construed prospectively and not retrospectively; unless they are otherwise incapable of a reasonable construction;’ and in The People v. Supervisors of Columbia County, that ‘statutes are not to be construed retrospectively, unless they can not have the intended operation by any other than a retrospective construction. In Palmer v. Conly, Jewett, J., says: ‘It is a doctrine founded upon general principles of the law, that no statute shall be construed to have a retrospective operation without express words to that effect, either by enumeration of the eases in which the act is to have such retrospective operation, or by words which can have no meaning unless such a construction is adopted.’ In Berley v. Rampacker, Judge Duer says: ‘Although the words of the statute are so general and broad as, in their literal extent, to comprehend existing cases, they must yet be construed as applicable only to such as may thereafter arise, unless the intention to embrace all is plainly and unequivocally expressed.’ ” In the case of City Ry. Co. v. Citizens St. R. R. Co., 166 U. S. 557, it was said: “A statute should not be construed to act retrospectively or to affect contracts entered into prior to its passage unless its language be so clear as to admit of no other construction. ’ ’ In the case of Beavers v. Myar, 68 Ark. 333, it was said: “An act of the Legislature will not be construed to have a retrospective effect if susceptible to any other construction. ’ ’ And in Fayetteville B. & L. Assn. v. Bowlin, 63 Ark. 573, it was said: “It is a sound rule of construction that a statute should have a prospective operation only, unless its terms show clearly a legislative intention that it should operate retrospectively. Cooley, Const. Lim., 455. The reason for the rule, says Mr. Black, is the general tendency to regard retrospective laws as dangerous to liberty and private rights on account of their liability to unsettle vested rights, or disturb the legal effect of prior transactions. Black, Interp. Laws, % 103, p. 251.” This rule of construction is universal. There is nothing in the language of the amendment of May 10, 1911, which makes it clear and certain that it refers to claims already barred by the statute of non-claim. A reasonable interpretation of it is that it only refers to debts that have been contracted and their payment secured by mortgage or deed of trust prior to.its enadtment, but which were not barred at that time, and to such as might thereafter be executed, and gave to the creditor the right to go into the probate court and present his claim in the usual way against an estate generally, or to foreclose his lien in a chancery court, or by sale under the power, or to pursue both remedies; and since the enactment of this amendment any creditor may or may not, as best suits him, probate his claim. If he prefers to collect it within the period of administration he will probate it. If the security is ample and he prefers the interest, he can let the claim run and foreclose his lien, as he could do if the ubligor had not died. At the date of the enactment of this amendment there were no doubt many debts secured by mortgages and deeds of trust to which the language of the amendment “where any indebtedness has been or may hereafter be secured by any mortgage or deed of trust” would apply. And it is by no means certain that -tbe Legislature was undertaking to revive debts then barred by tbe statute of non-claim. At any rate, tbis is not tbe necessary meaning of tbe language there employed. In bolding that tbe act in question is not retroactive, we assume that the Legislature bad in mind tbis rule of construction. And, moreover, we assume that tbe Legislature also bad in mind the decision of tbis court in tbe case of Couch v. McKee, 6 Ark. 484, wherein it was said that one could have a vested right in tbe defense of tbe statute of limitations, of which one could not be deprived by subsequent legislation. It was there said “A bar created by tbe statute of limitations is as effectual as a payment, and a defendant can not be deprived of tbe benefit of such payment, nor of tbe evidence to support it and, having provided himself with evidence sufficient and legal at tbe time of payment, no law can change tbe nature or destroy tbe sufficiency of the evidence. ’ ’ * * * Tbe proposition that tbe Legislature has tbe power to take tbe property of one man and transfer it to another is at once monstrous and absurd. And what is tbe difference between tbe proposition and tbe one that tbe Legislature has tbe power to deprive a man of legal defense against a demand set up against him? In tbe first case, tbe action would be direct and fully understood ; in tbe second it would be indirect, taking tbe property of tbe defendant under tbe form of a judicial sentence by depriving him of a valid defense against a demaud invalid in law. ’ ’ Apparently all tbe cases on tbis . subject have been collected in tbe able briefs filed in tbis cause and there is a difference of opinion in tbe authoripears to be that one may have such a vested right, and when it has become vested tbe Legislature can not thereafter deprive one of tbis defense. Tbe leading case opposed to tbe view of tbis court, and to what we conceive to be tbe weight of authority, is Campbell v. Holt, 115 U. S. 620. Tbe majority opinion in that case makes a distinction between the effect of statutes of limitation in vesting rights to real and personal property and their operation as a defense to contracts. Bnt two members of that court dissented and delivered an able dissenting opinion. However, the Legislature is presumed to have known the decision of this court, and we will not presume that it intended to require the court to again pass upon the subject where that intent is not expressed in unmistakable language. Appellee also contends that the administrator waived the statute of nonclaim by certain monthly payments of interest, which the deposition taken in the case show's were regularly made, up to June 1, 1910; and by writing certain letters also shown in the -deposition in which the administrator recognized the validity of the debt and promised to pay it as soon as he could make certain collections, and in another of these letters the administrator stated that there was no necessity to probate the note as it was amply secured by the deed of trust. But these letters were written after the bar of the statute of nonclaim had fallen and there is no contention that the administrator did anything which prevented the -probate of the note within the time limited by the statute. Moreover, in the case- of Hill v. State, 23 Ark. 604, it has been said: “The general statute of limitations 'applies to the remedy only, and the debt, after it is barred, may be revived by a new promise, part payment, etc., but the statute of nonclaim applies to the right, and when the claim is barred by it it is forever barred. No promise of the executor or administrator, made in any form, can revive the claim. It is not within their power to allow a demand after the expiration of the "two years. The policy <of the statute forbids it. The statute need not be pleaded, but the executor or administrator may insist on the bar, at any time before final judgment. ” It is urged that the debt is not barred as to the wife, Susie W. Keiser, who joined in the execution of the trust deed because it contained the following recital: “This sale is on condition that, whereas we are justly indebted to Mrs. A. E. Keiser in the sum of twelve thousand dollars, evidenced by note of even date hereof,” and that therefore a foreclosure may be had. It is said that the case of Culberhouse v. Hawthorne, 107 Ark. 462, is authority for that position. But the Culberhouse ease, supra, was a suit to enjoin the foreclosure of a mortgage given to secure a note executed by both the husband and wife, which was barred as against the deceased husband by the statute of nonclaim. The proof in that case did not show that the note had not been executed by the wife for the benefit of her separate estate, and although it appeared that the wife, too, was dead, there had been no administration on her estate, and the court held the proof insufficient to support the action to enjoin the sale of the land. But in the instant case Mrs. Keiser did not sign the note, and, if there is any liability of any kind against her, this liability grows out of the language quoted and not out of the execution of the note, because, as has been stated, she was not a party to its execution. In the case of Coleman v. Fisher, 67 Ark. 27, a mortgage recited that the mortgagor was indebted to the mortgagees in the sum of $590, evidenced by his fifty-nine promissory notes of $10 each, payable monthly to the order of said mortgagee, and it was there held that this recital was insufficient to support a promise to pay the sum mentioned and that as the notes were never executed the promise rested in parol and was barred by the three year statute of limitations. So here, if there was any obligation on the part of Mrs. Keiser to pay, that promise would be barred by the three year statute of limitations, as this suit was brought only one day before the bar of the five year statute of limitátions would have fallen. The decree of the court below is therefore reversed and the cause will-be dismissed.