The case was about a mortgage debt that was owed to Mrs. Pettis. A lower court had ruled that a statute of limitations prevented her from collecting on it. The Nebraska Supreme Court reversed that decision.
I'll reproduce the report at the end of this post for the curious, but the truth is, it's a little tedious. And if I had not scrolled up to the beginning of the publication to cite the source properly, I might have missed the most interesting thing about this case.
The report appeared on p. 631-635 of Reports of Cases in the Supreme Court of Nebraska, January Term, 1907. Following the title and copyright pages, I discovered a listing of who was sitting on the Supreme Court during the period of the reports in this volume. What caught my attention was the name of the Chief Justice, Samuel H. Sedgwick.
A quick check at Sedgwick Genealogy Worldwide told me exactly who Samuel was: a son of Dr. Parker Sedgwick by his second wife, Hepsibah Goodwin and, consequently, a first cousin of Darius J. Pettis, Kate's late husband.
Was the decision in this case affected by the relationship between the appellant and the Chief Justice? I'm sure they knew each other. But here's why I think the decision was good. A recommendation was presented to the court by Court Commissioners Albert, Duffie, and Jackson, who all concurred that the previous judgment should be overturned. In addition to Sedgwick, there were two other Justices who would also have had a hand in the ruling, so he was not alone in deciding this case.
Further explanation of the reason behind the judgment appears in the report, below. And in tomorrow's post, we'll find out what other Justices had to say about Samuel H. Sedgwick's character.
Reports of Cases in the Supreme Court of
January term, 1907.
Volume LXXVIII (Vol. 78)
Harry C. Lindsay, official reporter
Prepared and edited by Henry P. Stoddart, deputy reporter
Justices of the Supreme Court during the period of these reports:
Samuel H. Sedgwick, chief justice
John B. Barnes, associate justice
Department No. 1.
JOHN H. AMES.
WILLIS D. OLDHAM.
AMBROSE C. EPPERSON.
Department No. 2.
EDWARD R. DUFFIE.
I. L. ALBERT.
N. D. JACKSON.
Edward J. Mclaughlin, Appellee, v. Solomon Senne Et Al., Appellees; Kate E. Pettis, Appellant.
1. Limitation of Actions: Partial Payments. Part payment on a debt secured by real estate mortgage, when made by one having authority to bind the property, tolls the statute limiting the time within which suit for foreclosure of the mortgage may be brought.
2. ------: Mortgages. Ordinarily the owner of the equity of redemption has authority to bind the property by such payment, and a payment by him on the mortgage debt before the statute has run Is binding on the property, and tolls the statute as against a subsequent mortgagee with notice of the prior mortgage.
3. Mortgages: Priorities. Findings examined, and held insufficient to sustain a decree giving plaintiff's mortgage priority.
Appeal from the district court for
Walsh Bros.., Baldrige & De Bord and Charles H. von Mansfelde, contra.
In a suit brought by Edward J. McLaughlin for the foreclosure of a real estate mortgage, there was a contest between him and Mrs. Kate E. Pettis as to the priority of the mortgages respectively held by them. The Pettis mortgage is prior in point of time, but the trial court held that, as to McLaughlin, it was barred by the statute of limitations, and gave priority to the McLaughlin mortgage. Mrs. Pettis appeals.
No bill of exceptions was preserved, the appellant's theory being that on the facts found by the trial court her mortgage is entitled to priority. The findings are unnecessarily voluminous, and not restricted to the ultimate facts upon which the rights of the parties depend, but include much that is purely evidentiary. So far as seems necessary to an understanding of the grounds upon which our conclusion rests, the findings are, in effect, as follows:
(1) On the first day of October, 1888, one
(2) On the 6th day of December, 1889,
From the foregoing facts found it will be seen that the right to enforce the Pettis mortgage debt against the property became barred on the 1st day of October, 1901, unless it was interrupted by the payments, or some of the payments, made by Tukey and Allen. It is contended that such payments were ineffective to prevent the running of the statute in favor of the holder of the McLaughlin mortgage, and that contention presents what we regard as the decisive question in this case. That question, we think, must be resolved in favor of Mrs. Pettis. Our statute of limitations makes a distinction between an action in personam and one in rem for the enforcement of a debt secured by mortgage. The former, if founded on a written instrument, must be brought within five years (code, sec. 10), otherwise in four years after its accrual; the latter within ten years (code, sec. 6). Section 22 of the code provides: "In any cause founded on contract, when any part of the principal or interest shall have been paid, or an acknowledgment of an existing liability, debt or claim, or any promise to pay the same, shall have been made in writing, an action may be brought in such case within the period prescribed for the same, after such payment, acknowledgment or promise." The effect of part payment is to toll the statute, not only with respect to an action in personam for the enforcement of the debt, hut also with respect to a proceeding in rem for that purpose. Teegarden v.
But that rule has no application where the proceeding is in rem, as it is in this case so far as the mortgages contesting for priority are concerned. In such case, the question is not whether the payment was made by some one having authority to bind another, but whether it was made by some one having power or authority to bind the property. One of the legal incidents of a mortgage is the right of the holder of the legal title to redeem from the mortgage, and this carries with it the right to make payments on the mortgage debt from time to time to protect the equity of redemption. This right of itself is authority to bind the property by payments on the debt. The notice imparted by the record of a mortgage carries with it notice of this right, and, ordinarily, subsequent mortgagees take subject to it, when thus charged with notice. The role is thus stated in Hollister v. York, 9 Atl. 2, 59 Vt. 1: "A payment upon a mortgage debt of interest, or any portion of the principal, by any person interested in the equity of redemption, and having constructive notice of the mortgage, repels the presumption that the mortgage has been paid, and takes the case out of the operation of the statute of limitations, not only as to the payer, but as to all the owners of the equity." See, also, 2 Jones. Mortgages (6th ed.), sec. 1198;
Tukey and Allen, by Senne's conveyance to them in 1896, were reinvested with the legal title to the premises, and consequently the right to redeem from the Pettis mortgage. They held the title from that date to
It follows that the decree of the district court giving priority of the McLaughlin mortgage is erroneous, and we recommend that it be reversed and the cause remanded with directions to enter a decree in accordance with this opinion.
Duffie and Jackson, CC., concur.
By the Court: For the reasons stated in the foregoing opinion, the decree of the district court is reversed and the cause remanded, with directions to enter a decree in accordance with this opinion.