This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The statute of limitations operates as a bar to any action upon the contract; but the contract is not thereby discharged nor is the contract debt extinguished.1 The remedy alone is affected.2 Thus after limitations has run against the foreclosure of a mortgage, the mortgagee may nevertheless sell under a power of sale contained therein.3 This is illustrated by several classes of cases. Thus the right has still sufficient validity after the statute has run to serve as a consideration for a new promise.4 So if a question of the conflict of laws is involved, the statute of limitations of the forum is applied in the absence of specific statutory provision.5 If a cause of action is barred as to one of several joint debtors it has been held to be barred as to all.6 If the liability is joint and several the bar of the statute in favor of one debtor does not enure to the benefit of the other.7 A right of action against a surety is barred when the right of action against the principal is barred.8 This principle has been applied to an action against stockholders on their stock liability. Such right of action is barred when a right of action against the corporation is barred, that is in three years from the time that the corporation sus-pended business, even though by statute no suit could have been brought against the stockholders during the first year after such suspension.9 The fact that a right of action against a surety is barred by a special statute of limitations does not operate as a bar in favor of the principal.10
1 Shepherd v. Thompson, 122 U. S. 231; Bell v. Morrison, 1 Pet. (U. S.) 351; Bauserman v. Char-lott, 46 Kan. 480; 26 Pac. 1051; Gillingham v. Brown, 178 Mass. 417; 55 L. R. A. 320; 60 N. E. 122.
2 Thus the statute is said to be a " wise and beneficial law, not designed merely to raise a presumption of payment of a just debt from lapse of time, but to afford security against stale demands after the true state of things may have been forgotten, or may be incapable of explanation by reason of the loss of evidence." Gillingham v. Brown. 178 Mass. 417, 421; 55 L. R. A. 320; 60 N. E. 122; substantially quoting Bell v. Morrison, 1 Pet. (U. S.) 351.
3 Wheeler v. Castor, 11 N. D. 347; 61 L. R. A. 746; 92 N. W. 381.
1 "A debt secured by a note upon which the right of act was barred by the statute of limitations is not thereby extinguished or paid, but the debt still remains due; and if the person can, by resorting to any other means than an action upon the note, recover his money he may do so; and this because the debt is not regarded as paid, but as still due, though not enforceable by an ordinary action at law." Hopper v. Hopper, 61 S. C. 124, 138; 39 S. E. 366.
2 " Statutes of limitation of personal actions are laws affecting remedies only and not rights." Michigan Insurance Bank v. Eldred, 130 U. S. 693, 696; Booth v. Hoskins. 75 Cal. 271; 17 Pac. 225; Shaw v. Sil-loway, 145 Mass. 503; 14 N. E. 783; Buckingham v. Ludlum, 37 N. J. Eq. 137; Cocke v. Hoffman, 5 Lea
(Tenn.) 105; 40 Am. Rep. 23. Contra, MCracken County v. Trust Co., 84 Ky. 344; 1 S. W. 585.
3 Menzel v. Hinton, 132 N. C. 660; 95 Am. St. Rep. 647; 44 S. E. 385.
4 See Sec. 320, 1673-1678.
5 Amy v. Dubuque, 98 U. S. 470; Bacon v. Howard, 20 How. (U. S.) 22; Alabama Bank v. Dalton, 9 How. (U. S.) 522; McCluny v. Sil-liman, 3 Pet. (U. S.) 270.
6 Askly v. Bell, 80 Va. 811.
7 Harrison v. McCormick, 122 Cal. 651; 55 Pac. 592; Fish v. Far-well, 160 I11. 236; 43 N. E. 367; affirming 54 I11. App. 457.
8 Auchampaugh v. Schmidt, 70 la. 642; 59 Am. Rep. 459; 27 N. W. 805; Pacific Elevator Co. v. Whit-beck, 63 Kan. 102; 88 Am. St. Rep. 229; 64 Pac. 984.