Mueller v. Renkes

• Decision Date: 02 July 1904
• Citation: 77 P. 512,31 Mont. 100
• Parties: MUELLER v. RENKES.
• Court: Montana Supreme Court

77 P. 512

31 Mont. 100

MUELLER v. RENKES.

Supreme Court of Montana

July 2, 1904

Commissioners' Opinion. Appeal from District Court, Silver Bow County; E. W Harney, Judge.

Suit by Lena Mueller against George Renkes. From a judgment in favor of complainant, and from an order overruling a motion for a new trial, and from a judgment overruling an application for a receiver, defendant appeals. Affirmed.

John J McHatton, for appellant.

J. N Kirk and John Lindsay, for respondent.

POORMAN C.

This case stands for review on appeals on the part of defendant from a judgment rendered against him, from an order of the court overruling his motion for a new trial, and from the action of the court in overruling his application for the appointment of a receiver. The action is one to quiet title. The complaint contains the allegations of possessory right of possession and ownership, and other allegations usually found in such complaints, and that the defendant claims to own some interest in the property adverse to the plaintiff. The defendant denies the allegations of the complaint, and alleges as a separate defense and counterclaim that one Mrs. Mosherosh, the grantor of the plaintiff, on July 16, 1895, for a valuable consideration delivered to this defendant her promissory note dated July 16, 1895, for the sum of $2,450, due one year after date, with interest; that the maker of the note, who was then the owner of the property described in the complaint, on that day executed a mortgage to the defendant on said property to secure the payment of this note; that the note has never been paid; that on the 8th day of June, 1898, "this defendant, not knowing the effect of his act, canceled such mortgage upon the records of said county," the note not then having been paid; that this mortgage was recorded on the day of its execution; that on the 6th day of May, 1896, the said Mrs. Mosherosh made a pretended conveyance of this property to the plaintiff; that subsequently, and on the 20th day of December, 1898, this defendant "commenced a suit in" the district court, "entitled 'George Renkes, plaintiff, against Emma Mosherosh, defendant,"' to recover the amount due Renkes upon this promissory note; that judgment therein was entered for the plaintiff Renkes by default; that Renkes, at the time of the commencement of that action, filed an affidavit and undertaking on attachment, and caused this property to be attached; that an execution was issued and the property sold under the judgment so obtained by the said Renkes, and was bid in by him; that the pretended conveyance from Mrs. Mosherosh to the plaintiff in this action was made for the purpose of hindering and delaying the creditors of the said Mrs. Mosherosh, and that the plaintiff in this action, Mrs. Mueller, now holds the property in trust for the said Mrs. Mosherosh. The plaintiff filed a replication denying these allegations so far as they relate to the matters in issue between the plaintiff and defendant in this action. The defendant claims that some of these denials relating to this new matter and counterclaim of this defendant are not sufficient to raise an issue. Under the view taken, however, the question of indebtedness between Mrs. Mosherosh and this defendant becomes immaterial, except the mere fact that an indebtedness did exist between them with reference to this note, and this fact is undisputed. It is further undisputed that at the time Mrs. Mueller, the plaintiff, purchased this property, there was a valid, subsisting, and recorded lien thereon. It is further undisputed that the defendant in this action did recover a default judgment against Mrs. Mosherosh on this note, and that this judgment has not been paid.

There are two questions presented by these appeals: (1) Was this mortgage a valid, subsisting lien on the property described in the complaint at the time of the commencement of this action? (2) Was the conveyance from Mrs. Mosherosh to the plaintiff herein a bona fide transaction, so as to pass the title of the property to this plaintiff?

1. A mortgage itself does not create or alienate an estate in real property, but is a mere security for the payment of a debt or the discharge of an obligation. Section 3810 et seq., Civ. Code; Hull v. Diehl, 21 Mont. 71, 52 P. 782; Gallatin County v. Beattie, 3 Mont. 173; Holland v. Commissioners, 15 Mont. 460, 39 P. 575, 27 L. R. A. 797; Wilson v. Pickering, 28 Mont. 435, 72 P. 821; Swain v. McMillan (Mont.) 76 P. 943; Adler v. Newell (Cal.) 41 P. 799; Mott v. Clark (Pa.) 49 Am. Dec. 566; State v. Gilliam, 18 Mont. 100, 44 P. 394, 45 P. 661, 33 L. R. A. 556. It is true, a mortgage is a conveyance (section 1642, Civ. Code), but it is a conveyance of only a chattel interest (Hull v. Diehl, supra). A mortgage being a mere lien executed for the benefit of the mortgagee, it may be canceled or released by him at any time with or without consideration, and with or without the consent of the mortgagor. See Swain v. McMillan, above. Nor does the purchaser of mortgaged real estate become thereby personally liable for the payment of the indebtedness described in the mortgage. Sections 3752, 3790, 3817, Civ. Code. The lien is strictly in rem by reason of the mortgage, and, when the mortgage is released, a bona fide purchaser holds the res free of such claim or lien, whether the purchase was made prior or subsequent to such release.

In this state a mortgage may be discharged by entry in the margin of the record thereof. Section 3845, Civ. Code. The release in this case was made in that manner, and is in the following form: "I hereby certify and declare that the mortgage together with the debt thereby secured, is fully paid, satisfied and discharged. Witness my hand this 8th day of June, 1898. George Renkes. Attest, John Weston, County Recorder, by A. E. Whipps, Deputy." The defendant, in attacking this release, assumed the burden of showing the existence of facts sufficient to warrant a court of equity in setting it aside Section 2170, Civ. Code. The evidence clearly shows that neither Mrs. Mosherosh, the mortgagor, nor Mrs. Mueller, the plaintiff herein, knew of the intention of appellant to release this mortgage, and did not know for some time afterwards that he had done so. The defendant says: "I came to the courthouse alone, voluntarily, without conferring with any one about it, with the intention of cancelling this mortgage and going over to Mrs. Mosherosh, which I did, and getting new papers made out. I did not think I was making a mistake. *** No consideration in the way of money passed between myself and Mrs. Mosherosh for the cancellation of the mortgage." No claim can therefore be made that the release is the result of any deception on the part of...