Cunningham v. Davidoff

Delaplaine, J., delivered the opinion of the Court. Dora Davidoff alleges in her amended bill of complaint in this case: (1) that Frank J. Cunningham, appellant, and his wife, who is now deceased, acquired in 1917 a property, subject to ground rent, situated on Holmes Avenue in the City of Baltimore; (2) that on January 10, 1921, they assigned the leasehold interest to Aaron M. Jacob and his wife, who immediately gave back a purchase money mortgage to secure a loan of $1,500; (3) that the leasehold interest was assigned to her on April 26, 1936; and (4) that no payment has ever been made on the mortgage debt or the interest thereon, and hence the mortgage is barred by limitations. Complainant ¹³⁶ prays the court to declare that the mortgage is no longer a lien or cloud on the title, and to restrain the institution of any action to foreclose the mortgage. Defendant is appealing from an order overruling his demurrer to the amended bill.

In the early judicial history of England, the courts formulated the rule that, in the absence of a statute of limitations applicable to the foreclosure of a mortgage, an action to foreclose may nevertheless be barred by a presumption of payment arising in favor of the mortgagor in possession after the lapse of twenty years from the time the right of action accrues. The presumption that a mortgage has been paid when the mortgagor has been in possession for twenty years was adopted by analogy to the provision in Statute of 21 James I, Chap. 16, that no person shall make entry upon any land but within twenty years after his right of title accrues. The presumption of payment is founded upon the experience of mankind that claims which are valid are usually not allowed to remain neglected. The lapse of years without any attempt to enforce a demand creates a presumption that it was not originally valid or that it has ceased to exist.

Chancellor Kent said: “These presumptions, to be drawn by the Courts in the case of stale demands, are founded in substantial justice and the clearest policy. If the party, having knowledge of his rights, will sit still, and, without asserting them, permit persons to act as if they did not exist, and to acquire interests and consider themselves as owners of the property, there is no reason why the presumption should not be raised.” Giles v. Baremore, 5 Johns. Ch., N. Y., 545, 551. While a statute of limitations is a positive bar, the presumption of payment is not conclusive, but may be rebutted by evidence that the mortgagor or his successor in interest made a part payment on the principal or interest thereon, or otherwise acknowledged existence of the debt.

Boyd v. Harris, 2 Md. Ch. 210, 214 ; Brown v. Hardcastle, 63 Md. 484 ; Subers v. Hurlock, 82 Md. 42, 49 , 33 A. 409 ; Demuth v. Old Town Bank, 85 Md. 315 , 37 A. 266 ; Peters ¹³⁷ v. Hignutt, 138 Md. 24 , 113 A. 586 ; Morse v. National Central Bank, 150 Md. 142 , 132 A. 598 ; Miller v. Horowitz, 172 Md. 419, 432 , 191 A. 906 ; Blanch v. Collison, 174 Md. 427, 436 , 199 A. 466 ; O’Connell v. Everett, 274