Acklin v. First Nat. Bank of Mott, 6241.

• Decision Date: 23 May 1934
• Docket Number: No. 6241.,6241.
• Parties: ACKLIN et ux. v. FIRST NAT. BANK of MOTT et al.
• Court: North Dakota Supreme Court

64 N.D. 577

254 N.W. 769

ACKLIN et ux.

v.FIRST NAT. BANK of MOTT et al.

No. 6241.

Supreme Court of North Dakota.

April 11, 1934.

On Rehearing May 23, 1934.

On Rehearing.

Syllabus by the Court.

1. Under section 5608, Compiled Laws of 1913, and section 5607, 1925 Supplement to the Compiled Laws of 1913, to incumber a homestead by mortgage, the latter must be executed and acknowledged by husband and wife. Without both execution and acknowledgment the instrument is void.

2. To constitute an acknowledgment the grantor must appear in person before the officer for the purpose of acknowledging the instrument, and with a view to giving it authenticity, make an admission to the officer that he had executed the instrument.

3. The Legislature cannot, by retroactive measures, cure a void mortgage purporting to incumber a homestead, where the wife had not acknowledged the instrument.

4. Held, for reasons stated in the opinion,that the curative acts, as contained in chapter 275, Session Laws of 1927, and chapter 305, Session Laws of 1931, are not applicable to the facts in this case.

5. Where a mortgage is void for lack of an essential element to constitute a lien contract, a foreclosure by advertisement based thereon is a nullity.

6. Where a mortgage purporting to incumber a homestead is void, and subsequently the mortgage is foreclosed by advertisement upon notice to the mortgagors, and taxes paid by the mortgagee in accordance with the terms of the mortgage, the fact that the mortgagors made no objection or protest is not acquiescence constituting an estoppel.

7. Where taxes are paid by the mortgagee under the terms of a void mortgage, the payor has a lien by subrogation upon the premises for repayment.

8. Where the mortgagor seeks equitable relief from a void mortgage under which he has received a consideration, a court of equity may require, as a condition precedent to the granting of such relief, that the consideration be restored, even though no equitable estoppel exists.

Appeal from District Court, Hettinger County; George M. McKenna, Judge.

Action by W. A. Acklin and wife against the First National Bank of Mott, North Dakota, and another. From an adverse judgment, the named defendant appeals.

Judgment modified and, as so modified, affirmed.

Jacobsen & Murray, of Mott, for appellant.

Hanley & Hanley, of Mandan, for respondents.

MOELLRING, Judge.

This is an appeal from a judgment in favor of the plaintiffs and against the defendants, canceling a real estate mortgage. The appeal is from the whole judgment and is based solely upon the judgment roll. The trial court made findings of fact and conclusions of law upon which judgment was entered, and this appeal challenges the conclusions of the court from the facts found. In the brief of counsel for defendants, it is stated: “There is no settled statement of the case, the defendant being content to stand on the findings of fact as a basis for a judgment in its favor.” The trial court's findings are clearly within the issues framed in the pleadings, and the only attack, therefore, is upon the conclusions of law.

The trial court found that plaintiffs, who are husband and wife, were occupying the premises involved as a homestead at all times material to this case and are still so occupying the same; that the homestead property consists of a dwelling house, located upon a lot less than one-half acre in area, in the city of Mott, and is of a value not to exceed $2,500.

The court found, also, that prior to January 25, 1923, the plaintiff W. A. Acklin was indebted to the defendant bank in the sum of $1,068.11, and that on said date he executed a note for that amount in favor of the bank and also a chattel mortgage securing the same. The note was also signed by his wife, Mary A. Acklin, one of the plaintiffs. On March 7, 1923, plaintiff W. A. Acklin applied to the defendant bank for a loan of $200 to buy seed grain, and the defendant bank finally made a loan to him in the amount of $175 for such purpose, on condition, however, that he execute a note for that amount and secure the same together with the said note for $1,068.11 upon the premises involved-the homestead of plaintiffs. This he agreed to do and in pursuance thereof executed a note for $175 and also a real estate mortgage covering the homestead. Both the note and mortgage were antedated January 25, 1923, the date of the prior note mentioned, and the said mortgage purported to secure both notes. The note and mortgage were signed by the plaintiff W. A. Acklin at the office of the defendant bank on the same date, March 7, 1923.

The court also finds that the plaintiff Mary A. Acklin placed her signature upon the mortgage and the note of $175 at her home, on the 7th day of March, 1923, and “that at the time she placed her name thereon she did not know that said mortgage included the note for $1,068.11, but that she thought she was signing a mortgage upon her homestead for an amount not to exceed the $175.00.”

It is found, also, that while the certificate of the notary in the mortgage states that the plaintiffs appeared before the notary and acknowledged their signatures, respectively, to the instrument, on the 7th day of March, 1923, the facts are that: “The plaintiff W. A. Acklin executed and acknowledged the mortgage above described in the defendant bank before the notary public E. H. Trousdale but that the plaintiff Mary A. Acklin never acknowledged said mortgage or her signature thereto before the notary public E. H. Trousdale, or before any other officer authorized to take acknowledgments. That said mortgage was completely filled out at the time she placed her name thereon. That said mortgage was filed for record in the office of the register of deeds of Hettinger County, N. D., on the 14th day of March, 1923. That the defendant The First National Bank of Mott took said notes and real estate mortgage with knowledge of the fact that the mortgage was signed by Mary A. Acklin outside of the bank and not before the notary public, E. H. Trousdale, and was not acknowledged by her.”

The court also finds that from the year 1923 to the year 1931, the said defendant bank, as the alleged owner of the mortgage, never communicated with the plaintiff Mary A. Acklin with reference to the mortgage or asked her to pay the same; that the notes for $1,068.11 and $175, respectively, were renewed from time to time by W. A. Acklin, but that the wife never signed any of said renewal notes nor was she ever asked to sign any of them; and it is further found that the plaintiff Mary A. Acklin did not know that the real estate mortgage included and secured the note for $1,068.11 until proceedings were commenced in the year 1931 by the defendant bank to foreclose the mortgage by giving notice of intention to foreclose. The notice of intention to foreclose was mailed to plaintiff W. A. Acklin by registered mail, was received by him on the 25th day of August, 1931, and the contents disclosed to his wife on the same date. This notice stated that the amount claimed to be due, including taxes and interest, was the sum of $1,286.19, and it was upon receipt of this notice that plaintiff Mary A. Acklin first discovered that the defendant bank was claiming security on the homestead for the payment of the note for $1,068.11.

Subsequently, the mortgage was foreclosed by advertisement and the premises were sold at public auction, pursuant to notice, on November 21, 1931, and sold to the defendant bank as the highest bidder for the sum of $1,363.76, which was the amount of the indebtedness fixed in the mortgage, together with costs; and on the same date a certificate of sale was issued by the sheriff to the purchaser, the defendant bank.

The findings also disclose that this action was commenced by plaintiffs in the month of November, 1932, and within one year from date of sale under the purported foreclosure.

Counsel for the defendants in their brief present the issues in this court thus:

“1. Whether or not the mortgage became a valid one by virtue of an act of the Legislature of 1927.

2. Whether or not the plaintiffs were and are estopped to assert the invalidity of the mortgage.

3. Whether or not they can attack the validity of the mortgage after permitting the same to be foreclosed, and go to sheriff's deed.”

The law with reference to the conveyance of a homestead as it existed at the time the instrument in question was signed by the husband and wife is contained in section 5608 of the Compiled Laws of 1913, and reads as follows: “The homestead of a married person cannot be conveyed or incumbered, unless the instrument by which it is conveyed or incumbered is executed and acknowledged by both husband and wife.”

Section 5607 of the Compiled Laws of 1913, amended by chapter 229 of the Session Laws of 1923, which chapter became effective as an emergency measure on February 3, 1923, also provides, in the second paragraph of said section, that a mortgage must be “executed and acknowledged by both husband and wife,” to incumber a homestead.

These sections of our law were enacted to carry into effect the mandatory provisions of section 208 of the state Constitution, which provides: “The right of the debtor to enjoy the comforts and necessaries of life shall be recognized by wholesome laws, exempting from forced sale to all heads of families a homestead, the value of which shall be limited and defined by law. * * *”

The provisions of said section 5608, Compiled Laws of 1913, came before this court for construction on several occasions, and it has been uniformly held that where an instrument purports to convey an interest in the homestead estate, the instrument must be executed and acknowledged by both parties to the marriage relation; and, unless these statutory provisions have been strictly complied with, such purported conveyance is void.

In the case of Severtson v. Peoples, 28 N. D. 372, 148 N. W. 1054, 1058, in construing said section of our st...