Humbird v. Arnet

• Decision Date: 30 April 1935
• Docket Number: 7353.
• Parties: HUMBIRD et al. v. ARNET et al.
• Court: Montana Supreme Court

44 P.2d 756

99 Mont. 499

HUMBIRD et al. v. ARNET et al.

No. 7353.

Supreme Court of Montana

April 30, 1935

Appeal from District Court, Park County, Sixth District; Benjamin E Berg, Judge.

Foreclosure action by Thomas J. Humbird and another, the surviving trustees under the will of John A. Humbird, deceased, and another, against Charles A. Arnet, a bachelor, and others. From the judgment of foreclosure, defendants Chris Foss Alban Bodine, Y 5 Ranches, Incorporated, the Hill Cattle Corporation, and Anna G. Bodine appeal.

Affirmed.

Gibson & Smith, of Livingston, for appellants.

Frank Arnold, of Livingston, and Rockwood Brown and Horace S Davis, both of Billings, for respondents.

ANDERSON Justice.

The plaintiffs, as testamentary trustees under the will of John A. Humbird, deceased, appointed as such by the probate court of Ramsey county, Minn., brought this action to foreclose a real estate mortgage on lands in Park county.

The defendant Charles A. Arnet on November 29, 1916, executed and delivered his promissory note in the sum of $25,000, payable March 1, 1922, unto the Union Trust & Savings Bank of Spokane, Wash., and on the same day he made, executed, acknowledged, and delivered, to secure the payment of this note, the mortgage sought to be foreclosed in this action, which was recorded in the office of the county clerk of Park county on December 4, 1916. On January 8, 1917, the mortgagee bank indorsed the note, and, by instrument in writing, assigned the mortgage to the then trustees under the will of John A. Humbird, appointed as above stated. Thereafter, and prior to the commencement of this action, some of the original trustees died, and their successors were appointed by the court; they in turn died, and others were appointed in their stead who are now the trustees of this testamentary trust and plaintiffs in this action.

The defendant Arnet conveyed the mortgaged lands by deed to the First State Bank of Livingston on February 21, 1923. Thereafter the defendant Alban Bodine, as receiver for this bank, on March 25, 1924, by deed conveyed the lands to the defendant Mary Gludt, and again, as such receiver, on January 26, 1925, by further deed confirmed the previous conveyance to defendant Gludt. On July 19, 1930, Mary Gludt conveyed the lands to the defendant Y 5 Ranches, Incorporated, and on that day the Y 5 Ranches executed a note for $20,000 and a mortgage securing its payment to the Hill Cattle Corporation, defendant. Soon thereafter this note was indorsed without recourse by the payee, and an assignment of the mortgage executed and delivered, together with the note, to the defendant Anna G. Bodine. This occurred on August 6, 1930. On January 30, 1931, the Y 5 Ranches, Incorporated, by deed conveyed the lands to the defendant Chris Foss, subject to the mortgage for $20,000 to the Hill Cattle Corporation. All these various conveyances and the mortgage to the Hill Cattle Corporation were recorded soon after their execution, so that these several instruments were placed of record in the order of their execution. The assignment of the mortgage to the defendant Anna G. Bodine was not placed of record. As we have indicated, the various grantees, the mortgagee, the assignee thereof, the original mortgagor in the mortgage sought to be foreclosed, and Alban Bodine were all made parties defendant.

The pleadings are voluminous and comprise in excess of 265 pages of the typewritten transcript. Plaintiffs, in addition to the usual allegations in a foreclosure complaint, including those with reference to the various appointments of the testamentary trustees under the will of John A. Humbird, deceased, sought to avoid the effect of sections 8264 and 8267, Revised Codes of 1921, by alleging that from the time of the conveyance by the defendant Alban Bodine, as receiver of the First State Bank of Livingston, to the defendant Mary Gludt, he was in truth and in fact the actual owner of the lands and premises; that Mary Gludt held the title to them as a trustee; that all of the conveyances and the mortgage thereafter made were without consideration, fraudulent, and void; and that the defendant Alban Bodine during all this period of time, notwithstanding the various conveyances and the mortgage, occupied the mortgaged premises, operated the same as his own, without let or hindrance on the part of any of the record owners, and disposed of all the products of the ranch for his own use and benefit, and accounted therefor to no one. It was further alleged that at various times prior to March 1, 1930, after the conveyance to Mary Gludt, Bodine paid the interest on the mortgage sought to be foreclosed, and made payments on the principal aggregating the sum of $10,000; that he sought and secured informal extensions of the mortgage indebtedness, and thereby lulled plaintiffs into the belief that a formal extension, either by agreement pursuant to the provisions of section 8264, Revised Codes 1921, or an affidavit of renewal as provided by section 8267, Id., was unnecessary, in that, it was alleged, plaintiffs were all nonresidents of the state of Montana, had never resided within the state, and were unaware of the provisions of the statutes of Montana relative to the extension and renewal of real estate mortgages. Plaintiffs sought to foreclose their mortgage and to have it decreed that the lien thereof was superior to the claims of all the parties defendant.

Service of process in the action upon the defendant Mary Gludt was by publication. She made no appearance, and her default was entered. The other defendants all answered separately, denying the allegations which we have briefly summarized, and pleaded the bar of the statutes of limitations, viz., sections 9029 and 8267. Separate replies were filed to these separate answers, seeking to avoid the effect of these statutes as to all of the defendants, with the exception of the defendant Arnet, the original mortgagor. These replies reiterated the allegations found in the complaint which we have reviewed supra, and alleged that the defendants were estopped to avail themselves of these statutes. The cause was tried before the court without a jury.

The defendant Arnet, after his conveyance to the First State Bank of Livingston, made no further payments on the mortgage indebtedness of either principal or interest, and as to him the court found that the action was barred by the general statute of limitations. Section 9029, Rev. Codes 1921.

The evidence disclosed that the collection of principal and interest on the mortgage indebtedness was handled by the mortgagee bank, or its successor, as agent for the plaintiffs. Aside from the matter of granting of informal extensions, the plaintiffs had but little to do with the handling of this mortgage. It developed at the trial that in the year 1929, the officers of the bank, then the agents of the plaintiffs, were advised by their counsel in Montana somewhat in detail with reference to the provisions of sections 8267 and 8264 and other statutes, and hence the issue in the case raised by the pleadings on that score was thereupon without further importance in the case.

Prior to the trial the depositions of a number of the defendants were taken and were used on the trial. Other defendants were called as witnesses, and plaintiffs' case in the main is made up of the testimony of these adverse witnesses. Other witnesses were called, it is true. Defendants offered no testimony and rested their case upon the evidence adduced by plaintiffs' witnesses.

The defendant Mary Gludt was the mother-in-law of the defendant Alban Bodine. She resides at Harvey, North Dakota, and visited the home of the defendants Bodine approximately one year before the conveyance was executed to her by her son-in-law as receiver of the First State Bank of Livingston. It appears that thereafter she was not present in Montana, although the record owner of the lands and premises mortgaged. According to the testimony of the Bodines, the only consideration for the conveyance from the receiver of the bank to Mary Gludt was the sum of from two to five hundred dollars handed him by the defendant Anna G. Bodine, his wife and the daughter of Mary Gludt. The evidence is undisputed that from that time on defendant Alban Bodine occupied and operated the mortgaged property through the medium of tenants up to the year 1927, and from that time on by his employees. Although Mary Gludt was the record owner of the property from the year 1924 until the year 1930, Alban Bodine did not at any time communicate with her relative to the conduct of the affairs of the ranch property, in excess of 2,000 acres in area. Defendant Anna G. Bodine testified that she did not communicate with her mother on these subjects.

The only explanation as to why the lands were conveyed to Mary Gludt in 1924 is found in the testimony of Anna G. Bodine, wherein she said that her mother at the time of her previous visit had expressed a desire to own lands in Montana. Although Alban Bodine operated the ranch during all these years, sold the grain produced either by himself or by the tenants, used the hay produced thereon, and pastured the grazing lands with his cattle, he kept no records of these transactions from which he could determine the revenue derived from his operations on the ranch. During this period of time he alone communicated with the bank, plaintiffs' agent, with reference to the mortgage indebtedness. He paid the taxes with his personal check. He paid all the interest maturing up to March 1, 1930, and at various times during the interim made payments on the principal, aggregating the sum of $10,000. All of these payments were made by him by personal check.

For many years prior to the year 1930, defendant ...