Statement of the Case.

1st of June, 1865, and are now barred, shall be brought by 1st January, 1870, or both the right and right of action to enforce it shall be forever barred" is an ordinary statute of limitations; that it was a personal privilege of the debtor to plead it; and that to avail himself of it he must plead it.

The proposition that a purchaser with the legal title, whose right accrued subsequent to a mortgage debt barred by the statute of limitations, can avail himself of the statute, when sued to foreclose the equity of redemption, has been sustained in Georgia only in cases where the party setting it up has become the owner of the title, or of the entire equity of redemption, or has been found in possession of the mortgaged property. The court finds no fraud or irregularity in the transactions assailed in the bill to warrant a reversal of the decree.

THIS was an appeal from the Circuit Court of the United States for the Southern District of Georgia.

The decree from which this appeal was taken dismissed a bill brought by William H. M. Sanger, the appellant, to foreclose a mortgage. The bill was brought against William Nightingale, as executor of Phineas M. Nightingale, his father, Mrs. Ellen D. Nightingale, the widow, and John K. Nightingale, and others, children of Phineas, deceased, the maker of the original mortgage.

Sanger, the plaintiff below, was a citizen of New York, and the other parties were mainly citizens of the state of Georgia. This mortgage was made in the city of New York, on December 6, 1869, by Phineas M. Nightingale, who was a resident of Georgia. It conveyed to Sanger, the appellant, certain property in the state of Georgia, known as Camber's Island, in the Altamaha River. Three notes of $10,000 each accompanied the mortgage, payable respectively in one, two and three years, with semiannual interest at the rate of seven per cent per annum. It was to secure the payment of these notes that the mortgage was made, and it was duly recorded January 28, 1870, after having been properly acknowledged.

No money was ever paid upon this mortgage, either by way of principal or interest. Nightingale, the mortgagor, died in April, 1873, and William Nightingale became the executor of his will.

There were several mortgages on this property prior to the one to the plaintiff, which were properly recorded so as to con

VOL. CXXII-12

Statement of the Case.

stitute notice to Sanger, as well as to all other subsequent purchasers or incumbrancers. When Sanger came to file his bill to foreclose his mortgage, which he did April 8, 1883, it became necessary for him to bring these mortgages to the attention of the court. The principal, and only one of them, as the case presents itself to us, which is necessary to be considered, was one made by Nightingale, on January 30, 1855, to Charles Spalding, which included Camber's Island and a very large amount of landed estate beside, as well as some 120 slaves residing upon the estate so mortgaged. This mortgage had been assigned, for the consideration of $100,000, by Spalding to Edmund Molyneux, who afterwards died, and his widow and heirs had removed to England. The executor of the estate of Molyneux had taken judgment against Nightingale before his death for the sum due on the bonds secured by the mortgage to Spalding, and he had also foreclosed the mortgage of Nightingale to Spalding, the property had been sold, and a deed made by the sheriff under that sale to William Nightingale, son of Phineas.

All this occurred in the lifetime of the latter.

The bill of complaint of Sanger assailed this proceeding by which the mortgage to Spalding was foreclosed, and the title of the property came into the hands of William, as the result of a fraudulent combination on the part of Phineas M. Nightingale, his debtor, and William Nightingale, as representing the children of Phineas M. Nightingale, Mrs. Molyneux, and the executor of Molyneux, to defraud him of his just claims under the mortgage of December, 1869. In reciting the means by which this fraud was carried out he said that Phineas M. Nightingale, the mortgagor in both mortgages, conveyed on July 21, 1870, to Mrs. Molyneux, the widow and real party in interest as heir or devisee of Molyneux, then dead, a tract of land known as "Dunginess," which was received by Mrs. Molyneux and intended by Nightingale to be a complete satisfaction of the Spalding mortgage. He further asserted that the Spalding bonds and mortgage were then turned over to P. M. Nightingale, either by a written assignment, or accompanied with an indorsement showing that they

Statement of the Case.

were satisfied; that P. M. Nightingale afterwards procured this mortgage to be foreclosed and Camber's Island sold under it and brought in by his son William without any consideration being paid for it, and solely for the purpose of cutting off the right of Sanger under his mortgage.

The answer of the Nightingales denied this combination and fraud, and by way of explanation said that Dunginess was received by Mrs. Molyneux at the sum of $25,000, credited on the Spalding mortgage; that a question at that time existed. as to how far the loss of the slaves who had been emancipated, which were included in the mortgage of Nightingale to Spalding, and the consideration of which was the land and negroes mortgaged, would be treated as a failure of consideration; that this question was also settled at the time that Dunginess was conveyed to Mrs. Molyneux, and that an adjustment of that matter was made by which, after the receipt of the deed of conveyance of Dunginess, it was agreed that the sum of $51,250 remained due upon that mortgage. They denied all combination to defeat the plaintiff in his mortgage; they asserted that the foreclosure of the mortgage was a bona fide attempt to enforce the collection of the remaining sum of $51,250, and that William Nightingale gave his note for the sum of $30,000, for which the property was sold.

The plaintiff afterwards filed an amended bill, in which he adopted the version of the settlement between Mrs. Molyneux and Phineas M. Nightingale, by which Dunginess was received as part payment only, and the mortgage was foreclosed for the remaining sum, after deduction for the loss of the slaves, the balance of the bonds remaining unpaid. But in regard to the foreclosure proceedings on that mortgage he said, that at the time they were instituted the debt was barred by the limitation law of March 16, 1869, of the General Assembly of Georgia, and that at the time the bonds and mortgage on which that proceeding was instituted were taken by the children of said Phineas M. Nightingale, by the assignment and transfer of the executor of the Molyneux estate, the said bonds and mortgage were all past due and barred by said act

Argument for Appellant.

of 1869.1 He further averred that the failure of said Phineas to plead the statute of limitations in bar of the foreclosure did not and could not effect the right of the complainant to now avail himself of said statute of limitation. He then requested the court to decree the said foreclosure void, by virtue of said limitation law, against the claim and right of complainant. 4 Woods, 483.

Mr. Henry B. Tompkins for appellant submitted on his brief, in which he argued at length in regard to the alleged frauds, and as follows in regard to the statute of limitations.

1. The Spalding mortgage was given to secure a debt arising before 1st June, 1865, to wit: in 1855.

Section 3 of the act of 16th March, 1869, is as follows (pamphlet acts, Georgia Legislature, page 133): "That all actions on bonds or other instruments under seal, and all suits for the enforcement of rights accruing to individuals, or corporations, under statutes or acts of incorporation, or in any way by operation of law, which accrued prior to 1st June, 1865, not now barred, shall be brought by 1st January, 1870, or the right of the party, plaintiff or claimant, and all right of action for its enforcement shall be forever barred."

It is distinctly ruled in Georgia that a purchaser of mortgaged premises, buying before the foreclosure suit is begun, can set up the statute of limitations. In Williams v. Terrell, 54 Ga. 462, the court holds: "One who purchases mortgaged property, prior to the commencement of statutory proceeding to foreclose, and who is not a party to such proceedings, is not bound by the judgment of foreclosure, and may, when the mortgage fi. fa. is levied, go behind the judgment and set up that the mortgage was barred by the statute of limitations at the date of the filing the petition to foreclose." See also Lilienthal v. Champion, 58 Geo. 158, where it is held that a pur

1 The sections of this act which were brought before the court in the briefs of counsel were: § 3, in the brief of the counsel for the appellant, and § 6, in the brief of the counsel for the appellees. The former will be found in the report of the counsel's argument; the latter in the opinion of the court.

Argument for Appellant.

chaser before foreclosure proceedings may go behind the judg ment and show usury.

Also, Stokes v. Maxwell, 58 Geo. 78, where the right of a purchaser to go behind the foreclosure and set up the statute of March, 1869, was denied on the ground that he purchased after suit was begun.

Under the laws of Georgia providing for statutory foreclosure it was not permitted for any one to intervene in the suit. Code of Georgia, § 3965. But those not parties, and who could not become parties, are not precluded by the foreclosure. Frost v. Bordens, 59 Geo. 819.

2. So whatever knowledge Sanger may have had of the foreclosure of the Spalding mortgage in McIntosh Superior Court, he could not have interposed.

The question arises, if it be lawful for Sanger to take advantage of this statute of March, 1869, being a junior mortgagee, when he could without doubt have taken advantage of it, after foreclosure of the Spalding mortgage, if he had been a purchaser of Camber's Island from P. M. Nightingale?

As a general proposition, the rights and liens of mortgagees are not affected if they are not made parties to foreclosure proceedings in the suit of another mortgagee. 2 Hilliard on Mortgages, 156, § 51 et seq. There is no question in the case of attacking a judgment collaterally. The questions are: 1, Fraud, which renders void all judgments, &c., Code of Georgia,

1945 to 1947, 3178, 3595, 3596; and, 2, superiority of lien by reason of the absolute bar of the Spalding mortgage.

3. And where a prior mortgagee is barred by the statute of limitations, and is yet proceeding to foreclose without subsequent mortgagees being made parties, such subsequent mortgagees may intervene, and recover against the prior mortgagee. 2 Hilliard on Mortgages, 160, note (a). Lord v. Morris, 18 Cal. 482. (Decided by Mr. Justice Field.) Gates v. Lilly, 81 Nor. Car. 643. It has been shown that under statutory foreclosure in Georgia the subsequent mortgagee had no right to intervene. In California, as in Georgia, a mortgage is only a security for a debt. Yet a mortgage in Georgia is a deed of a claim, a right, a demand. Calloway v. Peoples' Bank, 54 Geo. 441,