Lohman State Bank v. Grim
| Decision Date | 29 January 1924 |
| Docket Number | 5367. |
| Citation | 222 P. 1052,69 Mont. 444 |
| Parties | LOHMAN STATE BANK v. GRIM. |
| Court | Montana Supreme Court |
Appeal from District Court, Blaine County; Charles A. Rose, Judge.
Action by the Lohman State Bank, against Rosie Grim. Judgment for plaintiff, and defendant appeals. Affirmed.
John F Duffy, of Kalispell, for appellant.
W. B Sands, of Chinook, for respondent.
A motion to dismiss the appeal, stating several grounds, has been filed by plaintiff, respondent herein. We are not impressed with any of the reasons assigned. The motion is overruled.
The facts in this case as we learn them from the pleadings are that in 1916 Thomas F. Grim and Rosie, his wife, with their children, were living upon a tract of land in Blaine county which Grim had entered as a homestead. For the purpose of purchasing a team of horses Grim in December of that year borrowed money from one Prosser. Grim and wife executed and delivered to Prosser a promissory note for the amount borrowed, and to secure payment of the same executed and delivered to him a mortgage purporting to convey the land which Grim had entered as a homestead. The note and mortgage bear date December 18, 1916. The mortgage contained a covenant of warranty as well as one of seisin.
The makers of the note having failed to pay it according to its tenor, the plaintiff, to whom Prosser had indorsed it before maturity, began suit to obtain judgment upon it and to foreclose the mortgage. Thomas F. Grim defaulted. Rosie Grim answered, setting up two defenses, the first of which is not material to this inquiry. In the second she alleged that when she signed the note and mortgage the land was held as a homestead by Thomas F. Grim, who did not perfect title thereto, but afterwards at a date unknown to her abandoned the same and relinguished it to the United States; that on September 20, 1920, she and her husband were divorced and the custody of their seven minor children was given to her; that about the month of November, 1920, and while maintaining a home for herself and children, she settled upon the land described in the mortgage and, with other lands, entered the same as a homestead in her own name; that she cultivated and improved the same, made proof thereon, and in due time received patent therefor from the United States. She prayed that the mortgage be declared void and plaintiff be restrained from asserting any right thereunder.
The plaintiff demurred to each defense. The demurrer was overruled as to the first defense, and sustained as to the second. The case went to trial upon the first defense resulting in a judgment for plaintiff upon the note and for a foreclosure of the mortgage. The defendant has appealed from the judgment. The question for decision is: Did the court err in sustaining the demurrer to the second defense?
In First State Bank v. Durand, recently decided, 68 Mont. ___, 222 P. 434, we held that an entryman holding land under the homestead laws of the United States may give a valid mortgage thereon even when he has not proceeded far enough to be entitled to a final certificate. The act of the entryman in giving a mortgage in good faith to secure a legitimate debt is not deemed an alienation within the meaning of and is not forbidden by the spirit of the federal statute which provides that land acquired under the homestead laws shall not in any event become liable to the satisfaction of any debt contracted prior to the issuing of patent therefor. U.S. Rev. Stat. § 2296, 8 F. Stat. Ann. (2d Ed.) p. 575; U.S. Comp. St. § 4551. This view is sustained by the nearly unanimous voice of the courts. Stark v. Morgan, 73 Kan. 453, 85 P. 567, 6 L. R. A. (N. S.) 934 and note, 9 Ann. Cas. 930 and note; Weber v. Laidler, 26 Wash. 144, 66 P. 400, 90 Am. St. Rep. 726; Kirkaldie v. Larrabee, 31 Cal. 455, 89 Am. Dec. 205; Adam v. McClintock, 21 N.D. 483, 490, 131 N.W. 394; Fuller v. Hunt, 48 Iowa, 163; Lang v. Morey, 40 Minn. 396, 42 N.W. 88, 12 Am. St. Rep. 748; Dickerson v. Bridges, 147 Mo. 235, 48 S.W. 825; Blanchard v. Jamison, 14 Neb. 244, 5 N.W. 212; Stark v. Duvall, 7 Okl. 213, 54 P. 453; Spiess v. Neuberg, 71 Wis. 279, 37 N.W. 417, 5 Am. St. Rep. 211. As to preemption claims: Norris v. Heald, 12 Mont. 282, 29 P. 1121, 33 Am. St. Rep. 581; Wilcox v. John, 21 Colo. 367, 40 P. 880, 52 Am. St. Rep. 246. Yet while the entryman may incumber the land voluntarily to the extent of his rights therein, within the limitations above mentioned, the statute prevents a creditor from in any manner acquiring an involuntary lien upon the land to secure satisfaction of a debt contracted by the homesteader before patent issues. Mettler v. Rocky Mountain Security Co., 68 Mont. ___, 219 P. 243; Keller v. Flanagan, 66 Mont. 144, 213 P. 222; First State Bank v. Bottineau County Bank, 56 Mont. 63, 185 P. 162, 8 A. L. R. 631.
That the homestead entry of Thomas F. Grim was an interest in realty capable of being transferred cannot be denied. Ownership of the land was potentially in existence. Grim, the entryman, had an inchoate right capable of ripening into full title upon performance by him of the statutory requirements. He was entitled to possession of the land itself, a right of some value. This he might sell with the improvements on the land. He might also sell his right of entry by relinquishment. See Hills v. Johnson, 52 Mont. 65, 156 P. 122; Selway v. Daut, 67 Mont. 262, 215 P. 646. Rosie Grim had a contingent interest in the entry. If it ripened into full title, she would have a dower interest in the land patented. If her husband had died while the entry was pending, she would have been entitled to the possession of the land and might have obtained patent therefor under the provisions of section 2291 of the United States Revised Statutes (U. S. Comp. St. § 4532). Premising then, as we must, that the mortgage was valid when made, we come to a consideration of section 8255, R. C. 1921, which provides:
"Title acquired by the mortgagor subsequent to the execution of the mortgage inures to the mortgagee as security for the debt, in like manner as if acquired before the execution."
That this statute is applicable to a case like the present seems clear. The general rule is that a subsequently...
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