Adam v. McClintock

• Decision Date: 05 May 1911
• Citation: 21 N.D. 483,131 N.W. 394
• Parties: ADAM et al. v. McCLINTOCK et al.
• Court: North Dakota Supreme Court

21 N.D. 483

131 N.W. 394

ADAM et al.

v.McCLINTOCK et al.

Supreme Court of North Dakota.

March 9, 1911.

Rehearing Denied May 5, 1911.

Syllabus by the Court.

Plaintiff, an unmarried woman, executed a mortgage on land held by her under homestead entry on which homestead she was residing; the mortgage immediately recorded secured the payment to defendants of her father's debt. She thereafter married her coplaintiff herein. They resided together on the land and claimed the same as exempt as a homestead under the state laws. The wife mortgagor files her schedules in bankruptcy in which she lists the debt, mortgage, and all covenants therein, of which defendants had notice. Said proceedings were regular and resulted in plaintiff's discharge in bankruptcy of all provable debts so dischargeable; in such proceedings she claimed her homestead as exempt under the state homestead laws, and the same was set apart to her as such. After such discharge, she makes final proof on her homestead, based on five years' residence, cultivation, and improvement, on which proof patent was delivered to her for the land so homesteaded. She with her husband then instituted this action, asking that the mortgage be adjudged invalid, alleging its invalidity, that the homestead exemption defeated the mortgage, and that the discharge in bankruptcy discharged the debt and mortgage. Held that the mortgage is a valid lien on the land, and foreclosure ordered.

Under section 6155 of the North Dakota Revised Codes of 1905, the title, after acquired by patent to the homesteader, inures to the mortgagee as of the date of the execution and delivery of the mortgage.

The mortgagor, by reason of the covenants and recitals contained in the mortgage, is estopped to deny its validity.

The recording of a mortgage in the office of the register of deeds of the county in which the land is situated, prior to final proof on the land so mortgaged, operates as constructive notice to the same effect as though the mortgage had been executed and recorded after the recording of the patent.

The homestead exemption to the family is dependent upon the mortgagor's title, and that is subject to the prior acquired lien of the mortgage, and the mortgage is not affected by the homestead exemption.

As plaintiff mortgagor had resided 6 1/2 years on the tract, prior to the institution of bankruptcy proceedings, she had the full, vested equitable title to the land homesteaded to which the mortgage attached before bankruptcy.

The bankruptcy proceedings in no wise affected the lien of the mortgage.

Appeal from District Court, Pierce County; Burr, Judge.

Suit by Fulbina Adam and another against W. D. McClintock and others to quiet title to certain land as against a mortgage held by defendants. From a judgment for plaintiffs, defendants appeal. Reversed.Paul Campbell, for appellants. C. L. Young and Butler Lamb, for respondents.

GOSS, J.

This action comes to this court upon an appeal by defendants from a judgment entered against them in favor of the plaintiffs by the district court of Pierce county; the judgment as entered quieted title in plaintiffs to the land involved. From this judgment, defendants appeal.

On trial the facts were stipulated, and are summarized into the following statement:

Fulbina Adam, before her marriage, made homestead entry upon 160 acres of land in Pierce county in 1901, establishing her residence thereon soon afterwards. On November 7, 1902, to secure her father's pre-existing debts to the defendants, evidenced by promissory notes aggregating $280 and accrued interest, due in 1903, plaintiff executed and delivered to defendants her mortgage in writing, duly acknowledged by her, covering her unproved government homestead, and running to defendants as mortgagees. The mortgage contained the usual covenants of title, ownership, right of possession, quiet enjoyment, right to convey, and against incumbrances. It also covenanted to pay the debts purported to be so secured. This mortgage was recorded in the office of the register of deeds on the day it was given. Plaintiff, Fulbina Adam, did not sign the notes secured by the mortgage, and the debts evidenced by said notes were not her debts. The mortgage was executed in her maiden name, Fulbina Baumstark. Her father, since deceased, had previously executed the notes secured, and he joined in the mortgage which covered other lands in which he had some interest. Thereafter, in August, 1903, these plaintiffs intermarried, and ever since have been and now are husband and wife. Immediately on their marriage they moved upon the unproven homestead held under homestead entry of the wife, and have ever since resided thereon. The husband plaintiff since the marriage has placed improvements upon the wife's homestead to the value of $500, and has had the complete control, charge, and use of said premises. Since their marriage three children have been born to plaintiffs, and the tract has always been claimed as exempt under the state homestead laws from levy under execution, and is of a value of less than $5,000. That at the time Fulbina Baumstark executed and delivered the mortgage aforesaid Nikolaus Adam was not present. He had no notice of the existence of said mortgage until after final proof had been made on said land, and he is in no way liable for the indebtedness mentioned in the mortgage.

On June 29, 1908, Fulbina Adam filed her duly verified schedules in bankruptcy in the United States District Court, and was then duly adjudged a bankrupt upon proper motion and order; that her schedules in bankruptcy listed and set forth the indebtedness and mortgage signed by her heretofore mentioned, and in addition thereto she duly scheduled and listed all estoppels against her contained in the warranties and covenants of said mortgage; that in said schedules she claimed as exempt to her the homestead premises, both under the homestead laws of the state of North Dakota and under the government homestead laws, and that said land was by the court set apart to her as homestead property and as exempt, as claimed in her schedules. It is further stipulated that said proceedings were in all things regularly conducted before said bankruptcy court, and as a result Fulbina Adam was duly adjudged a bankrupt under the laws of Congress relating to bankruptcy; that she conformed to all the requirements of the bankruptcy laws in that behalf, and was, on September 24, 1908, after due notice had been given, as by such laws required, to all parties entitled thereto, including the defendants herein, discharged from all debts and claims which are made provable by the United States bankruptcy acts against her estate and which existed on June 29, 1908, the day the petition for adjudication in bankruptcy was filed by her; the decree in bankruptcy however, excepted such debts from its operation as are excepted by law from discharge in bankruptcy.

It is further stipulated that on October 15, 1908, Fulbina Adam made final proof for said land under her homestead entry of seven years before, based on residence on such land-not commutation proof-and that her final proof was duly accepted by the Department of the Interior, and that title has passed on said final proof by patent from the United States to her (Fulbina Adam) prior to the commencement of this action. That said proof was paid for by her husband and coplaintiff, Nikolaus Adam, and that at the date of said proof and long previous thereto, and at the time that title passed from the United States government for said land to Fulbina Adam and previous thereto, this plaintiff Nikolaus Adam claimed homestead rights in and to said land under the state laws and was living thereon with his wife, Fulbina Adam, and had all such homestead rights as are so allowed by law.

The foregoing facts are the stipulated facts before the court. The pleadings are in the usual form, the husband and wife, plaintiffs, asking that title be quieted in them, to the effect that the mortgage be declared no lien upon the land, and be adjudged void and canceled of record. Defendants answering recite their mortgage, default in payment thereof, the usual statutory recitals, and ask judgment for sale of the land under foreclosure to collect the debt so secured. The trial court made findings of fact, establishing the facts stipulated and ordering judgment thereon as prayed for by plaintiffs, declaring defendants' adverse claims under the mortgage to be void, discharged, and a mere cloud on the title to said land.

This case presents many interesting questions for decision, among them (1) the validity of the mortgage given on the unproven government homestead of the wife plaintiff prior to her marriage; (2) the effect, if any, of the adjudication and discharge in bankruptcy upon the mortgage; and (3) whether the husband's homestead exemption or rights thereunder in and to the land under our state laws affect any rights the mortgagees may have under the mortgage given by the wife before marriage. On the decision of these questions turns the case.

Under the statement of facts the entrywoman, plaintiff, executed the mortgage in question the year following her homestead entry upon the land, October 22, 1901. When she filed her schedules in bankruptcy and was adjudged a bankrupt on June 29, 1908, she had resided upon said land for over 5 years, in fact over 6 1/2 years, and thereafter on October 15, 1908, she made final proof, and the same was accepted and a United States patent based on such residence and improvements was issued and delivered to her prior to the commencement of this action. She was an unmarried woman when she made homestead entry and also at the time she mortgaged her homestead; the date of her marriage being August 15, 1903.

[1] Was her mortgage valid when executed, considering the fact that legal title to the land was then in the United States government? The later authorities are unanimous that an...