Federal Land Bank of Spokane v. Davis

• Decision Date: 29 November 1930
• Docket Number: 6675.
• Citation: 295 P. 253,88 Mont. 463
• Parties: FEDERAL LAND BANK OF SPOKANE v. DAVIS et al.
• Court: Montana Supreme Court

295 P. 253

88 Mont. 463

FEDERAL LAND BANK OF SPOKANE v. DAVIS et al.

No. 6675.

Supreme Court of Montana

November 29, 1930

Rehearing Denied Jan. 27, 1931.

Appeal from District Court, Fallon County; Stanley E. Felt, Judge.

Action by the Federal Land Bank of Spokane against George W. Davis and others. From an adverse judgment, plaintiff appeals.

Affirmed.

Rudolph Nelstead, of Miles City, and Arthur W. Ostrom, of Spokane Wash., for appellant.

Thomas M. Murn, of Terry, and S. A. Cranston of Minneapolis, Minn for respondents.

GALEN J.

This is an action to foreclose a real estate mortgage dated November 15, 1917, executed by George W. Davis and his wife to the plaintiff on a tract of farm land located in Fallon county to secure a loan of $2,500. The complaint is in usual form, and alleges a breach of the covenants of the mortgage by reason of the failure of the mortgagors to pay certain installments on the mortgage indebtedness and taxes. As to the defendant Al. Hansen, it is alleged "that on or about the 13th day of January, 1919, the defendants George W. Davis and Florence Davis, husband and wife, conveyed the premises *** to the defendant, Al. Hansen, by a warranty deed of that date," and that, as a part consideration, the defendant Al. Hansen assumed and agreed to pay the mortgage executed by Davis and his wife to the plaintiff. The defendant Al. Hansen separately appeared and demurred generally to the plaintiff's complaint, which was overruled; and he thereupon made and filed separate answer to the plaintiff's complaint, wherein he "admits that on or about the 13th day of January, 1919, a deed of conveyance was made by George W. Davis and Florence W. Davis, husband and wife," conveying the land to him; but in that connection alleged that the deed was executed only to secure certain money which was owed to him by Davis and wife. Further, he denied that in the warranty deed from his grantors "he specifically assumed and agreed to pay any mortgage to the said Federal Land Bank of Spokane"; and alleged "that if there was any assumption of a mortgage" on his part, a release thereof was made by Davis and wife on the same date by a contract for a deed whereby the defendant Hansen was released and wholly exonerated from the payment of the mortgage indebtedness. The plaintiff filed its reply to the separate answer of the defendant Hansen, wherein it traversed the affirmative defenses pleaded. The cause was tried to the court without a jury, and, after the conclusion thereof, the court made its findings of fact and conclusions of law, upon which judgment was duly entered decreeing a foreclosure of the mortgage, and that the defendant Al Hansen is not personally liable for the judgment, or any part thereof, "and that the plaintiff is not entitled to a personal judgment against the defendant, Al. Hansen, for any sum of money remaining unpaid" on the judgment after a sale of the mortgaged premises. The plaintiff has appealed from the judgment, and the determinative question presented for decision is whether the court erred in absolving the defendant Al. Hansen from liability for payment of a deficiency judgment after sale of the mortgaged property.

It appears that on January 13, 1919, after the execution of the mortgage, the defendants Davis and wife, being indebted to Al. Hansen, on that date by a deed of warranty, conveyed to Hansen the mortgaged premises "subject to mortgage to the Federal Land Bank for the sum of $2,500 to be assumed by the second party" (Hansen). At the same time contemporaneously therewith, the parties entered into a contract in writing whereby Hansen agreed to reconvey the land to Davis and wife upon payment to Hansen of the sum of $415, represented by two promissory notes of even date for the sum of $207.50...