Little Horn State Bank of Wyola v. Gross

• Decision Date: 24 April 1931
• Docket Number: 6749.
• Citation: 300 P. 277,89 Mont. 472
• Parties: LITTLE HORN STATE BANK OF WYOLA v. GROSS et al.
• Court: Montana Supreme Court

300 P. 277

89 Mont. 472

LITTLE HORN STATE BANK OF WYOLA v. GROSS et al.

No. 6749.

Supreme Court of Montana

April 24, 1931

Appeal from District Court, Big Horn County; Robert C. Stong, Judge.

Action by the Little Horn State Bank of Wyola, a corporation against Carl W. Gross and others. Judgment for plaintiff, and defendants appeal.

Affirmed.

Guinn & Maddox, of Hardin, for appellants.

Johnston Coleman & Jameson, of Billings, and T. H. Burke, of Hardin for respondent.

FORD J.

This action was brought by plaintiff to cancel a judgment held by defendants Owen and Birlew, in so far as the same is a lien upon certain land belonging to plaintiff, and to restrain the sale thereof under execution issued upon that judgment. There was judgment for plaintiff, and defendants appeal.

In 1925 defendant Gross was the owner of 160 acres of land in Big Horn county. He was indebted to plaintiff in the sum of approximately $13,000, which indebtedness was secured by a first mortgage upon the land. Defendants Owen and Birlew were the owners of a mortgage upon, and a judgment lien against, the land. Both mortgage and judgment were subordinate to plaintiff's mortgage. In December, 1925, plaintiff determined that it could not let the indebtedness run longer, that the security was inadequate, and it would be forced to realize on its security. Plaintiff advised Gross that, if he would deed the land to it free and clear of incumbrances, it would cancel $10,000 of the indebtedness and take his unsecured note for the balance owing, otherwise it would be necessary to foreclose the mortgage. Gross accepted the offer.

An examination of the county records disclosed the Owen and Birlew mortgage and judgment. At plaintiff's suggestion, Gross communicated with Owen to ascertain for what consideration he and Birlew would release the mortgage and judgment as to the particular land.

The complaint alleges that thereafter Gross advised plaintiff that defendants Owen and Birlew had agreed to release their lien of judgment and mortgage against the land upon payment to them of $250, and that it believed that an agreement had been made between the parties, and advanced defendant Gross that sum for the purpose of securing the required release, and that Owen and Birlew had in fact agreed to release the judgment and mortgage held by them for $250; that plaintiff instructed its attorney, T. H. Burke, of Hardin, to prepare proper releases of the judgment and mortgage held by Owen and Birlew, who thereafter delivered to it an instrument which plaintiff was advised and believed constituted a full and complete release of the judgment and mortgage, and that, upon the payment of $250, such release was executed by Owen and Birlew and delivered to Gross; that plaintiff, believing the judgment and mortgage had been released and canceled, and relying thereon, surrendered to Gross all notes affecting the land, and that Gross and wife executed and delivered to plaintiff their deed conveying the land to it, and that plaintiff would not have accepted the deed in satisfaction of the Gross indebtedness had it not believed that it was securing a clear and unincumbered title to the land. It is alleged that through the mistake, inadvertence, and misunderstanding of plaintiff's attorney the release and satisfaction drawn by him did not purport to satisfy, or have the effect of satisfying, the judgment of defendants Owen and Birlew against Gross, and only constituted a release of the mortgage held by them, and that, as a result of the transaction, when plaintiff accepted the deed from Gross and wife for the land, it was apparently subject to the lien of the judgment, and that it did not discover the error until about December 9, 1927, after defendants Owen and Birlew had caused execution on the judgment to be issued; that the sheriff of Big Horn county, acting under the execution, was about to sell the land, and prayed for an order and decree restraining the sheriff from so doing and for a decree canceling the judgment upon which execution was issued, in so far as the same constitutes a lien upon, or charge against, the land described.

Defendants admitted that Owen and Birlew had a lien on the land by virtue of the judgment against Gross, but denied that Owen and Birlew had ever agreed to satisfy the same, but had agreed to release and satisfy only their mortgage. They denied that any mistake had been made or that there was any inadvertence or misunderstanding on the part of the plaintiff's attorney in preparing the instrument referred to in the complaint, and alleged that, if there was any mistake, inadvertence, or misunderstanding, it was due solely to plaintiff's own culpable negligence and carelessness, and was unilateral and not mutual; that due to plaintiff's own laches and unreasonable delay plaintiff was not entitled to equitable relief.

Issue was joined by reply and trial had before the court without a jury. Findings of fact and conclusions of law in substantial conformity with the allegations of the complaint were filed, and judgment was entered for plaintiff. This appeal followed.

Upon the filing of the complaint, a temporary injunction was issued restraining defendant John B. Shreve, as sheriff, from proceeding with the sale of the land under the execution issued upon the judgment of Owen and Birlew. Defendants' motion to dissolve the injunction was denied, and they predicate error upon the ruling. Defendants did not appeal from the order, and the question cannot here be considered. The order denying defendants' motion to dissolve the injunction was an appealable order. Section 9731, Rev. Codes 1921; MacGinniss v. Boston, etc., M. Co., 29 Mont 428, 75 P. 89; Bennett Bros. v. Congdon, 20 Mont. 208, 50...