Gibson v. Morris State Bank

• Decision Date: 07 April 1914
• Citation: 140 P. 76,49 Mont. 60
• Parties: GIBSON v. MORRIS STATE BANK ET AL.
• Court: Montana Supreme Court

140 P. 76

49 Mont. 60

GIBSON v. MORRIS STATE BANK ET AL.

Supreme Court of Montana

April 7, 1914

Appeal from District Court, Madison County; William A. Clark, Judge.

Action by Mary Gleim against the Morris State Bank, Charles L Finch, and others, in which Elizabeth Gibson, as administratrix of Mary Gleim, was substituted as plaintiff after the death of the plaintiff. From an order setting aside a decree in favor of the plaintiff and granting a new trial plaintiff appeals. Affirmed.

Hall & Whitlock, of Missoula, for appellant.

M. M Duncan, of Virginia City, and W. A. Pennington, of Butte, for respondent.

BRANTLY C.J.

This action was originally brought by Mary Gleim to foreclose two mortgages upon a tract of land situate in Madison county, and described as the west half and the southeast quarter of section 35, and the southwest quarter of section 36 in township 1 south, of range 2 west of the Montana principal meridian. Subsequently the complaint was amended so as to change the action into one to quiet title. It was tried and decided upon the latter theory. After the appeal had been taken to this court, Mary Gleim died, and Elizabeth Gibson, the administratrix upon her estate, was substituted as plaintiff in her stead. The deceased obtained the title by quitclaim deed from the Morris State Bank of Pony, Mont., dated January 12, 1911. The title of the bank was evidenced by a warranty deed executed to it by the defendant Chas. L. Finch, dated January 7, 1907. This deed, though acknowledged, was not recorded. Prior to the date of the deed, Finch had become indebted to the bank in various amounts, for which he had executed his promissory notes as follows: One for $2,275, dated March 21, 1903; a second for $145, dated April 21, 1903; a third for $1,627.25, dated June 7, 1905; and a fourth for $700, dated June 7, 1905. To secure the payment of the first three of these notes, he had given mortgages to the bank upon all the land described. When the mortgages were executed, Finch was not the legal owner of the southwest quarter of section 36, but held it under a contract of purchase from the state of Montana. The note for $700 was executed for money borrowed to pay the balance of the purchase price due the state. As additional security for its payment, Finch assigned to the bank his contract of purchase, and on June 10th thereafter a patent was issued by the state directly to the bank. The bank gave Finch a written statement to the effect that it held the title only as security for the payment of his indebtedness. At the time the warranty deed was executed, Finch's indebtedness to the bank amounted to about $5,000. The bank did not then nor thereafter surrender Finch's notes, nor cancel the mortgages, but retained them intact. Just prior to or about the time of this transaction, Finch and the bank had executed a lease of the land to one Carter, the bank joining because it was the apparent owner of the 160 acres lying in section 36, under the patent. Finch then went to Silver Bow county, and resided there until this action was brought. The bank collected the rent from Carter, and, after paying the taxes on the land and other charges, indorsed credits upon the second and third notes, but kept an account thereof upon its books under the title "C. L. Finch, Rental Ac." At the time the mortgage to secure the first note was executed, Finch was a single man. Before the latter transactions occurred, Finch and his codefendant, Adelene Vian Finch, began to cohabit as husband and wife, and held themselves out as such until the land was leased to Carter. Apparently they separated at that time, and have lived apart ever since. The latter refused to join in the second mortgage and deed to the bank. When the deed was executed by the bank to the deceased, all the notes were transferred to her order without recourse, except the second. As appears by a memorandum written upon it, it had been fully discharged out of the rent received by the bank from Carter. By formal assignments in writing also, the mortgages, together with the notes secured by them, were transferred to the deceased. Each of the assignments authorized her, at her own cost and expense, "to have, use, and take all lawful ways and means for the recovery of said money and interest; and, in case of payment, to discharge the same mortgages as fully as the party of the first part might or could do if these presents were not made." Though the defendant Adelene Vian Finch filed an answer, she did not appear, nor was she represented at the trial.

The issues presented by the pleadings were two, viz.: (1) Whether the deed from Finch was intended as a mortgage by way of additional security for the indebtedness due, or was intended by him and accepted by the bank as a conveyance to it of his equity of redemption in full payment and discharge of his indebtedness; and (2) whether the deceased was a bona fide purchaser for value. The court found the issues in favor of the plaintiff. A decree was rendered and entered accordingly. The defendant Chas. L. Finch made his motion for a new trial on the ground, among others, of insufficiency of the evidence to justify the decision. During the pendency of the motion, the term of office of Hon. Lew L. Callaway, the judge who presided at the trial, expired, and the motion was submitted to Hon. W. A. Clark, who granted it. The plaintiff has appealed.

Though defendant's notice of intention recites several of the statutory grounds for a new trial, apparently the only ground urged at the hearing in the district court was the insufficiency of the evidence to justify the findings. We therefore have before us for decision the single question whether Judge Clark erred in granting the motion on that ground. It is argued by counsel for the plaintiff that, while it is the general rule that an order determining a motion for a new trial on the ground of insufficiency of the evidence will not be disturbed if the evidence presents a substantial conflict, this rule has no application to a case in which, as in this, the motion has been submitted to and determined by a judge other than the one who presided at the trial. They say that, inasmuch as Judge Clark, not having seen the witnesses or heard their testimony, was compelled to gain his knowledge of the case from the record alone, he was in no better position to determine the motion than is this court, and hence that his order does not carry with it the presumption usually indulged on appeal in favor of such an order, viz.: That the ruling of the trial court will be accepted as conclusive, unless an abuse of discretion is made apparent. It is therefore argued that this court should examine the record and determine the question submitted, without regard to the conclusion arrived at by Judge Clark. The same contention was made in the recent case of Leveridge v. Hennessy, 48 Mont. 58, 135 P. 906, but was not considered or determined, because, as disclosed by the record, there was a decisive preponderance of the evidence in favor of the conclusion reached by the judge who presided at the trial, and hence there was no room for the exercise of discretion by the judge who ordered a new trial. It was there said: "The question is an interesting one and unsettled in this state, but we do not deem the present case an opportune one for its consideration." The statement that the question is unsettled in this state is not entirely correct. Several decisions heretofore made by this court either directly or in principle support counsel's contention. In the early case of Orr v. Haskell, 2 Mont. 225, in affirming an order denying a motion for a new trial, the court said: "It must be clear that the jury has erred before a new trial will be granted, on the ground that the verdict is against the weight of the evidence or unsupported by it. And, if this is the rule, as it undoubtedly is, even in the court where the cause is tried, and before whom the witnesses appear and testify, a fortiori ought it to be the rule when another court decides the motion for a new trial, with no other knowledge of the facts than is derived through the imperfect medium of a written statement." In Landsman v. Thompson, 9 Mont. 182, 22 P. 1148, after discussing and affirming the rule which ordinarily applies to cases presenting substantially conflicting evidence, the court said: "The rule above cited is based upon the ground that the judge below has heard the oral testimony, has observed the demeanor of witnesses, and had the benefit of living, speaking testimony, which in the Supreme Court is reduced to a lifeless printed record, for which reason it is presumed that the trial judge was in a better position to exercise a sound discretion than is the appellate court; and, if it does not appear that he has abused such discretion, his action will not be disturbed. In the case at bar, the judge who granted the motion was other than the one who presided at the trial. The court has not therefore the benefit of the judgment of the trial judge, based upon his view of the animate witnesses. We occupy the same point of view as the judge passing upon the motion in this case, as far as the advantage of judging testimony is concerned. This court has, as the judge below had, nothing but printed testimony. Neither has any light, save from the inanimate type, and to that we must refer to decide whether the judge abused a discretion." It then proceeded to examine the record, and reached a conclusion upholding the ruling of the judge who granted the motion, on the ground that there was no substantial conflict in the evidence.

Newell v. Whitwell, 16 Mont. 243, 40 P. 866, is, in principle, also directly in point. That was an appeal from an order granting a motion to dissolve an...